On Payroll, Tom Ricketts and Supply and Demand

The board these days is typically divided into two camps: The wait, don't spend and be patient camp and the why can't the cubs be competitive and still build the farm camp. Just for the record, I would have fallen under the be patient and spend everything on amatuers under the old collective bargaining agreement. Under the new one, I think it takes much too long to build strictly through the farm. I think with the dearth of talent in the system you have 3-4 years before we have a system that can fully stock a competitive major league team.

But thats not the point of this fanpost.

Its "how in the world did we get to the point that this is even an argument." For everyone in the be patient camp, picture yourself 3 years ago when the cubs announced Tom Ricketts as owner. Now if you could go back and time and ask yourself whether you would be supporting cutting payroll over 50% of its current level in year 4 and hoping we could compete for 500 for the first time of the Ricketts era in year 5 would you believe it? How would you feel about your new owner?

I would like to use a quote from Al's interview this offseason:

BCB: Let's move on to baseball related things. You’re anticipating the overall baseball budget to be pretty much the same as it was a year ago or a little increase? Decrease?

TR: In the same ballpark. How the baseball budget is determined is you take all the dollars you bring in, pay all your expenses and you give everything else to the baseball guys.

BCB: When you say expenses you’re talking about paying nonplaying employees?

TR: Yes.

BCB: Travel, electric bills, overhead…

TR: All the expenses that go with the overhead of running the team. And then after you’ve paid all of those, that goes to baseball and then it’ll be Theo’s job to decide how to allocate that within, in baseball. Whether it goes to on field payroll, whether it goes to amateur signings, international signings, expanded scouting. Whatever he decides.

Addressing this where did the money go? Per Cotts opening day payrolls

2010: $144M payroll / $4M amateurs (no info on international)

2011: $134M payroll / $19M amatuer / International

2012: $109M payroll / $14-$15K amatuer (we also received some money back from our trades)

We know the new front office and firings costs some money but $30M? We know that capital improvements are not included in operating expenses per the quotes above (if they were Ricketts would be even a more pathetic owner). So are revenues down? Doubtful. In a season where Tom knew the cubs were punting on the season, he decided to increase concession items at the highest markup ever. Hot dogs have gone from $4.75 to $6. Beers went from $6.50-$6.75 to $7.50. Tickets outside of the bleachers are up across the board. Now the missing money is a lot but nowhere close to what could happen next year. Please note, Tom said the same thing in his first year as owner on how he would determine payroll. This was his supposed way of doing business (not managing a profit).

Every year ticket prices have increased but the rise in concessions was the breaking point for me when I realized this guy is running a business. He may have said this was not about profit but thats a lie. I should have picked up on it sooner such as:

1) When we had to back load a one year deal for pena (has anyone ever backloaded a one year deal?)

2) We had to move derosa to free up payroll to sign the biggest mlb free agent of the ricketts era, Marlon Byrd!! for 3 and $15M (note we did not even pay the whole contract).

3) The bleacher ticket discount debacle that Al sounded off on last year

4) The joke that is dynamic pricing

5) The political issues

6) The ridiculous DJS performing in the Captain Morgan Club before games

7) My no less than 6 efforts that were routinely ignored to move the tvs to face the crowd instead of the aisles in the upper deck (where my tickets are). It makes no sense to have them face away from the crowd. Every year I bring it up to anyone who will listen and nothing happens.

Somehow rickets has managed to escape the media wrath by I have to believe he's on borrowed time. Often when Al gets on the soap box about tickets alot of people like to make the supply and demand argument. With the cubs, I don't believe its fully apt to use supply and demand like a business. The Ricketts are living off of years of goodwill the cubs have generated. People who go to games often are feeling more and more that they are being alienated, priced out and taken advantage off. The cubs major advantage used to be the difficult to get tickets perception, that in gone. Once public perception turns on the owners, people will leave in groves. Wrigley is an experience and once they lose that image they are screwed. There is a reason a company like coca-cola spend millions on advertising. Its all about image and the cubs are losing there's quickly. The media will soon turn and it will have a huge effect on sales.

Any good business needs reoccurring customers and provide a positive experience. Once Tom from Iowa goes to his one game a year and realize its half empty and there is no atmosphere he wont come back. And then he wont bring his cubs who will not grow up to be cub fans and take his family in the future. And its starts to be perpetuate. The cubs image is a lot more fragile than the cubs believe.

This is a FanPost and does not necessarily reflect the views of SB Nation or Al Yellon, managing editor (unless it's a FanPost posted by Al). FanPost opinions are valued expressions of opinion by passionate and knowledgeable baseball fans.

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