This will be the last scheduled "Fan Foil." For an explanation, tune in to tomorrow's final "Fan Favorite."
As for the title of this article, let me set the expectations and clarify the conclusion first: I'm absolutely not pinning the current state of the Cubs on Sam Zell. There are many, many things the Ricketts family, Jim Hendry, Theo Epstein, the coaches, and the players could do to improve the club that have no relationship with Sam Zell's influence on this organization. The point of this article will be to show how Zell has influenced the club.
One last bit of context: some of the points in this article could be perceived as "political" and/or could launch "political" discussion. A reminder that politics are off-limits here at BCB. The "political" descriptions are intended not as a political thesis, but as content for Sam Zell's character and personality.
With that as your background, let's get started with this: Sam Zell is an awful person. Seriously. Searches for "Sam Zell is good", "Sam Zell is nice", and "Sam Zell good deeds" returned no relevant results (just the same mix of bio and current event links you get just by searching for "Sam Zell"). Wikipedia says Zell has helped out a couple of business schools, including the one at Northwestern, and also supports causes in Israel.
Forbes lists Zell as the 345th-wealthest person in the world. I assume this gives Sam a sad, as his only goal in life seems to be aop that list. Here's a little about how he thinks. He's of the mind that wealthy people are successful because they simply work harder than the rest of us.
Zell is nicknamed the "Grave Dancer" for reviving dead businesses. Part of his empire is founded in the newspaper business, where Zell has been famous for slashing staffs and budgets and generally not caring at all about the quality of journalism produced.
He purchased the Tribune Company in 2007. The Tribune deal went bad fast and the Tribune filed for bankruptcy in late December 2008. Of course, Zell blamed the "greedy journalists" for just not accepting his vision. Those greedy jerks who wanted to, you know, do journalism. Of course, Zell never cared about his employees in general or journalists in particular, telling one "F*** You" (yes, this is an actual video) during an introductory Q&A session after he had acquired the Orlando Sentinel.
Now, as a small sidebar, I want to clarify some things about journalism. The industry has lots of problems. LOTS. I worked as a television news producer for about five years in my early-mid 20s (very late 1990s and early 2000s). I know a whole lot of current and former journalists. The extreme vast majority of them want to do good work. They want to do "real" journalism. But the industry, and the world, has changed sooooo much that that task is borderline impossible in the mainstream sense. Sam Zell is not responsible for destroying journalism. But he and other media moguls sure have done a lot of damage to the industry in pursuit of profit. As someone with a "pure journalism" mentality, it is my opinion that journalism is an industry that should not have a profit motive, due to its axiomatic role in a democracy. While many argue this is unrealistic, it really points to a functional problem of a democracy.
OK, by now, several of you have already passed the "tl;dr" limit, so we probably ought to get on to the Cubs' part. As I mentioned, Zell bought the Tribune Company, which of course owned the Cubs, in early 2007. As early as the end of that same year, Zell intended to sell the Cubs. It took more than two years to sell the club to the Ricketts family.
Look at those last two sentences again, because they are really the key to all the damage Zell did. He bought the Tribune in early 2007 and wanted to sell the Cubs less than a year later. So it's pretty safe to say that a long-term baseball vision wasn't exactly in the cards for the Cubs under Zell's "leadership."
The Cubs had a payroll of just a hair under $100 million in 2007, which was all in place by the time Zell took over. The payroll obligations climbed to $135 million for the 2009 season by the time Zell sold the team. This was entirely a factor of Zell pumping up the club value for sale. Built in raises took the payroll to $144 million for the 2010 season before payroll had to inevitably come down.
Let's also clarify that spending money in and of itself is not bad. There is a correlation between spending and winning, though it is shrinking. I'm worried that this link will be buried in this article, but a recent study suggests that money just doesn't buy happiness in baseball the way it used to (h/t to Peter Keating in the current issue of ESPN the Magazine). Even so, I certainly want the Cubs to be in a position to flex what should be their financial muscle. Sam Zell restricts that from happening to this day.
For now at least, I'd really prefer to table the "what should the Cubs' payroll be?" question. We'll talk about some of the factors here, but that's a more complicated question.
Zell's sale of the Cubs was a pure tax dodge which left the Tribune holding a tax bill even years later. From the Cubs' end, the sale left the Ricketts family with a huge debt. Brett Taylor at Bleacher Nation (and former BCB contributor) recently laid out more of the details. We've been discussing that, among other things, in this Fanshot.
The Ricketts family owns "only" 95 percent of the company as a contingency of the sale. This is part of the reason the family's options to invest in the club are limited. Zell would have to kick in additional funds to maintain his 5 percent ownership for tax purposes. This type of deal is being challenged by the IRS. But, for now, it is a limit to what the Cubs can do with their own money even today when Zell is "gone."
There's a notion that the Ricketts family got suckered by this deal: That if they had not agreed to Zell's terms, the billionaire would have just decided he no longer loved money and sold the club to someone without the tax restrictions. That's some serious pie-in-the-sky fiction, but I get it. I do. Despite my own "pro-rebuild" stance, I am not confident in the club ownership. To give lower-case kyle credit (from the Fanshot above), the Ricketts family has made plenty of mistakes. They could have fired Hendry sooner and had a better handle on Wrigley renovations. They also could be better at PR (frankly, it would almost be difficult to be worse). My stance is that the F.O. will have to be successful in spite of the financial restrictions and even in part in spite of the family, though I still hold out that the family wants to do the right things, they just aren't as skilled as we'd all hope.
But Sam Zell cares about exactly two things: money and himself. He's really a more vile form of a pre-three-ghost-visits Ebenezer Scrooge. If it wasn't the Ricketts family, Zell would have held for another "sucker", with the club suffering in the interim even more. If at some point Zell finally had to strip down his sale demands, the damage to the Cubs would have been even worse as the on-field club surely would have been neglected. Frankly, I think Zell is kicking himself for not thinking of the Houston Astros' model first. He might've stripped off all the assets, hoarded the profit, and then pumped up the club value by temporarily pouring in resources (with back-loaded deals, naturally). I imagine these are the things that keep Sam Zell awake at night.
To close, let me reiterate: all the Cubs' ills are not the fault of Sam Zell. Not even close. But we should not dismiss the damage done by Sam Zell just because he hasn't owned the club for a little over five years. The sale terms functionally keep spending restrictions in place and it took the club more than a few years to work out from under the back-loaded deals.
Sam Zell hurt the Cubs. Badly. He hurt journalism. Badly. Those are two things I care deeply about. And he did/does so solely in pursuit of an even greater fortune. So I can't think of a more appropriate subject to close out the Fan Foils series. I hope the IRS is able to stick it to Zell and that a hopefully-soon packed house, profitable, and winning Cubs team can be celebrating without him.