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BCB Interview: Cubs Chairman Tom Ricketts (Part I)

Today is BCB's sixth birthday -- that's like a century in blog years. And here's a birthday present for all of us -- a wide-ranging interview I recently conducted with Cubs chairman Tom Ricketts about his first year as the head of the organization and face of the franchise.

This interview will run in three parts -- today, tomorrow and Friday. Part I, after the jump, will deal with how the team ownership and management is structured, and how each member of the Ricketts family contributes to the overall family ownership of the team. Tom also answered questions about the three goals he announced when the family took over in October 2009, and player development and how that fits into the overall team budget.

One note regarding something Tom told me in the interview regarding investment in facilities for player development is apparently happening. Yesterday at CSNChicago.com, David Kaplan wrote that the Cubs are looking to buy a large parcel of land in the Dominican Republic to build a new academy:

The cost for a new academy will be several million dollars, but the family's goal is to build the best training and development facility anywhere in Latin America. Tom Ricketts has been talking with several well-connected people in the Dominican real estate market and is prepared to buy a large parcel of land to house the complex.

Follow me past the jump for the rest of the first part of this conversation.

BCB: The first question is -- on the record -- who really owns the Cubs, and what specifically is your father’s role in the team, if any?

TR: He doesn’t have a defined day to day role currently. He comes to a couple games. The team is owned by the Ricketts family. I’m not sure what the strict definition of owner is. I think that people should look to me as chairman, as the person responsible for directing the family’s investment. I’m the one on the ground who is leading the family ownership.

BCB: And your dad’s role is?

TR: He’s interested, he comes to games. He’s part of the family, it’s a family ownership.

BCB: So the accurate statement would be to say the Chicago Cubs owner is: "the Ricketts family".

TR: Yes. The Ricketts family is owner of the Chicago Cubs. And honestly, when people talk to me I use chairman. I try not to use the word owner because the meaning gets stretched.

BCB: It’s not one individual then.

TR: No, it’s a family asset. I’m the chairman, my siblings are directors.

BCB: On the subject of you being chairman, the last letter than you sent out was signed "executive chairman".

TR: The only distinction there is that in a lot of cases there’s a chairman of the board and all they do is work with the board. An executive chairman is typically a title people use when they’re not only chairman of the board but they’re active in the business. So my card says executive chairman.

BCB: So would you consider yourself CEO or is Crane Kenney considered CEO?

TR: Well, Crane’s team president.

BCB: I want to clarify so people understand.

TR: Every team has a chairman and a president. Every team has a guy who’s representing the team at the owner’s meetings and there’s a guy who works on the team business. And it’s really kind of a triumvirate. It’s kind of president, GM, owner.

BCB: So at the owner’s meeting it would be you.

TR: Yeah, typically Crane, Jim Hendry and I go to the owner’s meetings.

BCB: And would that be the same for every team -- three representatives like that?

TR: Some teams send more than one of their ownership group; you send more if you want.

BCB: It depends on how they structure their ownership group, then?

TR: It depends who wants to come. For example, Bill Neukom, Larry Baer, Brian Sabean, those are the counterparts at Giants, just picking one for example. Every team has those people.

BCB: So, going forward I can talk about you as Executive Chairman and ownership is the Ricketts family. Let's talk about the rest of the family. It has been a year, how much input have your siblings had and in what capacity? What does "director" mean?

TR: I think it would be important for everyone to know that all the siblings are very well informed. We have calls on a regular basis; we have board meetings on a regular basis. Starting with my older brother, Pete -- what he brings to the table is a lot of the work in growing AmeriTrade over the years. So he brings a really strong management background and has a lot of insights into the business side of what we’re doing both how we operate this business and how we assess business opportunities.

Laura lives here in Chicago. She’s been in all of our team meetings, but also meetings with some of the public officials related to our financing discussions. She’s been very forward and out in front in a lot of our community affairs issues and charities. She’s the chairman of Cubs Charities. And she’s been very, very active in a lot of our discussions. And once again, every major issue that goes through here we all talk about.

And Todd, apart from being the "Undercover Boss" -- which he did a brilliant job at -- he has an interest in the fitness and the nutrition side of things and a lot of the suggestions that were contributed last year came from him and he brought in some ideas on that, which we implemented.

BCB: Was that for players?

TR: Just for players. And also he’ll be the family point person for what’s being built in Mesa and projects like that. So, everyone’s involved. I’m the one who’s here every day and kind of leading the charge but we’re all pretty active.

BCB: What effect has this past year had on your family? Are your kids really excited, "My dad is one of the owners of the Cubs!" or are they really not that excited?

TR: The kids have had a great time. It’s been a really nice family experience for all of us. It’s a little bit awkward at times if you’re out in public and people come up and say hello, those kinds of things. But generally it’s been very positive.

BCB: A year ago, you announced you had three goals. Obviously one of them wasn’t achieved in 2010. How do you feel about the other two?

TR: Well, taking them in order, obviously the first goal is to win the World Series. I really do believe that the way you’re going to do that is by being consistent. And the way you’re going to be consistent and at the top of your division every year is through building a great organization. I think we’ve taken some pretty good steps in the last year. I think, you’ve seen, and you follow it pretty closely, but we have seen the respect for the Cubs organization in terms of talent that’s coming through the past few years. I think we have some players on the way. I think we have great coaches. I went around to the minor league parks last year and I sat down with a lot of our coaches and I think that we’re bringing in good players and I think that we’re doing a good job of bringing them along in the right way so they can become productive major league players.

I think where we were lacking is facilities and obviously we’ve dived right in on that. We’re looking at how we can improve our Dominican facility. I went down there, I spent several days down there last year and we’re looking at ways to just make it a better place for players to train and a better place for players to be.

So, apart from just the players and the facilities and the coaches, we’ve also added some scouting this year. We’ve added some people on the quantitative side. We’re looking at some of the baseball related problems with a different spin on them, maybe a little more analytical spin. Not in a way that is a complete 180 from what has been done in the past, but in a way to supplement and help the guys who really know the game and so I think we’ve come a long way on that front.

BCB: You said you needed to take a year, sit back, see what you had, see what was going on. In hindsight, is there anything you would have done differently this past year?

TR: In the big picture I don’t think so. I think that ultimately, given the information that we had, we did okay with our decisions. I can’t think of anything that’s major that I would have done differently, yet. Maybe in a couple years I’ll look back and said I could have done… We’re doing a lot. It’s a lot to accomplish. You know off the field we’ve obviously done a lot for the business side. But I think a lot of people don’t realize how important that is. People consider us on the same scale as a lot of other big market teams, but we have a lot less in terms of financial resources and we need to close that gap to get in that top tier of baseball. That’s important. That’s about understanding what we do in marketing and sponsorships, that’s about being more just being more thoughtful about how we do everything on the business side. So we’ve made some progress there, too.

BCB: To elaborate a little more about the winning the World Series part, it’s been said that the overall budget for baseball operations is going to be about the same as last year.

TR: Yes.

BCB: But the impression from some people is that the major league payroll will be lower and some of the money will be put into player development. Are there any more details that you can give about that at this point? Even if you can't state specific dollar amounts, how that might get split out? What’s going to be done? You talked about building an organization, that’s kind of what you’re doing by expanding scouting and similar things. Talk a little about what plans you have for that area.

TR: Like we’ve said in the letter and various other platforms, the amount of money that goes into baseball, think of it this way: it’s a closed system. Dollars don’t leave the system. We spend the money, we pay our expenses and what’s left goes into baseball. So the amount of dollars that go into baseball as a whole this year should be very, very close to what went in last year. What we have suggested that we’re looking at is just putting a little bit more into the development side as opposed to spending at the major league payroll level. How much and what form that takes, it moves around a little bit and we’ll just have to see what happens in this off season.

BCB: You haven’t decided, then, exactly where that’s going to go in terms of player development or what kind of people you might hire or what you might be spending on next year’s draft.

TR: Player development is amateur signings, too. We have kind of an idea in our mind of what we’re targeting. We don’t hard code it because something could come up that changes it. In other words, it’s a value trade off. If we find something that makes sense one way or the other we’ll shift some resources. And even if we did hard code it we’d probably not discuss it.

BCB: So you’re suggesting that you might be putting more into the amateur draft next year?

TR: We’d like to have more resources available. That said, our guys are good. If a player’s not worth the amount of money he wants then we don’t sign them. So it’s not like we’re automatically going to spend it just because we’ve got it budgeted. I think it’s really, really important that we walk the walk on bringing in the right players, and spending the amount of resources we have on development, because obviously everyone knows the economics of development relative to the economics of the free agent market.

BCB: So you want to bring the talent up through the system, more so than going through free agency?

TR: The good news we have out of the system is that we have been on a pretty good run with our top draft picks. They’re becoming productive players, and they’re not just becoming productive players, they’re good guys. They’re the kind of guys you want to have on your team and from a character standpoint, we’re looking for the right people in the amateur draft and then I think we’ve been developing them pretty successfully these last few years. I can’t speak to what happened under previous drafts or administrations but I think we’ve got some good momentum on that front. We want to make sure that we keep that machine rolling and not borrow too much from the future by spending all the money up front today. So we have to find that balance.

BCB: And don’t do a Jeff Samardzija kind of signing again?

TR: I won’t talk about any specific signing, but the fact is that you just have to find that balance. In the end every team has a finite number of dollars for payroll and for player signings both international and amateur, and you’ve just got to have the flexibility to take those dollars where you think most likely the best outcome is for those dollars. So to the extent we’d like to have more resources available for new player signings this year we’re just going to try and have those resources available.