The buck starts here: Value of a competitive ’15 especially high for Cubs

SHARE The buck starts here: Value of a competitive ’15 especially high for Cubs
SHARE The buck starts here: Value of a competitive ’15 especially high for Cubs

MESA, Ariz. – First it was Universal Pictures 26 years ago. Then it was The Sporting News 12 weeks ago, Anthony Rizzo a week later, and now Bloomberg Businessweek on the eve of the season opener – all touting the 2015 Cubs as champions, or in the case of Bloomberg, a dynasty in the making.

The thing about all those predictions and presumptions is that, as team president Theo Epstein said when spring training started, “We haven’t done anything yet.”

Until that changes, Crane Kenney’s business department might want to hold off on any more victory laps, especially with its latest miscalculation laid bare for a national television audience to gaze upon Sunday night in the vast outfield area where bleachers used to be.

Wherever the Cubs are in this rebuilding process – be it on the field or the field itself – the only certainties seem to be:

– Division rivals such as the Cardinals and Pirates are still really good and not likely to go away anytime soon;

– This is the most relevant, intriguing Cubs team to open a season in at least five years;

– And the measure of the process starts now, with big-league results finally in play, the stakes raised.

In other words, as Epstein has said more than once, “Now the hard part starts.”

And certainly more scrutiny.

“Scrutiny’s great. There should be scrutiny,” Epstein said. “But I’ll put our record of improving this organization over the last three years under as much scrutiny as you want. It’s gone pretty well.”

A strong 2014 for several of the top prospects in the system as well as new manager Joe Maddon’s sudden free agency may have even pushed the competitive (and spending) timeline up a year for the front office.

Now they have to make it pay off. Literally.

“A very competitive season this year will have extra impact because it might drive some revenues to help bridge the gap to the TV deal, which will be meaningful for us,” Epstein said.

This year’s payroll boost to about $120 million on the opening roster is an artificially high ceiling engineered by Epstein’s front office saving money from last year’s budget. The 2015 budget allotted from ownership was virtually unchanged from 2014 (about $100 million).

There’s little left of that surplus, so the baseball product this year may be on its own to create the ability to add next winter – with a new TV deal possibly as much as five years away.

The Cubs expect to compete this year. But winning may matter more than just for playoff implications.

“When you win your attendance numbers go up, your concessions go up, the per-caps go up, revenues as a whole go up and you become more attractive as a TV [programming product],” Epstein said, “and in turn the payroll goes up, which will help us keep the players we have and continue to grow this product.”

It’s unclear just how much the payroll budget is impacted by other cost factors such as ballpark construction or other interests related to the family trust through which the team operates financially.

Kenney, the business ops president, told Bloomberg, “Basically my job is fill a wheelbarrow with money, take it to Theo’s office, and dump it.”

And chairman Tom Ricketts has repeatedly insisted every dollar made goes back into the team, with all the money after overhead going to the baseball ops budget.

But the Cubs’ operating income jumped from $27.3 million in 2013 to $73.3 million last year, according to Forbes – making it the No. 2 ranked team in baseball in ’14.

They signed a new, more lucrative radio broadcast deal with CBS, secured a spring-stadium naming rights deal believed to be worth close to $8 million a year, raised ticket prices ahead of the 2015 season and installed a massive video board worth millions more in projected revenue.

Yet the payroll budget did not increase, according to insiders, even when the baseball department targeted one final piece for the off-season in World Series pitcher James Shields – who went to the Padres for four years, $75 million. The Cubs offered three and $60 million, in a package that would have had to be creatively structured and back-loaded.

Epstein won’t talk about financial specifics or details of free agents the Cubs pursued and failed to sign.

But it may be up to the baseball itself to drive enough revenues to fill its own wheelbarrow until that elusive TV windfall – what Epstein calls the game changer — comes in. That’s assuming the local sports cable bubble doesn’t burst first.

Carriage problems with the Dodgers and Astros after signing rights contracts with cable channels have raised doubts in some circles – including some in the Cubs’ offices — about how long the billion-dollar-deal boom will last.

“I’m not worried about a cable bubble,” Ricketts said during spring training. “I think the value of live sports programming continues to grow. … That’s something that I’m very confident with.

“We think we’re in good position. Particularly if the team starts performing on the field, we’ll be in very good position.”

That may be the only way, at least short term, for the baseball side to sustain the kind of big-league growth it envisions over the next several years – including, necessarily, adding more pitching from the outside.

The Cubs already are eyeing such pending free agents as Tigers left-hander David Price and Nationals right-hander Jordan Zimmermann.

For now, Epstein seems to be as intrigued as anybody else watching this team to see what Maddon and $155 million ace Jon Lester and the rest can do to make people forget about those five consecutive fifth place finishes.

“There are a few more butterflies because you know every game has a chance to come back and help you or hurt you in the end,” Epstein said, adding he feels no external pressure this year because of the expectations.

“I know that in baseball like in life, there’s a broad range of possibilities. There’s injuries, there’s randomness, there’s underperformance, there’s over-performance. We’ve gotten a few good breaks. I think in ’14 we took a huge step forward as an organization, in part because we happened to get some breaks.

“Like eight or nine key issues they all went our way. If eight or nine key issues with this team go really well, we’ll win the division. If they don’t go the way we want them to, we might have a worse record than last year.”

Whether he’s on the clock to show results, or whatever you want to call it, Epstein said he looks forward again to the task of working toward trying to win every night with the big league club

On the other hand, he said, “I know our organization’s not done growing. The 2015 Cubs are probably not going to be our best team over the next six years. I think we’re going to keep adding, keep getting better. Our young players are going to mature and improve.

“So we have to operate on those two different paradigms.”

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