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'Unsustainable' no more: Tom Ricketts says Cubs in 'good spot' to support payroll arc until TV deal

MESA, Ariz. – The Cubs still point to the “game-changing” jump in local TV revenues they anticipate in four years as the defining event that will dictate the long-term level of support for Theo Epstein’s baseball department.

But what about the ability until then to sustain the payroll trajectory they’ve accelerated with the sudden success of their young core?

Cubs chairman Tom Ricketts sounded optimistic the money will be there in the next few years for his baseball department to continue to supplement a roster that is projected to open the season with a franchise-record $146.6 million payroll.

“We certainly have brought the payroll up over the last few years,” Ricketts said Wednesday during his annual spring training media briefing. “We’ve done a lot of great things on the business side of the equation, and we have more people in the park. So that allows us more financial flexibility to bring in other guys.

“We’re comfortable with where our payroll is today, and can it go forward? Yeah.”

It was only three years ago this month that Ricketts called the club’s recent payrolls at the time “unsustainable,” foreshadowing steep cuts to the baseball budget as attendance declined and the club continued a tanking/rebuilding process.

Left unsaid that day: Spending restrictions resulting from the terms of the highly leveraged sale required by Sam Zell when he sold the club to the Ricketts family in 2009 played a significant role in the bottom line.

The terms required by Zell expire after the 2019 season, which coincides with the expiration of the team’s TV contract with CSN and the ability to offer regional rights for all 162 games to a single outlet for the first time since teams from Philadelphia to Texas and Los Angeles started cashing in on mega broadcast deals.

“To be able to have this kind of payroll with an old TV deal is pretty good,” Ricketts said. “Obviously, as we get toward that TV deal we should get even more financial flexibility.”

In the meantime, a 308,000 increase in attendance last season meant more than $23 million in additional revenue last year (according to internal metrics), along with, according to sources, another $12 million boost from playoff-related revenues.

A hefty ticket price increase this year, another projected increase in attendance and growing advertising revenue (including a large Pepsi deal since last year) made it more palatable to the business side to agree in November to an increase over the original 2016 baseball budget.

And Epstein’s front office made it work with creatively structured contracts to bring in free agents Jason Heyward ($184 million, eight years), Ben Zobrist ($56 million, four years) and John Lackey ($32 million, two years).

Baseball ops created a two-year window of near cost containment for 2016-17, based on projected budgets. And the long-term deals don’t rise significantly even in 2018-19.

But after 2017, last year’s rookies start hitting arbitration paydays, and Jake Arrieta and Lackey both become free agents – which could mean a megadeal to keep Arrieta or a potential need to buy more starting pitching elsewhere.

Count on more ticket increases if the Cubs sustain the competitive run they started last year.

And don’t be surprised if the Cubs strike a TV deal ahead of 2019 with CSN – the only outlet available to host the games on a new deal before 2020. Sources say the Cubs have talked with CSN extensively about that possibility and suggest the station has floated figures that might be close to the Cubs’ target price.

Whatever ground Crane Kenney’s business department makes up on the baseball plan’s more accelerated pace in the next few years could have a disproportionate say over how well Epstein is able to manage – and lengthen – the window of opportunity that opened last year.

“The fact is we’ve done a lot to grow the revenues of the team over [the past three years],” Ricketts said. “And we’re in a good spot.”