Q&A with new owner Tom Ricketts
Shortly before the sale of the Cubs was complete, new owner Tom Ricketts met at Wrigley Field with Sun-Times sports editor Stu Courtney, columnist Rick Telander, national baseball columnist Chris De Luca, Cubs beat reporter Gordon Wittenmyer and business reporter David Roeder. Here is an excerpt of that nearly 90-minute round-table discussion.
Sun-Times: How do you react to the thinking that, as a Cubs fan, you are going to throw a lot of money at this team to get it over the hump?
(John J. Kim/Sun-Times)
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The Ricketts Family
Ricketts: It's true, we really are fans. My street cred on the fan side should be pretty solid. But there is no silver bullet to winning a World Series. And it's not like they are not spending money already. From my standpoint, the way you win a World Series is to consistently make the playoffs and hope that you're the team that is the hot one when you get to that point. The way you consistently make the playoffs is to have the right player-development process, to have the right guys drafting the right talented kids and the right coaches and scouts working together to see them be productive at the major-league level. And just trying to be there every year. There's no load up for one season or there's never any one guy or one contract or one level of spending that's going to get you there. You just have to be consistent and you have to keep the right people pushing the team forward. And you have to build from the bottom up.
Sun-Times: Do you have a grasp yet on whether you have the right people here?
Ricketts: The answer, I think, is yes, but I'm going to learn a lot more over the next couple of years. One big difference between a corporate owner and a family owner is that we can really take our time and make long-term decisions. Everything we do, I want it to be the right decision and I want to make sure I have all the right information, rather than coming in and doing something that might seem easy or kind of expedient at the time. From what I see, and from what I know, I think there is a lot more talent coming through the Cubs system than maybe ever. They have a lot of people they are very excited about. I'll be down at the [organizational] meetings for that week of Nov. 2, hearing what all of the coaches and scouts say about that talent. I think they have drafted well, as of late, and they have some guys that they think are going to be real contributors.
Sun-Times: From the business end, how did this transaction come together?
Ricketts: On the transactional side, essentially the way it started is the family obviously has a lot of money from my father's founding of Ameritrade. The thought a few years ago, when the Tribune started to struggle, was that they can't sell themselves to a private-equity shop and keep the Cubs because it doesn't fit the profile from a cash-flow or time-horizon standpoint. We knew they would have to come for sale. I approached my siblings and my dad and said, "You know, if the Cubs come for sale, why don't we just throw our hat in the ring." And at the time, I think all of them basically thought that it was such an incredible long shot, they had no reason to say no. It was like, "All right, knock yourself out and do what you have to do."
Over time, we hired a good set of bankers, about three years ago today, well before the team was for sale. We got all of our ducks in a row in terms of who we were going to have as advisors, both on the legal side and even right away on the media side. So when that announcement came out, on the Cubs' opener [in 2007], we had everything ready to go. Basically after that, it was just a long and winding road of craziness at every turn. And a very complicated structure—through very volatile financial markets, which has made things more difficult. Ultimately, I think the reason we are still here is we are a single family, without a consortium of people, just able to persevere and just wait around the rim until the process is over.
Sun-Times: Do you see yourself being a hands-on owner like a George Steinbrenner or would you prefer to fade back and let the baseball people handle things?
Ricketts: What you have to do is find the person you want, and then you support him, and then they are accountable. If you're mingling in the player decisions, then you don't have any high ground to stand on when it's time for whether or not that person was accountable. So from our standpoint today, Jim [Hendry‚s] our guy. He has the opportunity to mold the team for next season. You know, after next season, we'll take a look and see how it went. But he has 100 percent of our support and we think he's the right guy. I think he's had a pretty good track record. This year was disappointing, but in general, I think the team's headed in the right direction.
Sun-Times: How close do you think that team is right now? And do you see putting much into payroll beyond what the budget was this year?
Ricketts: The payroll is pretty high, and there is a not a lot of flexibility in that payroll. Ultimately, a lot of the payroll is spoken for for next year. I think the payroll will come out slightly higher in 2010 than in 2009, but I also don't believe that just throwing money at the situation is really going to be the end game for us.
Sun-Times: The payroll budget for ‚09 was $140 million, and we're not sure if they reached it, so when you say it might come out a little higher, are you talking about where they finished or higher than what the budget was?
Ricketts: Higher than $140 million. A little bit higher than that, but not much. I don't want to get anyone's expectations up that it's going to be, "Go sign Roy Halladay," or something.
Sun-Times: Is it fluid a little bit, like if Jim Hendry says, "This is the guy we need and it's going to take a little bit more."
Ricketts: A little bit. But not much. We have to keep it in a band because we have to do planning, too. We have to understand what we're spending.
Sun-Times: You sell 99 percent of your tickets here. What do you need to do to the ballpark to start seeing a return on your money?
Ricketts: First of all, just so everybody knows, we intend to preserve the ballpark and improve it. It's a special place and, hopefully, when we all bring our kids or grandkids here, they are going to have that same experience when they walk up the stairs as people have today and have had for many years. Away from the bowl or away from the seating, you step back, go down the stairs and go, "Wow, this could get better." There are a lot of things that we can address in the offseason. We can look at more washrooms, we can look at some of the congestion on the concourses, we can look at a few other things that will make it a little easier for fans in the short run.
But in the long run, what we have to do—and that's a big part of next year—is just sitting down and putting together a five- to seven-year plan on what we are going to do each and every offseason to improve the stadium. Also we are going to develop more revenue opportunities and increase fan choices and increase the fan experience. Obviously, the Yum-Yum Donuts [building next to the ballpark] is great, but there is a better use for that land. One of the big projects next year is to make sure we start to get a plan in place. And we're also committed to executing that plan, even in the short building season we're going to have from the end of the season to the beginning of the next season. Hopefully, we can find the right answers for how we can improve the stadium in that six-month window.
Sun-Times: Not too long ago, concrete was falling at Wrigley Field. Is there anything you have to do immediately?
Ricketts: In the due diligence process, we had architect and engineers from a couple of firms go through the stadium in much detail. And the team was great in letting people have full access to everything. The team itself had some reports that are encouraging. It's our assessment that the bones or the infrastructure of the stadium are in pretty good shape. And the concrete, for the most part, is in pretty good shape. I don't know the exact status of the spalling and the netting; we'll have to go back and take a look at that at some point. But the real key is that the infrastructure of the stadium can support it for the next generation. What we have to do, as we improve certain parts of the stadium, build in new features or add a few seats here and there, we have to make sure we replace the things that need to be replaced.
The stadium is going to be 100 years old in a few years, but not every part of the stadium is 100 years old. There are parts that have never really been fixed up, and there are parts that are completely brand new.
Sun-Times: The urinals are 100 years old, right?
Ricketts: The troughs? I want to make it clear, we do intend to landmark the troughs, so you can rest assured, fans will have that for their kids, too. [Laughs.]
Sun-Times: How do you feel about naming rights?
Ricketts: We don't have any naming-rights discussions going on at all. I think Wrigley is the name we are going to go with. Down the line, I'm not going to say it will never happen ? the right kind of sponsorship or maybe naming the triangle building or something like that.
You have to be open-minded to that stuff. You can't let easy revenue opportunities get away from you. There is this balance, right? You have to pay your players and the other teams are going to be making money, so you have to be making money. You can't ignore it, but there are no plans to change the name of Wrigley.
Sun-Times: How will paying for the improvements at the ballpark affect the product on the field?
Ricketts: We have budgeted payroll to grow going forward every year. I'm not sure it will. One thing that most people would agree with is it's not how much you spend, it's about what you get for it. So it's more of a relative-value question than an absolute-value question.
We anticipate payroll going forward. One of the things that's different about what we bring to the table as opposed to a corporate owner is we can re-invest the profits. You guys have reported on the numbers and they're not particularly exciting. But instead of taking that as a payment up to a parent [company], we can just keep that money in the stadium. We also have financial flexibility if we have to borrow more to make a certain big change or something like that.
Sun-Times: The deal that was discussed with the Illinois Sports Development Authority estimated the ballpark work would cost $400 million. Is that about right?
Ricketts: The proposal that the state was considering—and we really weren't very much a part of these discussions at all—was to basically keep the marquee and store the scoreboard for a year, and tear everything else down.
Their thought was that they would basically take it down for a year or two and just keep the brick walls, basically keep the shell, and redo the whole inside. In another park or another situation that might be an answer that's useful. But here, I just don't see it. You have all these people who have spent all this time and money over the last 10 or 15 years building new stadiums to look old. Well, why don't we just take our old stadium and fix it up a little bit?
The other thing is I just don't think it would be the right thing to do.
Sun-Times: Do you expect to turn a profit at some point in the future?
Ricketts: Well, we'll probably make a profit in Year 1. But the goal is not necessarily to make a profit every year. The goal is to invest in the franchise. Our goal is to be the best franchise in baseball. To have the best facilities in baseball. And to win the World Series.
If it means that not every year is profitable, then that's just what it is. But the fact is you're building long-term value, and that's our focus.
Sun-Times: How much do you look at how the Red Sox' owners came in a few years ago and turned that franchise around?
Ricketts: Well, Boston and Chicago are not the same place, but there are a lot of analogies that you have to look at. Remember, they were going to get rid of Fenway. So to be able to rehab your stadium and improve it in kind of just the offseason, that's something that we have to strive to emulate. We have to do that. To increase the value that you get from your stadium, so that you can pay your players more, is another thing they do. And obviously the results on the field, we want to copy that, too.
Fenway is a great experience. They added a lot of sponsorship and things that we probably wouldn't do just because it's a little out of the character of Wrigley, but it's a great place to watch a game.
You can't copy every page of the playbook, but certainly they've done stuff that we would try to emulate.
Sun-Times: Do you see putting a JumboTron at Wrigley, even using a rooftop?
Ricketts: There are no plans to do that. If it got to the point that it made sense or we could figure it out, I would take a look at it. But there's nothing like that in the near term.
Sun-Times: How much do you value the tradition of the Cubs?
Ricketts: You have to be respectful of why Wrigley is different than other stadiums and why the Cubs are different than other teams. I think you owe that to the fans and you owe that to future generations. That said, you also can't let the game pass you by. You can't be so beholden to tradition that you miss ways that other teams are leveraging their clubs to have more economic power than you do.
Sun-Times: Will the structure of the front office change?
Ricketts: Not currently. Right now the structure is pretty simple. Crane [Kenney] will report to me and Jim will report to Crane. There is no double reporting. Crane is president of the team and Jim will report to Crane.
Sun-Times: Has there been any contact, maybe with the Milton Bradley situation or other topics, where they needed to run financial issues by you?
Ricketts: As a courtesy, Crane gave me a little bit of a heads-up, after the fact, on a couple of things. But I wasn't in the room or making decisions. It would be premature.
Sun-Times: What do you make of the whole Milton Bradley situation?
Ricketts: When it comes to individual players, I'm going to stay away from that. I'll leave that Jim. It's his responsibility to handle that. I think it's just kind of a slippery slope if I start talking about any individual.
Sun-Times: Is it more of an issue of, "Here's your budget and you're going to have to work within these numbers?"
Ricketts: Much more like that. It will be like, "Here's our numbers. Here's what we need to make budget. That's what you have to work with." It's not about, "Here's $140 million, spend $140 million exactly." If you can do it in $137 million, that's OK, too. One thing we will reinforce is not only budget but relative value. The correlation between dollars spend and wins is not strong enough that you can just say, "OK, go ahead and spend it." You would have to be more thoughtful than that.
Sun-Times: How difficult is it to separate the Cubs fan in your from the businessman in you?
Ricketts: That's a great question. I'm sure there will be times during games where this Jekyll and Hyde thing will be going on. Like I tell my kids, it's fun, it's exciting, it's a dream, but it's a job. I've got to take all of those responsibilities very seriously. I owe it to my family and to the future of the franchise and to all of the associates that work here to take the job side very, very seriously.
The good news is that I have started my own business in a very, very competitive market as an investment bank, I've been very, very successful—I have about 100 employees, which is about the number that are here. I know what it is to make money, I know what it is to build a culture, I know what it is to lead people. I think those kinds of things and experiences will be extremely useful in the chair.
Sun-Times: What can you do about the championship drought that is approaching 102 years?
Ricketts: Well, there's no magic formula for winning a World Series, but it has to be the goal every single year. You have to be consistent and you have to think long term. The one big signing is fool's gold. You have to have a team that's put together thoughtfully and you have to be thinking more than one year ahead.
Sun-Times: Was there anything you saw in the Red Sox and White Sox when they snapped their dry spells that could apply to the Cubs?
Ricketts: I'm not an expert on the Red Sox, but in the first couple of years, they ballooned the payroll a bit, which is something we are not going to do. But by the second World Series, a lot of talent was really developed. They definitely followed the model of developing their own players and being successful at it. And that's led them to their string of success, even though this year wasn't the greatest playoff for them. But they are consistently in that 90-plus win range in the toughest division. They have gone that route and been successful. I'm not as familiar with how the White Sox did it. But it goes back to the White Sox crawled to the finish line that year—but then just got hot at the right time. They were a team that had a lot of character and a team that had guys that seemed to like each other and liked playing together. And when they got to the playoffs, they hung tough and got it done.
Away from focusing on the big picture and being consistent, I'm not sure what else—there's no silver bullet.
Sun-Times: Will you be visible at the games on most days?
Ricketts: Yeah, absolutely. I think our philosophy basically is to be seen, not heard. Just be around. I think it will be pretty common to see me walking around.
Sun-Times: What will happen to ticket prices and are you looking at doing more of the premium seating?
Ricketts: Ticket prices, nothing's really been determined for next year, but I think it's safe to say they will go up some. I'm not sure which packages, but I think we will probably raise tickets a little bit.
Premium seating, if we can build in amenities that support higher ticket prices at certain places in the stadium over time, then we'll charge more. But I think that's just a matter of increasing the value of what you're getting. You can't charge someone $2,200 for a seat and then have them wait in line for an inning to go in a trough.
Sun-Times: Do you need more sky boxes?
Ricketts: When we go back to people who want to tear the stadium down and build it back up, I think they think sky boxes are a big driver of value. I think we only have a limited ability to have them. Our sky boxes, there is a fixed amount of them and they hang from that upper deck and they are Stalin-esque. It is what is for the time being. We are going to play around with them a little bit to try some other ways to improve them, but I don't see how we're going to add a lot of sky boxes.
But that's OK. One of the nice things about Wrigley, we have great corporate sponsors, but it's not really a corporate place. It's not a corporate experience. It's not like sky boxes are driving the revenue here. And that's just fine with us. If we don't have to do that, then I think we're better off for it. That said, I think they could be nicer. But I don't see where we would end up building more of them or turning that into a bigger part of our strategy.
Sun-Times: Who have you relied on to get a baseball insider's philosophy?
Ricketts: There is no one I have talked to about it, that I can name. It's more trying to be an observant fan. Because it's going to be a family business, we can take the approach of, OK, let's make long-term decisions and decisions that pay off down the line. We don't have to run out and bankrupt the team to make one big signing in hopes that we hit gold next year.
Sun-Times: Will this be your full-time job?
Ricketts: Ultimately, it will be a full-time position. I'm going to step back a little bit from my company. It will be a 40-hour-week thing next year just because there will be so many decisions that have to be made, and so many opportunities that we really need to take a close look at. And we shouldn't let time be the thing that delays the triangle building. We should get in there and figure out what we need and just lock it down and get it started.
We have other big decisions to make. Spring training [headquarters] is a big decision. We have other things that we want to do with some other revenue opportunities that we want to be looking at. And, of course, during the season, I want to be here for all of the games. And I want to go on the road, too. I want to meet more of the owners. I want to learn as much as I can.
Sun-Times: Crane Kenney has been criticized a lot in the last couple of years, especially having the priest bless the dugout before the 2008 postseason. What was the thinking behind retaining Crane Kenney?
Ricketts: I don't know the details of what happened with the priest, but if you look at what is pretty tangible there, Crane has done a good job of looking for ways to grow revenue opportunities with the team. I think he has managed the team and brought it forward. Once again, maybe 2009 was disappointing, but if you compare it to five, six, seven years ago, the way they ran the team, I think it's come a long way.
Throughout the course of due diligence I got very comfortable with Crane. I think he's got a lot of great ideas for what can happen next year. And I think he's earned the right to have the opportunity to be the president of the team when we take the team forward.
Sun-Times: As a fan, what would you do if the Cubs won the World Series?
Ricketts: Wow, we were just talking about that. As owner, the first thing I'm going to try to do is make sure the neighborhood is safe because it's going to be nuts. It will be one of those things where you remember where you were when kind of a thing. I really haven't thought that far ahead, to be honest, if we won the World Series. But it's certainly where we have to get to. We have to stop talking about stupid goats and stupid curses. That's all just a bunch of crap. We've got to move forward, think about the future, not the past. The reason the team has never won the World Series is they were either bad teams that played up to expectations or they were good teams that had bad luck in the playoffs. In the end, that's what it comes down to. To make it any bigger than that, is doing a disservice to the players who are here today and the coaches, and it's just foolishness.
Sun-Times: You realize it will continue to be brought up.
Ricketts: My philosophy is you just have to move on, and that's what I hope most fans do. We certainly don't feel like there is any type of curse or anything goofy like that.
Sun-Times: But is there more pressure because the players feel the weight of the 102 years? Ricketts: I don't have first-hand knowledge of that, but I imagine that's an issue. You remember last year how seemingly tight the team was in those first couple of games, and that might have been an issue. Hopefully, we'll see that one coming this time.
What I'm saying is those division series, it's a coin flip. It's really unfortunate that it happened to us, but it's not unheard of that the better team or a good team gets swept. Going into it, maybe the key is having the right mind-set. The pressure, I'm sure the players feel the pressure. When we get to the playoffs next year, I'm sure that they will feel that extra pressure. We just have to make sure that we address and try to acknowledge that there is extra pressure on the players and try to do what we can to address.
Sun-Times: The Cubs never seem to get on top and stay there.
Ricketts: Yeah, but if you look at it, the swings have started to come in a little bit over time. I mean, there were a couple consecutive years in the playoffs. One thing that is true is expectations are high. And that's not a bad thing. You should have high expectations for a team with a high payroll and very talented players. That's OK to have high expectations going in. I'm not sure which of the various factors this year led the team to not meet those expectations. We just have to make sure that we keep those high expectations, but more consistently meet them.
Sun-Times: With the expectations higher, what about the heat you are going to feel coming into this situation if it doesn't happen in two years, three years, one year?
Ricketts: Well, it kind of goes with the territory to face public heat. Hopefully, every informed fan will at least know that we do have a plan in place and we really do have a philosophy that's going to get this team to the World Series. And, hopefully, everyone will know that if we don't get there, no one will be more disappointed than me and my siblings. We feel the pain, so we definitely want to be part of the solution. I think it's unavoidable to have some of that. But there's not much I can do about that.
Sun-Times: Will Wrigley Field and the neighborhood look essentially the same in 10 years?
Ricketts: I see that bowl staying essentially the way it is. People like that. You're close to the field, good sight lines, it's good. Behind that, in the stadium will be better amenities, and you'll feel more comfortable when you get up to go get food or go to the restroom or anything like that.
Area-wise, you will have more options and more flexibility of things to do once you get here. We also want people to drop by on a non-game day and have something for them to do. We've talked about the triangle building, it's not just that. There are other buildings in the area we would like to take a look at using more effectively. When you build in something like a Cubs hall of fame, something for kids in the triangle building, you just bring in more value to the whole experience of coming here. We want people to get more value out of it and show up early. Not just to jam into the local bars and drink 10-dollar cans of beer. We want to make more well-rounded options and a more well-rounded experience.
With respect to the overall neighborhood, we intend to be very good neighbors. I think to the extent that we can incorporate some of the things the alderman would like to see, that would be terrific, like a nicer restaurant option here than what is generally available ? more of a year-round type of thing. The other thing we are going to do, as we build out, we would like to have a little bit bigger retain footprint so that easier if you want to buy your son a Fukudome jersey.
The analogy for the triangle building is closest to what might have been done at Lambeau Field, which I haven't seen, so I can't talk about it first-hand. Just trying to build that addendum that gives fans more options of what they can do.
Sun-Times: Did you really meet your wife at Wrigley Field?
Ricketts: I lived across the street and we used to come to every Saturday and Sunday bleacher game, pretty much, through my misspent youth. I lived at Addison and Sheffield for one year. It was a Sunday afternoon about 18, 19 years ago. We used to get there and sit in center field because we were too lazy to sit on the front wall, right or left. Plus, back in those days, before the two-beer limit, you could hand beers up to the guy in the first row, so there was an efficiency to that. But we were sitting there with a bunch of friends, and my brothers and my sister were there, too. There were like 12 of us and she was with a bunch of friends. And we just started talking and we agreed to meet later at Taste of Lincoln Avenue. And now we've got five kids.
I met her in the building. She was here with some friends.
Sun-Times: The Cubs had some dreadful teams back then. Why did you spend so much time at the ballpark, for the party atmosphere or the baseball?
Ricketts: It was obviously both. The beauty of the Cubs is there is a baseball game and there's also this like Wrigley experience that's just different. There's no other experience like it. It's unique, it's special and as real fans who have been to lots of games, we respect that.
In those days for us, when you're 25, 27, whatever it was, I was a trader and got out of work early a lot. So I would come up here a lot. I never sat in the regular seats. You basically grabbed a few beers and talked to whoever you were next to.
Sun-Times: Back then, did you ever imagine that one day you would own the Cubs and Wrigley Field?
Ricketts: Not in those days, no, not at all. But in those days, it was always a dream. I always loved baseball, I did a lot of fantasy leagues back in those days. I haven't done one for many years. But back when I was a trader, everybody talked about sports all day long. I used to know everybody's statistics.
Sun-Times: You know you are setting yourself up for some big heartbreak, too.
Ricketts: Yeah, I'm ready for that. I started a company from scratch to compete against the biggest companies in the whole industry and we succeeded. It was up and down for years, so I know what comes with the turf.
Sun-Times: Would you like to get the All-Star Game here in 2014 to present the new Wrigley Field?
Ricketts: I think it would be terrific to get the All-Star Game here. [But] I have not been in any conversations with anybody about the All-Star Game.
Sun-Times: Are you going to ask for any taxpayer subsidy for anything you do here?
Ricketts: No plans to ask for any taxpayer dollars.
Sun-Times: Do you have an idea of the cost for the improvements needed for the ballpark?
Ricketts: We have estimates. They are significantly less than [$200 million]. But I'm sure those estimates will get refined as we get further down the line. Plus, that's not all to be spent at once. If we put in place the longer-term plan, then we have a series of years to make those improvements, and hopefully we will be able to handle that from a cash-flow perspective.
Sun-Times: Are you going to attend the Cubs‚ organizational meetings in a few weeks?
Ricketts: Yes. I'm just there to learn. From a business perspective, I've learned a lot about baseball in the last three years. From a baseball perspective, I'm still just a fan. It will be great to meet all the people and see how the organization works and hear how they talk about the players. It will be great to get a good first-hand read on a lot of the talent they believe is going to lead us into the future. I'm excited to get down there and start learning about the way the baseball side of the organization is looking.
Sun-Times: Have you met yet with Jim Hendry to give him kind of a map for the offseason?
Ricketts: No. Just getting the deal closed. Jim knows what he's doing and I'm sure he has lots of things he wants to talk about. But we haven't discussed them yet.
Sun-Times: Have you spent much time with Lou Piniella?
Ricketts: No, I shook his hand once for a moment. But we're excited about ... it's our understanding that he's coming back next year. I think he's one of the best managers in baseball. And we want him to come back.
Sun-Times: Much has been made of his status. Do you anticipate wanting him beyond next season?
Ricketts: I think you take it one day at a time. I have no idea. We're excited to have him back next year. And we'll just stop there and see how it goes.
Sun-Times: What's the big advantage of family ownership vs. corporate?
Ricketts: There are three things. No. 1 is there is only one agenda. We just want to win. No. 2 is we can reinvest the profits, which I'm not sure was an option for our previous owners. And No. 3 is we can take a long-term approach and build a culture that looks to building lasting success, and can make decisions based upon what's going to happen next year and the year after and the year after. I don't think corporations don't get those three options.
That should give us a leg up over a corporate-owned version of this team.