Cubs reach first World Series in 71 years
The Cubs have long been among baseball’s most profitable teams, even if it took them 71 years to get back to the World Series.
The Cubs were the fourth most profitable baseball last season, according to stats from Forbes, which shows the team making $50.8 million.
And the team was actually the most profitable in the league in 2012, earning $32 million, when it finished dead last with 101 losses.
"They’re always profitable. But they’ll be a lot more profitable now," said Marc Ganis, a sports marketing consultant based in Chicago.
The key is a incredibly loyal fan base which keeps filling the seats at Wrigley Field, no matter how well the team is doing. Another advantage is the Cubs’ relatively modest payroll, since it depends mostly on younger, cheaper players many of whom are not even eligible for arbitration yet.
The team’s total payroll this season will come to $186 million, according to Spotrac. That’s about $93 million less than the Dodgers, the league leader who the Cubs just knocked out of the playoffs.
One of the keys to the business success is Wrigley Field, a 101-year old stadium known as the Friendly Confines. The Cubs have not drawn fewer than 32,000 fans per game, on average, in any season since 1997. Only three other clubs can say the same — the Yankees, the Dodgers and the Cardinals. The Cubs are also the only baseball team with a long waiting list to buy season tickets.
"The Cubs remain very popular, win or lose," said Andrew Zimbalist, a Smith College professor who is an expert on the economics of baseball. "It’s very cultish."
That strong demand for tickets means the Cubs can charge more for tickets. Chicago commands an average price of $51.33 per ticket, which is $20 more than the league average according to Team Marketing Report. The only teams with higher average prices are the Yankees and Red Sox.
In fact, the team’s popularity may well have worked against it on the field success, since past owners didn’t really see an upside from investing in better, more expensive players.
"There wasn’t a great effort to enhance the product on the field," Ganis said, referring to the period when the team was owned by the Chicago Tribune. "They had some good years but it was primarily being operated as programing for the broadcast properties."
The Ricketts family bought the team from the Tribune for $700 million in 2009. It has improved the club’s economics, increasing sponsorship deals and buying real estate in the surrounding neighborhood to develop, including seats on the rooftops beyond the outfield bleachers. The family also brought in new management to reshape the team on the field. The team’s value has more than tripled since then to $2.2 billion, according to Forbes’ estimate.
Even bigger profits could lie ahead, especially after the 2019 season, when it will renegotiate broadcast deals. Those contracts will no doubt pay more for a team that recently made it to the World Series.
"They’re lucky," said Ganis. "It rarely happens where the on-field and off-field plans come together at the same time,"