Tom Ricketts Discusses the Cubs Future Direction

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Thomas S. “Tom” Ricketts is chairman of the Chicago Cubs, and CEO of Incapital LLC, a Chicago investment bank that packages corporate bonds for retail investors. The son of Ameritrade founder J. Joseph Ricketts, Tom also directs TD Ameritrade Holding Corporation.

Forbes estimates the Ricketts’ family wealth ($1 Billion), consolidated under J. Joseph Ricketts at #371/ 400 on the Forbes 400 list. Tom reportedly makes only $171,000 a year in his role as TD Ameritrade Director, but the money he makes from as CEO of Incapital LLC is unknown. (and likely big money).

Ricketts co-founded the company in 1999, after working for the Chicago Board Options Exchange and ABN Amro. According to Forbes, “Incapital underwrites for several major U.S. corporations through its InterNotesSM product platform.”

In July 09, the Ricketts family reached an agreement with the Tribune Company to purchase the Cubs, Wrigley Field, and 25% of Comcast SportsNet Chicago for close to $900 million.

The deal was approved three months later, with Tom Ricketts board chairman, over 95% ownership of the team, Wrigley Field and 20% ownership of Comcast SportsNet Chicago. The Tribune retains 5%.

Let’s look at where he’s ended next.

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I caught up to Ricketts Wednesday at the Wrigley Field Stadium Club, for the unveiling of the new Cubs themed state of Illinois license plate. Joining Ricketts were Mr. Cub Ernie Banks and Illinois Secretary of State Jesse White.

Ricketts, who earned both his undergraduate degree and MBA from the University of Chicago gave the media an update on the Wrigley Field public funding situation.

“Right now on the public funding side, we’re just thinking through a lot of what we need and talking to different people behind the scenes to come up with a plan that would be a good plan for everybody” he said.

Ricketts knows his poorly-advised, unfortunately timed plea for public subsidies to enrich his privately-owned ballpark has been the biggest blunder of his 15-month tenure so far. Following the Cubs Convention, he was quoted in the Chicago Sun-Times:

‘‘I think we lost control of the dialogue a bit,’’ he said of public reaction to a plan that called for the Cubs to receive future growth in revenues from the game-ticket amusement tax.wrigley

‘‘From our standpoint, it was just a discussion with a handful of people about what we could do for next year, and I think once the media got a hold of it, it wasn’t a fully baked solution. It was just a discussion, and it ran through a bunch of people that didn’t have much of the information, and everybody had an opinion, and before you knew it, it was just kind of a mess.

‘‘Just to remind everyone in the room, what you read isn’t always the full story,’’ Ricketts said, adding that funding efforts are still going on behind the scenes. ‘‘Of all the things in the first year that if I had a re-do, I would probably re-run that one.’’

What Ricketts wants is to upgrade Wrigley with revenue from that 12% amusement tax, the highest rate in the nation. And the Cubs claim to be the largest single payer into that amusement tax. Their goal is to follow the lead of the St. Louis Cardinals and New York Yankees, when it comes to financing their stadium through such a revenue stream. (Of course, the team’s history on the field is about non-Cards and non-Yanks like as possible).

Here’s more detail on the type of plan he might employ, according to The Business of Baseball:

Franchises often negotiate with local municipalities to acquire the development rights to property surrounding their proposed new stadia. In MLB, these developments are often called “ballpark villages”. The promise of ancillary development makes it politically more palatable to support construction of a new ballpark.

As well, future tax revenues from the proposed surrounding development are promised to pay off public debt incurred from construction of the stadium. (aka Tax Increment Financing or TIF) And often the franchises benefit from controlling the development rights to these “ballpark villages“. Tom Ricketts hopes to construct “ballpark villages” adjacent to both Wrigley Field and the Cubs new home in Mesa AZ.

So that’s where we stand right now in dollars and sense, assets and liabilities. But what about Ws and Ls, as we draw closer to spring training.

“I thought the offseason was terrific, I felt we brought a lot of momentum into the end of last season, and the players all felt it was heading in the right direction,” Ricketts claimed.

“We added three key pieces in Pena, Garza and Wood and the fact is not only are they important players, but they’re going to be important leaders in our clubhouse,” he added.

With the Chicago Bears just missing the Super Bowl, the Blackhawks winning last June’s Stanley Cup, and the Bulls in first place, expectations are rising to provide pressure on Chicago’s woefully under-performing MLB teams to start performing.

Does Ricketts feel this pressure?

“”I really don’t think of it as pressure  at all, I really do cheer for all of the teams in the city. I think it’s good for the city to have teams winning in general. I would say last year you look at what the Blackhawks accomplished and the excitement they created, and we hope we’ll be in the same spot they are, and create the same kind of excitement,” he responded.

Paul M. Banks is CEO of The Sports Bank.net. He doesn’t have a real nickname, but he is also a regular contributor to the Tribune’s Chicago Now network, Walter Football.com, Yardbarker Network, and Fox Sports.com

He does a weekly radio segment on Chicagoland Sports Radio.com and Cleveland.com

You can follow him on Twitter @thesportsbank

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Comments

  1. Nick Grays says

    Nice article, it’s not everyday you can get this kind of perspective. I think the Cubs will be a lot better and the NL Central should be very entertaining this season.

  2. the central is always competitive,and wide open, as long as you have a decent payroll.

  3. This will probably be the new leader (maybe replacing Caps/Wizards owner Ted Leonsis for the “Maddest Cheddah” of “Juice like Minute Maid” award among TSB interview guests

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