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Attention Investors - Chicago Bears Organization is a Billion Dollar Bargain

Mike Burzawa

Die hard Bears fan and lead blogger at Bear Goggles On

If you have an extra $1.07 Billion laying around, how would you feel about buying the Chicago Bears?  No, the McCaskeys aren't selling YET but I am calling on someone - ANYONE - to make Virginia and Co. an offer they can't refuse.

Forbes Magazine ran a big series of articles called the Business of Football, where they take a closer look at the dollars and cents behind our favorite teams.  The Bears are the ninth ranked franchise at just over $1 billion dollars.  Not bad, eh? 

But Forbes looks deeper - those business guys don't get rich by glossing over things - and they bring the heat on the Bears like an Oakland Raiders pass rush against Chris Williams.  They call our Beloved Bears "the NFL's most neglected brand and the best opportunity in football." 

Let's break down both pieces of that statement because it's a biggie.

The NFL's Most Neglected Brand

Forbes basically throws the McCaskey family and team president Ted Phillips under the bus.  Here's their setup:

The problem begins and ends with the ownership. The team is controlled by 87-year-old Virginia McCaskey, the daughter of Halas. The face of the franchise is her son, Michael, who never aspired to be the head of an NFL team (his brother, George, will take over next year).

The day-to-day operations are led by Ted Phillips, an accountant. "We're not one of those teams where an owner can infuse their own capital from their other personal business ventures," says Phillips, explaining why the team isn't more successful. "This is the McCaskey's number one asset. Jerry Jones can leverage. We don't have that ability."

Pretty cut and dried, huh?  "The problem begins and ends with ownership." and that's only describing the business side of things and doesn't even consider what's going on between the white lines.

Chicago is the second largest NFL market, behind only New York (which is shared between the Giants and Jets), so effectively the Bears have the largest single-team market, yet they're only the 9th most valuable.  Something doesn't match up there.  You know why?  Because the Bears last big innovation with the T-formation.  Ginny and sons run the team like a mom and pop shop in a world of big box superstores.



The McCaskeys run the Bears like a mom and pop shop in a world of big-box superstores.

But it wasn't always that way.  As article author Monte Burke (I always trust financial advice from guys named Monte) from points out:

Halas was the NFL's first innovator. When the league struggled during its early days, Halas took his Bears--led by halfback Red Grange--on a barnstorming tour of the country. By the 1950s the Bears had the NFL's fattest profits, due mostly to Halas' prescient negotiation of TV rights. The smaller-market franchises were ailing financially. Along with New York Giants owner Wellington Mara, Halas led the charge to share those TV revenues equally.

That decision is the fundamental reason the NFL is now the most lucrative pro sports league in the world, with annual revenue of $8 billion. That shared broadcast money ($135 million per team last year) has also, somewhat ironically, allowed his heirs to hold on to the Bears without emulating his business acumen.

So how have the Bears gone from innovators to laggards?  Burke points out that a big part of the problem is the stadium deal to renovate Soldier Field:

The Bears' stadium, Soldier Field, was built in 1924 and had been home to the team since 1971. Looking for new stadium funding, McCaskey threatened to move and got nowhere with Chicago Mayor Richard M. Daley...

...Ted Phillips, who had joined the Bears in 1983 and a few years later was in charge of the team's finances. A year after taking over he worked out a deal with Daley. "We'd had an acrimonious relationship with the city," says Phillips, 53. "Part of it was just having a new face."

But a bigger part of it was that Phillips got the renovation deal done by effectively giving Chicago the stadium. "I told the city that I'd sign an extension of the lease and trust they'd make the stadium happen," he says. (The Bears currently pay $5.7 million a year for rent on a lease that runs through 2033.) In return the Bears paid 38% of the $660 million bill. The good news: Revenues from premium seating have risen to $32 million this year, up from $8 million before the renovation.

Dealing with the corupt Chicago political machine seems to be at the heart of the matter.  The lack of foresight and tunnel vision on the Soldier Field renovation is startling.  The seating capacity of a less than 10 year old stadium is the smallest in the NFL.

The lack of a dome or retractable room (and I know the "Bear weather" meatballs will come after me for that comment, so bring it!) limits the stadium to be limited to be used a handful of times every season.

Even now that the NFL has reconsidered allowing a Super Bowl in a cold weather city (see New York), the Bears couldn't host because their stadium is too damn small and doesn't have the minimum capacity.  That doesn't even consider trying to get a Final Four, the Olympic bid, etc.

Otherwise, the Chicago Park District hosts concerts, high school and college football games, etc, from which the Bears gain zero revenue.  Phillips and the Bears totally blew it!

The Bears are also behind on their media contracts:

Even in the revenues that are unshared with the rest of the NFL, the Bears have been laggards. The Patriots have half of Chicago's metropolitan population (4.5 million versus Chicago's 9.6 million). Yet New England made an estimated $12.8 million in local broadcast revenues (TV and radio) last year, compared to the Bears' $8.3 million.

But as Forbes points out, where the Bears lack in making money, they seem to excel in saving it:

If the Bears have been good at anything, it's at keeping payroll down. Since forbes began tracking team values in 1998, the Bears have never made the NFL's top ten for paying talent.

Maybe they're trying to change that perception with recent free agent acquisitions like Julius Peppers and contract extensions for Jay Cutler and Robbie Gould?  Maybe they'd be better off by doing a better job drafting and not having to go out and pay top dollar for hired guns.

The best opportunity in football

Some people see problems, I see potential.  If I had a billion dollars, this would seem like a slam dunk investment.  Make a couple of shrewd moves and Forbes projects that the team could be worth an added $800 million.  That's nearly an 80% return on investment. 

Of course, the McCaskeys aren't going to kill the goose that laid the golden egg.  They're going to milk this puppy for all it's worth:

After this season George McCaskey, who was named for his grandfather and is the eighth of Virginia's 11 children, will become chairman. George, 54, joined the team in 1991 as the director of ticket operations. He's been attending NFL owners' meetings with Michael and team financial meetings with Phillips. "I intend to continue the family's effort to continue George Halas' legacy," says George. Phillips is expected to maintain his current role.

George insists that the family intends to keep control of the team and that the succession plan has been "carefully thought through," though they refuse to provide any details.

If they sold the team, the McCaskeys might all have to go out and find jobs.  Then again, if they split $1 billion up, they might be able to get by.

So I'm passing the proverbial hat around.  All we need to do is find 1,000,000 Bears fans and get each of them to put $1000 each into the pot.  On second thought, someone get Mark Cuban on speed dial!



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Doshi said:

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But Cubes owns the Mavericks, and he'll never give that franchise up. NFL rules state that an NFL owner cannot own another sports team in a competing NFL city. So, in order for Cubes to buy up the Bears, he'd have to give up the Mavericks, and that's NOT going to happen.

Making the Bears a fully public company-team? It's worked once, and only once, in the history of American sporting teams. Ever heard of a little team up north in the minuscule town of Green Bay? The city of GB owns the team, and runs it essentially like a public company. Though I like the idea, I don't think it'll work in a 12 million metro area like Chicago. BTW, I'd definitely buy in on a grand or two if it would leave me with a couple tickets a year (not even Season, just one or two games!)

Mike Burzawa said:


Doshi - haven't seen you in a while. Welcome back!

I'm being a little facetious in calling for Cuban but you get the idea. Who else was in the bidding for the Cubs? Maybe Da Coach should buy the Bears!?!?!

I don't know if a fully public team is the answer, but someone - ANYONE - other than the McCaskeys has to be an improvement.

Bears STH said:


Great post Mike. Even I can't put a positive spin on this...

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