Did Tom Ricketts' Family Buy Too Much House?

Did Tom Ricketts' Family Buy Too Much House?

So I've got this friend. In order to protect his identity, I'll just call him Jehosephat, or J for short. J had a good job and was really successful, had a nice little family. And just like every other card-carrying WASP-y suburbanite, he wanted his share of the American Right.

I say "Right" because at some point "Dream" stopped being accurate anymore. At the risk of getting all political on everyone's asses, I think the concept that it was everyone's God-given right to put themselves underwater on a mortgage was a huge part of the financial crisis we're still digging out of.

But I'm not here to rake muck or broach an incendiary topic any further, just stating an opinion. Now, my friend J, he was more than capable of keeping up with a normal mortgage in a normal neighborhood. But like Yertle the Turtle before him, J was not happy with a 3-bedroom ranch in a subdivision from the 70's.

So he took advantage of the the fact that lenders were handing out huge mortgages like candy and he bought way more home than he really needed. I don't know all the specs, but it had to have been around 3,000 square feet, with all the trimmings and trappings. Dude was stoked, his wife was happy, kids were loving it.

And as his friends, we were more than willing to take advantage of our buddy's new place for parties, big-game watching, etc. But the weird thing was that his 3-car garage was still only 2/3 full, and with his aging sedan and his wife's grocery-grabber minivan.

The parties that had been so frequent when the house was first purchased grew farther apart, and when they did come around the beer had gone from craft to macro. No big deal though, right? That's what happens when the kids get older and get into more activities and you just fall away from the partying and such. Right?

But then he started begging off of get-togethers at other people's houses. When I stopped by one time, I noticed that his fence was all kinds of jacked up from a storm that had occurred months before. His car had a doughnut tire on it too, but I thought nothing of it at the time.

It wasn't until a short while later that we ended up finding out, through a second-hand source no less, that J had actually taken on a part-time job and was working three nights a week and every other weekend. While no one ever said anything up front, I think the realization hit us all pretty quickly. J had simply gotten in over his head.

He had thought that the money train was going to keep on rolling, but a lot of the bets he had placed on himself just crapped out. There was a promotion that got put on hold, an annual raise that amounted to little more than pennies per paycheck, and the never-ending stream of life upon which bills and responsibilities floated like so many pieces of driftwood.

Jehosephat was living it alright: Debt Rules Everything Around Me, DREAM! Pay the mortgage, crippling interest rate, y'all! And now all he could do was pray to wake up.

I'm sure this story sounds familiar to many of you. Maybe it's happened to one of your own friends or family members; maybe to you. But the fear I've got is that this is exactly what's taking place at the venerable old residence located at 1060 West Addison St.

Tom Ricketts and his family purchased (used loosely, as it's still not technically a sale at this point) the Cubs and Wrigley Field, along with an interest in CSN Chicago in a deal that placed them under a wearisome burden of debt. I can only imagine Pete the Planner's reaction to such a financial decision.

At first I figured it was all just a part of the deal, that any potential buyer would have had to abide by the shady constraints of Sam Zell's sale. And while it's true that Zell dictated the terms, I'm wondering whether the Ricketts clan hasn't perhaps gotten in over their heads.

Maybe I'm way off base here, like Emilio Bonifacio leading off of first, but the lack of substantial movement on the Wrigley renovation front has had me second-guessing my old beliefs just a bit. Sure the Cubs have put up new training facilities in the Dominican (unsure of the financial implications) and have created the Crown Jewel of the Cactus League with Cubs Park in Mesa (which was heavily publicly funded).

But what of the promises of a jumbotron, hotel, retail space, and improved player facilities at Wrigley? I've gone on record as saying that I believe Tom Ricketts lacks sac, that he's afraid to make a move that will upset the Wrigleyville apple cart, or beer cart. But what if it's more than that?

What if the real reason Tom's not telling us anything and the reason he's not making moves is because he can't? If it's because, like my buddy Jehosephat, he's tapped out and in need of a part-time gig? Huh, what was that about looking for a group of high-net-worth minority investors?

That's a whole paragraph of questions to which I don't really have the answers. And maybe it's just a matter of Tom being a people-pleaser, a guy who doesn't want to get his hands any dirtier with Chicago ward and city politics than they already are. Maybe this is just a stall job meant to keep fans at bay until reinforcements come.

And come they will, but when will they draftees be joined by battle-tested vets who don't mind doing a little merc work? I'm beginning to lean more and more toward the fact that the structure of the sale isn't the only thing holding the Cubs business side back. It might be that Tom's simply tapped out right now, period.

The good thing is that the city of Chicago literally cannot afford for the Cubs to continue to hemorrhage fans at their current rate. I've seen some people calling Bonifacio Ebola, and that's exactly what it appears the seats at Wrigley have contracted. The ignorant love to say that the Cubs don't need to win because they sell out every game, but a quick look at the stands for the home opener will tell you that's not true.

And don't give me the cold-weather bullshit. This is CHIBERIA. I'm pretty sure the people of the Midwest are made of strong enough stuff to sit outside in the 40s for a baseball game. So while it's not as ugly as The Cell, Wrigley was far from capacity, even with Ryne Sandberg in town.

I want to be wrong here. I want for the Ricketts family to simply be looking for ways to accelerate the timeline on an unenviable, but still inevitable, post-sale financial clock. But the more questions Tom dodges, the more turds he polishes, the more I have to think that he's simply covering.

Otherwise, why not come out and tell the fans the deal? If you tell us what's going on and explain the process in layman's terms, you buy some patience, even more than the gracious amount already being shown. But by hiding behind empty words and allowing bloggers to expose the truths of the situation, you leave it in the hands of the people to determine their own truth.

Tom, if you need some help, all you gotta do is ask, brother. I get $5 for every $1,000 I put on my Disney Visa (or something like that), and my kids love Disney World. That said, I think I can earn about $1.25 toward my next trip to Orlando. So what'dya say? My money'll buy you another urinal or something, maybe even a couple of LED bulbs on your video board.

But seriously, just let us know what's going on; we'll understand. But if this thing keeps dragging out and we just keep hearing the same old tired story, we're just going to tune it out. And if you think hearing angry or confused feedback is bad, try hearing nothing at all. Please, J, just let your friends know what you need.

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  • I think it is more like "This Old House." Tom bought some 100 year old house in some Boston suburb (often Newton), for $2 million, thinks he is going to subdivide it into 5 condos, gets permission to do so, and then finds out that the foundation is rubblestone (it always is), the joists are rotten, it is infested with carpenter ants that don't belong to the union, and vandals have stolen everything but the toilet paper. It needs about $5 million in work, so he calls up Kevin O'Connor, and hopes for product donations from Home Depot, some granite counter top company, some HVAC manufacturer,. some German manufacturer of septic treatment systems based in Tinley Park, etc. However, in Tom R's case, the neighbors are still picketing and AB InBev is not willing to make a significant product placement until Tom builds a Jumbotron on his own dime. As you noted, his mortgage got underwater (although he borrowed after the crash), so he is stuck begging. Maybe Rich Trethewey (or his sons Ethan and Ross) will come out to rod the sewer from the trough and install a new urinal valve, but he can't get Mark the Mason out to do more substantial repairs, so he is stuck.

    In that light, if the reports that the Cubs are worth $1.25 billion after The Ricketts Family paid $850 million have any substance, maybe he ought to sell and take his profit now. But given that Mark Cuban said that the club was only worth $500 million, I'm not so sure about the reports.

    Unlike Arizona, he is not going to get Chicago politicians to build him a replica of Wrigley Field, down to the Jewel-Osco rolling sign, and I doubt that the value of the team went up $400 million just because he got Arizona to do that and the Sod Father to fix the playing surface.

  • The renovation is in everyone's best interest, including fans, players, owners, rooftops, neighbors, and the city, but it's complicated moving forward so that it works for all parties without hard feelings. I think it's just the process and Tom wants to get it right. He might have bought .too much house' but would issues and the timing be different if he had not?

  • In reply to 44slug:

    This is just apologia. He was supposed to have broken ground last October, but didn't. Then, all the sudden the jumbotron became an impediment, resulting in losing a year. If he really intends to stay in Wrigleyville, he could have started the clubhouse work and the hotel, at a minimum. So, either he doesn't have the money, or he is waiting another 2 years to play the Rosemont card.

  • I think the fact that opening day was Friday, April 4 and they expect to be playing baseball there until late September is at least partly responsible for the observed "lack of substantial movement on the Wrigley renovation."

    Even the most well-capitalized firms must decide whether it makes more sense to finance a given investment through incurring debt, raising equity or an injection of owners' capital. Your speculation on their motives is only one of several plausible scenarios.

  • No matter the threat of lawsuits, I just couldnt fathom Reinsdorf not squashing these guys like bugs.

  • In reply to Tom Loxas:

    No, he'd hire Jim Thompson to squash them like bugs.

    At least Reinsdorf got New Comiskey and his investors' half of United Center built. Of course, in both cases, there weren't many neighbors with which to deal, although IIRC, a couple of properties had to be condemned.

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    I do feel that I need to finish the analogous story I started, so I might get something working. But yes, this is just one of several plausible options. It could very well be that they're honestly afraid of a lawsuit, that they don't want to ruffle feathers. It could be that the debt service payments are more daunting that they had anticipated and that the expected drop in ticket sales and ancillary revenue would make that even more so. Who knows? But this was just a thought that came creeping into my head.

  • In reply to Evan Altman:

    There is a chicken and egg between Theo about admitting that the budget isn't there for the major league roster and the fans being less willing to pay to see what is being offered. However, if he thought this would be avoided by the "additional revenue streams," that's at least a couple of years away.

    Reported attendance of 25,000 is less than the 40,000 to which the Cubs were accustomed, but sure better than the 11,000 the Sox got Thursday for what should have been a rain out, and the Sox decided to give those 11,000 a free ticket.

    Apparently raising beer from $7.75 to $8.00 didn't do the trick.

  • In reply to jack:

    I truly believe if the CBA wouldn't have changed we would have seen more of "Parallel Fronts", that and maybe one more IFA like Ryu.

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