Tuesday, February 05, 2013

Changing the Argument

This is not a good time to be a rooftop owner.  It’s not only that they have they been semi-vacant the past few years as the Cubs have been a painful on-field product to watch.  They’ve also been in a private battle with Cubs management on the future of their business model.

Now, with the announcement of new, and very reasonable, plans to renovate Wrigley Field, the Rooftoppers went public with their argument with a press conference.  At that event, they not only threatened to sue the Cubs to protect their ability profit from a product they don’t own, but also insulted Cubs ownership.  Cubbie Bear owner George Loukas said he was once Ricketts' landlord but would've jacked up the rent if he knew he'd eventually be Cubs owner.  They also kicked a Cubs PR representative out of the meeting.  One guesses they knew how well their position would stand to criticism.  Or maybe they don’t.

The opinion here is that the Rooftoppers don’t have a leg to stand on.  They are freeloaders on the Cubs’ product.  Well, they were freeloaders until they signed a contract with the Cubs that gives 17% of revenue to the Cubs in exchange for a business arrangement.  The details of this contract were not publicly available.

Until yesterday.

Phil Rosenthal’s report in the Chicago Tribune suggests he’s viewed at least a portion of that contract.

"...the contract allows that "any expansion of Wrigley Field approved by governmental authorities shall not be a violation" of the deal, which means if Mayor Rahm Emanuel gets behind the Ricketts, look out.

the contract calls for the Cubs to help hype them in a variety of ways, advancing the argument that the rooftop clubs are part of the appeal of Wrigley.

There's a requirement that "WGN-TV will show and comment upon the Rooftops' facilities during the broadcasts of Cubs games and the Cubs will request other Cubs television broadcasting partners to do the same." There's also a mandate for the team to "include a discussion about the Rooftops on their tour of Wrigley Field" and to include stories positive about the Rooftops in The Vine Line," the team's publication."

Be sure of one thing: If Rahm can close a deal to get $300 million spent on a Chicago landmark and $-0- comes from the city, he’s going to be behind it.

Rosenthal makes one other point:

"Rooftop owners talk about the taxes they pay, the people they employ, the money they've invested to make their businesses safe and viable, the character they add to the neighborhood."

Actually, they really haven’t made this full argument.  They’ve spent most of their time talking about the character aspect.

That’s the wrong argument to make.  It makes the Rooftoppers look self-important and unsympathetic.

But there is a way they can turn this around.  That way is to focus on the contract and the money they’ve spent.

The angle they need to take goes like this:

Yes, we are freeloaders.  Or we were.  In 2004, we signed a contract that made us partners with the Cubs.  Since that time, knowing we had a 20 year deal in place, we spent millions of dollars of our private money to improve these properties.  We’ve hired a lot of people.  We’ve paid a lot of taxes.  And we’ve give the Cubs a lot of money.  All we are asking for is this: Give us the chance to complete the contract we signed in good faith.  It would set a terrible precedent for Mayor Emanuel to back the interests of billionaires from Nebraska while ignoring small business owners, who have been in Chicago far longer than the Ricketts, and who never once asked for a dime of government money.

We pledge to work with the Cubs to increase their revenues they generate from us.  We believe that by the end of the contract the Cubs will recognize the value we add to their brand, both in dollars and aesthetics.

Please, Mr. Mayor.  Don’t confirm our worst fears that your government only backs those who can buy influence with you while turning your back on long time community investors, employers and taxpayers.

Frankly, it’s unlikely this would work.  Most likely, the Rooftoppers have already burned their bridge and they are about to be steamrolled.  But if they turn the argument from insults and neighborhood beauty from one of small business only striving living up to a deal signed in good faith, they might  have a chance to get public opinion on their side.

And, with that, a mayor who wants to be re-elected in two years.

In addition to increased revenues from advertising there is another angle to consider. Assuming the Cubs field a winning team in the next couple of years, the rooftops represent added capacity Wrigley Field doesn't have. The seats inside are capped but there is plenty additional seats (1-2k?) right across the street that will sell out if there is a playoff team inside. So the Cubs should bet on their team being better to get a bigger slice of the shared revenue.
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