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.
Comments:
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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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