11/21/24
May 01, 2003
The Chicago Cubs: Baseball's Enron?: Seems the Cubbies are taking advantage of Illinois' scalping law to "sell" $45 tickets to their games to a brokerage agency staffed by team executives. The broker can sell the tickets for up to $1,500 a pop. Under baseball's revenue sharing plan, the Cubs should send 30 percent of revenues into the pot, but selling the tickets to the agency means they contribute 30 percent of $45, not $1,500.
Greed.
posted by dusted at 05:23 PM on May 01, 2003
Tax evasion! I think of the brokerage agency ploy as the rich stealing from the rich, no matter what millionaire owns the Brewers, Twins, or Cubbies, and frankly I don't care too much... But the part about the fan not being able to get the $45 ticket (after sleeping in his car to be sure he was early in line) while the tickets flew down the block to be resold. is terrible
posted by 86 at 05:45 PM on May 01, 2003
My big question is Who the hell would pay 1500 bucks to see a Cubs game? Or any non-World Series game, for that matter...
posted by Bernreuther at 11:14 PM on May 01, 2003
Not to mention the Cubs' very existence as something of a tax/revenue shell game for the Tribune corporation... the Cubbies "lovable loser" tag wears thin when (as therev realizes) they pull the same, if not worse, stunts than greed mongers like the Yankees. For those who haven't read it: in early 2002, Doug Pappas wrote a must-read, great series on the financial side of the game (and some of the misconceptions behind the multi-billion-dollar industry that is MLB) for the baseballprospectus website, including some snippets on the Cubs:
Four major-league clubs are owned by large national-media companies: the Angels (Disney), Braves (AOL Time Warner), Cubs (Tribune Company), and Dodgers (News Corporation/Fox). This is a red flag for analysts, because the common ownership of a baseball franchise and a related enterprise can allow the parent company arbitrarily to apportion revenues and expenses between the companies. In particular, an entity that owns both a baseball team and its local television outlet may well charge the TV station less than fair market value for the club's media rights. This strategy not only allows the club to cry poverty during baseball labor talks, but artificially inflates the station's profits, a figure closely watched by stock analysts. All four of these clubs report suspiciously low media contracts, but in only two of these cases do the suspicions appear justified. ... That leaves the two national superstation teams, the Braves and Cubs. The undervaluation of the Cubs' rights is especially apparent, as according to MLB, they earned $6.5 million less than the crosstown White Sox, despite a superior radio deal and more games airing on the WGN superstation. An MLB spokesman recently told the Chicago Tribune (another part of the same empire) that the superstation part of the Cubs' TV deal is valued separately from the local broadcast rights. The Cubs keep about 30% of the superstation money, with the rest paid into the common pool, an arrangement that only increases the incentive to undervalue the Cubs' contract. As MLB admits that the Cubs would out-gross the White Sox if the Cubs' portion of the superstation money was added to the local contract, the superstation share of the Cubs' TV package is worth at least $22 million, possibly much more.
posted by hincandenza at 11:15 PM on May 01, 2003
I was going to post something trying to defend this action in the spirit of argument, but then I asked myself one question that made it seem very wrong: 1)What would your reaction to this be if the Yankees were doing it? And it became clear that this should definitely be stopped immediately.