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Acceptance

Tuesday, October 5, 2004

Denial

Anger

Bargaining

Depression

Acceptance

Well, I think I have made it through the first four steps... I'm sure I'll suffer some relapses into stage 4... I always do in the winter... but its time to get going with step 5. Acceptance. Its what you do when whats done is done... and us Cubs fans are pretty good at it.

As some of you know, this website was not originally intended to be a blog... I couldn't help myself, because I love telling people what I think... but I don't have superior ability to see nuanced situations in games... nor am I a great writer... but with the offseason comes my true purpose for the Cubdom. Its business time folks.

While most people will say I am a kill-joy for discussing business related moves in the season, its all we have in the winter, and the full attention of baseball fans is left to watch the 30 clubs leverage their financial and operating strengths against their oponents. The offseason is when pennants are won and lost, and thecubdom.com's sole proprietor is ready to get going.

On this site, I am going to begin my analysis of 2005 by attempting to divine the Cubs likely budget for the upcoming season. Then I will use this budgetary framework to identify how much money we will have available for the team in '05. The only problem with this approach is that Major League Baseball teams keep their financial numbers very close to the vest. So, we will begin by examining the known facts (attendance, ticket prices, broadcast ratings, etc) and extrapolating revenues and expenses. I will then try to peg a profit calculation on the Cubs, use the Tribune company's earnings growth rates, and try to see if we can't estimate an operating budget for the '05 Cubs.

Let's begin. All year long, I have been using Team Marketing Report's Fan Cost Index to estimate average ticket price for the Cubs. However, I have gone back and used a weighted average approach to find the true number.

• This past year, the Cubs had 3 different pricing schedules, Value, Regular, and Prime.
• There were 8 value dates, 45 regular dates, and 28 prime dates.
• The Cubs announced attendance for 2004 was 3,170,154.
• Wrigley Field had a published capacity of 39,345 before adding 213 dugout level seats at the beginning of the year... thus a capacity of 39,558.
• The Cubs announced ticket prices can be found at this link.
• The Cubs media guide breakdown of seats at Wrigley is available in this post.

• I assume all of the announced dates, prices, capacity, and attendance numbers are accurate.
• I assume that 500 standing room only tickets were sold per game for 70 games during the season. Furthermore, I will assume the average price on these tickets was $10.00. I cannot find documentation of this, but I believe Wrigley Field standing room only ticket prices were $8, $10, and $12 for value, regular, and prime games, respectively.
• Since to my knowledge the Cubs only failed to sellout the three games against the Expos, and those were nearly sold out, I assume the Cubs sold 100% of their tickets. I believe my standing room only assumption is conservative on both the number and average price of tickets sold, so the 100% assumption is convenient if not accurate.
• I could not find prices for the family, and group sections. Nor could I find prices for the Mezzanine suites. I have assumed family and group section seats are the same price as bleacher seats, since they are actually in the bleachers. The small number of these seats (107 and 119) means they only account for about $500,000 over the course of the season if they are at bleacher prices. A reduction of 10% would then only be about $50,000... which is small enough I won't worry about it. I arbitrarily pegged the Mezzanine suite seats at $50, $100, and $150 for the three pricing schedules.

Using a weighted average method, essentially multiplying all of a particular seat types by its price by the number of games at that price for all of the price types, I got the following 3 average ticket prices.

• On Value dates, the Cubs have an average ticket price of $14.30, and recognize about $573,000 in ticket receipts for a sellout.
• On Regular dates, the Cubs have an average ticket price of $27.97, and recognize about $1,120,000 in ticket receipts for a sellout.
• On Prime dates, the Cubs have an average ticket price of $36.79, and recognize about $1,474,000 in ticket receipts for a sellout.

For the season, following my assumptions above, I believe the Cubs collected $96,261,000 in ticket receipts. (My average ticket price is therefore $30.04, well above TMR's $28.45).

However, not all of this money can be kept by the ball club. I know that 10% of these receipts are actually tax, and are passed along to the City of Chicago and the State of Illinois.

Well folks, thats all for today. I will continue with other forms of revenues in the next few posts, and then we will start estimating expenses after that.

• NLDS Game 1. Cardinals 8, Dodgers 3. Cardinals lead series 1-0.
• ALDS Game 1. Anaheim 3, Boston 9. Red Sox lead series 1-0.
• ALDS Game 1. New York 0, Twins 2. Twins lead series 1-0.

Posted by Byron at October 5, 2004 10:41 PM | |

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