Cubs on List of MLB Teams in Violation of Debt Service Rules
By Chuck Sudo in News on Jun 3, 2011 7:40PM
Cubs spokesman Peter Chase isn't saying why the Chicago National League Ballclub is one of nine teams in Major League Baseball in violation of the debt service rules that were established with the most recent collective bargaining agreement nine years ago.
Under Tribune Co., the Cubs were long considered to be one of the more financially stable franchises in MLB. But that's because Tribune was adept at marketing the Wrigley Field Experience. Since the Ricketts family took over, they've had to deal with declining revenues and, this season, attendance numbers. The team currently has a number of player salaries coming off the books this season and $120.4 million in player salaries committed beyond 2011. Speculation is that the Cubs inclusion on the list has to do with the financing stipulations between the Rickettses and Tribune Co. when they took over in October 2009. The $845 million deal included partial ownership in Comcast SportsNet and the Friendly (but crumbling) Confines.
Under the terms of the Collective Bargaining Agreement, clubs cannot borrow to pay existing debt but must raise revenue or reduce expenses to pay existing non-player-related debt. They're also intended to limit a team's debt to 10 times its annual earnings. The sports talk bloviators have also been having a field day with this video of Ricketts family patriarch Joe Ricketts explaining why he decided to join in his son's efforts to buy the Cubs. The spin has ranged from Tom Ricketts being mesmerized by the Wrigley Field Experience to the entire family being fleeced by Tribune Co. As Joel Reese noted in his Cubs season preview, it appears as thought the Rickettses have an eyee on the future of the club. But the lack of buzz surrounding the team isn't helping them in the present and could put a crimp in their plans.