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The Cubs may have been swept in the first-round of the playoffs, but that one home game brought in $5.5 million, according to estimates.
By contributor
updated 10/10/2007 9:06:34 PM ET 2007-10-11T01:06:34

By knocking the Cubs out of the first round of the playoffs in three easy games, the Arizona Diamondbacks squelched the dreams of rabid Chicago fans. But the fact the historically hapless franchise made it that far did generate a bit of good news for one Chicago institution: Tribune Co.

As Tribune’s expected sale of the Cubs gets closer, the value of the 131-year-old franchise is hitting new highs. At the start of the season, Forbes magazine pegged its worth at close to $600 million. That number had soared almost $150 million from the publication’s assessed value in 2005, for a few reasons. One, the team added 1,800 seats to tiny Wrigley Field, bringing capacity to just over 41,000. And by selling space on two outfield doors to UnderArmour before the 2007 season, the Cubs squeezed more ads in a ballpark unaccustomed to them.

That short-lived trip to the playoffs will boost the team’s sales price, said Tim Mahon, principal at Anderson Economic Group in Chicago. In March, AEG put out a valuation paper on the Cubs that placed the team's worth at around $600 million. The playoff berth could add as much as 10 percent, or $60 million, to that figure, Mahon believes.

Why? A look at postseason cash helps show why. Even though the Cubs matched their worst-case scenario for the playoffs, hosting only one home game, Anderson Economic Group estimated a $5.5 million revenue boon for the team based on ticket sales (average price: $73), parking, souvenirs, and other purchases for that contest. Had the Cubs played in the World Series – which hasn’t happened since 1945 – AEG noted that the franchise would have raked in more than $60 million during the entire playoff run. To compare, Forbes estimated all Cub revenues for the 2006 season at $197 million, which means a long playoff postseason stint could count for more than 20 percent of total team revenue during a season.

Could that sort of bonanza fall in the lap of new owners? The fact the Cubs made the playoffs after a horrible 2006 season should persuade prospective buyers it is possible. During the last offseason, the team spent significantly on players, handing out a record $300 million in contracts, including an eight-year pact to outfielder Alfonso Soriano. While some might view that spending spree as proof that franchise expenses are out of hand, it is really an investment likely to generate more money in revenues from advertising, ticket sales and other sources down the line. It paid off quickly in one way, as the Cubs drew record attendance, nearly 3.3 million spectators, to Wrigley Field this past season.

“The success of the Cubs is absolutely impacting the value of the Cubs,” Mahon said. “The $300 million long-term investment (in players) hit on a majority of fronts. A new owner can have some confidence that the employees gained through this investment can contribute to generating economic income for the next few years.”

For any buyer, the fact that the Cubs are showing signs of becoming frequent playoff contenders is a huge selling point. During the Tribune’s 26-year ownership, the team has made the playoffs only five times. Combine the fact that playoffs in Chicago are rare and that the Cubs possess a starved fan base who last celebrated a championship in 1908, and that means any appearance is going to be a gold mine for new owners. Compare that to the Atlanta Braves, who earned so many postseason berths in a row (14) through2005 that they couldn’t even sell out games in Turner Field because fans yawned at another division series.

Aside from the bottom-line benefits of playoff possibilities, the postseason boasts an unquantifiable allure to buyers as well. When a rational businessman examines the books of a poultry company, emotions are not involved in the decision. Sports franchises are altogether different. As Mahon points out, an “ego premium” comes into play, which he believes can add about 25 percent to the value of a franchise, whether it is a playoff contender or cellar dweller. Think of a businessman who imagines being in charge of a World Series at Wrigley Field, and rational negotiations can disappear. 

The question remains whether the Cubs will be sold as one entity, or whether the team, 93-year-old Wrigley Field and the franchise’s 25 percent stake in Chicago-based television station Comcast SportsNet will be sold separately. If the entities are sold as one package, the cost could be as high as $1 billion. Tribune's Sam Zell, who bought the media giant earlier this year for more than $8 billion in a leveraged buyout deal, has stayed mum publicly on his desires.

Whatever the case, there is no shortage of suitors for the Cubs: John A. Canning Jr., head of  Madison Dearborn Partners and a good friend of Commissioner Bud Selig’s, is putting together a strong local consortium and is seen as the leading candidate. Dallas Mavericks owner Mark Cuban’s name has been floated, along with the unlikely one of New York Yankees third baseman Alex Rodriguez (how would he renegotiate his own contract?).

Whoever buys the venerable franchise (which went for only $20.5 million in 1981), this much is clear: Aramis Ramirez, Derrek Lee et al. may have flailed at the offerings from Diamondback pitchers, but just appearing on the postseason stage guaranteed that the offerings to buy their team will be of World Series quality.

David Sweet, a sports business writer in the Chicago area, can be reached at


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