Playing Hardball with the Rooftop Owners: The Cubs’ Case for Wrigley Field Expansion

By: Jack Meyer

Originally Posted: November 23, 2014


Wrigley Field has been the home of the Chicago Cubs since 1914 and is the second oldest ballpark in Major League Baseball. The iconic venue has remained largely unchanged throughout the past century, and only recently has Cubs ownership declared a substantial renovation a necessity. The Cubs have not won a World Series since 1908 and the Ricketts family, who took over ownership of the team in 2009, view an out of date ballpark as a serious impediment to fielding a winning team. The Rickettes have proposed a privately funded $575 million renovation to Wrigley Field. The renovation is expected to be completed in four phases beginning in 2014 and lasting until 2018 which will upgrade the stadium in a variety of ways such as providing additional seating capacity with outfield bleacher expansion, revenue generating advertising signs in the outfield, and a new clubhouse designed to attract free agents to the team. The biggest roadblock is a complicated contractual situation with the rooftop owners who signed a contract with the Cubs in 2004, whereby the owners pay a percentage of their profits to the Cubs for the right to sell admission to their rooftop views of Cubs games. The Wrigley Field renovation plan would obstruct the views of the rooftop owners who have erected bleachers on top of buildings outside of the stadium. In short, “Ricketts says the signs will generate the advertising dollars he needs to build a winning team. (The Cubs began this season with a payroll ranked 23rd in the league.) The rooftop owners say the signs will put them out of business.” After an inquiry into the contractual language as well as an investigation into the business ramifications, it becomes readily apparent that the Cubs should continue with the Wrigley Field renovation despite the rooftop contract.
In order to properly understand the conflict between the Cubs and the rooftop owners, one must first possess a basic knowledge of the history of Wrigley Field. Unlike most modern stadiums which are constructed in large open spaces adjacent to massive parking lots, Wrigley Field sits in the middle of a residential neighborhood on Chicago’s North Side. Because of this, a few fans in the 1970’s and 1980’s who happened to live in the apartment buildings across the street from Wrigley Field began to watch Cubs games while sitting in lawn chairs on top of their roofs. This was a charming and unique feature of the ballpark and television cameras would often capture small groups of people grilling and drinking beer on their rooftops on sun drenched summer afternoons. Those quaint and charming images are now distant remnants of a bygone era and the rooftops of today have evolved into sophisticated commercial enterprises generating $20 million annually with massive bleachers constructed on top of the same roofs once inhabited by a handful of primitive lawn chairs.
The transformation of the rooftops into big business prompted a lawsuit by the Cubs in 2002, claiming that the rooftops unfairly profited off the team by competing with the Cubs for ticket sales. The lawsuit was settled in 2004 with a contract which has formed the basis of the current controversy. Under the terms of the contract, the rooftop owners were to pay the Cubs 17% of their annual profits in exchange for the right to sell tickets to Cubs games. The contract also provided provisions in the event that renovations to Wrigley Field would obstruct the view from the rooftops. These provisions are crucial to the Cubs’ case because in every contract dispute it is imperative to look at the intent of the parties at the time the contract was made. The specific language of the contract states:


“The Cubs shall not erect windscreens or other barriers to obstruct the views of the Rooftops, provided however that temporary items such as banners, flags and decorations for special occasions, shall not be considered as having been erected to obstruct views of the Rooftops. Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement, including this section.”


The clause regarding “windscreens and other barriers” could potentially be seen as ambiguous and the rooftop owners would likely attempt to make the case that the outfield signage and videoboards proposed by the renovation would violate the contract by falling under the umbrella of “other barriers.” At the time the contract was signed in January 2004, the Cubs had used windscreens to block the rooftops’ view of the ballpark during the 2003 season while their lawsuit against the rooftops was pending. In the event that the rooftop owners would challenge this provision, a judge would likely interpret the contractual language narrowly, as referring specifically to windscreens or other similar barriers, and not large videoboards or outfield signs.
Wrigley Field expansion was certainly foreseeable to the parties at the time of the contract and there are other provisions which deal more directly with this possibility. For example the Cubs agreed to reimburse the rooftop owners for construction costs if higher rooftop bleachers needed to be constructed due to Wrigley Field expansion. The contract also contained a provision regarding the Cubs’ obligation if Wrigley Field expansion made the rooftop businesses no longer viable, but it is noteworthy that this provision expired in 2012. Thus, both parties were aware of the potential for Wrigley Field expansion, and the rooftop owners cannot argue that the expansion was something that which figuratively (and now literally) came out of “left field.”
Of immense importance is the clause referring to Wrigley Field expansion being approved by a government entity. This, more than any other clause, can be seen as a death blow to the rooftop owners. Wrigley Field has been designated as a landmark by the Chicago City Council, meaning that the Cubs needed approval from the city to expand Wrigley Field. The City of Chicago approved the renovation plan in July 2014 ; thus the expansion of Wrigley Field is not a violation of the rooftop contract because it was approved by “governmental authorities.”
The Cubs have recently began construction on the four year renovation of Wrigley Field and Cubs Chairman Tom Ricketts has stated publically that he intends to continue with the plan of erecting outfield signs and videoboards despite the rooftop contract. Ricketts is right to continue with the renovation plan for several reasons. First, the express and implied language in the contract favors the Cubs. Second, the Cubs have far greater financial resources than the rooftop owners and are likely to win a drawn out legal battle. Third, even if in the rare event that the Cubs would lose in court, the projected revenues of a renovated Wrigley Field make a breach of the rooftop contract an immensely better business decision than adhering to the current contractual constraints.
The business model behind the Wrigley Field renovation is relatively simple. The new outfield signs and videoboards will generate advertising revenue that can be used to pay higher player salaries and in turn make the team more competitive. A more competitive team, coupled with the Cubs’ already strong national fan base, will likely lead to a highly lucrative television contract when the Cubs’ current television deal expires in 2019 . (Ideal timing with the renovation scheduled to be completed in 2018). For a point of reference, the Los Angeles Dodgers recently signed a television contract with Time Warner worth $7 billion and it is a widely held belief that the Cubs potential contract will far exceed that of the Dodgers. Fueled by the revenues of this contract, which are unmatched by any other team in a sport with no salary cap, the Dodgers have fielded one of the most talented rosters in the Major Leagues.
The Cubs have fielded an intentionally mediocre roster in recent years in order to amass high draft picks and to save money to spend on potential free agents in the near future. This mediocrity is a part of a larger plan which centers around a renovated Wrigley Field and the Cubs would not be able to complete this plan if they were to adhere to the current rooftop contract. Thus, public support would likely be on the Cubs’ side if they decided to breach.
Ultimately the only statistic that truly matters to a sports franchise owner is that of wins and losses. Therefore, it is not simply the renovation to Wrigley Field itself that matters, but rather, it is the after effects that are projected to come with the renovation that will add immense value to the team. The Cubs and the rooftop owners could still reach a settlement agreement at any time in the near future, but as it stands right now, the Cubs should continue the Wrigley Field renovation and force the rooftop owners to sue. Could the rooftop owners be the final impediment standing in the way of a legendarily elusive World Series title for the Cubs? Only time will tell, but Cubs fans have waited long enough.

 


[3] Id.

[5] Advantage Cubs: A Comprehensive Look at Section 6 of the Rooftop Contract, Wrigleyville Nation (Jan. 31, 2014), http://wrigleyvillenation.com/2014/01/31/dispute-rooftop-owners/

[6] Id.

[7] David Kaplan, Key Points of the Cubs’ Wrigley Field Rooftop Contract, (Jan. 28, 2014), http://www.csnchicago.com/cubs/kaplan-key-points-cubs-wrigley-field-rooftop-contract

[8] Advantage Cubs: A Comprehensive Look at Section 6 of the Rooftop Contract, Wrigleyville Nation (Jan. 31, 2014),  http://wrigleyvillenation.com/2014/01/31/dispute-rooftop-owners/

[9] Id.

[10]  David Kaplan, Key Points of the Cubs’ Wrigley Field Rooftop Contract, (Jan. 28, 2014), http://www.csnchicago.com/cubs/kaplan-key-points-cubs-wrigley-field-rooftop-contract

[11] Id.

[12] Ted Cox, Wrigley Field Renovation Plan Approved by Landmarks Commission, (Jul. 10, 2014),  http://www.dnainfo.com/chicago/20140710/downtown/wrigley-field-expansion-plan-goes-before-landmarks-commission-today

[13] Craig Calcaterra, Tom Ricketts Decides to go to war with the rooftop owners over Wrigley Field Renovations, (May 28, 2014, 9:45 AM), http://hardballtalk.nbcsports.com/2014/05/22/tom-ricketts-decides-to-go-to-war-with-the-rooftop-owners-over-wrigley-field-renovations/

[14] Danny Ecker, Cubs unveil new outfield signs, Wrigley Field renovation plan, (May 27, 2014). http://www.chicagobusiness.com/article/20140527/BLOGS04/140529849/cubs-unveil-new-outfield-signs-wrigley-field-renovation-plans

[16]Ryan Nakashima and Ronald Blum, Dodgers TV Deal: L.A. Club Inks $7 Billion Time Warner Pact, MLB to Determine Revenue Sharing Impact, (Jan 28, 2014 9:06 PM),  http://www.huffingtonpost.com/2013/01/28/dodgers-tv-deal-time-warner-mlb_n_2570677.html

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