Thursday, March 13, 2008

Illinois Wrigley Field Play--Still a Bad Call

Local news is breaking this week on the state's effort to acquire Wrigley Field. I don't think this purchase is necessary, nor a good deal for taxpayers. In this post from last December, I made the case for keeping the State of Illinois on the bench for this acquisition play.

The citizens of Illinois are in the running to acquire Wrigley Field. Which prompts this question: Why?
Chicago's daily newspapers report that the Illinois Sports Facilities Authority (ISFA) is exploring a purchase of Wrigley Field, home of the Chicago Cubs. The baseball team and Wrigley are being sold by the Tribune Co. The state isn't talking about buying the actual team, only the North Side stadium. Under that scenario, someone else gets the pleasure of owning the ball club and then hammering out a deal to play at Wrigley with the ISFA.
This is a bizarre turn of events, one that exceeds the ISFA's core mission and puts the public smack in the middle of what should be a clear-cut, private-party transaction--the selling of a healthy business to a willing buyer.
Historically, the ISFA has played the role of backer-of-last-resort, using its bonding authority to generate funds to pay for sports-related projects. It bankrolled construction of a new South Side stadium for the White Sox, when the team was making noises about moving to another state--I seem to recall Tampa Bay-St. Petersburg was building a new stadium and courting the Sox.
(When the ISFA came to the White Sox rescue, the idea was that the new ball yard would be an economic engine for the South Side, spawning a flock of new and minority-owned businesses. We're still waiting on that one.)
And the ISFA funded reconstruction of Soldier Field--in one of the ugliest rehab jobs in Chicago's history. It did so when the Chicago Bears were under fire from the National Football League to upgrade its facilities or risk losing a hefty amount of league-generated revenue.
But buying Wrigley Field? Getting involved in the sale of the Cubs?
This is not an endangered franchise, far from it. Moreover, Illinois taxpayers--who are the ultimate backers of ISFA bonds--shouldn't be involved in a deal that's already attracted a small parade of rich people willing to pay up to $1-billion-plus to acquire the Cubs and Wrigley.
The newspapers' say Tribune Co. thinks it can maximize its price by selling the team to one party and the real estate to another. Maybe it can, but the ISFA shouldn't be salting the way for TribCo. to win the highest price.
That's what investment bankers and management are suppose to accomplish.
In addition, I'm not so sure this is the best way to get top dollar. Anyone who goes to a Cubs game knows the Wrigley experience is important--maybe even crucial--to repeatedly packing the place with adoring fans.
Slicing the team from Wrigley may actually lower the franchise's value. Also, adding a third-party, like the ISFA, to the equation probably increases the deal's uncertainty and risk, which can translate into a lower bid. For example, anyone who buys only the team will not have immediate control over its own facility and will have to cut a long term arrangement with the ISFA for use and maintenance of Wrigley.
Like it or not, that new owner gets the ISFA as a partner, one that will share the revenue which the state will use to service bonds needed to pay for Wrigley upkeep and expansion.
Which leads to another question: Why should the ISFA bear the risk of rebuilding Wrigley, when any of the new owners would likely do the same?
Perhaps the state is truly concerned about the fate of Wrigley Field and believes a new owner will move the club, tear down the baseball palace and put up condominiums and a shopping mall. Or maybe Gov. Rod Blagojevich is truly worried about Wrigley's fate and he wants his administration to be remembered for saving the North Side baseball shrine, not some other things that have happened on his watch.
Yet considering the aforementioned "Wrigley impact" does anyone think this is a necessary option? Be assured, there would be hell to pay if any new owner decided to junk Wrigley and destabilize the surrounding neighborhood, too.
And even if the state were flush with cash and running like a top--which it isn't-- does it make economic sense for the ISFA to pony up for Wrigley? Especially when publicly-backed bonds are suppose to be used to finance more important matters, like saving public transit.
This just doesn't wash.
To preserve Wrigley Field, taxpayers need to keep buying baseball tickets, not the entire ball yard.

(Photo courtesy of Ken's Aviation's on


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