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Cubs chairman talks marketing, baseball and business strategy

by Michael Krauss, president-Market Strategy Group

Tom Ricketts
Chairman
Chicago Cubs

Tom Ricketts’ vision is simple. He wants the Chicago Cubs to win the World Series.

The chairman of the professional baseball team laid out his plan at a BMA Chicago luncheon on January 23. To achieve the vision, he must address a series of challenges he calls his Five B’s—issues that stretch from business operations and branding to the historic ballpark that is the team’s home field.

His first challenge: “The prior owners had underinvested in the business and organization,” Ricketts said. “We needed to build out a robust business operation.”

Ricketts added new executives including a new head of sponsorships, a new head of ticketing and a new CMO. In all, he’s added 77 new employees, yet the Cubs have the smallest front office in baseball.

His second challenge was a big “B,” Ricketts said. It was baseball.

“Buying the Cubs was like buying a house the day after a great party. You walk in and there are beer cans and pizza all over the place. The first season we were in charge was 2010. We had the third highest payroll in baseball, the oldest team in baseball and no realistic prospect of winning a championship,” he said.

The farm system also posed a problem. “We did research on baseball performance,” Ricketts said. “The Cubs have the highest variance, year to year, in performance of any team. We’d win 90 games then lose 90 games the next year.”

Ricketts' analysis suggested the results were a function of putting too much money into older free agents and not spending on younger players in the draft. The business model “would not sustain success on the field,” he said.

He assigned two outside experts to independently analyze the team’s performance. He conducted qualitative interviews with 20 subject matter experts including fellow owners, managers and agents. And he hired Theo Epstein, who had rejuvenated the Boston Red Sox, as president of baseball operations.

New facilities also are key to resolving the baseball performance issue, Ricketts said. The Cubs invested in new facilities in the Dominican Republic, where many young players are discovered, and in Mesa, Arizona, where the Cubs are a big factor in the Spring Cactus league.

The Cubs also standardized their training and player development methodologies and they’ve hired Richard Renteria to manage the team, Ricketts said.

To create a great organization Ricketts needs great players. He has reversed the prior owner’s practice of investing in older free agents, he said. “Smart teams know that the best way to win is to bring in young talent.”

Ricketts third issue: The ballpark, a 100-year-old Wrigley Field.

“We are trying to preserve and improve it,” he said.  “There are a lot of challenges. It is the most special place in American sports. The best place to watch baseball.  It is a lot more than just steel and concrete. It is our home and we want to preserve it for our kids and grandkids. We want to improve the fan experience.”

His fourth challenge is broadcasting. Local sports provide a lot of content that cannot be easily time shifted, as other television programming can be.

The value of baseball media rights have grown and provide a financing opportunity for the Cubs. They have contracts with Comcast and WGN, and the contract with WGN is up this year.

Ricketts is taking a long-term view in negotiations. Other teams are farther ahead in garnering media revenue, he said. The Cubs must improve to be competitive.

His final issue: Branding or marketing.

“One of the first things we did was reinforce to our people that we need to have the best service,” he said. “We might be having a tough season, but no one at Wrigley should be having a bad day.”

He brought in The Disney Institute to train customer-facing personnel. He created incentives and rewards for ushers. And he did considerable market research on the fan base.

The research showed that team affinity develops by the age of 12. Young fans are important to the long-term health of the Cubs.

Ricketts walks through the ballpark four or five innings each game and gives out balls to young children and engages with fans. He doesn’t want to be the kind of owner who wears a suit and sits behind the Plexiglas in the owner’s box.

Based on his research and his ballpark walks, the team launched new mascot Clark the Cub.

Ricketts previewed the Cub’s marketing efforts for the season.

“We’re celebrating the 100th anniversary of Wrigley Field this year and calling it the party of the century,” he said. “We sat down and put together a great program for the summer.”

In addition to television commercials, Ricketts will energize the ballpark on April 23, the anniversary of its opening. The Cubs will celebrate each succeeding decade of baseball over the next 10 weekend home stands. The team will break the record for wearing the most throwback uniforms, Ricketts said.

The Cubs are being more systematic in their selection of corporate partners, he said. “The goal is to find fewer partners, but ones that care and want to engage in a special way.”

Rickets expects this year to be a springboard for the future. “If you are not on the season ticket holder list,” he said, “put your name on there now.”

 
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