Noted Cubs fan Scott Simon interviewed new Cubs owner Tom Ricketts on NPR’s Weekend Edition Saturday.The interview is chock full of interesting insight about why billionaires want to buy sports teams. One quote jumped out at me. Early in the interview, Ricketts claims
“You don’t buy sports teams just because you’re looking at the investment side of it.”
Really? Rod Fort pointed out in IJSF 1.1 that the average return from owning an MLB team in North America over the last 100 years was significantly higher than the rate of return on stocks. Mike Mondello and I pointed out in IJSF 3.2 that the increase in franchise values was larger in the last 20 years across all professional sports in North America than in earlier periods, even when accounting for changes in the characteristics of teams. This evidence suggests to me that the investment side of it must be very important. I chalk this quote up to the usual team owner penchant for not revealing their true motivations. Fans don’t want to think that the owner of their beloved local team is in it for the bottom line.
There is also an interesting discussion of the financial benefits of related real estate development projects. The Cubs are considering the purchase of property adjacent to Wrigley Field in order to develop it for some unspecified use. Ricketts alludes to expansion of space for players and coaches. At least Ricketts has no plans to replace Wrigley, unlike the recent travesty in the Bronx.