The feel-good factor from the Cubs World Series win may be palpable, but the economic benefits to the city are more difficult to quantify.
Aside from the Ricketts family and the Cubs organization, the biggest immediate beneficiaries were the bars and restaurants of Wrigleyville, says Danny Ecker, who covers the business of sports for Crain’s Chicago Business. Some bars were reportedly charging as much as $200 admission.
“The bars and restaurants in the area got the biggest lift of anybody just by being able to charge what they could for people just to get in,” Ecker said. “That was a huge boost to businesses in that area.”
He also expects a boost in merchandise sales that could add millions of dollars in revenue for the franchise and notes that this year the Cubs actually sold more than five times as much merchandise online as the average Major League Baseball team.
But he says the biggest boost for the Cubs organization coffers will be the extra money from TV broadcasting rights.
“In terms of the big picture, the value that the Cubs get when they talk about the $2.2 billion that Forbes values the Cubs at, that’s tied more to the rising value league-wide of national broadcasting rights deals,” Ecker said.
He says the timing of the Cubs win will really strengthen their hand when negotiating future TV deals and potentially launching their own TV network.
“The best thing overall is the timing of this in that it syncs-up well with the fact that in the next 12-14 months we should know whether the Cubs are going to form their own television network,” Ecker said. “The best thing for them is that they have such higher leverage now having proven that the team can win. They’ve got so much more leverage in negotiating of advertising rates which is really important, but also in negotiating whether cable providers would actually pay them per subscriber to carry the Cubs network.”
He also says that he’s expecting ticket prices to rise next season.
“I’m almost sure of it. They would be kind of crazy not to, to be honest,” Ecker said.
Robert Baade, professor of economics and business at Lake Forest College, who has a particular interest in the economics of sport, does not expect the World Series win to do much for the broader economy of the city.
“Boosters will argue that this has just been a bonanza for the city, and I don’t want to rain on Chicago’s World Series parade, but I think you have to look at it in a much more sober way,” Baade said.
“Most of the people who view the series are from metropolitan Chicago, so what you see as a consequence is that you are reallocating entertainment dollars. If people are going to spend time and money spectating at the World Series it means there is less money for other things.”
Baade also notes that with many of the Cubs players not living in Chicago year-round, much of the money that they earn from the win will not be spent in the area.
“If players’ primary residences are not in Chicago then the money that they earn from the World Series – and remember a good fraction of any money generated is going to go to players – that money is going to be repatriated and spent at their primary residences and not in Chicago,” Baade said.
And finally, Baade notes that all the late night revelry also has an economic consequence.
“Just imagine the number of people who changed work habits, who partied maybe a little bit more than usual and what the implications are for economic activity in the city of Chicago.”
Nov. 3: Cubs Chairman Tom Ricketts talks about hiring Theo Epstein to run the baseball operations, and tells us what's in store for the Wrigley Field hotel and plaza.
Oct. 27: We talk through the TV ratings and the business side of the Cubs' success with Crain's Chicago Business reporter Danny Ecker.
Oct. 26: For Chicago’s long-suffering fans to get in on the action of the Cubs’ historic championship run, they’ll have to pony up the big bucks.