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Baseball's Finances Are So Bad That It's Counting On the Chicago Cubs

As any baseball fan can tell you, there is no worse idea than counting on the Chicago Cubs. Yet that's exactly what Major League Baseball is doing by pinning its financial hopes on the famously failing team to rescue the league from its ballooning debt problem.

The league is hoping that the Cubs, who haven't won a championship in more than a century, can generate enough cash to cover the shortfall in its revenue sharing system. That system passes money to small-market teams so they can compete with their big-market rivals. The deficit has come about because MLB is trying to rescue two of its most prominent franchises -- the LA Dodgers and the NY Mets -- from bankruptcy. And neither of these teams is just a little broke.

  • From 2004 to 2009, Dodgers owner Frank McCourt and his wife used the team and related assets as collateral to run up an astounding $459 million debt, little of which was spent on the team. What's more, Forbes estimates that almost all of the team's profits were being used to pay down just the interest. Forbes also found that the team's debt load is currently 54 percent of its $800 million net worth.
  • The Mets managed to saddle themselves with a new stadium, a host of overpaid players whose performance have cut attendance severely, all while keeping their finances under the ever vigilant eye of Bernie Madoff. As a result of this the team's owners are being sued for $1 billion in an attempt to recoup money stolen in the ponzi scheme.
Revenue sharing is funded by the money generators like the Yankees, the Boston Red Sox and, until recently, the Dodgers and the Mets. So it's not just that MLB is spending money to rescue these two teams, but it has also lost revenue it was already counting on. And, as if that wasn't trouble enough, for reasons known only to Commissioner Bud Selig, the league has agreed to loan Jim Crane nearly half of the reported $680 million he needs to buy The Houston Astros from billionaire Dayton Lane.
Thus the league has turned to the inexplicably popular Chicago Cubs to pony up more money. (Full disclosure: I've been a Cubs fan since the 1960s. Pity me.) As with any scenario involving the Cubs, there is a problem. In this case it is simple: The Cubs are already heavily in debt and so can't afford additional payouts. Additionally, all the years of tragic mediocrity have appear to have caught up with the team and attendance is off.

For a long time, baseball has been synonymous with a vintage view of America: Leisurely afternoons spent laughing at the less-privileged, moms made out of apple pies and the such. Unfortunately the sport has updated and now resembles the nation's real pastime: Living beyond our means.

Image via WikiCommons

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