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.
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.
Related:
