The deal might not be biblical in nature, but $100 million will build one hell of an ark to sail through the choppy financial waters brought on by the coronavirus pandemic. Though financial terms were not officially disclosed Thursday, Action Network is reporting that the Cubs will receive $10 million annually over 10 years from DraftKings as their exclusive sports betting and daily fantasy partner.
DraftKings is developing a flagship retail sportsbook, including betting windows and self-serve kiosks, to be located inside or immediately adjacent to Wrigley Field. This makes the Cubs the first MLB organization to plan such an endeavor.
“An increasing number of sports fans want to integrate sports betting into their game experience, and we’re excited to be one of the first to engage in developing a retail sportsbook at a professional sports venue,” Cubs president of business operations Crane Kenney said in a release announcing the deal.
While it may seem as if there’s a lot to figure out from a logistical standpoint, this is something that’s been in the works for well over a year and is already well past the conceptual stage. Illinois passed SB 690 to legalize sports gambling on June 2, 2019 and DraftKings has been making inroads ever since. This is just the next step, and it sounds like it’ll be a big one.
“We want to build the biggest retail sportsbook in the country right in the heart of Wrigley, with an unrivaled experience, food and beverage, and the ability of a fan to go there pre-game, make bets, go to the game and sweat and come back and cash their tickets on the way out,” said Matt Kalish co-founder and president of DraftKings.
This partnership may not benefit the Ricketts family directly, since MLB places restrictions on team owners who have a direct stake in sportsbooks. So remaining independent from DraftKings means the league can’t limit what bets can be taken and will almost certainly generate more money. From the sounds of it, the plan is to have a full-service setup that’s open year-round for all kinds of gambling and entertainment.
“It might be the Cubs to win, maybe a few props like first home run, then stroll into the game at 6:45, sit down, sweat my bets and cheer on the Cubs,” Kalish told ESPN. “Then, after the game I can stop back at the DraftKings book, relax with my friends, get some food and drink and think about the next day’s game, maybe put in a few more tickets.”
The upshot is that the Cubs have yet another very lucrative revenue stream in addition to the burgeoning Marquee Sports Network that should significantly increase their overall operating budget. That doesn’t necessarily mean, however, that we’re going to see them getting splashy in free agency. Hell, the team just laid off dozens of employees in the scouting and player development areas just to save a few bucks.
Tom Ricketts claimed earlier this year that 70% of the organization’s revenues come from gameday activities and have thus been wiped out. Cutting 102 games from the schedule and waiting until July to get Comcast on board for carriage put a big dent in projected revenues as well. Mind you, I’m not saying the Cubs would be justified in going cheap this winter.
All I know is that if Ricketts is finding new ways to part Cubs fans with their money, he’d damn well better figure out how to turn back around and spend that money put the best possible product on the field.
Update: Kenney offered a little more information on the location of the sportsbook during an appearance on 670 The Score Thursday morning.
“It’ll be on campus,” Kenney explained while confirming that this will be a year-round destination. “With the construction of our office tower, we have retail spaces on the 1st and 2nd levels. There’s also some space at the ballpark, where the old DK sports bar was.
“There’s one other site on campus we’re considering.”
As for additional profits beyond the base sponsorship deal, Kenney said the Cubs don’t profit directly on wagers and outcomes. Rather, they’ll charge DraftKings “rent” for the eventual space occupied at Wrigley. As has become obvious from their myriad acquisitions and developments in the area, the Cubs are “in the real estate business.”