Wrigley rooftops sue Cubs, accusing team of price-fixing scheme
A group of Wrigley rooftop businesses sued the Chicago Cubs and team chairman Tom Ricketts in federal court Tuesday, accusing the team of violating the terms of its revenue-sharing contract and trying to create a price-fixing scheme that would monopolize the market for game tickets.
The investors, led by Edward McCarthy, own the businesses at Lakeview Baseball Club, at 3633 N. Sheffield Ave., and Skybox at Sheffield, at 3627 N. Sheffield. They want a financial judgment as well as injunctive relief that prohibits the Cubs from blocking the views into Wrigley from the rooftops.
The Cubs have approval from the city for six advertising signs, including a large-scale video board in left field, part of a $375 million renovation project that began in the fall.
The 58-page filing purports to pull the curtain back on meetings and negotiations with Ricketts and team executives. In it, the investors allege that the Cubs told the rooftop businesses they were causing demand for Cubs tickets inside Wrigley to drop and sought a solution by creating a price-fixing operation. When the rooftop businesses declined, the team used the proposed signs to intimidate them into selling or have their views obstructed.
“We don’t like you competing against our bleachers and grandstands,” Cubs president of business operations Crane Kenney allegedly told McCarthy last year after the city approved the team’s package. “How hard is it going to be to sell tickets when you have no glimpse of Wrigley Field?”
The suit also alleges that the team is in violation of its terms of the revenue-sharing contract with the club because the document granted a nonexclusive license to sell tickets to view Cubs games in the agreement.
Blocked views would hurt the rooftops’ ability to sell tickets to games, diminish competition and increase Cubs’ total market share of selling views to live games, hurting consumers, the lawsuit contends.
“Although the rooftop license agreement expressly permitted the Cubs to expand the Wrigley Field bleachers,” the suit reads, “under no circumstances were the Cubs permitted to erect windscreens or other barriers to obstruct the views from the rooftop business during the 20-year agreement.”
The investors also accuse Ricketts, whose family bought the team in 2009 for $845 million, of defaming the rooftop businesses and committing fraud when at the 2014 Cubs Convention he compared the businesses to a person “charging people money to wrongfully watch a neighbor’s pay-television through their window.”
Cubs attorney Andrew Kassof, of Kirkland & Ellis LLP, said the team will fight the lawsuit.
“Wrigley Field’s expansion and renovation is in the best interest of the team, its fans, Major League Baseball and the city of Chicago,” Kassof said in a statement.
The lawsuit comes just days after the Ricketts family purchased three neighboring apartment buildings and their rooftop businesses. The deals were long expected after months of negotiations as the Cubs have continued efforts to control the dollars that Cubs fans spend during the season.
And, according to the lawsuit, shortly after the Ricketts bought the team, executives began trying to buy rooftops. They were unsuccessful.
But on May 8, 2012, at least nine owners met with Ricketts and Cubs executives. They said that demand for tickets inside Wrigley was declining because the rooftop businesses’ offered discounted tickets, sometimes through Groupon, and game-day tickets. The team asked them to “agree with the Cubs on setting coordinated, minimum ticket prices.”
Ricketts later threatened to block the views unless they agreed to a “price-fixing scheme, stating, ‘whatever you give us is in return for not being blocked.’ ”
At another meeting, team executive Mike Lufrano suggested the two sides form a management firm to sell tickets, a scenario the rooftops dismissed, according to the lawsuit.
On Feb. 4, 2013, Ricketts complained to the rooftops again. This time he cited how the rooftop businesses began selling tickets for the Pearl Jam concert at Wrigley before the team’s tickets went on sale, robbing the team of the chance to set the concert’s initial market price.
Ricketts’ request to set minimum ticket prices was rebuffed by the owners again, according to the lawsuit.
The lawsuit is the latest punch thrown in the ongoing feud between the Cubs and the neighbors along Waveland and Sheffield. The sides settled a long-running squabble in 2004 and the contract called for Cubs to receive 17 percent of the rooftops’ annual revenue. In exchange, the team promised not to block the rooftops’ views.
But in 2010, the Cubs put up a sign featuring Toyota’s logo rising from the back of the left-field bleachers. Rooftop owners tried to stop the sign, fearing more advertising was imminent.
In 2013, the team unveiled an upgrade to the historic stadium and proposed a handful of outfield signs, including a giant video scoreboard.
Tuesday’s lawsuit is the first brought against the Cubs since they unveiled the proposed large-scale video board. However, a group of rooftop properties, including McCarthy, filed a still-pending lawsuit against the Commission on Chicago Landmarks last year after the panel signed off on the Cubs’ renovation package.
The Cubs last year received approval to install two scoreboards and five signs in the outfield, although in December, after the National Park Service recommended one fewer sign, the team agreed and the city approved a new proposal for six signs.
“The Cubs have decided to put up giant signs that will block the rooftops hallways into a 20 year contract to guarantee the rooftops an obstructed view,” said Thomas Lombardo, a Park Ridge-based attorney with Di Monte & Lizak who represents the rooftops.
“The Cubs are blocking the rooftops who refused to sell to the Cubs for a fraction of their value, rooftops who refused to take part in a price fixing scheme that the Cubs demanded. It’s unfortunate the rooftops were forced to take legal action but they are confident they will find justice in the legal system.”
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