The sale of the Cubs continues to twist and turn in the midst of the current financial crisis with word today that the Tribune Co. may consider retaining a larger ownership equity than originally planned.

With the deal being leveraged as a tax avoidance deal, initial plans were for Tribune to retain a 5 percent ownership stake. By retaining a partial ownership, Tribune would dodge approximately $400 million in taxes.

As we noted earlier this week (see Financial Crisis Impacting Cubs Sale in a Big Way), the credit crisis along with the leveraged deal that Sam Zell is proposing is creating problems for potential buyers. The deal structure requires the would-be owners to carry an exceptional amount of debt. That, in turn, means banks will need to be able to loan large sums of cash to the winning bidder. With banks under exceptional pressure, it may be some time before that could occur. The crisis has altered the playing field.  As reported by the Chicago Tribune:

"It would make sense in these times to retain a larger stake," Robert Willens, a leading New York tax analyst said. "But as a practical matter, I wouldn't want to retain more than 20 percent given the highly engineered nature of the transaction."

The company appears in no rush to finalize a deal. No deadline has been set for the next round of bids. Prospective buyers are still waiting for key financial details about the broadcast properties up for sale.

As we reported last month (and filed under rumor), Thomas Ricketts was viewed as being the winning bidder in the deal. While Ricketts is considered to still be very much in the hunt, how the financial crisis has altered his bid is unknown at this time.

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