Written by Maury Brown
Friday, 07 November 2008 11:53
The sale of the Chicago Cubs appears to be taking yet another interesting twist as a report in Friday's Wall St. Journal has Tribune moving from a proposed 5 percent retained ownership equity in the Cubs to 50 percent in an attempt to keep the remaining bidders in play during the economic downturn.
The shift would lessen the amount that Sam Zell and Tribune would stand to gain at the previous 5 percent ownership level, but, with the downturn in the financial and credit markets, keeping bidders in play appears to be a greater priority than sticking to the prior ownership equity figure. As reported by the WSJ:
"This will still generate substantial cash," said one person with knowledge of the sales process. "We're talking hundreds of millions of dollars."In other news, it appears that MLB has made it clear what many have suspected throughout the process: Mark Cuban will not be accepted as an owner based upon his personality dynamic, something that runs counter to the conservative nature of the ownership brethren in MLB. As reported by the Chicago Sun Times:
But the likelihood of selling a smaller stake raises the question of whether Mr. Zell erred by not pushing for a quick sale after he took control of Tribune. Mr. Zell had said the sale of the Cubs, the stadium and a 25% stake in a regional sports network was a priority when he struck a deal to buy Tribune for $8.2 billion in April 2007. The Tribune acquisition saddled the TV and newspaper company with $13 billion of debt amid declining revenue at its eight major daily newspapers.
Then Mr. Zell spent several months working with Illinois officials to secure public financing to renovate its home, Wrigley Field, in hopes that such a deal would increase the value of the team. The talks ultimately failed to produce a deal, but by then credit markets had begun to seize up.
Global financial crisis or not, baseball's old guard plans to stand firm against letting Cuban into the club. ''There's no way Bud and the owners are going to let that happen,'' a Major League Baseball source said this week. ''Zero chance.''
As to whether the purchase agreement will be reached by the end of the year, with the change in the markets, and the new dynamic invoked by Tribune regarding ownership equity, don't bank on it.
''We'll be standing here at next year's GM meetings,'' the MLB source said, ''and this will still be unresolved.''