According to published reports, the sale of the Chicago Cubs, Wrigley Field, and a 25 percent stake in Comcast SportsNet Chicago is winding down, with the final bidder being selected any day now.
But, thereâ€™s a catch.
While the Cubs, and their associated holdings are not part of the Chapter 11 bankruptcy filing for the Tribune Co., the final deal will have to be approved by a judge. With three bidders in the mix (Thomas Ricketts, Marc Utay, and Hersh Klaff ), the judge will be looking to have the maximum amount garnered from the sale, meaning the two finalists that were not selected for the Cubs will have one last shot at inching the sale price up.
To add to the difficult process, as reported prior, Sam Zell, the owner of Tribune, is structuring the deal in a tax-avoidance fashion by retaining an ownership equity in the deal. To gain as much cash as possible, Zell is looking to retain a minority stake in single-digits â€“ perhaps as low as 5 percent.
With the credit market crunch, the would-be buyers may find it exceptionally difficult going, based on Mr. Zellâ€™s criteria.
The final step, after the purchase agreement between the bidder and Zell has been met, is for 75 percent of the 30 owners in MLB to approve the deal. While it is never easy to plot the direction of the owners in MLB, that may be the easiest part of the deal, at this stage.
So, while an announcement may be made at any time as to who the final bidder is for the sale of the Cubs, in reality, the final bidder could wind up not being the final bidder for one of baseballâ€™s most storied franchises. A deal, once reported to be valued at over $1 billion should fetch between $850-$930 million.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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