Winner in Cubs sale process to be picked this week 07/01/2009 |
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The winner in the long-awaited sale of the Chicago Cubs Major League Baseball team will be identified this week, three sources close to the process said on Tuesday.
"Bidders have been told a single party to negotiate with will be chosen this week," said one source, who asked not to be identified because the sale has not closed.
Tribune Co, which owns the Cubs and filed for bankruptcy protection last month, declined to comment. Cubs Chairman Crane Kenney said in December that he expected a sale by spring training, which starts in February.
While the Cubs are not part of the bankruptcy filing, analysts expect the court to weigh in on the sale, which they estimate could attract bids of around $1 billion, the most ever paid for a U.S. sports franchise.
Bidders are anxious to take control of the team, which has not won a World Series title since 1908 but is nationally recognized due to its history as a lovable losers and its national exposure on cable television.
The final three bidding groups include Tom Ricketts, chief executive of Chicago investment bank Incapital LLC and the son of the founder of TD Ameritrade Holding Corp (AMTD.O); Marc Utay, a managing partner with New York-based private equity firm Clarion Capital Partners LLC; and Chicago real estate executive Hersh Klaff.
Utay and a spokesman for Ricketts declined to comment, and Klaff could not be reached.
Tribune filed for Chapter 11 bankruptcy protection because of its heavy debt load and the weak U.S. publishing sector. The owner of the Chicago Tribune and Los Angeles Times newspapers put the Cubs on the block in April 2007, when Tribune announced it would be bought for $8.2 billion by a group led by real estate magnate Sam Zell.
But Tribune has missed deadlines before. It had hoped to pick a winner by the end of 2008 for the sale of the Cubs; Wrigley Field, where the Cubs play; and a stake in a regional sports cable TV network.
Once a winner is picked, the deal still must be finalized, which could prove tricky given tight credit markets and the bankruptcy court's involvement, analysts have said.
Another factor is Tribune's desire to minimize its taxes by retaining a small stake of about 5 percent in the team, said a source close to the process who asked not to be identified. "This is such a complicated deal, between this tax structure and the bankruptcy," the source said.
After that, 75 percent of Major League Baseball's team owners would have to approve a change in ownership.
Mark Cuban, owner of the National Basketball Association team in Dallas and an early Cubs bidder, said on his blog (http://blogmaverick.com/2009/01/06/the-cubs/) on Tuesday that the biggest challenges to his bid were the financial structure of a potential bid and the impact of the weak economy.
"I never thought it conceivable that it would be hard to spend a billion dollars on a sports team," Cuban wrote. "In this case it was.
"Then the credit crisis hit and hit hard," he added. "All of the sudden, what seemed like a sane business decision, didn't seem so sane any longer ... I could not see any scenario where the Cubs were worth anywhere near the numbers that had been discussed in the media."
(Source: Reuters)
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