Tribune to sell Cubs, Wrigley in first half 2008

by JohnM on Dec 12, 2007 10:50 AM CST

News today that Sam Zell, new owner of the Tribune, plans to sell the team and the park in the first half of 2008. They need to sell assets to help pay down debt as advertising revenue and circulation declines. This is a little earlier than some had expected, given that the company hasn't even given bidders the team's financial details yet.

Most interestingly, the Sun-Times reports that "Zell is looking at selling Wrigley Field and surrounding real estate separately from the team itself."

That won't go down well with prospective buyers, right?

ST article: http://www.suntimes.com/business/693025,trib121207.article

Others: http://news.google.ie/news?hl=en&ie=UTF-8&tab=wn&ncl=1124842460

This is a FanPost and does not necessarily reflect the views of SB Nation or Al Yellon, managing editor (unless it's a FanPost posted by Al). FanPost opinions are valued expressions of opinion by passionate and knowledgeable baseball fans.

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Forget Zell

..........hes posturing. Anyways, I dont believe the team will be sold until next xmas time.

"Hey.....Cubs win!!!" ---Harry "I strongly dislike Steve Stone." ---Hammer

by Hammer on Dec 12, 2007 10:38 AM CST reply actions

I think the sale will occur before then...

... possibly being finalized by the end of the season.

In any case, yes, it is entirely possible that the park will be sold separately -- and that whoever buys it will lease it back to the Cubs. That entity could be a separate company or LLC set up by the group that eventually buys the team.

And I agree, it's partly posturing.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 10:45 AM CST up reply actions

while I can see them doing that

I am really uncomfortable with that arrangement. If the team is leasing the stadium that is less money that they have to spend on players, and it also limits their ability to make any changes to the ballpark as time goes on.

AC 00 00 00 - BELIEVE

by mike @ Bleed Cubbie Blue on Dec 12, 2007 10:49 AM CST up reply actions

No, I think you're misunderstanding this.

The reason anyone would do that is for tax purposes. It would NOT limit the ability to spend on payroll, nor to change the ballpark, especially if it's the SAME entity owning both under different corporate/LLC names.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 1:16 PM CST up reply actions

gotchya

I was thinking more of a situation like the Bears have where the stadium is in the hands of the Chicago Park District.

AC 00 00 00 - BELIEVE

by mike @ Bleed Cubbie Blue on Dec 12, 2007 1:58 PM CST up reply actions

And in that case...

... yes, the team gets screwed. But that wouldn't be the situation here.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 2:02 PM CST up reply actions

I'll bet every professional franchise

has the team and their stadium as seperate entities. As Al mentioned, there are considerable tax advantages to doing this. One company owns the team, and another company set up by the teams owner(s) owns the stadium.

"I don't like them fellas that drive in two runs but let in three" Casey Stengel

by MPH73 on Dec 12, 2007 3:05 PM CST up reply actions

Well, that is...

... for teams who own their ballparks. There aren't that many of those -- most new parks are municipally owned, due to the fact that teams held up cities to build all these new parks.

The Cell, for example, is owned by the Illinois Sports Facilities Authority.

Off the top of my head, apart from the Cubs, the Red Sox, Dodgers, Yankees and Giants own their ballparks. There may be a few others, but not many.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 3:32 PM CST up reply actions

Is there some way this is meaningful

from the seller's perspective?

A buyer's only got so much to spend, right? So whether he buys a package, or a la carte, he still have the same total budget, no?

There is probably some arcane accounting reason why a buyer might prefer this arrangement for future ownership reasons, but from the seller's perspective, I don't get it (unless, of course, he's selling the two pieces to two separate buyers).

Why does everybody stand up and sing "Take Me Out to the Ballgame" when they're already there? ~Larry Anderson

by JohnM on Dec 12, 2007 10:59 AM CST up reply actions

Who?

Is all in the running to buy the cubs??? anyone know?

by Cubbieblue06 on Dec 12, 2007 11:13 AM CST reply actions

Parking Garage

Does anyone know the status of the parking garage/mall project adjacent to the stadium? Is this on hold until the sale goes through? Is it possible that the new owners will reconsider or redesign this project? Can this be a substantial source of revenue for the new owner? And do we think the parking spaces in the garage will be made available to season ticket holders only?

Just hadn't heard anything on this in quite some time...

"Look, what's important is to be in first place on the last day of the season." -Lou 8/1/07

by 26.2cubfan on Dec 12, 2007 12:04 PM CST reply actions

It was put on hold...

... in part because of the upcoming sale.

However, I should point out that the Cubs agreed, when the city gave them permission to build out over the sidewalk, a public way, to increase the size of the bleachers, to add 1 parking space for every ten new seats. With 1800 new seats in the new bleachers, the Cubs have to add at least 180 parking spaces. That new building was to have 400 spaces -- but as of now the Cubs have added none.

We await developments.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 1:17 PM CST up reply actions

Separate Sales

This is the result of the screwed up MLB Judicial AT exemption. Zell can either sell a single asset (team and park) subject to the whim of 29 other people or he can sell two assets - the park to anyone he pleases at whatever price he can obtain and the team subject to the whom of the 29 other people. And if he sells the park to say Mark Cuban, then Cuban's ability to "force" MLB to sell him the team becomes readily apparent. (For example, if you don't approve the sale to me, then when the Cub lease expires, it will not be renewed. Leaving the owner of the Cubs as the owner of a team without anywhere to play in a city and state where Government funding to build a new palace may not be as readily available. At that point that owner might feel compelled to sell to Cuban.)

by frustratedfan on Dec 12, 2007 1:04 PM CST reply actions

Or, conversely...

... that reduces the value of the team, because the team isn't worth as much without the ballpark. It's a double edged sword.

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 1:18 PM CST up reply actions

The Red Sox...

...don't own Fenway Park. It's owned by Fenway Sports Group, a subsidiary of New England Sports Ventures. NESV owns the Sox, NESN and half of Rousch Racing. This is absolutely fecking brilliant, because FSG isn't responsible for one red cent of revenue sharing. Here's a look at how it works. For an example -- let's use Mark Cuban once again. If you don't like Cuban, just substitute Levin and suppose I'm talking about the Wolves when I mention the Mavericks. Suppose that some shell company buys Wrigley Field -- call it Egomaniac Sports and Events. It would own the Dallas Mavericks, Cuban's share of the American Airlines Center, and whatever other properties he wanted it to buy. Then, ESE buys the Cubs. All the money that Wrigley makes -- ALL of it -- can't be touched by MLB. That means more money that can be invested in the on-field product. It's a natural extension of teams investing in Regional Sports Networks, and then giving them sweetheart deals to televise the games. Money that revenue sharing can't get to.

FREE CARMEN PIGNATIELLO!

by cwyers on Dec 12, 2007 1:28 PM CST up reply actions

In other news...

...I some how turned off "Auto Format" on accident and it's killing me. Seriously.

FREE CARMEN PIGNATIELLO!

by cwyers on Dec 12, 2007 1:29 PM CST up reply actions

LOL

But your analysis is spot-on, and that's very, very likely how any buyer of the Cubs would approach buying both the team and the real estate (and also, by buying the Cubs they also get their 25% stake in CSN).

"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx

by Al Yellon on Dec 12, 2007 1:32 PM CST up reply actions

Thanks for that analysis

Old Style is the nectar of life.

by Mordecai on Dec 12, 2007 3:58 PM CST up reply actions

So

that explains why a buyer might want to do things that way, thanks.

Now I'm still trying to figure out why it matters to the seller. Because in the article, it said that Zell was interested in selling the two properties separately, in the context of maximizing his return.

And again, I don't see how that happens unless the two buyers are completely unrelated.

Why does everybody stand up and sing "Take Me Out to the Ballgame" when they're already there? ~Larry Anderson

by JohnM on Dec 12, 2007 4:40 PM CST up reply actions

Actually

it was answered by frustrated fan.

Interesting stuff.

Why does everybody stand up and sing "Take Me Out to the Ballgame" when they're already there? ~Larry Anderson

by JohnM on Dec 12, 2007 4:43 PM CST up reply actions

Reduces the Value of the Team

Perhaps. But right now if the team and the stadium are sold together, it is not being sold on the free market. And if I were the one making the sale, I would bet that selling two entities, with only one of them subject to the control of 29 others and the other sold on the free market would, together, bring in more than both being sold together but not on the free market.

by frustratedfan on Dec 12, 2007 9:36 PM CST up reply actions