Sale Of The Cubs... Into Extra Innings

by Al on Oct 16, 2008 8:07 AM CDT in News Comment 40 comments

Many of you are waiting for the final installment of my "Building a Cubs Champion" series -- what I'd do to improve the team on the field (and I'll have something to say about the coaching staff, too).

This is a really important post and I'm not finished yet -- may not be, in fact, till early next week. I want to make sure I get each and every thought I have exactly the way I want it.

So you'll have to be patient a few more days (after all, it's still only mid-October and free agents haven't filed yet and can't till the WS is over).

In the meantime, today we can talk about something that may affect how Jim Hendry goes after players this offseason -- the current economic crisis may cause further delays in the sale of the team:

With banks reluctant to make loans, Tribune Co. faces increasing risk of prospective buyers dropping out of the auction or being unable to close a deal in the next few months no matter how creditworthy they are. In addition, the higher costs of borrowing could trim the size of the bids.

To address some of the concerns, company officials have tossed out the idea of keeping more than 5 percent of the franchise, said three sources close to the bidding process. In this way, the buyer would have to come up with less cash but still gain controlling interest in the team. When lending markets open up, the buyer would have the option to buy Tribune Co.'s ownership interest.

The original reason for keeping less than five percent, which was part of the original proposal, was to reduce the taxes that Sam Zell would have had to pay on the transaction because the Cubs were purchased 27 years ago from the Wrigleys for $20.5 million and now may be sold for up to a billion dollars. In any case, it doesn't appear that anything's going to happen soon:

Now, it could be weeks or months before money flows freely again to finance such a deal. One bidder, Mark Cuban, owner of the National Basketball Association's Dallas Mavericks said last week that, "Even if we wanted to close the day after tomorrow, the banks might not be able to close."

Cuban suggested that in the current turmoil it might not make sense for Tribune Co. to sell the Cubs. A Tribune Co. spokesman declined to comment.

My guess is: this deal gets delayed several months. In that case, it's business as usual for Jim Hendry & Co., and current team chairman Crane Kenney, who along with Zell have given Hendry approval to do whatever he feels he needs to in order to build a winner, give the same approval for the 2008-09 offseason.

That ought to give you enough to "discuss amongst yourselves" for today.

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Comments

my first first?

by JCD on Oct 16, 2008 8:11 AM CDT reply actions 0 recs

You always remember your first.

"Destiny is a matter of choice, not chance"

by MerlinDog on Oct 16, 2008 8:53 AM CDT up reply actions 0 recs

A Newcomer's question about Cuban . . .

I’m a recent convert to baseball and to the Cubs (I watched exactly no sports my entire life (I’m 32). Three years ago, as a favor, I started watching the Cubs with a friend, and since there I haven’t missed a game since. So, I’ve had a unique Cub experience – all the ecstasy and agony compacted into three seasons.

My question is simply this (if you think this hijacks your thread from its intended purpose, Al, feel free to delete this post): I’ve heard quite a few things about Cuban, and he seems like the type of dynamic owner that might be good for the Cubs. SEEMS to be, I say, because I don’t know enough to make an informed decision.

So, enlighten me – if the sale goes down to Cuban, is that a good thing?

"From childhood's hour I have not been as others were - I have not seen as others saw." - Alone, Edgar Allan Poe

by Edgewood on Oct 16, 2008 8:21 AM CDT reply actions 0 recs

Depends on who you ask

Some, like me, think he is the type of free spending, progressive owner the Cubs need. Others think he is self serving and only wants the team to boost his image. Which is also fine by me, b/c if he wants to boost his rep, what better way to do that than to win big in Chicago?

Okay, just so I understand it... in your wildest fantasy, you are in hell. And you are co-running a bed and breakfast with the devil.

by bren on Oct 16, 2008 8:24 AM CDT up reply actions 0 recs

Yes

by lamentir on Oct 16, 2008 8:25 AM CDT up reply actions 0 recs

Thanks for being so detailed in your response.

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

by Al on Oct 16, 2008 8:56 AM CDT up reply actions 0 recs

Cuban

I agree with bren, Cuban definitely would be a progressive owner for the Cubs. He’s passionate, and wants to win. I’m not saying the current regime doesn’t want to win, I’m saying new ownership isn’t looking to cut costs and kill off the present momentum. Problem Cuban has is Reinsdorf and the other MLB owners who toadie to Reinsdorf. Reinsdorf deals with Cuban in the NBA and doesn’t like him there. I believe Reinsdorf will do everything he can to stop Cuban from being in the MLB. And secondly, why would Reinsdorf want anyone to succeed with the Cubs? He owns the White Sox.

Check out my Cubs shrine: http://picasaweb.google.com/vegascubfan/CubsRooms#

by VegasCubFan on Oct 16, 2008 1:23 PM CDT up reply actions 0 recs

Absolutely

I believe he would be a good thing for the cubs. Some like him cause the moeny he would throw at the team, but I like him cause of the attention he grabs.

I believe he would be the perfect owner for this CUBS team come playoffs. What other owner could grab so much attention and almost lead a team through the playoffs with passion?

Some like to point at the Dallas Mavs, but there really is no comparison between them and the Cubs. While the Mavs could see Cuban as a attention hog and a distraction, the cubs would see him as a much needed side leader.

My 2 cents.

THE WAVE
to remind us how fans of other teams can win games, despite not caring about whats going on at all. -Rudey

DAMN YOU BASEBALL GODS..

by Rudey on Oct 16, 2008 3:59 PM CDT up reply actions 0 recs

An owner leading the team through the playoffs?

Oh, this I gotta hear.

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

by Al on Oct 16, 2008 10:18 PM CDT up reply actions 0 recs

Maybe...

…he could coach 3rd base.

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

by MPH73 on Oct 17, 2008 12:52 AM CDT up reply actions 0 recs

Get real. Cuban is just a cheerleader who owns the team. His best contribution is

that he provides the players with the best facilities needed to do their job. That’s it. A lot of this crap about him being a leader is just a myth. He has said on several occasions is that he is a passionate owner. He’s no Jerry Jones or Al Davis.

"Hats for bats.....keep bats warm." - Pedro Cerrano
"Hey bartender, Jobu needs a refill !!!!!!!" - Eddie Harris

by willie mays hayes' gloves on Oct 17, 2008 8:54 AM CDT up reply actions 0 recs

This is ridiculous

Put them up on Ebay, set your reserve price for 1.3 Billion Dollars, and a Buy It Now for 1Billion, give it a week and watch the bids flow

Okay, just so I understand it... in your wildest fantasy, you are in hell. And you are co-running a bed and breakfast with the devil.

by bren on Oct 16, 2008 8:22 AM CDT reply actions 0 recs

Huge Change Since 1981

Wow! Even given inflation since 1981, there’s a huge difference between $20.5 million and $1 billion in value. Back then, the goal of the Cubs was to beat out the Mets for fifth place in the NL East. Now, we’re griping about how the Cubs win division titles but can’t win a playoff game.

"The big possum walks late." - Harry Caray

by memphiscub on Oct 16, 2008 8:34 AM CDT reply actions 0 recs

As long as no one

ties Hendry’s hands on making deals, the sale does not mean anything. Now if you say a quick sale means Hendry is going to have an open bank vault to spend, then it is hurting us to wait. For now, no sale does not mean much.

This is only the beginning....Lou Pinella end of '07 season and Chicago Transit Authority (the band when they were really good).

by mrcubsfan on Oct 16, 2008 8:45 AM CDT reply actions 0 recs

Debt payment

My limited understanding of the Tribune’s finances is that they have a $600 M debt payment due in 2009 and that Zell needed to close on the sale before then to make that payment. It may be tough for him to come up with that money if the Cubs aren’t sold, so I’m guessing he’ll do what he can to sell the team sooner rather than later. Maybe he can delay the payment somehow or come up with the $$ some other way. But, this could be a factor.

by raisin1 on Oct 16, 2008 8:57 AM CDT reply actions 0 recs

The flip side of that...

…is Zell is a smart businessman and he knows if he sells the time now, he isn’t going to see the same about of dollars he would if he sold it a year from now.

"Pounding sand since 1982...."

by cubswynn on Oct 16, 2008 9:19 AM CDT up reply actions 0 recs

IF...

he doesn’t have the Cubs sale for the June pymt (there’s another in Dec, ‘09 IIRC), other assets will have to be sold. Tribune Co owned some 40 newspapers and media outlets when Zell took over. The News Day out of NY nearly by itself took care of one previous payment. I would expect that if the Cubs were not sold soon enough for Zell to cover his 06/09 pymt, another asset such as the Baltimore Sun could be sold to cover. I haven’t followed this for many weeks now so the sale of other assets may or may not be an option.

Sweet Lou for Mayor in '11.

by blackhawk24 on Oct 16, 2008 9:19 AM CDT up reply actions 0 recs

I appreciate you raising that point...

bloggers continue to post these pieces, ignoring the flip side; that illiquidity in the credit markets leaves companies with below investment-grade ratings like the Trib few other options to raise upwards of a billion dollars inside of 12 months other than an asset sale.

Until you see an accompanying news story that Zell is coming off of his recovery plan, and considering the sale of a high visibility media asset, or has renegotiated his credit facilities — and it will make news in this market — the Cubs sale is on schedule. And cash is king.

by Damen Jackson on Oct 16, 2008 9:42 AM CDT up reply actions 0 recs

Jim Cramer? Is that you?

And btw, pitching is king. Just ask Blue Mike.

"Pounding sand since 1982...."

by cubswynn on Oct 16, 2008 10:21 AM CDT up reply actions 0 recs

No!!

Not white, bald, old, or loud. At least not that loud.

But let me say that I did go back and read that Trib article. It sounds a lot more like Zell is prepared to keep the Trib as a minority owner — albeit with a large stake — rather than wait for the market to correct. So even it suggests that they’re trying desperately to engineer a quick sale; likely to whomever can raise $700 million or so the quickest and/or easiest.

by Damen Jackson on Oct 16, 2008 10:33 AM CDT up reply actions 0 recs

opps that was suppose to be a reply to purpleline

"Pounding sand since 1982...."

by cubswynn on Oct 16, 2008 10:26 AM CDT up reply actions 0 recs

So Hendry has the green light to do "whatever"?

This based on Kenney and Zell…?

So am I to believe that this could say, pursue a certain pitcher who just happened to carry a team (that’s just North of here) to the playoffs? Or, if a certain 1st baseman is traded, another FA that played for the Angels late this season could be courted? Wow…

Levine just reported on ESPN1000 that the Cubs are putting the final touches on a Jim Hendry extension…

Sweet Lou for Mayor in '11.

by blackhawk24 on Oct 16, 2008 9:23 AM CDT reply actions 0 recs

Despite Zell's eccentric behavior...

He’s been one of our better owners in due to his laissez-faire approach to owning the team.

I don’t see this delay as a big problem for the Cubs’ near-term success, which is all I really care about. Zell seems to understand that you leave the baseball operations in the hands of baseball experts and his actions have spoken pretty loud.

I just hope this sale doesn’t become a big distraction. For music dorks out there, I hope the Cubs sale doesn’t become like Radiohead’s last album release where all the attention focused on the unique sale of the music and overshadowed the music itself.

"In theory there is no difference between theory and practice. In practice there is." - Yogi Berra

by wrigley's ivy on Oct 16, 2008 9:31 AM CDT reply actions 0 recs

I think a large part of that was due to the media, though...

Other bands have done similar things, and are now emulating the approach…The similarity is that the media often helps in a large part to shape the way that people think about the way people might feel about cutting edge or unprecedented actions in pop-culture, sports, etc…

I can’t recall the exact Rolling Stone headline, but it was the issue with Thom Yorke on the cover and it talked about how they were ‘turning the industry upside down…’ when in all reality, I think they are just at the forefront of where the industry is headed, similar to Zell’s ownership approach. I think the Al Davis and George Steinbrenner models of ownership are going to slowly but surely become a thing of the past…

That might not have made sense….Oh well…

"There is not a better offense in America. Missouri has had 48 possessions and scored on 33 of them. The nation's No. 1 scoring offense has punted just five times and has yet to go three-and-out." Tom Dienhart, Rivals.com

by PurpleLineToWrigley on Oct 16, 2008 9:49 AM CDT up reply actions 0 recs

Agreed on Zell

He has been a great owner. Crane Kenney and Jim Hendry have been allowed to spend all the money they want to make the team better. Now he might not be going crazy with money like Cuban might, but still we are getting to spend money and get the big free agents.

Your 2008 Missouri Tigers! #12 5-1 (1-1). Next up at Texas. Jeremy Maclin can still win the Heisman.

by nji232 on Oct 16, 2008 11:30 AM CDT up reply actions 0 recs

Spoken like a true Missourian

kidding

"Pounding sand since 1982...."

by cubswynn on Oct 16, 2008 10:23 AM CDT reply actions 0 recs

Furcal - Theroit

Did all the Theroit Bashers and Furcal Bandwagon boys enjoy the game last night ?

by nimblenikelfoos on Oct 16, 2008 10:23 AM CDT reply actions 0 recs

Still would rather have Furcal....

by PurpleLineToWrigley on Oct 16, 2008 10:31 AM CDT up reply actions 0 recs

Strange circumstances

On the one hand Sam Zell needs the new ownership group to fund the purchase with a lot of debt so he can realize the magical tax advantages that are the linchpin of the financial transaction for him. But on the other hand the current financial crisis will make a funding strategy built around a lot of debt very hard, if not impossible, to pull off. Which would lead you to believe that Mark Cuban and the Ricketts family can be the only serious bidders left because they each sit on top of huge cash positions. But Zell needs for this to be a heavily debt financed deal. So what then is the solution???

"Not that I don't feel like I'm part of the team, by no means, but when you get that nice celebration coming into the dugout and you're getting your ass hammered by guys, it's no better feeling than to have that done.'' -- Matt Stairs (aka The Professional Hitter)

by MDBNIU on Oct 16, 2008 11:22 AM CDT reply actions 0 recs

I'll answer my own question...

Sam Zell is the de facto owner of the Cubs and is likely going to remain so for the forseeable future.

by MDBNIU on Oct 16, 2008 11:32 AM CDT up reply actions 0 recs

I have a hard time believing that the pending sale won't be an issue

I think that Zell has let the team run the way that Kenny and Hendry think is best, but there haven’t been any real tough decision that have had to be made in the past year or so. The two major expenditures or decisions have been Zambrano and Fukudome. Z, obviously, was to keep a piece that is already on the team and Fukudome was a supporting piece.

We don’t know whether Keneny and Hendry have the green light to extend the organization if Hendry thought that Teixeira or Sabathia were “THE missing piece”. I find it unlikely that anything of that magnitude would be allowed to happen.

Formerly NO100

by jerry morales rules on Oct 16, 2008 11:56 AM CDT reply actions 0 recs

what do you all think?

is it better to get this deal done soon or is it better to not have to worry about it and let hendry do his thing? I think it might be best just do what he needs to and not worry about it. However i do want they sale resolved and over with. opinions?

by Glacier on Oct 16, 2008 12:28 PM CDT reply actions 0 recs

Canning likely to win Cubs

Face it Bud Light has already decided just like with the Dodgers and Red Sox sales. Canning is his buddy. He will try to rip off the taxpayers for Wrigley. Just what Bud Light and Jerry Ruinsdorf want. With the anti trust exemption they can pick the owner they want. That means no Mark Cuban. It likely means another Conservative owner like PK Wrigley or the Tribune. Cuban would be a Bill Veeck or Charlie Finley. The fans loved Veeck but the owners hated him with a passion.

by sanks on Oct 16, 2008 12:39 PM CDT reply actions 0 recs

Canning is out of the running.

Or at least, was at last report. Where did you get this information?

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

by Al on Oct 16, 2008 2:28 PM CDT up reply actions 0 recs

It's Cuban and the Ricketts...

Got to be. Very little chance Canning or the other LaSalle Street and Wall Street names can put together a $1 billion plus funding package in this market. Cuban and the Ricketts family each are sitting on a couple billion dollars of cash and have zero need to finance anything. How this meshes with Sam Zell’s desire for heavy debt financing in order for him to unlock all of his complicated tax schemes is the problem.

by MDBNIU on Oct 16, 2008 2:33 PM CDT up reply actions 0 recs

"Business as usual?

How can you be sure things will be “business as usual” for Jim Hendry and Crane Kenney if the deal is put off for several months due to a global economic crisis? Is any company operating “business as usual” in the near term? When buyers and sellers might not be able to close deals because their banks can’t close the deals? And the entire country of Iceland was put up for sale on Ebay today? (OK, that last one wasn’t serious.)

I could be wrong, but I would not be surprised to see FA contracts way down this year league wide, and more off season trades than usual.

My next sig line quote will also be from Lou Piniella, and the first word will be either "Look", or "Listen", followed by a comma.

by JohnM on Oct 16, 2008 1:53 PM CDT reply actions 0 recs

What you are saying might be

An economic crisis that doesn’t clear the waves quickly could impact business as usual for the franchises along with other businesses. What I’m not sure about is whether teams borrow to finance player salaries. Usually you don’t think of companies covering payroll with debt; rather it would be covered by revenue from operations. But MLB player contract obligations might be treated more like borrowing to pay for an asset. I really don’t know.

by AboutTheCubs on Oct 16, 2008 3:30 PM CDT up reply actions 0 recs

Actually...

many larger businesses finance payrolls with short-term facilities; heavily so in a surprising number of sectors. I’ve no specifics on MLB teams and their payroll explicitly, but economic downturns will negatively impact the business in a number of ways besides that. Lower tickets sales, less dollars spent per ticket holder, lower advertising revenue, and decreased product purchases are a few examples that immediately come to mind.

But the game is a passion play all around, especially for fans, so it remains to be seen how much it will hurt teams.

by Damen Jackson on Oct 16, 2008 3:38 PM CDT up reply actions 0 recs

I completely agree...

…that it is a stretch (at least right now) to assume Hendry is going to be able to go out and spend enouph to add a “top flight” free agent. It may turn out he does, but we just won’t know until things get sorted out with the organizational meetings and Hendry presents what he would like to do to Kenney.

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

by MPH73 on Oct 16, 2008 9:04 PM CDT up reply actions 0 recs

Sam, how is the sale going?

Oh, yes, ‘cause you’ve got such a heavy workload around here. Hmm, how you, uh… how you coming on that sale you working on? Hmm? Got a big, uh, big stack of papers there? Got a, got a, got a nice little story you working on there? Your big big sale you’ve been working on for three years? Hmm? Got a, got a compelling protagonist, eh? Got a, got an obstacle for him to overcome? Huh? Got a story brewing there? Working on… Working on that for quite some time, huh? Yeah, talking about that three years ago. You’ve been working on that the whole time? Nice little, uh, narrative- beginning, middle and end? Some friends become enemies, some enemies become friends? Eh? At the end your main character is richer for the experience, yeah? Yeah? Yeah, you’ve got, uh— no, no. You deserve some time off. I’m super-excited. You think Cubs will be hot? I bet Cub’s will be hot. I think Cub’s will be hot, too!

"We’ve still got a long ways to go, I don’t like to get giggly over things in July. But the team’s playing well, they really are. They’re playing with confidence, and it shows."

by Cubster on Oct 17, 2008 10:34 AM CDT reply actions 0 recs