Zell to sell a smaller share of the Cubs ?

by Doggie Stalker on Nov 7, 2008 5:11 PM CST

Ok new article says Zell may consider selling a smaller share ( down to 50% ?) of the Cubs as a way to do the sale as the credit crunch is killing his ability to get top dollar. Odd on the same day other articles claim Cuban can't get them as he is rumored to have the highest offer.As always my links don't work. Some day I will figure it out but will probably get a cell phone or DVD player before that.

http://sportsillustrated.cnn.com/2008/baseball/mlb/11/07/tribune.cubs.ap/index.html

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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Working link

http://sportsillustrated.cnn.com/2008/baseball/mlb/11/07/tribune.cubs.ap/index.html

"I am not ashamed to say I love Greg Maddux" - Jim Hendry

by Doggie Stalker on Nov 7, 2008 5:11 PM CST reply actions

Tribune sounds like on hell of a company

They dragged their feet, and could ultimately end up costing themselves money

Although, youd think that would make Cuban’s offer more attractive. Perhaps this would help Zells case in the event Bud’s Boys try and block Cuban.

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 Nov 7, 2008 5:36 PM CST reply actions

However...

… if he sells less than 50% to Cuban, who is the team owner then? Cuban? Zell? Do they then have to hire a managing general partner like the White Sox have?

Curiouser and curiouser.

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

by Al Yellon on Nov 7, 2008 5:41 PM CST up reply actions

MLB rules do require a majority share holder

so either Zell or buyer will have to get 50.000001 %

"I am not ashamed to say I love Greg Maddux" - Jim Hendry

by Doggie Stalker on Nov 7, 2008 5:45 PM CST up reply actions

They do?

I don’t think the White Sox have a majority shareholder — they have many partners, and elected Reinsdorf managing general partner.

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

by Al Yellon on Nov 7, 2008 6:03 PM CST up reply actions

I think this was put in later

I will see if I can find a link or something.

"I am not ashamed to say I love Greg Maddux" - Jim Hendry

by Doggie Stalker on Nov 7, 2008 6:13 PM CST up reply actions

P.S

To clarify my understanding was you had to have a majority share holder but that does not actually mean one person
own 51% you could have say two entities owning 30% each and one owning 40%

"I am not ashamed to say I love Greg Maddux" - Jim Hendry

by Doggie Stalker on Nov 7, 2008 6:16 PM CST up reply actions

I wonder if its really this complicated

I mean, I know its a Billion dollar transaction, but should it take 2+ years, which will probably end up being 3+ years?

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 Nov 7, 2008 6:04 PM CST reply actions

this whole thing

is beyond old. get it done already geez

I BELIEVE!!!! GO CUBBIES!!!!!!!!!!

by cubsluver22 on Nov 7, 2008 6:35 PM CST reply actions

Truer words...

…have never been spoken :)

by AeroZach on Nov 7, 2008 10:02 PM CST up reply actions

Reminds me of some old sayings...

“Be careful what you wish for” and “the grass is always greener on the other side”. How ironic when it seems the Tribune company finally started running the team well it is being sold.

by LT on Nov 7, 2008 8:46 PM CST reply actions

I wouldn't be surprised

if Selig and his band of robber barons had a stake in the reduced terms. Zell has met his December note but has another one due in June for $593M. The Trib just announced a $3.8B 2ndQ loss. Perhaps the owners are loaning Zell money and taking a note which they then resell to their approved friends at a discounted rate. When conditions improve, the note is converted to stock and another knight sits at the Round Table.

If you like Selig's handling of the steroid issue, you'll love his choice for next Cub owner.

by tharr on Nov 8, 2008 2:55 AM CST reply actions

Not that I'm defending them...

… but wouldn’t you say it’d be pretty easy to find this out? Wouldn’t loans of this size be leaked by someone?

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

by Al Yellon on Nov 8, 2008 3:57 AM CST up reply actions

I'm not suggesting

the loan or loans would be illegal or even hidden, although they might be. Unless the loan is from a public company, there is no stipulation that it be filed. It could well be in the form of personal loans or even cosigned notes. But i am suggesting that Selig and his friends will do almost anything. Add to that the fact that Zell is interested in one thing. From the attempt to have the state take over Wrigley to breaking the sale into little pieces, he has attempted to maximize upfront cash. However, market conditions affected the sale due to his delay and now he’s on Plan D. It’s no longer a seller’s market and that means the hyenas are on the prowl.

If you like Selig's handling of the steroid issue, you'll love his choice for next Cub owner.

by tharr on Nov 8, 2008 5:16 AM CST up reply actions

I'm guessing, though..

… with the current credit crunch, there aren’t too many people out there with the means to make this size loan.

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

by Al Yellon on Nov 8, 2008 5:33 AM CST up reply actions

On the contrary

Numerous investors went cash and bonds prior to the huge plunge. Take 4 or 5 baseball owners, put them next to a banker who has dealt with them in the past. They jointly collateralize a note for $200M-$400m and Zell has his June 2009 payment while he waits out the economic downturn. In turn, he assures the baseball people that he will work with them to choose an acceptable owner.

Obviously that’s a hypothetical case but not unreasonable. These deals are done all the time in the houses of the wealthy and influential. The bottom line is that Zell’s position isn’t as strong as he imagined it would be and he’s vulnerable to heavy handed negotiation.

If you like Selig's handling of the steroid issue, you'll love his choice for next Cub owner.

by tharr on Nov 8, 2008 5:22 PM CST up reply actions

The longer it takes for John Canning to become the owner then the better for us Cub fans

Canning is going to suck as owner. He’ll actually make us pine for the days of Phillip K. Wrigley.

McGrath: I got a good deal on those boys. The scouts said they showed a lot of promise.
Reggie Dunlop: They brought their f***in' TOYS with 'em!
McGrath: Well, I'd rather have em playin with their toys than playin with themselves.
Reggie Dunlop: They're too dumb to play with themselves. Boy, every piece of garbage that comes into the market and you gotta buy it!

by MDBNIU on Nov 8, 2008 7:47 AM CST reply actions

you dont know that. your talking out both sides of your uninformed mouth again.

I BELIEVE!!!! GO CUBBIES!!!!!!!!!!

by cubsluver22 on Nov 8, 2008 8:27 AM CST up reply actions

Actually, I tend to agree with his sentiment

And while I’ve gotten into it with Blue Mike at times, he’s only “talking out both sides” of his mouth if he is saying different things to different people about Canning’s potential ownership.

Facts are meaningless. You could use facts to prove anything that's even remotely true! --Homer J. Simpson

by Shanghai Badger on Nov 8, 2008 8:52 AM CST up reply actions

Yeah

That much is true, Canning kinda creeps me out…maybe it is better stuff stays in limbo for awhile.

by StevenABQ on Nov 8, 2008 11:47 AM CST up reply actions

This is actually old news...

As the basis of this piece was covered in a previous post by Al a few weeks ago. I know people think that guys like Cuban have a billion bucks just sitting around, but they don’t. Especially not now. With the Trib’s next debt service coming due, Sam is forced to sell to the first person who can come up with about 600 million in cash the quickest; or roughly a 40-55% ownership stake. If you read the tea leaves, I don’t think it’s Cuban, and I suspect he knows it.

It’s not that curious. It’s the simply the maneuvering of a cash-poor company to raise cash in a creditless market, and in time to not have to start chopping up the core company to do it.

by Damen Jackson on Nov 8, 2008 11:12 AM CST reply actions

Another issue

that Zell is trying to do is minimize the tax implications of the sale which has a huge potential liability. It seems Zell waited too long and his bargaining position has fallen.

If you like Selig's handling of the steroid issue, you'll love his choice for next Cub owner.

by tharr on Nov 8, 2008 5:27 PM CST up reply actions

I believe you are correct....

…he had his tax attorneys working on creative ways to save millions in taxes, and the bottom fell out of the market while they were pondering plans.

I really don’t understand how selling a portion of the club is going to be in his best interests (long term), but I guess he may have to for the June 09 payment.

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

by MPH73 on Nov 9, 2008 10:15 AM CST up reply actions

Lets end the suspense...eventually, John Canning WILL be the owner

Might not happen for a year. But it will happen. What Bud and the MLB owners want is what Bud and the MLB owners get. I’ll barf when Canning is named owner. He’ll say all the right things in the beginning but proceed to run this organization into the ground.

by MDBNIU on Nov 9, 2008 11:57 AM CST reply actions

And I still think the Ricketts group is getting the team...

… and you were among the first people to say so.

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

by Al Yellon on Nov 9, 2008 4:48 PM CST up reply actions

I still like the Ricketts a great deal

BUT…I’ve opened my eyes up to the reality that Bud Selig and the LLB owners get what they want. ALL indications are that John Canning is who they want. I think they work with Sam Zell to ensure the financial deal and the process ends up working to that conclusion. There is a lot of “backroom” negotiating that is going to happen in this. Canning will end up coming in with “highest bid.” I’m already preparing to hate every moment of Canning as Cub owner.

by MDBNIU on Nov 9, 2008 5:35 PM CST up reply actions