Zell's Cub Sale A Tax Dodge?
http://www.laobserved.com/archive/2008/08/zells_cubs_sale_a_tax_dod.php
There's no article to quote to flesh this out as the link I provided then links to some audio from Fortune magazine. I have yet to hear it, but the headline, which I repeat verbatim here, is certainly intruiging. The LA Observed website, where I found this, has its own section dedicated to Zell and all the crap he's pulled since he bought the Tribune and all its accessories. Safe to say, no one likes him.
This is a FanPost and does not necessarily reflect the views of SB Nation, Bleed Cubbie Blue, or Al Yellon, editor-in-chief. FanPost opinions are, however, valued expressions of opinion by passionate and knowledgeable baseball fans.
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we knew he wanted to see the Cubs
for cash. I’m not sure this changes that.
Our 2008 Chicago Cubs -- FINDING WAYS TO WIN!
by drewishdrewid on Aug 14, 2008 1:49 PM CDT 0 recs
Zell seems a bit too close to Gordon Gekko for comfort
doing his part to kill good journalism as soon as possible. Someone bought out United Airlines while putting the company in the employee’s hands, and we see how well that turned out. TribCo employees are going to get scr-wed the same way.
As relates to the Cubs, my understanding is that Zell makes more moolah if the club is bought in a highly-leveraged transaction (something to do with a loophole in the present tax laws). This does not appear to hinge on one ownership group or another winning the bid, just how the deal is structured in the end. Baseball is already looking into it, but it can’t be good for us fans if the new owner has to worry about big loans from Day 1. Whether or not we get a “good” owner, you’d be taking resources away from whatever payroll may be set.
by The Deputy Mayor of Rush Street on Aug 14, 2008 2:53 PM CDT 0 recs
Is his hair as nice as Gordon's?
Proud recipient of a hot dog shot from the Iowa Cubs hot dog gun.
by IowaCubs- on
Aug 14, 2008 3:57 PM CDT
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Newspapers are hurting regardless of Zell
It’s a national problem. The Washington Post which is not owned by Zell is also constantly shrinking in size. They recently had a large layoff of many long time reporters and columnists. Zell may or not may be a nice guy but newspapers shrinking have nothing to do with him.
by rlpete on
Aug 14, 2008 4:24 PM CDT
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This is true
Zell and the Tribune Co. are not alone in the sharp decline newspapers have been having. McClatchy Co. bought out Knight Ridder about two years ago and many of those papers are bleeding money. Gatehouse Media went on newspaper buying spree about a year or so ago and are now losing a lot of money. MediaNews (Dean Singleton’s company for those of you familiar with Jim Bounton’s book “Foul Ball” about the baseball field in Mass.) bought up a bunch of northern California newspapers about two years ago and they’re having problems.
Newspapers are downsizing their staffs and production staff, combining the resources of papers. For example, a staff writer for the Marin Independent may also have their story run in the San Jose Mercury, Contra Costa Times, etc. One paper’s production plant will also print the papers of other papers in the chain. Some papers such as the Denver Post and Orange County Register are going to be if they haven’t done so, eliminate their business sections.
It’s all very sad. (I work for a media monitoring company so I read about this stuff in the publications I go through)
"Pinky, are you pondering what I'm pondering?"--The Brain
by brook on
Aug 14, 2008 5:41 PM CDT
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The NY Times is another one going down the tubes.
Bleeding money, shrinking revenues and high costs. It has nothing to do with Zell. Reporters usually have no business sense, little wonder the LA Times staff bitches. That blog is hilarious, a bunch of whiners that don’t understand that they are part of the problem in the newspaper industry.
by cubswin on
Aug 14, 2008 8:02 PM CDT
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Newspapers have yet to adapt to the new world of technology
Bleedcubbieblue.com is but one example of the competition newspapers like the Chicago Tribune face for readership and thereby the ad revenue which is a newpaper’s life blood.
by MDBNIU on
Aug 14, 2008 5:42 PM CDT
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Exactly
Same thing with Blockbuster. Or the Music Industry. Or countless other examples. They failed to adapt, and now the free market is deciding.
by dr stabbingworth on
Aug 15, 2008 9:12 AM CDT
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The Chicago Tribune has an article that covers it.
"Baseball is like church- many attend, few understand." ~ Leo Durocher
by The Lip on Aug 14, 2008 4:09 PM CDT 0 recs
More power to him
In paying less taxes… if he can figure out a way to do it, fine.
by astroview on Aug 14, 2008 5:03 PM CDT 0 recs
Sam Zell is a ruthless shark
Always has been. He’s going to milk every last penny out of the Cubs because that is what he does and that is what has made him a top M&A guy. Pushing the envelope on the tax side is what all these guys do. Teams of the best tax attorneys money can buy are working on the Tribune Company divestiture for Zell.
by MDBNIU on Aug 14, 2008 5:39 PM CDT 0 recs
I pay my taxes, why not Zell?
Not to over simplify, but why should he get a break for a highly leveraged deal of a billion dollar baseball team? He has owned the team for basically a year, he has invested very little time or energy into developing it. True, the Cubs appreciated as Trib Co owned it, but since Zell bought Trib Co I don’t feel any sympaty for him. I get certain tax breaks. Being a home owner, but in return I’ve upgrade my house. My wife got some breaks on student loans, but she is a highly skilled medical professional working for a government institution. The government is getting a break on what they pay here as opposed to what she would make on the open market. A nice trade all things considered for both.
We just took a trip to the Dells. Lots of miles driven on interstate highways built with tax dollars. Everytime I drive to Chicago I go up and down roads that taxpayers from all over the country helped to pay for. Not to drag on and on, but it pisses me off to no end to hear people bitch about taxes. We get a nice return for what we pay. And, since we keep voting for people that do what we want we can’t complain there either.
If Zell had bought the Cubs back in ‘81 I’d feel some sympathy for him. But, since he is just flipping a property I feel none.
by Nibbles on Aug 14, 2008 9:49 PM CDT 0 recs
Ugh.
“We get a nice return for what we pay?” Not even close…the federal income tax, state income tax, and any other tax you want to throw in there, have become social engineering weapons wielded by incompetents. God help us. Taxation without representation is alive and well…
"Why does that man drop his club before he runs? I would bring it with me." ~Stewie Griffin
by Goodie1969 on
Aug 14, 2008 11:04 PM CDT
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And...
… let’s please end the political discussion right here. Thanks.
"That's my opinion and if you don't like it, well, I have others." ~ Groucho Marx
by Al on
Aug 15, 2008 9:00 AM CDT
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if it's legal, what's the problem?
if he broke the law, he should pay for it, if he didn’t, good for him. welcome to capitalism, he’s got a right to as much money as he can make, even if it a disgusting amount. I don’t see how this should really effect the Cubs, in either the on-the-field product or the sale. Everybody knew He was ruthless when he bought out the Tribune company, so why exactly is this news?
anyways, more power to him, seeing as how he’ll soon be but a foot note in Cubs history.
oh, and i just must say that when a government takes 50% of your paycheck just because they’re the government, than blows the wad on a lot of vanity projects just so they look busy and can get re-elected, that’s not getting a good return on your money.
by Petrie000 on Aug 15, 2008 3:10 AM CDT 0 recs
Yep
The Tribune Company and the Cubs are property of Sam Zell right now. If he can milk every last drop of money from the assets then more power to him. It’s called capitalism.
by MDBNIU on
Aug 15, 2008 11:30 AM CDT
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"I don’t see how this should really affect the Cubs"
If you want to discuss the philosophy of Federal tax policy, I would suggest something like politico.com, however as this is “Bleed Cubbie Blue” – I’m really trying to focus on what all this means to the future of the Chicago National League Ballclub, not Sam Zell and his bank vault, fair enough? (So feel free to ignore my crack about penny-pinching journalism)
For comparison, I took a look back at the Glazer family’s (owners of the Tampa Bay Bucs) purchase of English football club Manchester United. Their takeover of that team was highly-leveraged, and happened in 2005. (I believe ManU is roughly the British equivalent of the Yankees)
From The Telegraph
At first glance Manchester United’s latest financial results are mightily impressive. A gross turnover of £245 million, profits up 93 per cent to £59m and new market research that shows they have a third of a billion followers around the globe. All of which must make United supporters feel very smug about the rude health they find their club in. With the Premier League trophy securely locked away in the Old Trafford boardroom and bumper revenues being drawn from the club’s expanded 76,000 capacity home, the fears which accompanied the 2005 leveraged buyout by the Glazer family do not appear to have been realised. Except when you come to consider the debt the Americans have piled on to the club to finance their £800m buy-out. Manchester United Limited’s accounts do not give any indication of how much it costs to finance the £600m of loans taken out by the Glazers to buy United.
The gist of the article appears to say that while business had never been better, and record revenues were being achieved, the profits were barely paying off the interest on the original debt..
A large chunk of those loans were paid off in August 2006 when the club refinanced their borrowings, leaving the club with a larger sum to repay (£600m) in the end but lower annual interest repayments. There were plans to refinance again last summer but they had to be shelved as the global credit crunch took hold. So until the market improves, United are faced with their hefty annual interest bills. And the £67m interest figure certainly puts United’s record breaking financial performance in a very different light.
That was early in 2008, before financial results from the latest season were reported. The Daily Mail picks up the story in May…
Manchester United may be chasing a League and Champions League double on the pitch but their financial results show the club are sinking deeper into debt and posted a significant loss last year. They have incurred increased debt to their creditors and have yet to pay out on some transfer fees for players. The Old Trafford club posted a £58.2million loss in the financial year ending June 30, 2007. However, that was a substantial improvement on the £135.3m loss the company recorded in the previous year.
What I’m driving at is that as Cub fans, we have a stake in the team being sold in a manner that allows the new owner(s) to operate the club in a manner that allows for the main focus to be on the field, not on an endless push to find new revenue streams to keep the business end of the operation solvent. I do believe MLB will have some control over this, but I would not be shocked if there is ultimately the threat of a Zell lawsuit to get wring everything he wants out of this asset.
by The Deputy Mayor of Rush Street on Aug 15, 2008 3:41 PM CDT 0 recs












