Really Bad News on Ownership Front
by frustratedfan on Jun 8, 2009 5:19 PM CDT
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The news is now reporting that Zell is about to "lose" control of the Tribune and its going to go into a full blown Bankruptcy situation. Losing Zell? Normally that wouldn't really be a bad thing. But in this case it would throw the whole Tribune situation up in the air and we could well see the deal canceled and lots of other problems develop. The only "plus" is that, under bankruptcy, (and notwithstanding the screams of the players union) the Cubs could well seek to void the contracts of Soriano, Bradley, Lee and any other high priced talent. The problem is that, under that kind of hatchet, the contracts would likely be chopped simply based on dollar value and not on baseball sense. Thus essentially any high priced Cub could be launched... or they could have their contract sold if it has value... or the Court could order the sale of the ball park and the team separately to see if it brought in more money... or order it sold to the highest bidder in an open auction... or any variety of other actions....
Am I panicing?
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This puts me just about over the edge with this whole process
When its all done, somebody tell me the name of the new owner. this is getting out of control.
Just say no to players named Aaron on the Cubs.
by nji232 on Jun 8, 2009 5:22 PM CDT reply actions 0 recs
I plead ignorance on how these things work.
Where the hell has Ivy Walls been?
Anyway, all I can say is this Cubs sale has been positively Kafka-esque. I’m pretty sure that this team will never be sold, and we’ll never know precisely why.
I've committed to tweeting about the Cubs for the rest of the season. (Does that sound as ridiculous as I think it does?) Anyway, if you're on Twitter, you can follow me here.
by dat cubfan daver on Jun 8, 2009 5:33 PM CDT reply actions 0 recs
Here
http://www.bleedcubbieblue.com/2009/6/7/902153/zell-to-lose-control-of-tribune
I posted about this the other day. In all likelihood, this doesn’t affectthe sale of the Cubs, unless Ricketts backsout. Even then, there woud be another buyer. A BK court could allow the sale to happen independent of any other BK proceedings. The Cubs aren’t going BK, the Trib is. To that point, it sounds as if they might emerge soon as it is.
"When they signed Fukudome, I knew they were trying to get me fired". - Ron Santo, January, 2008
by BeerCub on Jun 8, 2009 5:48 PM CDT reply actions 0 recs
The Tribune site also is reporting the story
There’s a story on the Chicago Trib’s site about Zell possibly losing control of the company.
The story doesn’t really discuss the Cubs organization. This is because, if i remember correctly, when the Tribune Co. listed the assets when it first filed for bankruptcy, the Cubs and Wrigley weren’t included because they were being kept seperate from the Tribune Co. The proceeds from their sale would have to go to paying down the Tribune Co. debts, however.
I don’t know if that status necessarily changes if Zell is removed from control.
"Pinky, are you pondering what I'm pondering?"--The Brain
by brook on Jun 8, 2009 5:49 PM CDT reply actions 0 recs
It doesn't
You’re correct, the Cubs are a separate part of the BK proceedings.
"When they signed Fukudome, I knew they were trying to get me fired". - Ron Santo, January, 2008
by BeerCub on Jun 8, 2009 5:51 PM CDT up reply actions 0 recs
I believe you are correct...
…and I also don’t believe Zell losing control would have much bearing on a potential sale of the club.
Zell bit off more than he could chew in this circumstance. A media property is not like real estate, and he is like a “bull in a china shop” with the Trib.
If anything blows the Rickett’s deal, it will be because he feels the financing is just too costly at this point in time.
"I don't like them fellas that drive in two runs but let in three" Casey Stengel
by MPH73 on Jun 8, 2009 11:32 PM CDT up reply actions 0 recs
The contracts would not be voided
The Cubs are a wholly owned subsidiary of the Trib. The Trib isn’t liquidating, they’re re-organizing. Even if the Cubs weren’t being sold, they’re profitable, and any profitable asset would usually remain as is in a BK. They have survived on their own before the Trib got them, and they will after this is over.
"When they signed Fukudome, I knew they were trying to get me fired". - Ron Santo, January, 2008
by BeerCub on Jun 8, 2009 5:54 PM CDT reply actions 0 recs
Agreed
That is ridiculous. As big as Alfonso Soriano’s contract may seem, $20 million is a blip on the screen when you consider the entire Tribune Co’s yearly operating costs.
by Poloplaya14 on Jun 8, 2009 8:35 PM CDT up reply actions 0 recs
Nothing negative will happen...
…with maybe the exception of slowing the process down. The Cubs are worth too much, etc, to screw up. So everybody is going to wash their hands and handle with care while dealing with the Cubs. It means everything will take longer, and more paperwork will need to signed, but other than that, it won’t affect the Cubs as they are.
by TheHawkRules on Jun 8, 2009 5:57 PM CDT reply actions 0 recs
The only monkey wrench in the works could be the inability of the Ricketts' family to secure the $450 million in credit facility
I also wouldn’t go writing the eulogy of Sam Zell just yet. This man is a billionaire and an absolute shark when it comes to highly leveraged deals.
All this sordid affair speaks to is the urgency of the Cubs to WIN NOW. I don’t see how Ricketts is going to keep the payroll at its current level. I just don’t.
You mean, let me understand this cause, ya know maybe it's me, I'm a little messed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to amuse you? What do you mean funny, funny how? How am I funny?
by BLou on Jun 8, 2009 6:07 PM CDT reply actions 0 recs
Yes
Because Zell did such a great job buying the Tribune. The guy’s a genius.
by Josh77 on Jun 8, 2009 6:16 PM CDT up reply actions 0 recs
Zell has bought and sold dozens of companies en route to amassing a personal fortune that exceeds $2 billion
You can piss on Sam Zell all you want. I don’t think however he will lose much sleep.
You mean, let me understand this cause, ya know maybe it's me, I'm a little messed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to amuse you? What do you mean funny, funny how? How am I funny?
by BLou on Jun 8, 2009 6:24 PM CDT up reply actions 0 recs
He'll probably lose as much sleep
as Hendry and Wilken do over you.
by Josh77 on Jun 8, 2009 7:00 PM CDT up reply actions 0 recs
no one
gets to that stage without having made mistakes, and I’d bet Zell would be the first person to tell you that.
This has not been a good acquisition by Zell.
I'm a Cubs FANATIC. They are my team, through thick and thin. When they play over their heads, and when they play under the gutter. When they win the division, and then get swept in the division series. When they get no-hitters and when they blow no-hitters. And some day, when they go all the way and get those rings. This is the kind of fan I am.
by drewishdrewid on Jun 8, 2009 9:03 PM CDT up reply actions 0 recs
+1
He overplayed his hand badly and his dragging out of the process has cost him a bundle. If he had moved to get the sale going as quickly as possible, he would have had the chance to sell before the bottom fell out of the market. As it is, the bankruptcy is just another headache he doesn’t need. It won’t affect the ultimate sale, but it certainly doesn’t strengthen his position any.
"Hats for bats.....keep bats warm." - Pedro Cerrano
"Hey bartender, Jobu needs a refill !!!!!!!" - Eddie Harris
by willie mays hayes' gloves on Jun 8, 2009 9:25 PM CDT up reply actions 0 recs
Zell built his fortune...
…in real estate, and he has even admitted this media thing was completely new to him.
It’s a hell of a lot different dealing with people as assets vs property, and old Sammy does not appear to be wired for this task. I think the guy got bored, and decided to try something a little bit different, and it is indeed different than what he is accustomed to.
"I don't like them fellas that drive in two runs but let in three" Casey Stengel
by MPH73 on Jun 8, 2009 11:37 PM CDT up reply actions 0 recs
Agreed about Ricketts
Which is why if the Cubs are well out of the race by the all star break (they better not be), I would not be surprised at all if there was some sort of fire sale. That’s all speculative on my part but you never know.
by ak123 on Jun 8, 2009 6:54 PM CDT up reply actions 0 recs
According to this, Ricketts financing was going to happen
$350M in credit, $450M supplied themselves, $100M with that celebrity thing we discussed here a few weeks back.
http://www.suntimes.com/business/1580337,CST-FIN-cubs19.article
I understood the hangup was the back-end provisions on the TV deal. TribCo wants to keep ’GN installed regardless of the deal. Ricketts wants to auction the rights to the highest bidder. The difference in the 2 sides is thought to be in the range of $50M and the 2 sides have supposedly come closer recently.
I’m not sure Zell’s controlling position has a whole lot to do with the Cubs situation, especially since they were not included in the Ch-11 filings.
So who’s a a business guru here that can answer some of this?
Sweet Lou for Mayor in '11.
by blackhawk24 on Jun 9, 2009 7:40 AM CDT up reply actions 0 recs
for those who kept saying that the bankruptcy
has nothing to do with the Cubs and their sale, I would like to submit Exhibit A…..
baseball is a game of outs......pop out, ground out, line out, pitch out, strike out, fly out, and Fox and Bud's favorite black out
by Cubbie-Tim on Jun 8, 2009 7:18 PM CDT reply actions 0 recs
What Exhibit A?
"When they signed Fukudome, I knew they were trying to get me fired". - Ron Santo, January, 2008
by BeerCub on Jun 8, 2009 8:36 PM CDT up reply actions 0 recs
the bankruptcy court
if you read the post it explains a lot of what i have said time adn tiem again. Cubs were not included in the bankruptcy filing, but being an assett of the Tribune Corporation, they (the Cubs) still can (or quite likely will be) affected by it.
baseball is a game of outs......pop out, ground out, line out, pitch out, strike out, fly out, and Fox and Bud's favorite black out
by Cubbie-Tim on Jun 8, 2009 8:48 PM CDT up reply actions 0 recs
What evidence do you have of that?
The Cubs were barely mentioned in the article. They are NOT part of the bankruptcy filing. While the court may eventually have some say over the final sale, this latest event is irrelevant to the Cubs.
"You can observe a lot just by watching." ~ Yogi Berra
by Al on Jun 8, 2009 9:00 PM CDT up reply actions 0 recs
Bankruptcy Rules
Anything that’s an asset of the debtor comes into the debtor’s Bankruptcy estate. The Tribune Company has a substantial ownership stake in the Chicago Cubs (I think there are some minority owners, although I’m not totally sure on that one). Even if the Tribune Company does not wholly own the Cubs, their ownership stake is part of the bankruptcy estate.
As part of the bankruptcy estate, the bankruptcy court judge and creditors have a substantial say in the disposition of the Cubs’ assets. However, courts are willing to give a lot of leeway to the debtor in possession when it comes to asset sales. If the creditors have no problems with it, there’s nothing fraudulent about the asset sale, and the Tribune Company as debtor in possession has not done anything to tick off the judge, then the asset sale goes through without much trouble.
However, a shift from Chapter 11 to Chapter 7 wouldn’t change anything about this sale. The Cubs themselves are not in bankruptcy, so they won’t be able to attempt avoidance of the contracts (which is a breach, not a termination!) and other fun techniques to screw around with the team.
by Outshined_One on Jun 8, 2009 10:40 PM CDT up reply actions 0 recs
I agree...
…the courts won’t have much to say about the sale of the Cubs, but they will have plenty to say about where the proceeds go.
"I don't like them fellas that drive in two runs but let in three" Casey Stengel
by MPH73 on Jun 8, 2009 11:40 PM CDT up reply actions 0 recs
Correct!
So, as I said above, this is irrelevant to any discussion of the Cubs.
"You can observe a lot just by watching." ~ Yogi Berra
by Al on Jun 9, 2009 3:40 AM CDT up reply actions 0 recs
at this point yes
but it can change at any time.
www.cnbc.com/id/28115975/ (yes it is from DEcember, but it does give some detail).
according to that, it seems that the expected sale of the team is the reason why it was left off, but if the Cubs start spending a bunch of money it hints that the courts could get involved in the Cubs daily workings.
to my knowledge, even if it was not included, it is still an asset of the company in bankruptcy and the courts can force it into being included as part of the bankruptcy filings if there is valid reason to. The reason it was not needed to be included at this time is that the Trubune filed Chapter 11 (restructuring). If the Tribune Corporation is forced into Chapter 7 then it has to liquidate all assets, which then would include the Chicago Cubs and Wrigley Field. Again this is how it has been explained to me previously.
Anyone have a link to a direct answer about this, or better yet know a bankruptcy attorney?
baseball is a game of outs......pop out, ground out, line out, pitch out, strike out, fly out, and Fox and Bud's favorite black out
by Cubbie-Tim on Jun 9, 2009 11:48 AM CDT up reply actions 0 recs
found a link with details
http://www.nytimes.com/2008/12/09/sports/baseball/09sandomir.html?_r=2&ref=sports
this part here is quite interesting
It is not unusual for certain subsidiaries to be excluded from the Chapter 11 filing of a parent. In the spectacular bankruptcy of Lehman Brothers, for example, the money-management firm Neuberger Berman was not part of the filing. Yet its sale, announced last week, must still be approved by the United States Bankruptcy Court, as will any sale of the Cubs, Wrigley Field and another asset excluded from the bankruptcy filing — the Cubs’ 25 percent stake in Comcast SportsNet Chicago, the regional sports network.
"The general explanation for not including a subsidiary in a bankruptcy is that it’s a stand-alone company and not in need of reorganization," said Harvey Strickon, a counsel to Paul, Hastings, Janofsky & Walker, who specializes in bankruptcy law.
Saul Burian, managing director of the financial restructuring group at Houlihan Lokey Howard & Zukin, an investment bank, said: "Why disrupt subsidiary operations if you don’t have to? You may get the best of both worlds: the urgency and competitive auction dynamic that helps get a deal done and access to the bankruptcy court to give the buyer certainty" — with immunity from creditor challenges if the judge approves the sale.
Separation from the filing is not a reason for Lou Piniella to strip off his shirt and crack open a beer or three in Wrigley’s bleachers. Under certain circumstances, Tribune creditors could try to force the Cubs into bankruptcy or seek to impose court oversight on its operations. "The Cubs and Wrigley are legally under the control of the parent in bankruptcy," said Robert M. Lawless, a professor at the University of Illinois College of Law.
baseball is a game of outs......pop out, ground out, line out, pitch out, strike out, fly out, and Fox and Bud's favorite black out
by Cubbie-Tim on Jun 9, 2009 12:15 PM CDT up reply actions 0 recs
Theoretically, yes, but...
I would be surprised if a court would approve oversight of the Cubs. Approving the sale would be more advantageous to the Tribune’s creditors as it would put money in the Trib’s pockets. Managing the Cubs further would only take more money away from the Trib and therefore, from the creditors. All that matters in the end is how much and how fast can the creditors collect. An orderly sale can further that goal. Overseeing the Cubs operations cannot.
by Fraggin Judge on Jun 9, 2009 4:55 PM CDT up reply actions 0 recs
Court oversight of the Cubs
That would only happen if it turned out the Tribune Company was doing something like using the Cubs as a front for a money laundering operation or if the Tribune Company was trying to screw over over its creditors through grossly and horrifically mismanaging the Cubs.
In other words, it ain’t happening.
by Outshined_One on Jun 10, 2009 9:08 AM CDT up reply actions 0 recs
I wonder if all nine figure business transactions are this slow and/or complicated
Or if this one is particularly FUBAR
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 Jun 8, 2009 8:20 PM CDT reply actions 0 recs
In the case of the Cubs...
… the whole is greater than the sum of its parts. The organization as a whole would be worth a great deal less without any of its star (highly paid) players or its mecca of a field. Nobody is breaking this thing in to tiny pieces and selling them on ebay.
And honestly, the ownership transition is interesting, but unless we have solid evidence that the new ownership will either drastically increase or decrease the payroll (i’ve heard claims on both but seen evidence of neither), it has little bearing on what happens on the field.
I, personally, could not care less which old already rich white guy is reaping the rewards of owning this storied franchise unless that guy is also affecting my experience with it. Zell isn’t touching anything (he’s got some other stuff on his mind, obviously) and Ricketts hasn’t said what he’ll do with the team or the field. Its all irrelevant at this point.
"Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end"
by AndrewJStone on Jun 9, 2009 11:48 AM CDT reply actions 0 recs
If they are selling on Ebay...
do you think they’d have a minimum bid, or do you think I might be able to get a steal? I’d like to purchase the scoreboard, and possibly Bob Brenley.
by CubsWin!Oregon on Jun 9, 2009 2:02 PM CDT up reply actions 1 recs
Seems inevitable that a $136 million payroll is non-sustainable
The Ricketts family isn’t spending $900 million and financing $450 million of the deal to bleed money. They are good business people and are going to want to operate this thing at a reasonable margin level. Plus they have the issue of having to come up with either a major renovation plan for Wrigley or build a new ballpark at some point. So they are going to definitely watch their pennies.
You mean, let me understand this cause, ya know maybe it's me, I'm a little messed up maybe, but I'm funny how, I mean funny like I'm a clown, I amuse you? I make you laugh, I'm here to amuse you? What do you mean funny, funny how? How am I funny?
by BLou on Jun 9, 2009 2:20 PM CDT up reply actions 0 recs
Do you know what the margin level is for this team?
How do you know that the organization is not profitable even with a $136 million payroll?
by SouthernCub on Jun 9, 2009 2:21 PM CDT up reply actions 0 recs
Good question. I don't think we know the answer to that. I don't see the Cubs releasing that information
for public consumption anytime soon. It’s possible that the Cubs could sustain a $150 or $160 million dollar payroll and still remain profitable.
"Hats for bats.....keep bats warm." - Pedro Cerrano
"Hey bartender, Jobu needs a refill !!!!!!!" - Eddie Harris
by willie mays hayes' gloves on Jun 9, 2009 2:37 PM CDT up reply actions 0 recs
I think that's the really meaningful question.
In the end, can the Ricketts group get the money under the tightened credit rules imposed by banks nowadays? If they can, the sale will be approved by the bankruptcy court. If they cannot, the deal is doomed.
by Fraggin Judge on Jun 9, 2009 4:58 PM CDT up reply actions 0 recs
Oh come on.
Show me numbers to prove this, or stop proclaiming it. Seriously.
Has Ricketts said anything to imply it?
Has the Trib said anything to give you the idea the cubs aren’t raking it in in spite of the payroll?
Do you have ANY evidence to back this up, or are you just spouting nonsense?
"Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end"
by AndrewJStone on Jun 9, 2009 2:44 PM CDT up reply actions 0 recs
Out of curiosity
i wonder if MLB’s antitrust has any complication with the Tribune Corporation and including / not including the Cubs in their original filing.
baseball is a game of outs......pop out, ground out, line out, pitch out, strike out, fly out, and Fox and Bud's favorite black out
by Cubbie-Tim on Jun 9, 2009 12:08 PM CDT reply actions 0 recs
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