The Cubs announced Friday via press release that they had completed their purchase of the small percentage of the team still owned by Tribune Company. Here is the entire text of the release:
Tribune Media Company (NYSE: TRCO) and the Chicago Cubs today announced that Chicago Entertainment Ventures, LLC, the Cubs’ parent company, has completed the purchase of Tribune’s remaining five percent membership interests in Chicago Entertainment Ventures, LLC. The transaction occurred pursuant to the exercise of a purchase right under the parties’ agreements and concludes Tribune’s ownership interest in the Cubs and their affiliates.
Tribune Media (formerly Tribune Company; the broadcast and publishing divisions of Tribune split in 2014) had retained the five percent interest in the Cubs after the 2009 sale to the Ricketts family primarily for tax savings. (Later, the IRS hit Tribune with a tax bill, however.) Details on that can be found in this 2008 Reuters article, and at the time it was also understood that within 10 years that interest was to be sold, likely to the Ricketts family. I detailed that in this article here in December.
It is also my recollection, and Brett Taylor did a great job of breaking this all down in this 2014 article, about how the debt the Cubs took on to structure the purchase was all supposed to be paid down by 2019. While that debt existed, the Cubs were presumed to be under some restrictions on how much they could spend on payroll. Theoretically, with this sale of the final 5 percent of the team completed, that debt no longer exists.
I’m no expert on baseball financial matters and perhaps I am misremembering; Brett Taylor’s article contains a lot more detail on all this. And it seems clear that MLB owners, whether “colluding” or not, have all decided to stay under certain luxury tax levels for payroll in 2019. Those restrictions didn’t exist when the Cubs were sold to the Ricketts family 10 years ago.
It would seem, though, given all this and all the additional revenue that the Cubs have realized from various sources (new private clubs, etc.) and the additional revenue that they will presumably be receiving when their new TV network debuts in 2020, that they could spend more money on player payroll if they chose to do so.
In any case, at the very least this, as noted in the release, concludes Tribune Company’s ownership interest in the Chicago Cubs, something that began 37 years ago.
As always, we await further developments.