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Friday, November 09, 2007

Chicago Tribune: Rogers - Cubs’ sale crawling into ‘08 (RR)

Since it was announced in early April that Tribune Co. was being sold, it was believed that incoming Chairman Sam Zell would spin off Wrigley Field and the team occupying it at some point in the final quarter of 2007. But two highly placed MLB sources confirmed Thursday that Commissioner Bud Selig had been unable to keep the process moving at that timetable, ruling out a sale before the end of the year and making one before the Cubs go to training camp next spring highly unlikely.

“I’m afraid that is right,” a source said. “I can’t say for sure why this is moving at the pace it is, but the pace of it has been frustrating. We had hoped it would pick up some steam, but it hasn’t.”

According to the source, MLB has not even closed out the application process for prospective buyers. The bidding for the team is still expected to be robust, but only five groups have been cleared to look at Tribune Co.’s baseball records, according to the MLB source.
...
General manager Jim Hendry believes he will have the authority to fill the team’s needs this winter, saying he has received assurances the payroll will increase. He has begun the pursuit of Japanese outfielder Kosuke Fukudome as well as at least two pitchers from Japan, starter Hiroki Kuroda and reliever Hitoki Iwase.

NTNgod Posted: November 09, 2007 at 12:22 AM | 10 comment(s)
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1. Pops Freshenmeyer Posted: November 08, 2007 at 11:48 PM (#2610078)

he has received assurances the payroll will increase

That's the big news here. The better news is that any new owner will face a PR disaster if they come in and look to trim payroll. It's strange to think that the Cubs will spend more with no owner at all than they did under the Tribune.

It is also a sign that an ownership change will be good for the franchise.

2. NTNgod Posted: November 08, 2007 at 11:58 PM (#2610085)

They're still owned by the Tribune for now - it's just that the Tribune has changed hands.

It is hard to read what the Cubs will and can do this offseason, because of the impending sale.

Is it "You can increase the payroll, no strings, don't worry about the lengths of contracts"?
"You can increase the payroll, if you don't take on new long-term deals, and it's just a short-term bump - short-term deals or acquisitions only - until the new owner decides what direction to go"?

3. Pops Freshenmeyer Posted: November 09, 2007 at 12:01 AM (#2610087)

They're still owned by the Tribune for now - it's just that the Tribune has changed hands

Due to Zell's presence, however, the Trib Corp isn't calling the shots, right?

4. Pops Freshenmeyer Posted: November 09, 2007 at 12:22 AM (#2610096)

For instance, here is a paragraph from the news article:

"'John and [senior legal counsel] Crane Kenney have been great with me,' Hendry said before departing the general managers meetings. 'Look at the long-term commitment we made to [Carlos] Zambrano, which we all know would have been far exceeded if Carlos had gone on the free-agent market. We had the communication in place to sign him to a deal [for $91.5 million over five years]. A lot of people this week have been saying that bidding could have gone to $140 million to $150 million in this market if we hadn't got him signed. It took a lot of cooperation to get that done when we got it done.'"

"John" refers to the team President, John McDonough. The unusual bit is that the team's senior legal counsel appears to have been involved in granting permission for the Zambrano contract.

5. NTNgod Posted: November 09, 2007 at 12:23 AM (#2610097)

I should have said process of changing hands.

Well, since Zell still doesn't own the Tribune Co., the old guard still ARE calling the shots, but from LimboLand. The sale (to Zell) is still most likely to go through, it appears, but there is the off-chance it still might break down - the FCC still has problems with the Trib, among other issues*.

* in general, a company can't own both newspapers and TV stations in the same markets. The Trib is in that situation in several markets, but has a special waiver for it. The waivers, as it stands right now, wouldn't carry over to new ownership - which would put a monkey wrench in the Tribune sale to Zell.

6. McCoy Posted: November 09, 2007 at 12:35 AM (#2610105)

The Cubs contracts are so back loaded right now that I don't think there is any hurry to sell the team. They have at least all of 2008 to do it and with the revenue being what it is and the costs pretty close to being fixed the profits will come in, so there is no rush. It isn't like the Cubs are a cash black hole siphoning cash from the Tribune.

7. NTNgod Posted: November 09, 2007 at 12:50 AM (#2610112)

FWIW, here's a Financial Times article from a few days ago (Nov. 3rd) in reference to the Tribune sale to Zell.

Tribune Company and the chairman of the Federal Communications Commission are locking horns over the proposed $8.2bn buy-out of the media group by Sam Zell, the real estate entrepreneur, in a stand-off that threatens to derail the deal.

Tribune has warned the FCC that the takeover is at risk of collapsing if it does not receive regulatory clearance in the next two weeks.

But Kevin Martin, the Republican chairman of the commission, in private conversations, has said he is unwilling to address the matter before December 18, the date he has set for a vote on industry-wide changes to media ownership rules.

If the buy-out fails to close by the end of the year, the newspaper publisher's new owners will not be able to register the company for tax-exempt status next year, a crucial element of the deal.

The price of the $34-a-share offer will also increase because of additional payments based on an 8 per cent interest rate, which would take effect after January 1.

Tribune says it needs at least 20 days between receiving FCC approval and closing the deal.
...
In order to close the transaction in time, Tribune, publisher of the Los Angeles Times, needs the commission to grant its new owner temporary waivers that will allow it to bypass media ownership restrictions.

8. Joe Ryan Posted: November 09, 2007 at 03:05 AM (#2610162)

I'll be honest, I think the Tribune Company gave the Cubs every chance to succeed. On field issues have hampered the club.

9. Pops Freshenmeyer Posted: November 09, 2007 at 09:17 AM (#2610236)

The sale (to Zell) is still most likely to go through, it appears, but there is the off-chance it still might break down - the FCC still has problems with the Trib, among other issues

I hadn't heard about the holdups involving the Tribune's sale. Thanks, NTN.

10. Moses Taylor's bus bench has been Tom Sellecked Posted: November 09, 2007 at 10:26 AM (#2610305)

I'll be honest, I think the Tribune Company gave the Cubs every chance to succeed. On field issues have hampered the club.

I mostly agree, as long as we're only talking about payroll. They failed by hiring incompetent baseball people, which caused the on field issues (and mismanagement of the resources).

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Friday, November 09, 2007

Chicago Tribune: Rogers - Cubs’ sale crawling into ‘08 (RR)

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