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Friday, February 29, 2008

The Biz of Baseball: Brown: Zell is Selling and Maximizing, Much to MLB’s Discontent

Or, as Maury sez..."Sam the Zellot.”

For fans of baseball—and surely as the sun rises tomorrow, MLB thinks the same—the sooner Sam Zell is removed from all things Chicago Cubs the better. While other corporate ownerships have been chastised by some fans for not doing enough to improve the team for the future, Zell isn’t interested in anything more than getting as much money out of the Cubs and Wrigley as he can, and doing so yesterday would be nice, if you don’t mind.

Hey, it’s his toy/asset, so he’s got that right. But, sports teams are different than oil futures, or junk bonds, or for that matter, newspaper companies. Apparently, Zell isn’t interested in making friends in the baseball business along the way, so I wouldn’t be surprised if in a few years he has to pay to get into a game at Wrigley… if he ever decides to take an interest in baseball.

Repoz Posted: February 29, 2008 at 12:54 PM | 8 comment(s)
Related News: General, Business, Chi Cubs

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1. Moses Taylor: armed with a will, the past, a brick Posted: February 29, 2008 at 02:16 PM (#2703146)

Good read. This whole situation sucks.

2. JPWF13 Posted: February 29, 2008 at 04:52 PM (#2703334)

Msybe Zell is trying to be the biggest a-Hole imaginable so Selig will let him sell to the highest bidder- a man Selig would never let own a team otherwise- Mark Cuban....

3. Maury Brown Posted: February 29, 2008 at 05:46 PM (#2703406)

Msybe Zell is trying to be the biggest a-Hole imaginable so Selig will let him sell to the highest bidder- a man Selig would never let own a team otherwise- Mark Cuban....

There has been an unconfirmed rumor of someone jumping into the fray that would make every bidder on the list for the Cubs look poor... Carlos Slim Helú. If true, money would certainly not be an issue for him.

4. Traderdave Posted: February 29, 2008 at 06:00 PM (#2703428)

Sam Zell is a prick. I would rather drink a pint of gasoline than be in the same room as him.

That said, this is America & he is free to do as he likes with his property. I'd drink two pints of gasoline to defend his right to do that.

Separating the team from the park could prove to be a solid strategy. A park is a big asset that requires alot of upkeep but doesn't have growth potential. Most teams don't own their parks, of course, but the ones that do could really benefit from a sale & leaseback deal.

BTW, Tribune debt trades at deeply distresed levels; expectations of a default are widespread. That may explain his zeal in milking the cash cow.

5. Voros Posted: February 29, 2008 at 06:07 PM (#2703440)

Traderdave,

I think that's the general gist I'm getting from Zell, though I would say that he may be pushing the "it's mine and I'll do as I damn well please" line way too far to his own detriment. That he's right about several of the issues doesn't mean he has to be a jerk about it, and I don't think being a jerk is going to help him any.

I do think he's mistaken about night games. I don't think more night games would help him long term. Day baseball has a big hand in providing the Cubs with the fanbase they have. The occasional night game helps, but going to a Sundays, Holidays and getaway Thursdays slate of day games only (like everybody else) would likely not be in his financial interest long term.

6. Cabbage Posted: February 29, 2008 at 06:09 PM (#2703445)

That said, this is America & he is free to do as he likes with his property. I'd drink two pints of gasoline to defend his right to do that.

Here here.

At least he's being polite and waiting a few months before demanding a taxpayer subsidy (and its coming... just you wait).

7. Cabbage Posted: February 29, 2008 at 06:15 PM (#2703453)

If you think its expensive now, just wait to see what it costs when its free.

8. Maury Brown Posted: February 29, 2008 at 07:46 PM (#2703519)

At least he's being polite and waiting a few months before demanding a taxpayer subsidy (and its coming... just you wait).

Not really. The plan is for the state to float bonds for the purchase and renovation of Wrigley (this, of course, if the deal to break off Wrigley goes through with the state of Illinois). It's that action that creates a real problem for would-be owners.

How does the state plan to pay off the bonds? Rent payments from the new owners, plus revenues from the naming rights deal.

This also explains why MLB hates this wrinkle.

Capital improvements to the facility are being paid for by ownership, but they do not reap the benefits in the increased equity because they don't own it. They also can't control what does, or does not, happen with the facility, nor enjoy the naming rights revenues.

Plain and simple, it's a bad deal from management's perspective.

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Friday, February 29, 2008

The Biz of Baseball: Brown: Zell is Selling and Maximizing, Much to MLB’s Discontent

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