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Monday, June 25, 2007

Fortune: Chasing the Cubs

[T]he Tribune Co., in the wake of its $8.2 billion sale to Chicago real estate king Sam Zell, is poised to offload the lovable losers - for a price that could exceed $1 billion. And observers say that if Major League Baseball commissioner Bud Selig has his way, John Canning Jr., CEO of Madison Dearborn Partners, will be the Cubs’ next owner.
...
In Selig’s mind, Canning has three things going for him. He has deep pockets to buy the team, he has Chicago roots, and, as part owner of the Milwaukee Brewers (he’d have to sell that stake), he’s already a familiar face to the league’s owners. He’s also a big fan: Before becoming a private-equity mogul, he was a young catcher who failed in a 1962 tryout with the Atlanta Braves.

“I have enormous respect for John Canning, both as a person and as a businessman. But it’s a process that will be fair and open,” says Selig. “The Cubs are one of our treasures.”
...
While Canning is considered the leading contender, closing the deal may not go as smoothly as a Tinker-to-Evers-to-Chance double play. That’s because the team is being sold by a public company with a fiduciary responsibility to sell to the highest bidder.
...
The deal is expected to include Wrigley Field, the team’s storied ballpark, and a 25 percent stake in Comcast Sportsnet Chicago. A billion-dollar price tag would be a record sale for a U.S. sports franchise.

I knew the name was familiar… he currently owns 11 percent of the Brewers and was in control of Selig’s share of the Brewers before the sell-off to Attanasio.
Also, the FORTUNE writer must not be a hardcore baseball fan - in 1962, the Braves were still located a little bit north of Atlanta….

NTNgod Posted: June 25, 2007 at 11:02 PM | 11 comment(s) Login to Bookmark
  Tags: business, cubs

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   1. NTNgod Posted: June 25, 2007 at 11:14 PM (#2417079)
Here's Canning speaking when the Brewers were put up for sale in 2004:
John A. Canning Jr., an influential member of the board of directors, said he had been in favor of putting the team up for sale, and had advised Selig and Selig-Prieb to do so.

"This has been under discussion for a long time," he said in a telephone interview from Chicago. "Bud has stayed totally out of operating the team, but he has always known he has the appearance of a conflict. I don't think he wanted to abandon his partners. But there was a unanimous view that this was the right way to go."

Since 1998, Selig has placed his shares - various team officials confirmed Selig's ownership percentage at 26%, the largest of the ownership group - in a voting trust controlled by Canning and longtime friend Mitchell Fromstein.

Canning, a self-described baseball junkie, said he had no interest in participating in a new ownership group. "I don't want to continue on without the Seligs," Canning said.

Were Canning and other investors tired of pouring money into the team after years of losses and losing seasons? Canning paused before answering.

"You know, it's an issue," he said. "There are different levels of pouring money into this franchise. We were sensitive to the fact that different people can afford to take different risks. But we didn't want to pour money in and dilute some people's interests, all of whom were loyal partners."
(BTW, if you read the whole article and notice the name Edmund Fitzgerald in the Brewer history part, and see a possible joke - the Brewers being the wreck of Edmund Fitzgerald or something - the ship was named for his father)
   2. odds are meatwad is drunk Posted: June 25, 2007 at 11:29 PM (#2417103)
yeah the cubs are dead if he buys them
   3. Banta Posted: June 25, 2007 at 11:45 PM (#2417133)
I agree with the headline. Having a chaser is probably a good idea if you plan on watching the Cubs.
   4. pkb33 Posted: June 25, 2007 at 11:46 PM (#2417135)
It'll be as 'fair and open' as the Red Sox sale was, I imagine.
   5. TFTIO is familiar with the works of Pablo Neruda Posted: June 25, 2007 at 11:46 PM (#2417136)
Does anybody in the entire wide world think that the process will be "fair and open"?
   6. NTNgod Posted: June 25, 2007 at 11:47 PM (#2417138)
Rightly or wrongly, Canning was in the middle of the late-2003/early-2004 "the Brewers are dead" scare (dark times, they were) and the whole Ulice Payne situation: Brewers' payroll at risk into '06
A financial report prepared for the Milwaukee Brewers in July 2003 and shown to potential investors envisioned reduced player payrolls through 2006. The report, obtained by the Journal Sentinel, makes a number of financial assumptions about the future of the team. But one of the key assumptions made in the report and shown to these potential investors is there would be no significant growth in the near future for baseball operations, including player payroll.

"Major League team payroll (excluding benefits) is reduced from $46.1 million in 2002 to $42.5 million in 2003, and reduced further thereafter through 2006," the report says. Brewers board members John A. Canning and Harris Turer said Thursday the report was a work in progress.
...
Said Canning: "I know the document has to be significantly revised. The whole concept was to present as conservative a case as you could think of. If we started drawing 1.2 million (fans), the losses would be so significant, you'd be an idiot to have a payroll of $40 million."
...
The issue of what the Brewers intended to do with their payroll next season and Payne's direct involvement remain sore points, both Turer and Canning said. The two said that no members of the Brewers' board were benefiting from cutting the team payroll.

"I've never received a stinking dime," Turer said. "It's not even close."

"I haven't taken a cent out," said Canning, who said he invested $7 million in the team in the '90s.

(this was when Melvin was ordered to shave the payroll to under $30mil for 2004, which forced the Sexson deal - Cuts may imperil Brewers on field)
   7. J. Michael Neal Posted: June 26, 2007 at 05:07 AM (#2418094)
I smell a lawsuit coming. When you're dealing with a publicly traded company, you don't have nearly the same leeway to rig deals. Sure, it's written into league rules that they have to approve any new owners, but do you really think Selig wants to sit in a witness chair and explain why he rejected the highest bidder?
   8. TerpNats Posted: June 26, 2007 at 01:42 PM (#2418230)
Perhaps Cuban will be given the Pirates as a consolation prize.
   9. JoeHova Posted: June 26, 2007 at 02:51 PM (#2418286)
That was a dark time in Brewer history. I give Payne credit for going public with that stuff and possibly hastening the sale of the franchise by the Selig's.
   10. Dan The Mediocre Posted: June 26, 2007 at 03:21 PM (#2418309)
I smell a lawsuit coming. When you're dealing with a publicly traded company, you don't have nearly the same leeway to rig deals. Sure, it's written into league rules that they have to approve any new owners, but do you really think Selig wants to sit in a witness chair and explain why he rejected the highest bidder?


If there wasn't such a lawsuit after Henry was awarded the Red Sox, I doubt one will come up.
   11. Misirlou's been working for the drug squad Posted: June 26, 2007 at 03:29 PM (#2418324)
If there wasn't such a lawsuit after Henry was awarded the Red Sox, I doubt one will come up.


The red Sox were not a publically traded company.

Question. Can MLB force a sale of a team if the owner dies and they don't care for the heir?

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