Filed:August 22nd, 2009
I'll keep an open mind about whether they're better than the old boss. But it's official: after weeks months years of negotiations, the Tribune company has reached a definitive agreement to sell the Chicago Cubs for $845 billion to the Ricketts family, led by broker/financier Tom Ricketts.
Here's a quick snippet from the announcement:
Tom and Joe Ricketts will have management control of the joint venture as its 95 percent owner. Tribune Co. -- which owns the club, Wrigley Field and approximately a 25 percent interest in Comcast SportsNet -- will retain a five percent ownership interest.
I'm happy to see the deal done, especially after watching Sam Zell as recently as last week tell interviewers that multiple offers were still being considered, and that the deal was still up in the air. And while I've concerns about the short-term competitiveness of the team, given the rather expensive financing -- $450 million total at last check -- I'm confident for now that the Ricketts will make solid major league owners long-term.
But the short-term competitiveness of the team is a big concern. Interest payments on half a billion is a lot of coin; frankly, you wonder how deep pocketed they actually are after the attempt earlier this year to sell deep-pocketed Chicago fans non-voting stakes in the club. Sorry I didn't have 25 million handy at the time. And given the escalating 2010 payroll, still weak consumer spending, and a 2009 team that doesn't look to have people running for the advance ticket window, I'm curious to see how the 2010 expenses will be handled.
That's besides the fact that the agreement is still subject to numerous approvals, including the bankruptcy court. I wouldn't be worried if this were a straight up sale, but the joint venture looks like another Zell tax-advantaged entity, deferring compensation, and shielding earnings from both creditors and the tax-man. Will creditors howl? Maybe, but I don't see this just getting rubber stamped.
The Tribune envisions this wrapping up quickly, and transition occurring by year end. While I tend to agree, I'm inclined to think late December. Awfully late in an off-season to start making decisions about the on-field personnel. Do you keep a Rich Harden? Do you offer arbitration to players like Reed Johnson and Aaron Heilman? Do you start targeting free agents to help the club?
All tough decisions normally, but even more problematic without ownership and your front office personnel firmly in place.
It's all interesting backdrop coming off what's looking to be a tragically disappointing 2009 season. This year has been bad, but 2010 could quickly shape up to be the lost season for the club.