…according to the Bright One the Tribsters have now set November 26th as a deadline for potential bidders to prove they can still come up with the financing to make the deal.
Tribune is “looking for confirmation on valuation and structure,” the source said. The company wants to unload the team for about $1 billion in a way that minimizes taxes, but some think that price is unrealistic.
LMAO, ‘unrealistic’…how about a fucking pipe dream. When Cuban made that $1.2 billion offer last summer, Zell should have been all over it. He wasn’t and now he’s gonna pay. How ugly has this whole thing gotten, well the Tribsters may not be able to unload the once coveted franchise and guess what, the newspaper business ain’t helping matters. This is ugly:
On Monday, Tribune reported a net loss of $121.6 million across its operations for the third quarter, compared with a profit of $152.8 million for the same period a year ago. Revenue declined 10.5 percent to $1.04 billion.
and more…
The company said print advertising revenue fell 19 percent in the third quarter, to $111 million, and that total paid circulation was off 7 percent from a year ago to 2.2 million copies Monday through Friday. Price hikes reduced losses in circulation revenue to just 2 percent, Tribune said.
Revenue from the broadcasting division fell 8.3 percent to $264.4 million, the company reported.
This sale has been really poorly managed by Zell, his delay in getting the deal done while he putzed around with the state of Illinois could cost the Tribune company up to $500 million. Think about that one for a second my friends. The Tribsters have already said they may keep up to 50% of the club. The truth is the Cubs are not worth nearly what they were just a few months ago. Zell and Company may want to wait this whole thing out, but they need cash to pay down their debt.
So what happens next? Your guess is as good as mine. I don’t think Zell will have a deal anytime soon. But the longer he waits the less this franchise could be worth as the whole economy bottoms out. At some point in the near future I will not be surprised to hear that the Cubs freeze payroll to 2008 levels and if things get even worse, we could see more drastic measures by the Tribsters. It is hard to imagine revenues in 2009 being what they were in 2008. At some point the global financial crises will impact the club on the field, it might be sooner than any of us suspect.
Well, the only upside to a potential salary freeze by the team is that the Cubs won’t be alone. If the economy stays in the tank — and I think it’s a safe bet to do so for at least a couple of years — revenues will stagnate across the board, and a bunch of teams will have the same problem.
There will be a couple of owners who won’t care, of course, and Cuban may have been one of them. It’ll be interesting to see what teams adapt to the new economic realities that will (ok, may) result from all of this and what it all means. Maybe those backloaded deals that were, in fact, a good idea two or three years ago will come back to haunt us after all…
I was hoping for the Renaissance with a new owner but as luck and lore would have it, it looks like the Dark Ages will continue for this franchise…I seem to recall the deal was thin to begin with. With the new economic reality and asset devaluation in the range of 30-40%, does Zell have the financing and income stream to get through this? I would love to hear the internal discussions but it would seem the organization waited too long and now would be under great stress. Is it possible the Trib could file for bankrupcy protection and if they did would the team be held up in the proceeding for an extended time period? What would this mean to the team’s finances? Well, if there is no prospective sale then its a matter of whether squeezing revenue out of the team will make any difference to the Trib plight or not…(Do they go on a starvation diet to survive or can they put on a happy face and hold out hoping the market will improve and a white knight will ride in?) I hope Crane Kenney got a 2 for 1 deal on the holy water because some is desparately needed now at the Tribune Tower. In the meantime keep an eye on the Cubs deal making to get signs of a position shift.
True Uncle Dave, the Cubs won’t be alone in this mess. Still the hope that I once had for this sale taking the Cubs into a new era of management has dwindled. I’m not real confident that there can be a deal at this point, at least not one structured with the debt that Zell wants to avoid taxes. Smarter financial people can explain how all of that works. But this sure is not a good time to be selling a ballclub, couple that with ad sales in media and it’s a bad time to be Trib management.
jh, I’m afraid we will begin to see that position shift soon. (Of course I was shocked when Hendry went on that spending spree afte 2006 and agains after last season–So my track record is horrible)