Well today is the day that Sam Zell and the Tribsters will receive their final bids for the Chicago National League Ballclub. Maury Brown at The Biz of Baseball has the details:
Today marks the deadline for final bids on the Cubs, Wrigley Field, and a 25 percent stake in ComcastSports Chicago.
The group of bidders has reportedly been whittled down to four. Sources close to the process say that the four are Jim Crane, the former chief executive of freight-forwarding company EGL Inc; Thomas Ricketts, chief executive of Chicago investment bank Incapital LLC and the son of Joseph Ricketts, the founder of TD Ameritrade Holding Corp; Marc Utay, a managing partner with New York-based private equity firm Clarion Capital Partners LLC; and Chicago real estate executive Hersh Klaff.
Dallas Mavericks owner Mark Cuban has been said to be out of the running, even before insider trading charges were levied against Cuban by the SEC.
The deal, once targeted at above $1 billion has been besieged by the sour economy with the Tribune Co. shifting from wanting a 5 percent ownership equity to 50 percent. The increase in ownership signals a willingness of Tribune to retain a larger stake in exchange for keeping bidders in play as the depleted credit market wreaks havoc on the process.
With the GM meetings coming up and the Cubs now on a tighter budget, hopefully this plays out quickly. That would be unusual in this process, nothing in this sale has gone quickly thus far, so why would this? If there is anything else that comes out today, I’ll update this post, if not well…
UPDATE 3:14 — Nothing we didn’t already know from the Tribune:
At least three prospective buyers have submitted a new round of bids to Tribune Co. for the Chicago Cubs, one of professional sports’ trophy franchises.
Chicago real estate investor Hersch Klaff; the Ricketts family, founder of online brokerage TD Ameritrade Holding Corp.; and a group led by Marc Utay, a New York private equity investor, delivered their proposals by the Thanksgiving deadline, according to sources involved in the negotiations.
Sources declined to comment on the size of the three bids, which include the team, Wrigley Field and Tribune’s 25-percent stake in Comcast SportsNet, a regional cable sports network.
It was unknown at the time this report was filed whether two other prospective buyers — Houston businessman Jim Crane and Mark Cuban, owner of the Dallas Mavericks basketball team — had submitted new bids.
i’m sure zell can field bids for the club, ccd — hell, i’ll send him one — the interesting part will be the price point. s&p is on record saying that zell probably won’t be able to raise enough cash by the sale of the cubs to meet his funding requirements in 2009.
crain’s a while back noted that there is a provision in zell’s deal that requires tribco debt not to exceed nine times cash flow. as you might suspect, cash flow is down nearly 50% for tribco from the time of the deal. zell was forced to dump newsday earlier to lower debt in accordance with this provision; further, with how things have deteriorated, he probably cannot go until june 2009 without paying down more or defaulting. with no other asset sale in the works, it would seem that zell NEEDS to sell the cubs NOW.
that puts bidders in the drivers seat. given the impossibility of financing, i wouldn’t be surprised if the cubs sold a 95% stake for less than $800mm, perhaps quite a bit less. we’ll see i guess.
I think there’s a wild card here, gm. Bud Selig. He recently said the deal has to be done by the end of the year. Zell is part owner in another franchise so Selig can force his hand and I think he’s doing that. Remember when we were hearing that the deal was off until spring at the earliest? Selig then said the deal had to be done and hours later Zell said it would be completed by Christmas.
Zell is going to get screwed in this deal.
I have a sense that Thomas Ricketts will win out and I couldn’t be more excited (I once woke up in the middle of the night in a cold sweat thinking, what if somebody like a Bidwell buys the Cubs. Yikes!). Ricketts is a classic Chicagoan. He graduated from the University of Chicago, is a philanthropist, shrewd businessman and is, relative to most owners, young – which means more thinking outside the box and being aggressive. No question, Zell needs to move this along quickly and keeping a small stake is a wise move for both sides of the deal. I also think this will be the most creative sale that has ever taken place in MLB history.
Great comment Peter. I hope you are right about Ricketts and I suspect you will be!