Bruce Levine reported it over the weekend, Maury Brown reported it back in September. Today it became official, Tribune has has decided to move forward exclusively negotiating the sale of the Cubs with Tom Ricketts. Here is what the Bright One reports this afternoon:
Tribune Co. has selected a favored bidder for the Chicago Cubs and has forwarded the offer to the media company’s creditors, sources said today.
One person familiar with the process said the endorsed bid was from Thomas Ricketts, president of corporate bond dealer Incapital LLC. He is the son of Joseph Ricketts, founder of the TD Ameritrade brokerage.
A Ricketts spokesman said neither he nor his client knows which offer was sent to Tribune creditors. His bid is one of three proposals for the Cubs that Tribune evaluated at length after weeding out several others.
Ricketts is believed to have offered around $900 million.
So, Ricketts is the man and $900 million is the offer. Ricketts is not yet the winner of the franchise. What he has won is exclusive negotiating rights for the Cubs with Sam Zell and Tribune.
“They want Ricketts, and it’s always been Ricketts,” a source said.
While the others might have bid a higher price for the team, the source said the Ricketts offer had more conservative financing, an important factor when credit is extremely tight.
Also, Ricketts lives in the Chicago suburbs and represents what it essentially a family bid. Baseball owners, who must approve any Cubs sale, are known to favor tight-knit groups of owners with local ties.
Ricketts will have no trouble passing mustard with MLB owners or the commish. To make sure of that take a look at the law firm he has hired:
Ricketts has an advantage because he hired the law firm Foley & Lardner to assist him in the ownership quest. A Foley partner is Robert DuPuy, who is president of Major League Baseball.
Ahhhh the insest that is major league baseball. LMAO.
Of course this does not mean Klaff nor Utay are out of this yet. In Sam Zell’s never ending auction you can always change your bid. Do you get the feeling, they are just making this whole process up as they go along? I sure as hell do.
UPDATE 7:25 — Here’s more from the Trib’s Chicago Breaking News site:
The deal would represent a return to family ownership for the Cubs. Before Tribune took control of the team in 1981, the Wrigley family, founders of the chewing-gum company, owned the Cubs for 65 years. The clan sold the team and Wrigley Field to the media company, which owns the Chicago Tribune, for $20.5 million.
In Chicago, the Ricketts family is hardly as well known as the Wrigleys, or any of the current owners of the city’s major professional sports franchises, but certainly that would change quickly for the new custodians of one of the country’s best-known teams, as well as one of its most storied stadiums. Along with the Cubs, the Ricketts are buying Wrigley Field, and a 25 percent stake in a regional cable sports network.
The family patriarch, J. Joe Ricketts, grew up in Omaha and started a discount stock brokerage. In the 1990s he transformed the company into an Internet trading powerhouse now known as TD Ameritrade Holding Corp. He is ranked among the world’s billionaires, according to Forbes magazine, with an estimated net worth of $1.2 billion. Shares of the company are also owned by his wife and four children.
The family’s pursuit of the Cubs was led by Tom Ricketts, 43, the second-oldest child. An investment banker, he resides in Wilmette with his wife and five children. Two of his siblings also live in the Chicago area.
The Ricketts family would control one of baseball’s most popular franchises, despite the team not having won the World Series since 1908. The team draws more than 3 million fans to an aging ballpark that is beloved for its charm but lacks modern stadium amenities. Forbes estimated the team’s value at $642 million last year, fifth highest in baseball.
Normally, I would say the idea that the Ricketts family is offering more cash than any other buyer, I would think this would get the deal done. But, as an observer of this sale, I have no idea what happens next and I have no idea what to expect. (I hope the deal get’s done, but I’m not holding my breath.)
UPDATE 8:43 — Here’s what the NY Times has to say about this:
Ricketts, the chief executive of InCapital, a Chicago-based investment bank that underwrites bonds, will now negotiate exclusively with Tribune. The media giant, which has been in Chapter 11 bankruptcy proceedings since last month, needs cash to pay its debts and will probably try to push Ricketts’s bid higher.
But Tribune has spent nearly two years trying to sell the team and the storied ballpark. It has missed opportunities to sell them for over $1 billion, and was unable to capitalize financially on two consecutive postseason appearances by the Cubs. Now, with banks suffering from a credit crunch that is limiting their lending, Tribune might not be able to squeeze Ricketts.
If Ricketts and Tribune finalize their deal, it is likely to be sent to the federal bankruptcy judge who is overseeing Tribune’s reorganization and then to Major League Baseball. A three-quarters vote of baseball’s owners is required for approval.
So the club is worth $642 million according to Forbes, Ricketts and family are offering $900 million in a deal that will include cash. In this environment, the Tribune should take that money and run as opposed to squeezing Ricketts as the article suggests they might. This is Zell and the Tribsters, so I expect they will squeeze, squeeze and squeeze some more. At which point the high offer will end up being lower than the $900 million Ricketts reportedly offered.
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17 responses so far ↓
uncle dave // January 22, 2009 at 6:24 pm
Do you get the feeling, they are just making this whole process up as they go along? I sure as hell do.
You don’t get to be rich and powerful by following the rules, do you?
wpbc // January 22, 2009 at 6:41 pm
True. Especially when you are making the rules…what rules?
wv23 // January 22, 2009 at 6:49 pm
foley & lardner is also a big milwaukee firm…
pmayo // January 22, 2009 at 7:21 pm
Tribune has it now, too.
wpbc // January 22, 2009 at 7:35 pm
That’s convenient!
wpbc // January 22, 2009 at 7:37 pm
pmayo, have you found the new OS yet? I haven’t, but a friend of mine is Wisco found it.
pmayo // January 22, 2009 at 9:26 pm
I haven’t yet, but I’m going foraging tomorrow.
wpbc // January 22, 2009 at 10:15 pm
The view from the casual Cub fan:
Brian, have you ever been hit in the head by a brick?
MB21 // January 22, 2009 at 10:40 pm
Brian, have you ever been hit in the head by a brick?
The only thing that would explain such ridiculous comments is if he had in fact already been hit in the head with a brick.
Bullpen Brian // January 22, 2009 at 11:00 pm
What is your email address WPBC??? I’m interested in adding your site to my blog page. Thanks.
uncle dave // January 22, 2009 at 11:05 pm
lol, MB. Beat me to it. This whole thing brings me back to a comment I was going to make on the PSL story before my job shat upon my head with a speed and intensity that our parents’ generation could only dream of.
Anyway, regardless of whether or not raising ticket prices is a dick move by the beloved — and to clarify, in case anyone missed it, yes it is — I don’t think the Cubs can possibly lose a PR battle at this point. The club can sell Chad out in the bleachers a shit sandwich at this point and he’ll eat it like it was his last meal.
So from a business perspective, the PSL decision is a no-brainer. Season ticket sales are a way of capturing sales by exploiting scarcity, and PSLs take that to its logical extreme. What better time to pull the trigger on adding them in than when you’re on the cusp of a drop in demand?
Ticket sales for this club will be insulated from the economic downturn more than most goods, if only because the buyers of this particular good happen to be quite irrational. You know, like they’ve all been hit in the head with a brick.
wpbc // January 22, 2009 at 11:12 pm
Brian, you’re not the Brian that wants to be hit in the head with a brick are you? LOL.
It’s wpbc(at)ymail(dot)com.
all the best,
wpbc // January 22, 2009 at 11:22 pm
LOL. Well said. They won’t lose those guys.
That’s an interesting thought Uncle Dave.
I think they’ll use the PSL’s with the new grandstand construction. The hard thing will be for many of us to come up with the money. I go in on my tickets with a group of 10. We could probably come up with the money, a few years ago I wouldn’t have thought twice. Right now I will. I know they have people on a waiting list, and alot of them. So eventually they’ll get there cash. But at what point do they alienate themselves from long time fans where it is a detriment to them as a franchise. There is a tipping point somewhere. I’m not sure where it is, but at some point alot of fans will just say to hell with all of it.
I think you’re right if this thing is over in a year. If this lasts longer we will see an impact in 2010 and 2011.
uncle dave // January 22, 2009 at 11:56 pm
Yeah, y’know, it’s all conjecture on my part. I’ll bet you my first unemployment check against yours that I’m right on this one.
What I don’t recall that might be instructive is how the Bears fared when they sold their PSLs. (They did force that on the fans when they desecrated Soldier’s Field, no?). They had a weaker product than the Cubs do now, if I recall.
I guess the thing that I keep coming back to is that there are a buncha people out there who just have a shitton of money and will make bad decisions, downturn or no. I might be warped by living in San Francisco, but I see so many fifty thousand dollar cars and other outward signs of excess that it’s tough to reconcile that with any sort of impending restraint on the part of the moneyed class.
I hear you on not being able to split the PSLs with your buddies, though. I used to do that up in Seattle, had seats five rows from Junior back when he was Junior. Good times.
SS // January 23, 2009 at 8:05 am
Looks good to me. I hope he decides to sink some money into the scouting and PD system’s infrastructure – scouts, schools, coaches, etc. I remember reading a couple years ago, that the Cubs were woefully behind. If you can develop just 1 more Major League player every year, than you would otherwise – that’s a big advantage when you can dramatically outspend your competition.
wpbc // January 23, 2009 at 8:16 am
It sure is SS, and it really doesn’t cost that much (when you compare it to the money they are spending on the ML roster). Imagine a hybrid team with the payroll of the Cubs and a minor league system like the Minnesota Twins. That would be something to watch…
Cubs sale: mid-May or bust « waxpaperbeercup // March 18, 2009 at 1:54 pm
[...] and the Ricketts family are not moving along in their negotiations as well as everyone hoped back in January when the deal was going to be done by Opening Day. Oooops. Like everything else with this sale the [...]