Killre's abandonment of the Cubs seems to have the Tribune Company reeling. Yesterday, Bloomberg reported that the Tribune company was close to accepting Sam Zell's $8,000,000,000 offer. I could have written 8 billion but the amount of pre-decimal zeros in that number is crazy. According to Bloomberg:
Zell said this month that he plans to keep the company's television stations and newspapers intact, including the Chicago Tribune and stakes in the Food Network and CareerBuilder Inc., a Web site that lists job openings and resumes of job-seekers.
"My intention is not to break it up,'' Zell, 65, said in a March 12 interview.
Notice that no where in this quote does Sam say that he plans to keep any part of the Cubs. This would be bad business. Although profitable, the Cubs would be an awful nice way to get some of his money back fast. And with the emotional investment many have with the team (even businessmen) possibly even more money than it is worth. Much more than it is worth if you ask Killre.
So what would happen to the Cubs if the sale happens? According to Reuter's News Service:
A more realistic scenario would be a sale of the Cubs and Tribune's 31 percent stake in the Food Network, in addition to rolling over the McCormick Trust's equity stake and potentially their proceeds from the dividend, estimated at $548 million, into the LBO financing, the bank said. A sale of the [C]ubs is valued between $450 million and $500 million and the company's stake in the Food Network is valued around $700 million to $750 million.Almost 2 billion back in the pocket right away! Holy Cow! But the article states that the most realistic option on the Trib's table right now is for "a "self-help" option, which could include less leverage and a smaller dividend than what Zell is proposing, as well as the spin-off of Tribune's television group."
So what happens to the Cubbies if the Tribune tries this "self-help" idea? Well, the Trib would likely sell off it's television holdings and become a full-fledged tree-killing news service. Will the Cub's "business model"* continue without the combination of paper, TV, and radio? Maybe not. No matter what happens it looks like the Cubs could have a new owner in the next 1 to 3 years. Hey, hey!
Of course, there is the most likely option that no one seems to talk about. Imagine, if you will, a dad holding hands with his son, staring at his ticket stub, just trying to find Section 4 brought to you by Coca-Cola, Row Hummer H3, Seat Spiderman 3 in the Olive Garden Terrace.