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Chicago Cubs To Be Sold At Season's End
Tribune says it plans to sell Chicago Cubs after 2007 season
By DAVE CARPENTER, AP Business Writer
April 2, 2007
CHICAGO (AP) -- Tribune Co. made a stunning pitch to investors on baseball's opening day: The Chicago Cubs will be sold at season's end.
The announcement Monday came as the ailing media conglomerate announced its acquisition by billionaire investor Sam Zell. It puts one of sports' most storied and star-crossed franchises on the block, a year shy of the 100th anniversary of its last World Series title.
Zell, a real estate magnate who already owns part of his hometown Bulls and White Sox, issued no comment about why he's not interested in keeping the Cubs in connection with the $8.2 billion deal. The team is one of Tribune's richest assets.
Bidding for the ballclub and historic Wrigley Field, however, is certain to be fiercely competitive. Analysts have estimated the Cubs could fetch $600 million or more, a far cry from the $20.5 million Tribune paid in 1981.
While the total may not exceed the record $660 million paid for the Boston Red Sox in 2002 by a group headed by John Henry, analysts and baseball insiders all agreed the price should top those paid since then for the Washington Nationals ($450 million), Los Angeles Dodgers ($430 million) and Milwaukee Brewers ($223 million), and agreed to for the Atlanta Braves ($461 million).
"The Cubs are a great franchise. Great history, great tradition," baseball commissioner Bud Selig told reporters in Chicago, where he was attending the White Sox opener against Cleveland. "I'm not going to speculate on price."
The Cubs' popularity as a sports franchise -- and the lure of potentially steering them to their first championship since 1908 -- has attracted the interest of many potential buyers since a sale became a strong possibility last year. Billionaire entrepreneur Mark Cuban, Phoenix sports executive Jerry Colangelo and actor Bill Murray are among those reported or rumored to have interest, along with numerous Chicago business figures.
Cuban, the most prominent and wealthiest of the bunch, did not immediately respond to a request for comment, nor did Colangelo, a Chicago-area native who said in a November interview that he would have "great interest" in the Cubs.
Tribune hopes first to erase or at least lessen the Cubs' stigma of losing following 99 years without a championship, more than a quarter of them under its watch.
"In our last season of ownership the team has one mission, and that is to win for our great fans," said Dennis FitzSimons, Tribune's chairman, president and chief executive officer.
Speculation that the Cubs might be destined for new ownership ramped up last fall when Tribune put itself up for possible sale under pressure from disgruntled shareholders. It intensified with the club's offseason spending spree, including signing outfielder Alfonso Soriano to an eight-year contract for $136 million -- the fifth-richest contract in major league history.
Tribune had said for months that it would focus first on a sale of the entire company before considering selling individual pieces, which also include 23 television stations and 11 newspapers. That sale was announced Monday morning when it said it had agreed to a complex deal in which the company will go private and Zell will invest $315 million.
While the Cubs are renowned for their losing ways, they also have become more of a box-office success under Tribune's ownership and have spent dramatically more money in recent years. Nevertheless, its stewardship will go down as checkered if it fails to win so much as a single pennant.
"It's a marquee franchise," said sports economist Andrew Zimbalist, an economics professor at Smith College who pegs the club's value at $500 million to $650 million depending on any changes to TV contracts and how Wrigley Field factors into the deal. But, he added, "My guess is this is probably good news for Cubs fans. I don't think Tribune Co. has done a lot positive for the club."
Tim Speiss, who advises sports team owners for New York accounting firm Eisner LLP, pegged the Cubs' value based on 2005 revenues at roughly $465 million, excluding any debt, but said that's not only the factor in bidding for a sport franchise. "There's always a lot of emotion, for a lot of reasons," he said.
Selig contended that Tribune's ownership shouldn't be evaluated solely on on-the-field results.
"There are a lot of different ways to evaluate ownership," he said. "I understand completely the won-loss parameters people use to judge people in this business. The Tribune Company has, as far as I'm concerned, been outstanding owners."
The ownership issue overshadowed the start of the season in Cincinnati for the Cubs, who are given a chance to contend in a weak NL Central Division but are not the favorites. The Reds beat Chicago 5-1 in the opener.
Lou Piniella, the Cubs' new manager, said he met with his players before the game and told them not to let the news affect them.
"We're not to going to change," he said. "The club's going to be run the same way it's always been run. I told the players that with the business end, they don't have any control over that. The only thing they can control is what they do on the field."
Cubs President John McDonough said there hasn't been any indication Tribune will cut back on resources for the team in its lame-duck ownership season, although he declined to say whether the announcement might affect negotiations with pitcher Carlos Zambrano on a multiyear contract.
"I feel confident that if during the (season's) midpoint we need to improve the ballclub, those resources will be there," he said.
General Manager Jim Hendry called the Cubs one of the premier franchises in sports.
"Everywhere we go, half of the fans are Cubs fans," Hendry told reporters in Cincinnati. "We play in the greatest ballpark in the world. It's the greatest city to play in. Who wouldn't want to be part of the Cubs?"