Monday, October 24, 2005

The Big One

Yes, this could really happen. The Cubs could be sold says Crains' Chicago Business.

Tribune Co. CEO Dennis J. FitzSimons is considering selling assets to prop up his company's shares, and that's got some wondering if the Chicago Cubs could go on the block.

Investors expect Mr. FitzSimons' search for salable assets to focus on holdings not fundamental to the company's primary businesses of publishing and broadcasting.

Selling the Cubs "makes more sense now than it has in a while," says John Miller, a vice-president at Chicago-based Ariel Capital Management LLC, Tribune's fifth-largest shareholder. "They're trying to get the stock turned around, so they tried buying back their shares, and that didn't work. Now, they move on to non-core assets, like the Cubs."

Asset: Chicago Cubs (100% Tribune-owned)

Estimated sale value: $400 million to $550 million

Why sell? With Wrigley Field expansion set to begin and attendance at all-time highs, the team would fetch a premium. Tribune could demand long-term broadcast rights in any deal.

Why not? Tribune bought the team for $20.5 million in 1981, so the tax hit could be large. "They'd also be very wary of ever being in a position to bid for the Cubs' broadcast rights, no matter how far in the future it is," says Barrington Research Associates Inc. Analyst James Goss.

Now, before anyone leaps up and screams how wonderful this would be, remember that it also takes a good buyer to make everything work out. For all their foibles, the Trib has done a great job keeping Wrigley up to date and they have spent dollars on the team in recent years.

Bring in a Mark Cuban? I'm all for it. But just look at what's happening with the Dodgers to see the risks in a change in ownership. All we need is some gasbag come in here and start screaming that Wrigley is too small with too few skyboxes. Next thing you know and the Cubs are playing in Barrington at ReMax Field.

Get your hopes up, but have them tempered by reality.

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