Another Trib Subsidiary Speaks

Over in the LA Times, there's an interesting article about the Chicago Cubs. Can't find it? Try the business section:

The Chicago Cubs may be turning in a dismal on-field performance this year, but as a financial entity, it is still one of the most valuable franchises in pro sports.

That could be important if the Cubs' owner, Tribune Co., remains under shareholder pressure to sell off corporate assets or there is a wholesale breakup of the media conglomerate.

The possibility that the Cubs might land on the market has prompted speculation on Wall Street and among sports experts about the team's value, with most estimates settling in a range between $450 million and $550 million.

The lower figure would make the team the fifth- or sixth-most-valuable franchise in Major League Baseball even though the Cubs, currently in fifth place in the National League Central division, haven't won a World Series since 1908.

"The Cubs' attendance is always strong, it's in a large, passionate baseball market and it has got a long history," said Jeffrey S. Phillips, a director at the investment banking firm Houlihan Lokey Howard & Zukin who specializes in sports transactions.

You have to love when an I-banker focuses on the minimal subscription risk that the Cubs face.

There's more great stuff in the article. It's almost as if they've cherry picked from this site.

"I don't think you'd have people flocking out to see the Cubs lose in a different facility," said Maury Brown, co-chairman of the business of baseball committee of the Society for American Baseball Research.

You mean, people are Cubs GAME fans first and fans of the TEAM second?

Another selling point: the Cubs' national exposure on Tribune's WGN "superstation," a local TV station that also functions as a cable channel, carrying games to as many as 55 million viewers nationwide. The Cubs also are carried by a regional sports network operated by Comcast Corp. in which Tribune holds a 25% interest.

The terms of both deals are undisclosed, obscuring the Cubs' true profitability. The value of the WGN contract is further muddied by Tribune's ownership of both the team and the station, which gives the company leeway to shift profits and losses from one operation to another.

"Broadcast-related revenue is the wild card," Phillips said.

In other words, the Cubs may not have the maximum cash available to an owner-who-owns-as-a-hobby to spend on payroll?

As an operating asset of any large media conglomerate, a sports team is generally small potatoes. The Cubs' operating revenue, estimated at less than $200 million a year, amounted to 3.5% of Tribune's total revenue of $5.6 billion in 2005.

Wow. The Cubs are small potatoes in the Tribune farm.

One question actively debated in the sports world is whether the Cubs would perform better under private, rather than corporate, ownership. Although the team has spent generously -— its 2006 opening-day payroll of $94.4 million ranked seventh in the league Â- corporate managers are prevented from the no-holds-barred investments that often spell victory.

"Overall, the Cubs haven't won, and I don't think there's a better metric," said Andrew Zimbalist, an economist at Smith College and author of a 2006 examination of Selig's leadership entitled "In the Best Interest of Baseball?" "On balance, it hasn't been a successful ownership."

Massive applause.

The only question I have is this:

Why write this article now? Someone trolling for something? What does the Trib usually do in advance of making a move?

Hmmm...

:::UPDATE:::
Poster CCD suggests that this article was green lit by non-newspaper Trib higher ups. No chance that the editors wait for a green light from above to write an article like this. A better bet is that the idea was hinted (read: handed down) from above.

I've got a family friend who was approached by Steve Stone to be an investor in a planned buyout of the Expos and a relocation to Las Vegas. This source informed me last week via e-mail that he's heard of a deal book put together by an I-banker to independently solicit bids on the Cubs from investor groups. By independent, I mean that the book was not solicited by Tribune.

Any bets the Trib Exec suite has a copy and leaked THAT to the Times?