The Great Unwinding

The Tribune Company as we know it today stands a shadow of a chance of existing in its current form. By spring training next year, the Trib could change from the billion dollar market cap, national, king-of-all-media powerhouse that it is today into a privately held newspaper and sibling radio station.

Here's what we know from the board meeting the Trib held yesterday:

The company said late Thursday after a special board meeting that it intends to make potentially transforming changes by the end of the year.

The first move was to restructure two complex partnerships with the Chandler family that were a legacy of the 2000 takeover of the parent company of the Los Angeles Times. That clears the way for a new board committee of seven directors to work with Dennis FitzSimons, Tribune's chairman and CEO, on the makeover plan.

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The short timeframe suggests the company, whose revenue continues to drop amid newspaper circulation declines, will move quickly beyond the plan it outlined in May calling for a combination of select asset sales, a $2 billion stock buyback and further cost cuts.

The key words for Cubs fans are, "beyond the plan it outlined in May". At that time, the Cubs were not projected to be part of any restructuring. Clearly, all those statements can now be ignored as the new position of the board overrules what was said previously.

Will the makeover plan include the Cubs? What we need to look for next are statements from players like Ariel Capital that hold large chunks of stock that have stated publicly their feeling that the Cubs should be sold.

Guess what Bloomberg has?

"We would welcome an LBO," John Miller of Ariel Capital Management, owner of 14.9 million Tribune shares or a 6.1 percent stake, said before yesterday's announcement. "An LBO is a much cleaner transaction, which would then allow the board to focus on long-term economics as opposed to worrying about the short-term concerns of Wall Street."

What Miller is saying is that they would welcome the company going private. This would entail the Tribune Company taking on a massive amount of debt. Far more than they currently have. This would then lead to the selling off of massive pieces of the company to pay off the debt.

Why does this page think that would include the Cubs? Several reasons.

First, the likely division to be spun off in an LBO would be broadcasting. Without a broadcasting arm, owning a ballclub to provide programming makes no sense. That means a sale of the Cubs would increase in probability.

Second, look at the person quoted. Ariel's wanted the Cubs sold for a long time. One of the reasons they would want an LBO is that it would almost certainly force the sale of the team and generate cash for core operations.

Let's temper this excitement with a big caveat. There is the possibility that the Trib could go LBO and sell everything off except: The Chicago Tribune newspaper, WGN Television, and WGN Radio. Is such a scenario, it would be possible to see a restructured Trib company continue to own the Cubs as it would clearly provide synergies to such an organization.

The hope at that point would be for different management. If Denis FitzSimons were to leave at that point, the hope would be that a new chairman would take a more civic approach to the Cubs and less of a shareholder value approach that the current board (correctly and appropriately) has.

What is imminent at this time is simply this: Major changes will occur at Trib Corp over the next 180 days. None of this can be bad for fans of the Chicago Cubs.