Worth More Or Less

Discussion of the eventual sale of the Chicago Cubs continues to bubble up. A lot of the speculation revolves around the spending spree that the Tribune is on and why they are spending so much on baseball players when the refuse to spend on reported and editors. One of the theories is that better players, and better on-field performance, will drive up the value of the franchise. Derived from that is the idea that winning a World Series title in 2007 would drive up the value of the franchise even farther.

That line of thinking makes Carl Spackler look smart.

One of the reasons people, especially local people, want to buy the Cubs is because they realize what being the person to finally make the Cubs a winner would mean. It means statues. Beatification. Lionization. Cannonization. It means being more popular than Barrack Obama, more powerful than Richard Daley, and having more influence than Oprah (aside: does anyone remember that her last name is "Winfrey" anymore?)

It means the world's biggest ego trip.

What happens if the Trib manages to win prior to finalizing a sales price? Denis FitzSimons gets the ego trip and the “buyer” gets to be second fiddle. No portraits on the Bigsby & Kruthers building. No cover of Time magazine. No profiles in Sports Illustrated. Nothing but being another Buzz Aldrin.

If the Cubs win before the sale, the sale price will go down.

Just A Little Longer

While Jason Schmitt rumors swirl around like the whirlpool that will eventually become his late season respite, Crains had this to say yesterday on the fate of the Tribune.

Tribune Co. said Tuesday that it would extend its deadline for deciding whether to sell the company until the first quarter of 2007.

"We are committed to a complete review process that will yield maximum value for all Tribune shareholders," William A. Osborn, chairman of an independent committee set up to review offers, said in a statement. "We anticipate a final recommendation to the full board during the first quarter of 2007."

...

Tribune Chairman Dennis FitzSimons said response to the company's proposed sale has been "strong" and the timeline was being extended so the company could thoroughly consider all the proposals.

This would seem to mean one of two things. First, offers are strong but involve more than just cash and time is needed to value the likely exchange of stock that would take place.

The second, and more likely scenario, is that while the offers are "strong" in terms of seriousness, they are weak in terms of price. The delay is to try to drum up more interest and higher prices.

Looks like the timeline may be pushed back a little, but that's all. If prices are so weak for the whole company that may also make the scenario of a ChiTrib-WGN TV-WGN 720-Cub company more likely. The company may have to be sold in pieces.

What's been very interesting is Mark Cuban’s silence on all this. Well, silent except this little entry on his blog.

Wow. Mark's getting all fired up about newspapers and local advertising and synergies. Hmmm....

It's All In Your Attitude

As mentioned the other day, The Source leaked a few rumors about the Cubs. One that was not discussed on this page is something that has to be considered as a reasonable possibility. That is: Tribune Company will sell off all their non-Chicago assets and leave a core company consisting of the Chicago Tribune Newspaper, WGN TV, and WGN Radio.

Such a structure would preserve Col. McCormick's original company, maintain perceived local synergies, preserve the cross-ownership waiver that allows the Trib to own broadcast and print media in a single market, and save the Tribune millions of dollars in taxes on the sale of the Cubs.

In such a company, a strong business case can be made that the Cubs should remain one of their assets.

A reasonable case could also be made that this would not be all bad for the fans of the Cubs given one, huge if...

There was an article in the LA Times suggesting that the big spending of the Cubs could affect the sale price of the team. Some believe that having good players will increase the value by reducing the number of empty seats that were seen in Wrigley Field last September. Others argue that, beyond the high salaries created by the new contracts reducing the available cash flow on which a purchase price can be calculated, a new owner won't want to be tied into long term contracts of players he doesn't want. There's merit to all those arguments. But there is still a clear, strong desire by Denis FitzSimons and his management team to stay an independent company under current management. And that fits with the rumor from The Source.

So, let us say Trib management is running the Cubs under the guise of eventually undertaking a local retrenchment strategy. The spending on Alfonso Soriano and Aramis Ramirez would have to be explained by something other than increasing the value of the team or "going for it" in 2007 and leaving the cleanup costs to the next owner.

One of the reasons the Trib has been a horrible owner is that there has been no one from the top who has demanded a winner be put on the field. Before Denis FitzSimons fired Andy MacPhail, when was the last time anyone heard a Tribune exec say anything about the Cubs and winning? Other than the insulting statements of Jim Dowdle, probably never. The Trib execs have always viewed the Cubs as a synergistic source of programming for their broadcast media outlets and as a venue for in-house corporate entertainment.

(Aside: The Brother-In-Law is an ex-Tribune Entertainment exec. Once, while in Chicago for a group meeting, he and his Trib Entertainment co-workers all played in a company softball game. The game was held at Wrigley. Each employee received a Cub jersey with their name stitched on the back. Everyone received their jersey in the Cubs' locker room where the jerseys were hanging in the player's lockers. Nice perk, especially for him as he's a Yankee fan.)

The real problem isn't the Trib itself, it's the attitude of the execs. Last week, the Trib ran down the performance of corporate ownership as stewards of baseball franchises. For the most part, the corporate owners were successful. The Trib was one of the least successful of all the corporate owners.

A big reason is that the successful one seem to have had public executives with large egos running the teams, or, at the least, been a public face for the team. Guys like Ted Turner and Michael Eisner come to mind.

What has always been missing from the Trib is that guy. The ego-maniacal owner that wants to win at all costs because he is trying to bolster his ego by winning with his fancy yacht (small coincidence that Ted Turner won an America’s Cup and a World Series). You look at Stanton Cook and Jim Dowdle and Denis FitzSimons. These men did not have the kind of public egos you see in Mark Cuban, Ted Turner and George Steinbrenner. The one group wants their name in the paper. The other group wants you to buy their paper.

That’s the biggest reason we all should hope for a change. As Disney Chief Executive Michael Eisner once said, "The problem with a company like ours is, if you run [the sports teams] for the shareholders ... you couldn't pay the salaries."

But does the change have to be a sale? Could the change we need simply be one of attitude? Are the Trib execs capable of such an attitude change?

Let's go back to The Source's rumor and envision a company comprising the Cubs, WGN TV, WGN 720 AM, and the Chicago Tribune paper. Let's also assume that Denis FitzSimons would stay in charge of such a scaled down operation.

Denis has taken a pounding on all fronts the past year. To say his mettle as a leader has been questioned would be an understatement. Now, I'm sure Denis has a tremendous ego. You don't get to be the CEO of a Fortune 500 company without one. How might such a person respond to nationwide dismay at their leadership?

Maybe by winning a yacht race with a boat that’s perceived as a gilded dinghy.

Could it be that the spending on Soriano and Ramirez, plus whatever else might be on the horizon could be a huge middle finger to everyone who said that FitzSimons was a Dead-CEO-Walking?

If it is, this page would readily support such actions. This page doesn’t hate the Trib, it just hates the cavalier attitude their management brought toward the Cubs and winning over the past 20 plus years.

Were that to change, a sale would be unnecessary. We fans would have the ego maniac in charge that we've always needed. If Denis FitzSimons wants to give a big F-You to Barrons and Business Week and Forbes and do so by bringing the World Series to Wrigely, we'd all be on board for the ride.

Get Bombed

Happy Turkey Day, everyone!

Better Late Than Never

Who needs boycotts when six weeks of fan apathy will do?

As this page is late to the Alfonso Soriano discussion, the summary of statements having merit include:

1) Who cares about the size of the contract? For years, we detractors of the MacPhail ear have said that the Cubs can afford to spend with the Yankees and Red Sox. We've been shouted down that the Cubs do spend enough, the just don't spend it wisely. The Soriano Signing pretty much shoves a big can of STFU down the "Wisely" camp's throats. It also makes one's bile rise as one thinks back to the number of players passed over that could have helped the franchise.

2) The Tribune Company clearly doesn't care about the length of the contract as they will not be the owners when the contract matures.

3) This is clearly a signal that Andy MacPhail was holding the team back. There's no way that Jim Hendry all of a sudden discovers the negotiation skills to land a fish like this after having whiffed on Rafael Furcal, Miguel Tejada, and Carlos Beltran. Obviously Hendry already had the ability but was being reigned in. There's no way this happens in the presence of argyle and wool.

But there's a really wonderful angle about this signing that no one seems to have mentioned. The whole of Major League Baseball has just been put on alert. $136 million over 8 years means there's a new tough guy on the horizon. It's not just the Yankees and the Red Sox that 27 other teams have to worry about. It's the Cubs, too. They just flexed their financials after spending years dressed as Clark Kent. The Cardinals, Astros, Mets and Dodgers are very worried right now. The Cubs can be very dangerous as they do have the ability to be the top spender in the National League. By a wide margin. If they do, look out.

From the Home Office

There is also some info from The Source on the current happenings with the Cubs.

1) Hendry negotiated the Soriano deal directly with Soriano. Supposedly, Soriano had ranked his possible destinations from one to six. Alfonso had the Cubs ranked sixth. Hendry closed the deal by meeting one-on-one with Soriano and telling him to call current and ex-Cubs to ask about Jim's reputation as a boss. Soriano made those calls and came away impressed. The deal then closed quickly.

2) Stand by for some pitching signings. As previously reported, look out for Jason Marquis.

3) There is a reason Larry Rothchild was so awful the last few years and still was able to get offers from both Jim Leyland and Lou Pinella. The reason is that Larry wasn't able to teach the style he wanted to teach due to Toothpick Interference. Call this page optimisitc if you must, but Larry probably deserves one year to see what he can do in the absence of Dusty Baker.

Taking Names

For over a year, this site has been telling you that the Tribune was moving closer to a state where a sale of the Cubs would be inevitable. People ridiculed this site for engaging in wild speculation (while they themselves speculated on things from A Rod to Japanese pitching stars).

Then, as time wore on, the expectations "tempered by reality" became more and more real.

Today, Crain's released names of people actually preparing to make bids:

At least two local businessmen — industrialist Thomas Begel and restaurant owner and politico William Marovitz — say they're assembling ownership groups to make separate bids that probably will top $500 million.

Mr. Begel says he's put together a group of 15 partners that includes his industrial conglomerate TMB Industries. "We've lined up some very large investors," he says, declining to divulge their identities.

The problem is, the Trib isn't selling the Cubs. See, back five months ago, a Trib spokesman told us so:

"As our chairman and CEO has said, the Cubs are not for sale," said spokesman Gary Weitman. "They are a major asset to us."

That was this. What does the Trib say now compared to 157 days ago?

Asked whether the Cubs are for sale, Tribune spokesman Gary Weitman declined to comment.

Same guy, different answer. This is just like the old Saturday Night Live skit: The Pepsi Syndrome! In that skit, President Carter is exposed to radiation at the Two Mile Island nuclear plant. After his exposure, a press conference is held to discuss the effect on the President:

Ross Denton: Good afternoon, good afternoon, ladies and gentleman of the press. First, as to the president's condition, let me say that the president is feeling certainly "stronger" than he's ever felt. And he would like to be with us right here, in this room if he could. I think now I'll just open the door to questions-

Female Reporter #1: Yes, is it true that the president is 100 feet tall?

Ross Denton: Nooooo! Absolutely not!

Male reporter #3: Is the president 90 feet tall?

Ross Denton: No comment.

Ross Denton used to work for the Trib, it seems.

The sale of the Cubs is no longer speculation. This is going to happen. Soon. Like, in the next 6 months.

As an aside, Marovitz is married to Christie Hefner. Hefner is CEO of Playboy Enterprises Inc.

Can you imagine the cross-promotions in the 7th inning stretch?

There's No Such Thing As A Free Funeral

Milton Friedman 1912-2006

From Wiki:

"Friedman was the leading proponent of the monetarist school of economic thought. He maintained that there is a close and stable link between inflation and the money supply, mainly that the phenomenon of inflation is to be regulated by controlling the amount of money poured into the national economy by the Federal Reserve Bank; he rejected the use of fiscal policy as a tool of demand management; and he held that the government's role in the guidance of the economy should be severely restricted."

If more lawmakers understood this, our kids wouldn't have $40 trillion in future tax payments dedicated to debt service.

The Ellipses...

...and the Cubs announce a huge free agent signing. Henry Blanco (Hank White, as coined by Andy Dolan and purloined by ESPN 1000's Steve Rosenbloom this morning) is back for 2 more years at a cost of $2.5 million per year. Nice. Now, if they only could get rid of Michael Barrett.

...but this was tempered with the signing of Mark DeRosa and his ginourmous historical stats. Always nice when GM-Pro Tempore Jim Hendry gambles for three years on a guy no one else wanted for more than two (Jacque Jones?) and gives up a draft pick in the process.

...so the minute Rex Grossman realized that you can't throw two touchdown passes on a single play, the Bears won a game coming from behind. Not a coincidence.

...now that Mike Brown, the second best football player on the Bears defense, is out, the Bears have given up 100 yards to running backs in each game he's missed. Also not a coincidence.

...if you are a major league baseball player who is considered a marginal free agent, and Jim Hendry calls, given what we've seen with DeRosa and Jones, don't you just immediately take whatever Hendry is offering? You just know it's over market, right?

...then again, the DeRosa signing is fine for a team with a $130 million payroll. We Cubs fans can expect that knowing the Tribune Company is about to be sold for scrap, WGN TV will have a new owner, and the Cubs have held the line on ticket prices (due to slack in demand) which limits the available dollars for payroll.

News from Wrigley Field. It won't cost more to see the Cubs next year than it did this past year. Why? Just ask Interim-Until-The-Team-Is-Sold-President John McDonough:

John McDonough said last season's attendance was ''a tremendous tribute to our fans and speaks volumes about [their] commitment'' to the team, adding, ''we recognize the importance of our season-ticket holders and to reward you, we have frozen season-ticket prices for 2007."

Gee. Empty seats at the end of last year and the lack of an increase is "a tremendous tribute to our fans." That speaks volumes about demand, not commitment. Does McDonough expect us to believe that, if the Trib didn't think that they could squeeze another $5 million in revenue by raising prices $2 a ticket they wouldn't? Why not suggest that the new ticket prices would go to free agents?

Simple. Ticket prices are purely a function of demand. Prices are set at the point that maximizes revenue and have nothing to do with payroll.

But no increase as a reward to the fans? That may be the second most condescending thing I've ever heard a Cub employee say to Cub fans (first was Jim Dowdle suggesting Cub fans were happy with the occasional "sniff" of a pennant every few years). Our "reward" is not to pay more for crappy entertainment? How about rewarding us with a good team!

Schmuck.

:::UPDATE:::
Nice work over at 1060 West:

So for the record: boycotts and protests don't work. But empty seats sure seem to get peoples attention at Clark and Addison.

Exactly.

Echo!

In a column that sounds a lot like a post a few scrolls south of this one, Mike Imrem of the Daily Herald questions the Kerry Wood and Aramis Ramirez signings:

If the culture at Wrigley Field is to change, a good start would have been to allow Ramirez to take his 30something home runs and 100something runs batted in to another team.

(Jim) Hendry likely understands all this. I continue to believe he’s a good baseball man who can turn the Cubs around as well as anyone else could.

But what do I know? Apparently not much, considering Hendry is among myriad sports executives in town who prefer taking advice from anybody but me.

So Ramirez and Wood remain Cubs, meaning Hendry must be seeking counsel elsewhere.

(Lou) Piniella is the prime suspect.

Smart. Very smart.

When, oh when will this TEAM get smart?

Counting Down...

It doesn't get any plainer than this:

Like a train wreck or a car accident, when rich people do battle, everybody stops to watch. Billionaires Ronald Burkle, Eli Broad and David Geffen haven't taken off the gloves but all signs point to them fighting for ownership of their troubled hometown newspaper, the Los Angeles Times.

...

Last week Burkle and Broad teamed up to bid for Chicago-based Tribune Co., which acquired the paper in 2000 when it bought Times Mirror Co. Details were not disclosed. It's believed that if they succeed they would sell off Tribune's other newspapers, TV stations and its baseball team — the Chicago Cubs — and keep just the Times.

With the Chandler's stated willingness to sell their block of shares (at a price reported to be in the mid-30's), this could come together very quickly.

Let's go!

Same Old Stuff

As you have already read elsewhere, Aramis Ramirez and Kerry Wood remain Cubs. Both these moves strike me as typicla Jim Hendry moves. And by that, I mean safe. Just like a year ago when Hendry overpaid for Juan Pierre, Hendry overpaid for A Ram. $73 million over 6 years? For a guy with a history of taking portions of seasons off?

Then again, what else was Hendry supposed to do? There was no one else who could have the kind of impact at that position. And letting him go sends what kind of signal to other free agents?

Until seen differently, A Ram remains a lazy player. And he's ours to watch until 2012.

As to Kerry Wood, the smart move would have been to cut ties and let Kerry move on. With the Cubs, the safe move is to keep him. Kerry signed for cheap, has some upside if healthy, he's still under 30 years old, and he sells lost of jerseys.

One of these days, the Cubs will gete leadership that takes chances. Not today.

Time Is Short

There have been few recent developments in the "Cubs For Sale" story that has become the hallmark of this blog. That's changed:

Tribune Co. has started to shop around its premier television stations in its three biggest broadcast markets, including Chicago’s WGN-TV/Channel 9, according to a published report.

Investment bankers are reportedly seeking bidders for WGN in Chicago, KTLA-TV in Los Angeles and WPIX-TV in New York, according to a Friday report in the Los Angeles Times.

Once WGN TV is sold, the Cubs go next. There would be no rational reason for keeping the Cubs. They would be a non-core asset that would only provide about 7% of WGN Radio's airtime.

Looking more and more like the Cubs will have new owners by this time next year. New owners could be announced as soon as Spring Training and a sale could close by the end of the season.

Any Given Sunday

One of the fun things about my choice of employment is that I get to see how my clients generate their revenue. Over my nearly 20 years doing this, I've had the experience of touring alarm monitoring central stations, seen aluminum wheels for Ford Mustangs be cast, watched Maytag washing machines be assembled, and sat in the broadcast truck for a round of the PGA Championship.

This past Sunday, I was invited to sit in the broadcast truck again. This time the truck was contracted for the Chicago Bear / Miami Dolphin game. As part of that, I had field and press-box access pre-game. Here's some pictures I was able to take on the field between around 10:00 AM and 11:45 AM (click on image for full size).



Some of those pictures include Lovie Smith reviewing his soon-to-be-defeated troops, a Marty Booker / Olin Kreutz reunion, Robbie Gould practicing his corner kicks, Mike McCaskey trying to look like Walter Payton, the entrance to the Bears' locker room, and the world's ugliest camera man.

It's a hell of an experience to see the NFL from that side of the production. The upside of sitting in the truck is that you realize just how big a business the NFL really is. For example, one of the producers is in constant contact with the broadcast center at CBS HQ in NYC. Halfway through the first quarter, the producer was talking about taking a commercial break if "this play goes nowhere" because, if they didn't, they'd have to shift the double commercial break to the third quarter.

The other upside is getting to sit in the truck's soundroom. Seeing the pre-game jet flyby on a 1080i screen with no picture degradation while hearing the jets in 5.1 surround sound is also very cool.

Suffering for Suffrage

I did my civic duty this morning. In case anyone's interested, my ticket was split more than a Jessica Alba skirt. But upon completing my electronic ballot, I wondered why we can't make some simple changes to our voting process to make it easier for everyone to vote. Things like:

1) A national holiday for federal elections. Who the hell celebrates Columbus Day anymore except us bankers? Let's eliminate Columbus Day and substitute, say, Susan B. Anthony Day on the first Tuesday after the first Monday each November. Or, if the Italian-Americans really want to keep a holiday for a man who sailed under the flag of Spain and was possibly a Jew, move the observance of Columbus Day in even numbered years to the first Tuesday after the first Monday of November.

2) 24 hours of voting. No more of this "working hours" voting. God forbid you work an off shift and have dependents.

3) Polls open and close everywhere nationwide at the same time. Hand in hand with 24 hour voting, have every national polling place open and close at the same time. This would end any possible "West Coast voter suppression" due to early Presidential returns on the East Cost making the outcome a forgone conclusion and discouraging people from voting.

4) Social Security cards as registration cards. Pretty much everyone gets one at birth now, right? Outfit each card with a magnetic strip. Present that with a secondary form of ID (driver's license, utility bill, etc.) and vote. No more registering. And once the card is swiped, there's no possibility of voting more than one time.

5) Open polling. No more of this "vote in your precinct location or no where else" garbage. If I can see and pay my phone bill via the internet anywhere in the world, why not my ballot? Once I can identify myself with my social security card, why can't a computer spit out my ballot anywhere in the country? If I'm traveling in Arizona, why can't a database allow me to have my Cook County ballot down there and count it up here?

Time to move our process into the 20th Century. We'll worry about the 21st once we're up to speed on last century's technology.

Oh, and hope the Democrats take control of at least the House or the Senate. The country seems to operate best the less government does. I can't see a divided Congress with a lame duck President getting anything substantial accomplished.

Sounds good to me.

Only A Few Questions Left

Now that the Tribune Co. has announced a willingness to sell pieces of the company, all that's left for us to find out is this:

Which pieces?

Who are the prospective buyers?

It remains possible that the Trib could divest itself of all its non-Chicago holdings. A core company containing the Chicago Tribune, WGN TV, WGN Radio, CLTV, the stake in Comcast Sports Chicago and the Chicago Cubs could be all that is left. Such a company would clearly no longer be run by Denis FitzSimons and his management team. There's no way that current Trib management would go from running a national media company to a local one. They'd all take their golden parachutes and leave.

If this scenario comes to pass, then their remains one final question: Who would be the new CEO? That new CEO would be responsible for the direction of the Cubs going forward.

Our hopes could be pinned to someone like Scott Smith and Ann Marie Lipinski.

Ram and Shef

Can this page go on record and say that there would be severe disappointment if the first left and the latter arrived? Gary Sheffield as a Cub is of little interest. Aramis Ramirez needs to remain a Cub only because the Cubs failed to trade him and can't afford to let him go while receiving nothing in exchange.

A Ram may now be the most overrated athlete in Chicago now that Brian Urlacher is playing up to (and beyond) his reputation. While seeing him go would not be a bad thing, seeing him go for nothing back would be another Jim Hendry criminal offense.