Thursday, December 14, 2006

Little Interest

Looks like Tribune Company isn't a very desirable buy right now.

The auction for parts or all of the Tribune Co. will likely result in a scaled-down sale of some units or no sale at all, sources say, as the company's decision fast approaches a first-quarter deadline.

Despite the lack of interest, the possibility of the Cubs being sold remains very high. That's for several reasons. First, the Chandler Family wants to see a positive return on their 20% interest in the Company, a return they are not seeing right now. Selling the company in pieces would generate cash and possibly realize a value greater than that of the current stock price.

But the other issue that will keep the Cubs at the top of assets potentially for sale is simply the debt load the Trib has. With the billions in debt taken on in support of a silly stock repurchase plan, the Trib does need to find a way to pay the dollars back.

They also need assets that are growing, generating new revenues and new profits.

Given the lack of new seats at Wrigley Field and the heightened payroll, the probability that the Cubs are a growth asset in the Trib portfolio is slightly less likely than is an investment in slide rules.

There remains little in the way of announcing a potential buyer for the team within the next five to six months.

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