Friday, July 13, 2007

Maverick Owner Targeting Cubs?

There's a great buzz over Mark Cuban and his interest in buying the Cubs as noted by Rick Morrissey in his column today. Rick touches on a number of points that are all true, but he seems to miss a big picture item.

Because of the nature of the Tribune Company’s ownership structure, they almost certainly have to sell the Cubs at the highest possible price. This isn't just like two neighbors agreeing to buy/sell a used car to each other at a cheaper price than the seller could get off Craigslist. Sam Zell can't simply sell the Cubs to John Canning because they are friends. As a publicly traded company and/or as an ESOP, the Tribune has a fiduciary responsibility to the shareholders to get the maximum value for the team.

There's a similar situation going on right now. For comparison, just look at ABN Amro's attempted sale of LaSalle National Bank to Bank of America. There is an ongoing shareholder lawsuit that has questioned if ABN was getting maximum value for LaSalle. This is holding up a billion dollar transaction.

Now, imagine if Zell, Bud Selig and Jerry Reisndorf (as the local kingmaker and senior partner overseeing Sam Zell's ownership stake in the White Sox) want to sell to Canning in a sweetheart deal – Slightly lower cost because of the ease of getting Canning approved as a buy by Major League Baseball. Now, let's say that Cuban goes public with his bid amount and his bid is worth more than a Canning's. Wouldn't Trib shareholders have the same basis for a lawsuit against management as ABN shareholders?

I'm not saying Cuban will get the team. I'm saying: A) His involvement makes things very complicated for Selig; and B) Don't count him out just because Reinsdorf and Selig don't like him.

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