Friday, August 21, 2009

Done But For The Details - But BIG Details

It's Ricketts or bust:

The Chicago Cubs will have a new owner, and it's who everyone expected it to be back in January.

Tribune Co. said Friday that it signed an agreement to sell the iconic franchise to the Ricketts family. The family is paying about $800 million to acquire a 95 percent interest in a package of assets: the team, Wrigley Field and Tribune Co.'s 25 percent stake in Comcast SportsNet Chicago, which broadcasts many Cubs games on cable television.

The agreement values the franchise and related assets at $845 million, less than the Rickett's winning bid in January of $900 million. Tribune Co. will retain a 5 percent ownership stake in the joint venture.

So, $55 million came off the price. Oh, wait. $100 million came off the price. Originally, the Ricketts were going to pay $900 million. They are "only" paying $800 million, but because of the 5% holdback by the Trib, everyone gets to say the price is really $845 million.

Like yesterday's piece, this article is silent on the funding aspects of the deal. That could still be an impediment to final closing. Furthermore:

The family will not gain control of the team until after the baseball season ends, probably sometime in October, because there are still a few conditions of closing. Tribune Co. has been in Chapter 11 bankruptcy since December, and a major disposition of assets requires the court's blessing.

As part of the court's approval process, Tribune Co. said it will place the Cubs in Chapter 11 bankruptcy so that the franchise can "emerge free and clear" of the company's financial obligations.

The company said that the Cubs bankruptcy will not interrupt team operations, and player contracts and other agreements with ticket holders, sponsors and supplies are not expected to be affected.

Court approval is expected because Tribune Co. has run a robust sales process that has kept creditors informed throughout, sources said.

Major League Baseball owners also have to approve the deal.

Looks like the Ricketts bid is on third base headed for home and no one is covering the plate. That said, there are many, many things that could still trip this up.

Until the press reports that the Ricketts financing is 100% locked up, nothing is done. Well, except for the approval of the other MLB owners. They want to lock in the price of the Cubs before it falls any further. For each dollar fewer that the Cubs sell means lower valuations on every other franchise.

Once the financing is locked in, so is the transfer of the team.

Comments: Post a Comment

Subscribe to Post Comments [Atom]

<< Home

This page is powered by Blogger. Isn't yours?

Subscribe to Posts [Atom]