Friday, May 29, 2009

Deep Stat

We haven't had any good 'ole Alfonso Soriano love around here of late. So, it's about time, no?

Courtesy of David Pinto's Day-By-Day Database, you can compare the Cubs hitters over the last month. Sorting them by OBP, we find that Soriano has an OBP of .248. The only OBPs lower than that this past month are Ryan Freel, Andres Blanco and pitchers.

But not all pitchers.

Carlos Zambrano and Rich Harden have higher OBPs than Soriano this month.

Rich Harden for leadoff!

Thursday, May 28, 2009

Exit Gambit?

It's not a secret that the sale of the Cubs to the Ricketts family is on thin ice. Just how thin was made clear in two Chicago Tribune articles today.

The first appeared in Phil Rogers' column this morning:

As the transfer between Sam Zell -- the Tribune Company chairman and CEO who said he didn't want to own the team but has been in charge for almost 2 1/2 seasons now -- and Tom Ricketts plods along, the sides seemingly at odds over the structure of an agreement in principle reached four months ago, Selig must be getting close to doing a Zambrano.

According to sources, he speaks to both the Zell and Ricketts camps frequently, hearing their sides of the gridlock that has kept the deal from being passed along to Major League Baseball's 29 owners for approval. It's easy to imagine steam coming out of Selig's ears when he gets off the phone, angry that one of his premier franchises remains in such an awkward state of limbo.

You can picture Selig wadding up some document he had just been faxed and flinging it against the windows of his Milwaukee high-rise. He wanted this deal done in 2007, would have settled for 2008 and long ago was assured it would happen by Opening Day. No one seems to know when it will happen, which could leave the hands of Cubs general manager Jim Hendry tied at the July 31 trade deadline.

Selig has declined to speak publicly on the subject. But it's clear he wants it resolved, sooner rather than later.

A highly placed MLB source said Wednesday that the slow pace has been due to the ongoing negotiations between Ricketts and Zell, as well as between Ricketts and the banks, not any red tape on MLB's end.

"It's not even on our desk," the MLB source said. "We can't do anything until we have it. We wish we had it already."

You wonder if the announcement of the sale to Ricketts may have been premature. The sides haven't been able to finalize the deal. While there have been no indications of the deal potentially falling apart, the MLB source indicated that, at times, both sides have spoken about difficulties dealing with the other side.

So, unlike stories reported last week, and disputed here, the financing is NOT done yet and doesn't appear to be close. The sides are having "difficulties" dealing with each other. This is not a deal that is close.

Then, late today, Sam Zell gave an interview to Bloomberg TV. He made this ominous statement (emphasis added):

"These are very difficult times. These are difficult times to arrange financing," Zell said in an interview, adding that if the Ricketts deal falls through, he is confident the media company--which filed for Chapter 11 bankruptcy protection in December--will find another buyer for the ballclub.

"We've made it very public that the Cubs don't fit into the long term picture of the Tribune," he said. "So if the Ricketts deal doesn't get done, I'm sure there will be other ones."

Translation: We're selling the team and there's a good chance it won't be Ricketts. You hear me all other interested buyers? We're SELLING THE TEAM AND IT'S NOT SOLD YET!

This is a clear signal that the Ricketts purchase is in doubt. Has anyone verified that the Ricketts stock sale has actually been executed?

Corn Cob Dress over at Wax Paper Beer Cup (POP!) adds in his concurring opinion that this deal is dying. What he and his commenter misses is that the financing is still not complete. Here's what we know has been lined up and the source:

$403 million - Ricketts family sale of stock (either cash on hand or pending sale)
$350 million - committed from banks.

That's it. A total of $753 million is ready for closing.

Another $100 million was proposed as part of a private placement, but this money has not been committed to or funded according to published reports. The last gap of $47 million (which gets to the $900 million agreed upon purchase price) was being sought from minority investors like Bill Murray and Jimmy Woo Woo.

As of right now, there's a $147 million financing gap. And that's why this deal is falling apart.

Wednesday, May 27, 2009

The Ellipses

Five days in Palm Springs is usually fun, especially when the Murton's great grandfather is celebrating his 90th birthday. But when the temperature is an average of 10 degrees higher than the age of the birthday boy, returning home to 60 degree weather isn't such a bad thing.

...and the Cubs were as cold as Palm Springs was hot. Yes, the Cubs still have a strong balance sheet from which to recover, but losing 8 straight to the Padres, Cardinals, Pirates and Astros is a heavy cash burn.

...but "flu-like symptoms" are affecting Derrek Lee and Bobby Scales. Is this code for "hangover" or something else?

...and this page's favorite player, who had an awful, awful April 2008 followed by a pretty strong May 2008 has swapped those months in 2009. Perhaps the two walks on Monday and the hit last night show that he's starting to come out of one of his typical month-long slumps.

...Jake Peavy was nearly a White Sock, but refused to go be a fly ball pitcher in a home run haven. Smart. But Barry Rozner thinks that the Cubs could still land Peavy if the Ricketts family gives the OK. Barry, there's still no guaranty the Ricketts are going to ever own the Cubs! No way that Sam Zell allows a deal to be made to bring in another $60+ million in expenses if there's even a 1% chance that Sam ends up paying the bill. The Cubs are stuck with this roster, save minor, no-cost moves (like dumping Aaron Miles for Jake Fox), until the ownership is settled. Any moves made will be either salary neutral or result in a salary reduction., LeBron James hits a buzzer beating 25 foot shot to win a playoff game in Cleveland and all the talk is about how this becomes the contra to Michael Jordan's "The Shot" of 1989 in Cleveland lore. Ignoring the Jordan's shot was on the road, for a 40 win team playing against a 50 win team, maybe someone should remind everyone that Jordan's shot also won a playoff series. LeBron's shot looks to go down in history as the only thing that stopped a sweep.

..."And if I do get appointed, that means I bought it," said Roland Burris on a wire tapped phone conversation with ex-Gov. Rod Blagojevich's brother. Roland, it's the people of Illinois calling. Time to come home now.

Tuesday, May 19, 2009

So Dey Got Dat Goin' For Dem... Which is Nice!

If there's one blogger out there with a feel for the sale process, it's Corn Cob Dress, once of the sadly departed and now of (shouldn't there be a sound of a POP when that page loads up?).

Well, he's been all over the developments from yesterday about the Cubs, the Ricketts Family, the seemingly fluctuating sale price, and their sources of capital. Just check out the latest source:

Bill Murray's lifelong love affair with the Chicago Cubs may turn into something more.

The actor and Wilmette native has met with Tom Ricketts, who is negotiating to buy the Cubs from Chicago Tribune parent Tribune Co., about investing in his favorite baseball team, multiple sources said.

As talks with Tribune Co. grind on, Ricketts, an investment banker who lives in Wilmette, has held separate discussions with a handful of celebrities to raise money from them and other wealthy Cubs fans willing to pony up as much as $25 million. In addition to Murray, he's met with Jim Belushi and John Cusack, said two sources familiar with Ricketts' proposal.

Having a deep pool of minority, non-voting investors is not new. Lamar Hunt was the largest shareholder of the Chicago Bulls at the time of his death and George Steinbrenner continues to own a piece of the Bulls. If the Ricketts do end up owning the Cubs, they don't need to own the majority share if they can find investors to take non-voting pieces. Clearly that's what they are looking for now.

But as noted yesterday, this WGN valuation issue is looming huge:

The Ricketts family was seeking certain concessions on the WGN contract such as changes in how advertising revenue is shared between the team and the station, said sources familiar with the negotiations. Without adjustments, the family may consider lowering the $900 million offer it made in January when it won the auction for the Cubs over two other bidders.

At stake is up to $50 million in the value of the franchise, or about 5.5 percent of the original bid, sources said. "It's a big issue," said one of the sources, who asked not to be identified. "We've reached a bump in the road."

"Big issue?" "Bump in the road?"

This deal still has a strong possibility of falling apart. And then you have a cash strapped team with an already bankrupt owner.

For the fans, the Trib ownership needs to end. Quickly.

Monday, May 18, 2009

The Details

Crain's follows on with more details on where the Ricketts are in the purchase process. The last remaining sticking point is, as guessed here, the actual purchase price. It seems $900 million is just too much:

Thomas Ricketts, who is leading his family’s bid for Tribune Co.’s Cubs, has lined up financing for the deal, but a dispute over price is delaying the transaction.

The Ricketts family, whose original bid was close to $900 million, now believes the real price should be closer to $850 million, a source said. The sides disagree over the value of the team’s multiyear contract to broadcast games on Tribune’s WGN network.

At issue is about $40 million to $50 million — roughly 6% of the original bid, which also includes Wrigley Field and a 25% stake in regional cable channel Comcast Sports.

Broadcasters pay sports teams for the right to air games. The contract between the Cubs and WGN, which was inked last fall, might have been set too low, given that the broadcaster and the sports team have been owned by the same parent: Tribune Co.

Mr. Ricketts and a Tribune spokesman decline to comment.

The Ricketts family last week worked out final details on a $350-million loan from J. P. Morgan Chase & Co., Citigroup Corp. and Bank of America Corp. The Ricketts family in February sold about $403 million in TD Ameritrade stock to raise cash for the buyout. Separately, Barclays PLC is marketing a $100-million private placement of notes with institutional investors, a source said.

To summarize:
1) The Ricketts have arranged $703 million in financing with another $100 million being sought from private investors by Barclays.

2) The Cubs-WGN contract is not inked at market price and therefor provides the Cubs with below-market cash flow. Since a large determinant of purchase price is a multiple of cash flow, lower cash flow reduces the value of the team.

Reason #2 is a bunch of crap. Since the Cubs and WGN are the same company, there's no reason that contract couldn't be voided by mutual agreement. This argument is simply posturing by the Ricketts to get the price reduced.

The real number to look at here is how much cash the Ricketts now have at the ready. Assuming the credit package is signed, there is $803mm on the table to close. The Ricketts family probably also has some cash on hand that could be thrown into the deal outside of cash generated from their recent stock sale. But not $97 million.

This deal still does not close at $900 million. If it falls apart, still a possibility, look for the WGN contract to be used as the excuse.

That's potentially hilarious given that fewer and fewer games are even on WGN anymore.

Almost Over?

Breaking news from Sports Business Journal on the Cubs sale:

Chicago Cubs buyer Tom Ricketts is close to lining up three banks to arrange the $450 million financing necessary to complete his acquisition of the team, financial sources said, positioning him to clear a substantial hurdle in the long-running sale of the club.

JPMorgan Chase, Citigroup and Bank of America are set to commit to the deal as soon as the end of this week, the sources said. That commitment would allow Ricketts to submit his $900 million bid to the court that’s overseeing the bankruptcy filing of current Cubs owner Tribune Co. The court likely then would take 30 to 45 days to process the offer, one source said, leaving a potential closing ready by July.


According to one finance source, the $450 million financing is split between a loan and a fixed-rate private placement, which represents loans from institutional investors like pension funds. The bank loan portion is roughly $350 million, the source said, and the private placement, which the three banks are arranging, is about $100 million.

The three banks are committed to keeping the entire loan on their balance sheets if they are unable to find other financial institutions to buy pieces of it, a process called syndication. Before the credit crisis last September, banks would have agreed to a deal like this contingent on syndication, but syndications have become much more unreliable since the fall, so a recent trend in finance is for banks to hold onto larger chunks of loans.

Ricketts has been trying to sell preferred notes in the team to raise another $50 million. These so-called "perk notes" would give the individual lenders special access to games, team executives and spring training. The notes would be repaid after 15 years. Sources differed on whether Ricketts would succeed in selling the notes, with some saying there was interest and others describing it as a hopeless cause.

One wonders what the term of these notes are. The longer term, the better. Usually on notes like this the borrower gets up to five years. Given where interest rates are likely headed, and where a few of the lenders that will agent the syndication are headed, short term would be very, very risky for the Ricketts family.

One also wonders if this is tied to a successful syndication of the private placement.

Given the credit market, this is mildly surprising that this deal could come to fruition. May it close and close quickly.

Tuesday, May 12, 2009

History Happening All Over Again

On the west side of Chicago, there was an enormously talented team of young athletes that played in a stadium on West Madison Street. Great things were expected of them, but everyone believed that they needed a year or two to gel and become a challenger for the league title.

Instead, this team took full advantage of their playoff opportunity. They won a first round series. In the second round, they took on a rival division champion. Despite lacking home field advantage, they won that round as well in six games, finishing the series with a resounding win in front of a raucous Chicago crowd.

The next challenge this team? A group from Detroit.

No, not the Chicago Blackhawks. This story is about the 1989 Chicago Bulls.

It was 20 years ago that Michael Jordan hit "The Shot" to beat the Cleveland Cavaliers and went on with the help of a young Scottie Pippen and Horace Grant to whip the New York Knicks. Yes, they lost to the Detroit Pistons in the next round, you could feel that there was something special about that group of players.

Last night, you got the same feeling about another group of players.
Duh dee duh!  Duh dee duh! Duh dee duh dee duh dee duh!
Patrick Kane, Jonathan Toews and Kris Versteeg could have been wearing sweaters with 23, 33 and 54 stitched on them. Kane's final goal, which led to a shower of haberdashery, was as sweet as nifty a piece of stick work you'll ever see.

As frustrating as the Cubs have been to watch when it mattered the last few years, the last month of hockey has been a sheer pleasure to watch. And it only projects to get better.

For a long time to come.

Tuesday, May 05, 2009

Dumb Headed

Phil Rogers takes to the dwindling pages of the Chicago Tribune today to call for the end of pitchers hitting and the permanence of the designated hitter rule:

Every time a pitcher takes the field, he's an accident waiting to happen. The risks inherent in pitching are huge. It's silly to increase those risks to include the ones that hitters and baserunners face, especially when so much of a team's payroll and its hope for success is tied into those arms.

Phil is absolutely correct. Every time a player takes the field, they risk injury. A pitcher like Zambrano should never get hurt rushing to first base to beat a throw to the bag.

Let's extend that rule to non-batting as well. Zambrano could just as easily have hurt himself hustling to cover first base on a sharp grounder to Derrek Lee. Let's prevent pitcher injuries by also having a Designated Pitching Fielder. This player would stand behind the mound and do the entire fielding work of the pitcher while the pitcher himself would be forbidden to touch a ball batted into play.

You know, one of the pro-DH rules is that no one wants to see the pitcher hit and fans want more offense. Let's stipulate that the fans want to see more offense. In furtherance of that goal, hereby is proposed the DH+1 rule. Team may not only DH for the pitcher, but may also DH for one more position player. This would allow the Cubs to play a batting schlub like Aaron Miles in the field, only. He could be DH'd for in the line up Rogers' beloved Jake Fox. This won't lead to a slippery slope, no sir!

These are just theories of course.

Like the Geocentric Universe.

If the Trib wants to see it's circulation increase, they are going to need compelling reasons to read it. Phil Rogers is not one of those reasons if this is the kind drivel he plans on producing.

Last Dance of the French Mistake

Not sticking out his tush any more
Dom DeLuise

Monday, May 04, 2009


Is this a ''cheering'' forearm bash or a  ''booing'' one?It's good for Carlos Zambrano that he never wanted to play in the NFL. Despite his linebacker body, he seems to have all the durability of Brad Muster. It's really too bad because Z could probably play a serviceable outfield or even sub at first base on occasion if needed. And his stick would likely be better than your average replacement player.

And speaking of first base, how nice was it to see Derrek Lee emerge from a season long funk? And by season, one could make the case that includes the last full year. Since May 3, 2008, Lee has posted BA/OBP/SLG of .266/.332/.409 which yields a .741 OPS with 15 homers and 82 RBI. Lee acknowledged that he's been struggling and that the fans have noticed:

When Derrek Lee hit a grand slam in the fifth inning to break a 2-2 tie, the Wrigley Field crowd of 40,457 wanted a curtain call. So Lee obliged.

"It felt good; I didn't know if I wanted to come out, because they've been booing me every at-bat," Lee said, laughing.

Lee has 3 homers and 15 RBI to go along with a .219 batting average, a .263 on-base percentage and a .360 slugging percentage. He said he doesn't let the booing get to him.

"It doesn't bother me," he said. "I just go play the game and concern myself with helping the team win. The fans are free to do what they want to do, so it doesn't bother me."

Again with the booing Derrek? This feels so familiar.

Look, Derrek. We Cub fans were really close a few years ago. In fact, you may recall that you had a big part in denying us what we've wanted for so long. Since then, the Cubs have spent and spent and spent to try to finally win. We've come to the point where we expect winning and we expect the key players to produce. When they don't produce and they cost the team games, or even a playoff spot, our bile remains for a long time (see: Hawkins, LaTroy).

This is your fifth year hear. Maybe one day, you'll figure us out. By your statements, you clearly haven't as of yet.

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