Baseball Trade to Cut Tribune’s Earnings

It’s only spring training, but former Chicago Cub Sammy Sosa has already shown that he’s an “impact player” -- at least when it comes to the first-quarter profit of Cub owner Tribune Co.

The Cubs were so eager to send Sosa packing that they agreed over the winter to pay in the neighborhood of $16 million just to get out of the final year of the outfielder’s contract. And that, Tribune said Thursday, would reduce first-quarter earnings by nearly 3 cents a share.

The Cubs’ parent company would presumably like to put the Sosa trade behind it.

But it can’t -- at least not until it releases its first-quarter earnings.

The company has been put in the unusual position of having to publicly spell out, in its financial results for the period ending March 31, the multimillion-dollar cost of pushing Sosa out the clubhouse door.

“As you know, Sammy Sosa is now a Baltimore Oriole,” Tribune Chairman and Chief Executive Dennis FitzSimons said at a media-industry investment conference this week, in the company’s first public discussion of the Sosa trade’s financial effect.

“While this trade will not impact our full-year results,” he said, “there is a timing impact.”

Because the timing of the trade caused Tribune to “accelerate” the payment of Sosa’s salary, FitzSimons said, the company’s first-quarter net income will be reduced by almost 3 cents a share -- which works out to something over $9 million on an after-tax basis.

FitzSimons’ disclosure sent a chuckle rippling through the crowd of institutional investors, a number of whom were amused to learn that a major corporation’s financial results could be skewed by the sudden departure of one baseball player.

“I hear some laughter out there,” FitzSimons said mildly. “Sammy wasn’t cheap.”

Investors primarily know Tribune as a Chicago-based media holding concern with TV stations, including KTLA, and newspapers that include the Los Angeles Times.

But Tribune also has owned the Cubs since 1981.

When asked about the Sosa affair’s dent to the company’s profit, a Tribune spokesman emphasized that although the first-quarter results would be hurt by the payout, the hit would be largely offset in the company’s second and third quarters.

Tribune shares fell 96 cents Thursday to $40.88 on the New York Stock Exchange.