Who’s going to buy the Chicago Cubs, and for how much?
With Tribune Co. saying Monday that it was putting the storied franchise on the block to raise cash, speculation centered around several big names, including Jerry Colangelo, chairman of the NBA’s Phoenix Suns and a former owner of that team and baseball’s Arizona Diamondbacks, and Mark Cuban, owner of the NBA’s Dallas Mavericks.
Some Chicago-area businessmen, including Don Levin, owner of the Chicago Wolves minor league hockey team, also are believed to be interested in the Cubs, who haven’t reached the World Series since 1945 and haven’t won it since 1908.
Colangelo told the Associated Press in November that he would have “great interest” in buying the Cubs, and that he’d already initiated preliminary discussions with others who might join him in a bid. Cuban has in the past expressed interest. Neither could be reached Monday. Levin was traveling, but a spokeswoman said his interest had not waned.
There will be no shortage of bidders for the Cubs, said Marc Ganis, president of Chicago-based Sportscorp Ltd., a sports marketing and consulting firm.
“If Mark Cuban does decide he’s interested, he’ll prove to be a very formidable competitor,” Ganis said. “He’s a very serious player. And Jerry Colangelo is pretty much looked upon as the gold standard in Chicago because of all that he’s accomplished.”
Tribune purchased the franchise in 1981 for $20.5 million. Late last year, a high-ranking baseball official said a Wall Street acquaintance told him that Tribune was valuing the Cubs at about $1 billion. The highest price ever paid for a Major League Baseball franchise was $700 million for the Boston Red Sox in 2002.
One investment banker who has looked at the franchise said its pretax value could be as high as $800 million. At that price, the Cubs would bump up against the U.S. record for a sports property sale -- the $800 million that the NFL’s Washington Redskins sold for in 1999.
In November, Merrill Lynch analyst Lauren Rich Fine said the most relevant figure was the value of the franchise after taxes had been paid on a sale, which she estimated at $450 million.
Part of the Cubs’ value will be driven by the club’s partnerships with media companies. Broadcasters demand a constant flow of programming, and baseball provides plenty of game action, along with pregame and postgame shows, in which to embed commercials. The value of media partnerships was evident in the Red Sox sale, which included an 80% stake in NESN, the cable channel that carries the team’s games.
Tribune said it also would sell its 25% stake in Comcast SportsNet, a cable channel co-owned by Comcast Corp., the MLB’s Chicago White Sox and the NHL’s Chicago Blackhawks. That network will broadcast 72 Cubs games this season. Tribune’s WGN television and radio stations will continue to broadcast Cubs games, based on long-term contracts.
The Cubs are a relatively small part of Tribune’s overall business; they reportedly made about $20 million last year. Tribune’s other major holdings include 11 newspapers and 23 broadcasting stations.
The Cubs’ ability to continue spending on such high-profile players as Alfonso Soriano, who in November signed an eight-year, $136-million contract, will be determined by the new owner.
“Our mission has not changed,” Cubs President John McDonough said in a statement Monday. “The goal is to win a World Series for our great fans. Under the leadership of [new Manager] Lou Piniella, we are on track and believe 2007 will be a very successful season.”
As word of the proposed sale spread Monday, hope continued to spring eternal among Cubs fans.
“It’s opening day, and I’m actually hopeful for the first time in years that the team’s luck could be turning,” said Drew Harrod, 31, as he waited Monday morning for a commuter train in Chicago. “Think about it. A rich guy. Rich guys don’t put up billions of dollars, buy a baseball team and expect to lose.”
But Derrick Godfrey, 33, is worried that the team might end up in the hands of an out-of-towner. The Cubs are to be sold after the end of the season, and before Tribune Co. completes its sale of the rest of its business to Chicago real estate magnate Sam Zell. It’s uncertain whether Wrigley Field, the team’s fabled ballpark with ivy-covered walls that’s almost as old as the team’s World Series losing streak, would be part of the deal.
“He’s going to sell the Cubs at the end of the season.... What if he sells them to someone outside Chicago?” Godfrey said. “What if it’s to someone worse than the Tribune? What if they move the team out of Wrigley?”
On Monday, the Cubs started their season with a 5-1 loss to the Reds in Cincinnati. The team’s home opener is Monday against the Houston Astros.
Times staff writer P.J. Huffstutter in Chicago contributed to this report.
(BEGIN TEXT OF INFOBOX)
Publishing: Eleven daily English-language newspapers, including the Los Angeles Times, the Chicago Tribune, Newsday, the Baltimore Sun and the Orlando Sentinel, and three editions (Chicago, New York, Los Angeles) of the Spanish-language newspaper Hoy
Television: Twenty-three stations, including KTLA-TV Channel 5 (in Los Angeles), WGN-TV Channel 9 (Chicago) and WPIX-TV Channel 11 (New York)
Other properties: Chicago Cubs baseball team, radio station WGN-AM (720) (Chicago)
Investments: CareerBuilder (online recruiting), 43% share; ShopLocal (online advertising), 43%; Legacy.com (online obituaries), 40%; Topix (Internet news aggregation), 34%; TV’s Food Network, 31%
Los Angeles Times