Bruce lurking & Cubs sale

[FergieJ31]

"If the Cubs come up for sale, it would most likely happen through an investment banker. If they produce a book, I certainly would take a look at it,'' wrote Cuban...

 

Would that happen quietly? I genuinely don't know the answer, not trying to be sarcastic or anything.

 

Depends on whether the Cubs thought they could drive up the price with a bidding war or not. Or how much either party wanted to keep it a secret. My feeling is any Cubs sale would be somewhat of a surprise when it happens. I don't think you'd see it negotiated in the press for months on end. Corporations are very good at keeping deals quiet if they want to. And it's a lot easier to sell off an entity within a corporation than to sell the entire business, which would require shareholder votes.

 

As I said in the original post on this during the winter, Tribune is probably not the entity who is going to decide to sell the Cubs. A financial buyer will come in and sell off the pieces to strategic buyers. I.e., the TV stations would be sold to a larger TV operater, the newspapers to a media publisher, in order to get premium prices. There will be no "Tribune Corporation" as we now know it.

 

Lefty, I missed that original post during the winter. What's going on at Trib Co that would result in such a mass liquidation? TRB has rallied about 15% since the beginning of April. Someone on Wall St must have liked the stock buyback plan -- in fact Goldman Sachs upgraded the stock just this morning.

 

Here's a pretty good articleabout it. Google News the word "tribune" and you'll find all kinds of articles about the Tribune possibly spinning of it's broadcasting division. Lots of change gonna be happening there.

 

Thanks for that link Banedon -- the stock buyback plan, yes. I was wondering if there was something else b/c Lefty painted a bankruptcy scenario in his post.

 

The buyback involved the strategic sale of assets like WATL, and it did have the intended effect of boosting the stock price, but it's really a doomsday scenario (bankruptcy) that would result in the Cubs being put up for general sale.

 

What's much more likely to me (and I freely admit I'm speculating - I have no inside info) is that the Trib Co is bought in a year or two, after its recent market outperformance streak has petered out, and that the buyer will be another mass-media conglomerate (Viacom maybe?). The Cubs would be the crowning, sentimental jewel of that purchase.

[FergieJ31]

there would have to be a good reason NOT to approve Cuban. There isn't one that I know of.

 

Exactly. The owners might drag feet on approval or heavily scrutinize the finances, but Cuban would get approved.

 

I suspect Cuban would get tagged as a potential Steinbrenner of the NL, and given the oft-argued economic disparity in the league that alone would be sufficient reason to blackball Cuban. The Cubs could only afford four no-votes; the NL Central alone would be able to block the purchase. Pitt, Cincy and Milw are small-market teams - they would be heavily incented to block.

[goonys evil twin]

there would have to be a good reason NOT to approve Cuban. There isn't one that I know of.

 

Exactly. The owners might drag feet on approval or heavily scrutinize the finances, but Cuban would get approved.

 

I suspect Cuban would get tagged as a potential Steinbrenner of the NL, and given the oft-argued economic disparity in the league that alone would be sufficient reason to blackball Cuban. The Cubs could only afford four no-votes; the NL Central alone would be able to block the purchase. Pitt, Cincy and Milw are small-market teams - they would be heavily incented to block.

 

Owners don't necessarily want to make it impossible to sell their teams. Blocking other owners from selling because it might improve that team isn't necessarily good business.

[Banedon]

there would have to be a good reason NOT to approve Cuban. There isn't one that I know of.

 

Exactly. The owners might drag feet on approval or heavily scrutinize the finances, but Cuban would get approved.

 

I suspect Cuban would get tagged as a potential Steinbrenner of the NL, and given the oft-argued economic disparity in the league that alone would be sufficient reason to blackball Cuban. The Cubs could only afford four no-votes; the NL Central alone would be able to block the purchase. Pitt, Cincy and Milw are small-market teams - they would be heavily incented to block.

 

On this theory, why would the NL West teams have allowed Frank McCourt to buy the Dodgers? He's obviously going to spend a ton of money on that team, so why wouldn't they block him? SF, SD, aren't exactly small markets, but neither can spend LA money, and surely the Rockies and Diamondbacks would want to block that right?

[vance_the_cubs_fan]

there would have to be a good reason NOT to approve Cuban. There isn't one that I know of.

 

Exactly. The owners might drag feet on approval or heavily scrutinize the finances, but Cuban would get approved.

 

I suspect Cuban would get tagged as a potential Steinbrenner of the NL, and given the oft-argued economic disparity in the league that alone would be sufficient reason to blackball Cuban. The Cubs could only afford four no-votes; the NL Central alone would be able to block the purchase. Pitt, Cincy and Milw are small-market teams - they would be heavily incented to block.

 

The owners love it when a team sells at a premium because it only drives up the price of their own team.

 

I remember when the Rangers were sold to Tom Hicks. Everyone knew he was coming in and going to spend money, but the owners loved the fact he was paying nearly 500 million for a team that 6 years earlier had sold for less than half that. They like the rapid appreciation of value and so overlooked what Hicks might do to the other aspects of the game.

 

Furthermore, if owners blocked the sale of teams simply on the grounds that an owner might spend money, the anti-trust exemption could come under some heavy scrutiny.

[FergieJ31]

there would have to be a good reason NOT to approve Cuban. There isn't one that I know of.

 

Exactly. The owners might drag feet on approval or heavily scrutinize the finances, but Cuban would get approved.

 

I suspect Cuban would get tagged as a potential Steinbrenner of the NL, and given the oft-argued economic disparity in the league that alone would be sufficient reason to blackball Cuban. The Cubs could only afford four no-votes; the NL Central alone would be able to block the purchase. Pitt, Cincy and Milw are small-market teams - they would be heavily incented to block.

 

Owners don't necessarily want to make it impossible to sell their teams. Blocking other owners from selling because it might improve that team isn't necessarily good business.

 

Yes, of course, and if the Cubs team payroll didn't budge much from its current level with Cuban as an owner I wouldn't argue the point that Cuban would get blackballed. I have no idea what payroll would be under Cuban but it's not a stretch to say it'd increase from current levels -- 10%, 15%? As you said earlier, goony, if the owners felt he would throw off the payscale they would be incented to block.

[Chocolate Milk]

I'm more interested in Cuban's approach than his money.

[vance_the_cubs_fan]

I'm more interested in Cuban's approach than his money.

 

Agreed.

[Banedon]

I'm more interested in Cuban's approach than his money.

 

Yep, and I'm not sure that a payroll boost would even be necessary. It just needs to be spent better (obviously).

[cubfan1955]

I'm more interested in Cuban's approach than his money.

 

Yep, and I'm not sure that a payroll boost would even be necessary. It just needs to be spent better (obviously).

Indeed. Someone that is halfway competent could actually cut the Cubs payroll by 25% and improve this roster.

[MustangMike]

I'm more interested in Cuban's approach than his money.

 

Yep, and I'm not sure that a payroll boost would even be necessary. It just needs to be spent better (obviously).

 

 

His unending drive to win is what would make it interesting. What I don't know about him is his relationship with his coaches/players. Is it like Stienbriener where everyone is scared of him and fears their job...not a good enviornment. However the yanks have 26 or whatever championships to lean against.

[mul21]

I think you have to look at the energy and popularity he has brought to the NBA. A sale of the Cubs to Cuban would most likely raise the profile of baseball and increase revenues in a roundabout way for everyone because of the increased publicity. Owners like guys who can make them more revenue, regardless of their policies or tendencies.

[stitchface]

the only way the NL owners block the sale is if the price is too low and there is another potential owner they like better.

[RegulusBlue]

I don't think it would be worth the bad blood that would be created by blocking a sale for the other owners to do it.

 

Plus, without much knowledge of how buying a franchise works, I can't imagine that they can block a sale for any reason they want. If that were the case, all the worst owners in baseball history would still be in charge because the other teams would fear competition from a better owner.

[Ding Dong Johnson]

The sale of a big market team like the Cubs will likely drive up values of all baseball franchises. I don't see why owners would stand in the way of a sale unless it was to the owner of another existing MLB team.

[cubfan1955]

There are 3 constants with the Cubs:

 

1. The Trib isn't selling them.

2. MacPhail, Hendry, and Baker are here for the long term.

3. Winning the World Series is a fantasy that isn't going to happen as long 1 & 2 applies.

[Banedon]

There are 3 constants with the Cubs:

 

1. The Trib isn't selling them.

2. MacPhail, Hendry, and Baker are here for the long term.

3. Winning the World Series is a fantasy that isn't going to happen as long 1 & 2 applies.

 

Those are constant? Baker's managed for what...3 1/2 years? Hendry's been GM for about that same time. MacPhail's been in Cubs management for maybe 10 years?? (That's a guess) And the Tribune has owned the Cubs for 25 years or so? So that means out of nearly a hundred years of futility, one or more of those guys have only been involved in a quarter of that maximum....how does that make it constant?

[cubfan1955]

It's constant at the present time.

[Banedon]

It's constant at the present time.

 

Well everything is constant until it changes...

[gus_dog]

There are 3 constants with the Cubs:

 

1. The Trib isn't selling them.

2. MacPhail, Hendry, and Baker are here for the long term.

3. Winning the World Series is a fantasy that isn't going to happen as long 1 & 2 applies.

 

Those are constant? Baker's managed for what...3 1/2 years? Hendry's been GM for about that same time. MacPhail's been in Cubs management for maybe 10 years?? (That's a guess) And the Tribune has owned the Cubs for 25 years or so? So that means out of nearly a hundred years of futility, one or more of those guys have only been involved in a quarter of that maximum....how does that make it constant?

 

constant hyperbole

[Soul]

It's constant at the present time.

 

Well everything is constant until it changes...

 

It just feels constant because the fan base is ready to turn the page, but ownership hasn't gotten to that point yet.

[Lefty]

"If the Cubs come up for sale, it would most likely happen through an investment banker. If they produce a book, I certainly would take a look at it,'' wrote Cuban...

 

Would that happen quietly? I genuinely don't know the answer, not trying to be sarcastic or anything.

 

Depends on whether the Cubs thought they could drive up the price with a bidding war or not. Or how much either party wanted to keep it a secret. My feeling is any Cubs sale would be somewhat of a surprise when it happens. I don't think you'd see it negotiated in the press for months on end. Corporations are very good at keeping deals quiet if they want to. And it's a lot easier to sell off an entity within a corporation than to sell the entire business, which would require shareholder votes.

 

As I said in the original post on this during the winter, Tribune is probably not the entity who is going to decide to sell the Cubs. A financial buyer will come in and sell off the pieces to strategic buyers. I.e., the TV stations would be sold to a larger TV operater, the newspapers to a media publisher, in order to get premium prices. There will be no "Tribune Corporation" as we now know it.

 

Lefty, I missed that original post during the winter. What's going on at Trib Co that would result in such a mass liquidation? TRB has rallied about 15% since the beginning of April. Someone on Wall St must have liked the stock buyback plan -- in fact Goldman Sachs upgraded the stock just this morning.

 

Private Equity is swimming with money. The stock has rallied, but it still has a very modest market cap, and hasn't done anything for years.

 

Back to Private Equity: Tribune is a perfect target given the environment. It has very little debt. A financial buyer can borrow most of the purchase price, sell some assets, clean up the operations, and IPO what's left with a huge debt burden and take out all their equity.

 

My initial winter post said it would happen this year if the junk bond market held up until Fall. It has been shaky the past month. If it rights itself I think we are on target. When I originally posted there was no talk of any buyback or other in-house finanacial engineering, but this is how it starts. The execs try to do something internally to forestall change from the outside. But today the financial buyers have more power. This will happen.

[Lefty]

Thanks for that link Banedon -- the stock buyback plan, yes. I was wondering if there was something else b/c Lefty painted a bankruptcy scenario in his post.

 

I'm sorry if I was misunderstood. Nothing I said involved bankruptcy.

Edited June 9, 2006 by Lefty

[CubinNY]

There are 3 constants with the Cubs:

 

1. The Trib isn't selling them.

2. MacPhail, Hendry, and Baker are here for the long term.

3. Winning the World Series is a fantasy that isn't going to happen as long 1 & 2 applies.

 

Those are constant? Baker's managed for what...3 1/2 years? Hendry's been GM for about that same time. MacPhail's been in Cubs management for maybe 10 years?? (That's a guess) And the Tribune has owned the Cubs for 25 years or so? So that means out of nearly a hundred years of futility, one or more of those guys have only been involved in a quarter of that maximum....how does that make it constant?

 

constant hyperbole

 

I don't see any hyperbole is what you bolded. In 1945 MLB was full of 4A guys who couldn't be drafted in the Army, and the Cubs still got swept. Since then its been nothing but futility with the occasional utter ridicilous.

[Lefty]

I don't see any hyperbole is what you bolded. In 1945 MLB was full of 4A guys who couldn't be drafted in the Army, and the Cubs still got swept. Since then its been nothing but futility with the occasional utter ridicilous.

 

The Cubs lost in 7 and would have won if Passeau hadn't been hit with a comebacker in Game 6. Yeah, I'm still bitter.