Tribune Management discussing LBO per WSJ

[Wilson A2000]

Would they attempt to sell the Cubs before next season? If they fire Dusty, wouldnt't they want to sell the Cubs before they clean house so the new owner can have control?

[Soul]

Would they attempt to sell the Cubs before next season? If they fire Dusty, wouldnt't they want to sell the Cubs before they clean house so the new owner can have control?

 

Since the underlying management would presumably stay the same (at least momentarily), I don't think the start of a season would have much bearing on it. Someone go ahead and correct me if I'm wrong.

 

I mean obviously it would be nice to be able to start with a clean slate for your first season, but MLB ownerships are incredibly scarce. If you get the chance to buy in, I don't think you are going to nix a deal just because it doesn't fall in-between seasons.

[Wilson A2000]

True, but if the Tribune wants to sell the Cubs it would be an easier sell with a clean managerial slate. You could buy Hendry out. He isn't expensive (if the new owner doesn't like him). But managerial decisions usually come pretty quickly after the WS so the Cubs would have to sell quick if they want to go this route. But doesn't the process of selling a team take months? Edited September 22, 2006 by Wilson A2000

[Fro]

Any buyouts for MacPhail and Hendry would be chump change for a guy like Cuban or any other new owner. I suspect that'd have little bearing on whether you buy the team or not.

[Wilson A2000]

It all adds up though. Even the rich guys can be sticklers.

[Soul]

Yes, I think it would take some time to complete a deal.

 

I'm just doubting that the GM/Managerial situation would hurt the chances of selling the team. I mean, the Cubs are already real bad on the field. Any buyer is going to know this coming in. Any additional value the Cubs might have garnered by being a winning franchise has got to be out the window at this point anyway.

 

So you muddle along for 6 months before you can mandate wholesale changes.......I don't see that as a real deterrant when you're talking about a possible lifetime commitment.

[Wilson A2000]

But the NL is so weak that by completing some trades and picking up some FA, the Cubs can seriously contend for the pennant next year. THe Cubs have the pieces in place to be good very soon only because the NL is weak.

[Jazz]

But the NL is so weak that by completing some trades and picking up some FA, the Cubs can seriously contend for the pennant next year. THe Cubs have the pieces in place to be good very soon only because the NL is weak.

 

 

That and the fact that if the Cubs won the world series, the profits would be exponentially bigger than any other team in baseball.

[Banedon]

http://www.chicagotribune.com/business/chi-0609220093sep22,1,1111508.story?coll=chi-business-hed

 

After a five-hour board meeting Thursday, Tribune Co. Chairman and Chief Executive Dennis FitzSimons said he will substantially restructure the company in a process overseen by a committee of independent board members.

 

"Everything's on the table," FitzSimons said after the meeting, noting that the committee will review a range of options.

 

FitzSimons and other sources said possibilities include taking the company private in a leveraged buyout, spinning off the company's televisions stations and selling some newspapers.

 

The committee hopes to approve a plan by the end of the year.

 

There's more to that article if you want to read more.

[Wilson A2000]

http://www.chicagotribune.com/business/chi-0609220093sep22,1,1111508.story?coll=chi-business-hed

 

After a five-hour board meeting Thursday, Tribune Co. Chairman and Chief Executive Dennis FitzSimons said he will substantially restructure the company in a process overseen by a committee of independent board members.

 

"Everything's on the table," FitzSimons said after the meeting, noting that the committee will review a range of options.

 

FitzSimons and other sources said possibilities include taking the company private in a leveraged buyout, spinning off the company's televisions stations and selling some newspapers.

 

The committee hopes to approve a plan by the end of the year.

 

There's more to that article if you want to read more.

 

But there is no clue in there that they might sell the Cubs. The Cubs make them money so why sell it? My guess is that they restructure the Tribune Co, sell what isn't needed, but keep the Cubs. It's the best of both worlds.

[goonys evil twin]

http://www.chicagotribune.com/business/chi-0609220093sep22,1,1111508.story?coll=chi-business-hed

 

After a five-hour board meeting Thursday, Tribune Co. Chairman and Chief Executive Dennis FitzSimons said he will substantially restructure the company in a process overseen by a committee of independent board members.

 

"Everything's on the table," FitzSimons said after the meeting, noting that the committee will review a range of options.

 

FitzSimons and other sources said possibilities include taking the company private in a leveraged buyout, spinning off the company's televisions stations and selling some newspapers.

 

The committee hopes to approve a plan by the end of the year.

 

There's more to that article if you want to read more.

 

But there is no clue in there that they might sell the Cubs. The Cubs make them money so why sell it? My guess is that they restructure the Tribune Co, sell what isn't needed, but keep the Cubs. It's the best of both worlds.

 

Well, if everything is on the table, then they might sell the Cubs. Furthermore, the fact that it does make them money is exactly why they might fetch a good price for it. Plus, it's not really a strategic asset.

[Wilson A2000]

True. Strategic? I guess not. A moneymaker? Certainly.

[Stu]

It is a strategic asset in that it creates synergies with WGN TV, WGN radio and the newspaper. I guess it depends on which assets they keep. A media syndication executive who is a friend of mine thinks they will keep their Chicago assets, including the Cubs, and sell off all the other papers, i.e. LA Times, Orlando, Fort Lauderdale, Hartford, ect.

[Banedon]

True. Strategic? I guess not. A moneymaker? Certainly.

 

The question is: How bad do they need money immediately? If they need a lot of money immediately, they may sell it. If they're ok with just having the steady income, then they won't.

 

To me it's like someone owning a property that they rent out, and that property has skyrocketed in value for some reason or another. Do you want the security of steady income, or do you want to get the maximum value out on the sale?

[Wilson A2000]

True. Strategic? I guess not. A moneymaker? Certainly.

 

The question is: How bad do they need money immediately? If they need a lot of money immediately, they may sell it. If they're ok with just having the steady income, then they won't.

 

To me it's like someone owning a property that they rent out, and that property has skyrocketed in value for some reason or another. Do you want the security of steady income, or do you want to get the maximum value out on the sale?

 

With Hnedry at the helm, the Cubs will be average for years. People will catch on and stop going. Then the value will shrink.

[Outshined_One]

With Hnedry at the helm, the Cubs will be average for years. People will catch on and stop going. Then the value will shrink.

 

But does the Tribune Company see Hendry that way? I'm sure the Cubs are still turning a sizable profit, despite their recent declining attendance and ratings.

 

What would be most worrisome out of all of this is if the Tribune Company decides to keep the Cubs, but cut payroll in an attempt to maximize profits. If there are people in charge who think that the Cubs could easily draw an average of 25,000 people a game with a $70m payroll, they might very well take that approach, good records or not.

 

This is not necessarily good news for Cubs fans. So many problems could come out of this whole restructuring.

[Sammy Sofa]

What would be most worrisome out of all of this is if the Tribune Company decides to keep the Cubs, but cut payroll in an attempt to maximize profits. If there are people in charge who think that the Cubs could easily draw an average of 25,000 people a game with a $70m payroll, they might very well take that approach, good records or not.

 

Sadly, this is the most likely course of action brought up so far in this thread.

[goonys evil twin]

What would be most worrisome out of all of this is if the Tribune Company decides to keep the Cubs, but cut payroll in an attempt to maximize profits. If there are people in charge who think that the Cubs could easily draw an average of 25,000 people a game with a $70m payroll, they might very well take that approach, good records or not.

 

Sadly, this is the most likely course of action brought up so far in this thread.

 

I don't think that is most likely, because I don't think that would be very profitable. Ratings would plummet, attendance would plummet, all revenues would plummet, and the fan base would dwindle. They built up the present fan base during a time when people didn't have many other options. Baseball was the number 1 sport for years, it was the only worthwhile thing on tv, and there wasn't much but tv. I could see them leveling off at the $95m level, and failing to bump it over $100m. I could see them drift to about 10-12 range over time, if others spend more. But a drastic cut in payroll would hurt their revenues way too much.

[Wilson A2000]

Unless they were able to put out a moderately-priced yet winning team. Other teams have done it. The Twins didn't spend 100 million. I don't think the fan base would care as long as they won. If you have a cheap payroll that means you are most likely fielding a team of younger playes. The Cubs' minor league system appears to be quite dry so that hypothesis won't work. But heck the fans wouldnt care if the Cusb won with a 50 million dollar team. Now that won't happen, but they wouldnt care if it did. I ust dont see the Cubs slashing 25 million and getting better.

[goonys evil twin]

Unless they were able to put out a moderately-priced yet winning team. Other teams have done it.

 

True, but the referenced post spoke of "good records or not".

[C.C.]

Unless they were able to put out a moderately-priced yet winning team. Other teams have done it. The Twins didn't spend 100 million. I don't think the fan base would care as long as they won. If you have a cheap payroll that means you are most likely fielding a team of younger playes. The Cubs' minor league system appears to be quite dry so that hypothesis won't work. But heck the fans wouldnt care if the Cusb won with a 50 million dollar team. Now that won't happen, but they wouldnt care if it did. I ust dont see the Cubs slashing 25 million and getting better.

 

The Twins never spent 100 million, so fans don't have those expectations and minnesota is a small market team. If the Twins could spend 100 million they would. If the Cubs slashed salary to 75 million it would be a insult to the fans. Espically when the W.Sox are spending over 100 million. I can't see the TRIB doing this.

[Neuby]

Hopefully they sell quick so the Cubs can hire a new manager and get Ramirez locked up.

[bhogg]

Any buyouts for MacPhail and Hendry would be chump change for a guy like Cuban or any other new owner. I suspect that'd have little bearing on whether you buy the team or not.

 

 

Krispie Kremes are less than 5 bucks a dozen. . . .

[danonwaveland]

Even if the Trib sold tomorrow, it would take several months to work things out on the business end and then more time for owners' approval, probably running into at least early next season. We'll have Hendry, et.al., around for a while, I'm afraid, and the new manager -- for better or for worse -- will be in place.

 

By the way, Soul said:

"Someone go ahead and correct me if I'm wrong." Do you think you could get my wife or my son to say that?

[Soriano12]

could the NSBB members pool money and buy the Cubs?

 

put me down for $100

 

 

\:D/