Tribune Rejects Wrigley Offer

[ZMovieman]

Thought about putting it in the Cuban thread, but decided it needed its own. Feel free to merge if needed.

 

http://chicago.cubs.mlb.com/news/article.jsp?ymd=20080513&content_id=2691506&vkey=news_chc&fext=.jsp&c_id=chc

 

Wrigley will now be packaged with the Cubs. So how does this change things? Or does it?

[MustangMike]

Thought about putting it in the Cuban thread, but decided it needed its own. Feel free to merge if needed.

 

http://chicago.cubs.mlb.com/news/article.jsp?ymd=20080513&content_id=2691506&vkey=news_chc&fext=.jsp&c_id=chc

 

Wrigley will now be packaged with the Cubs. So how does this change things? Or does it?

 

To me it made no sense to a new owner not to own the stadium with the team....espeically Wrigley field. I do wonder, as with buying a house that "need repair", do you get a little discount on the price knowing you have to make major changes? I doubt they get that lower price, but I was just wondering if that would be possible.

If I had the money, i wouldn't buy the cubs without Wrigley, so I hope this makes the sale quicker.

 

If/When the "redo" wrigley, have there been any ideas on how they would do it and the main things they would add to this new grandstand? Parking, skyboxes, more seats,ect?

[Sorianos hop]

That's good news. The last thing I need is for the ARM on my box seats to reset.

[jersey cubs fan]

Thought about putting it in the Cuban thread, but decided it needed its own. Feel free to merge if needed.

 

http://chicago.cubs.mlb.com/news/article.jsp?ymd=20080513&content_id=2691506&vkey=news_chc&fext=.jsp&c_id=chc

 

Wrigley will now be packaged with the Cubs. So how does this change things? Or does it?

 

To me it made no sense to a new owner not to own the stadium with the team....espeically Wrigley field. I do wonder, as with buying a house that "need repair", do you get a little discount on the price knowing you have to make major changes? I doubt they get that lower price, but I was just wondering if that would be possible.

If I had the money, i wouldn't buy the cubs without Wrigley, so I hope this makes the sale quicker.

 

If/When the "redo" wrigley, have there been any ideas on how they would do it and the main things they would add to this new grandstand? Parking, skyboxes, more seats,ect?

 

A home buyer may get some knocked off the price because houses are in plentiful supply and sellers need to make theirs look better than the competition. There's a limited supply of MLB teams and only one Cubs/Wrigley. They will get what the buyers are willing to pay.

[Soul]

Wrigley will now be packaged with the Cubs. So how does this change things? Or does it?

 

Primarily, it changes things for the better. In my opinion. To me it was madness to separate the two, but that's just me.

[Outshined_One]

So how does this change things? Or does it?

 

It makes financing for potential new owners a bit more of a hassle, but every potential bidder has already assessed the value of this team with and without Wrigley included in the price. This shouldn't change a whole lot unless some bidders out there were banking on the team being sold without Wrigley. If that's the case, those bidders will quietly drop out.

[jersey cubs fan]

So how does this change things? Or does it?

 

It makes financing for potential new owners a bit more of a hassle, but every potential bidder has already assessed the value of this team with and without Wrigley included in the price. This shouldn't change a whole lot unless some bidders out there were banking on the team being sold without Wrigley. If that's the case, those bidders will quietly drop out.

 

Why would you think that? MLB wasn't going to let somebody borrow a billion dollars to get the Cubs. If anything, the lack of an unfriendly prearranged lease arrangement, and the flexibility that allows, would make financing a little easier.

[Bull]

this tells me a deal is close and the new owner said "no deal unless I get both" Zell wouldn't do this if it didn't = $$

[nilodnayr]

this tells me a deal is close and the new owner said "no deal unless I get both" Zell wouldn't do this if it didn't = $$

 

read the article

[Banghart]

Score is reporting that the Sun Times report of Sam Zell rejecting the offer to buy Wrigley Field is false, and that the negotiations are still going on between ISFA and the Tribune.

[Jon]

Score is reporting that the Sun Times report of Sam Zell rejecting the offer to buy Wrigley Field is false, and that the negotiations are still going on between ISFA and the Tribune.

Thompson was on WGN Radio this morning saying that the Sun-Times story was false. He said that Zell had send him a letter that he should receive today regarding the status of the sale.

 

Because the story appears on Cubs.com after Thompsons radio interview and roughly the time when he would have received the letter, though, I'm leaning towards believing that the deal is just about off.

[nilodnayr]

Score is reporting that the Sun Times report of Sam Zell rejecting the offer to buy Wrigley Field is false, and that the negotiations are still going on between ISFA and the Tribune.

Thompson was on WGN Radio this morning saying that the Sun-Times story was false. He said that Zell had send him a letter that he should receive today regarding the status of the sale.

 

Because the story appears on Cubs.com after Thompsons radio interview and roughly the time when he would have received the letter, though, I'm leaning towards believing that the deal is just about off.

 

I think if you read between the lines in the article, you can surmize that the deal is just about off as it stands, but the ISFA can amend the deal to come up with the money in a different (less creative) and Zell will take a look at it.

[Outshined_One]

So how does this change things? Or does it?

 

It makes financing for potential new owners a bit more of a hassle, but every potential bidder has already assessed the value of this team with and without Wrigley included in the price. This shouldn't change a whole lot unless some bidders out there were banking on the team being sold without Wrigley. If that's the case, those bidders will quietly drop out.

 

Why would you think that? MLB wasn't going to let somebody borrow a billion dollars to get the Cubs. If anything, the lack of an unfriendly prearranged lease arrangement, and the flexibility that allows, would make financing a little easier.

 

This is a moot point right now, given that Wrigley apparently still might be offered independently, but there are incredibly few people in the world who have enough cash on hand to buy the Cubs out of pocket. Even if you get a group of people together to pool cash, it is very difficult to get enough people together to basically write a check for hundreds of millions of dollars, if not a billion dollars. Rest assured, at the very least, some of the money used to buy the Cubs will be borrowed.

 

With Wrigley in the fold, that's some more capital that has to be scrounged together. Guys like Cuban and Canning should be able to get it without much trouble, but it just means that lines of credit have to be expanded accordingly.

[jersey cubs fan]

So how does this change things? Or does it?

 

It makes financing for potential new owners a bit more of a hassle, but every potential bidder has already assessed the value of this team with and without Wrigley included in the price. This shouldn't change a whole lot unless some bidders out there were banking on the team being sold without Wrigley. If that's the case, those bidders will quietly drop out.

 

Why would you think that? MLB wasn't going to let somebody borrow a billion dollars to get the Cubs. If anything, the lack of an unfriendly prearranged lease arrangement, and the flexibility that allows, would make financing a little easier.

 

This is a moot point right now, given that Wrigley apparently still might be offered independently, but there are incredibly few people in the world who have enough cash on hand to buy the Cubs out of pocket. Even if you get a group of people together to pool cash, it is very difficult to get enough people together to basically write a check for hundreds of millions of dollars, if not a billion dollars. Rest assured, at the very least, some of the money used to buy the Cubs will be borrowed.

 

With Wrigley in the fold, that's some more capital that has to be scrounged together. Guys like Cuban and Canning should be able to get it without much trouble, but it just means that lines of credit have to be expanded accordingly.

 

Yes, but I don't see that being a hassle for guys used to financing much bigger deals. The fact that they are getting the whole thing and not some convoluted lease arrangement would seem to me at least to offset the problems with getting more financing.

 

But the only people who stood a chance on this deal were people who weren't going to have problems with financing to beging with.

[Irrelevant Dude]

This just seems like a negotiating ploy to me and I still expect the state to end up buying Wrigley Field. Tribune Company has no reason to quickly sell the stadium to them on their first offer, especially with the leverage of private bidders to fall back on.

[DivineBovine]

this tells me a deal is close and the new owner said "no deal unless I get both" Zell wouldn't do this if it didn't = $$

 

 

I agree that to the Trib, it was all about money. They obviously don't give a rat's ass with regard to the future of the team, their primary motivation has always been money.

 

To me, this says that they rethought the initial theory that the 2 assets would fetch more money apart. Many of us have mentioned in prior threads that any owner would want both assets together. Clearly, not owning Wrigley and being locked into a lease with the owner of Wrigley would affect the potential bids for the Cubs.

 

As a fan, this is fantastic news. I was very concerned about the prospect of another entity owning Wrigley. This would mean profits from the park to be separated from profits from the Cubs and therefore not necessarily being reinvested in the team. After all, the owners of Wrigley would be motivated sheerly by profit. We all hope that the owners of the Cubs will be motivated primarily be the desire to win- after all, billionaires don't buy sports franchises primarily for profit. There are better investments out there.

 

Let's hope for an owner who is willing to dish out the dough to win. The fans deserve it.

[davearm2]

So how does this change things? Or does it?

 

It makes financing for potential new owners a bit more of a hassle, but every potential bidder has already assessed the value of this team with and without Wrigley included in the price. This shouldn't change a whole lot unless some bidders out there were banking on the team being sold without Wrigley. If that's the case, those bidders will quietly drop out.

Hard to imagine this being true, given that the Cubs have yet to release their financial portfolio to the approved bidders.

[davearm2]

Score is reporting that the Sun Times report of Sam Zell rejecting the offer to buy Wrigley Field is false, and that the negotiations are still going on between ISFA and the Tribune.

In the article I read, there were some pretty definitive quotes from Crane Kenney to suggest the ISFA proposal has been rejected. For all intents and purposes, Kenney is the proverbial horse's mouth on these matters.

[Careless]

Score is reporting that the Sun Times report of Sam Zell rejecting the offer to buy Wrigley Field is false, and that the negotiations are still going on between ISFA and the Tribune.

Thompson was on WGN Radio this morning saying that the Sun-Times story was false. He said that Zell had send him a letter that he should receive today regarding the status of the sale.

 

Because the story appears on Cubs.com after Thompsons radio interview and roughly the time when he would have received the letter, though, I'm leaning towards believing that the deal is just about off.

in the 720 pregame, they interviewed the chairman of the cubs(?) who said that this made is significantly less likely that the field would be sold separately from the team. Hopefully they're giving up on that.

[nilodnayr]

It isn't so much a negotiating ploy as a message to come up with a way to finance the deal that doesnt significantly devalue the actual team.

[Jon]

Trib[/url]"]After Tribune Co. rejected the authority's latest proposal as creative but unworkable, sources said that the media conglomerate is privately indicating it might hold off selling the ballclub if the inevitable need for costly repairs at the antiquated ballpark significantly discounts the bids it fields for the team.

 

Heavily leveraged since going private late last year in an $8.2 billion deal engineered by real estate magnate Sam Zell, Tribune Co. bought itself a little breathing room on a Cubs sale, or at least a plausible negotiating stance, with this week's announced $650 million transaction for control of Newsday, according to analysts. The deal for its Long Island, N.Y., newspaper gives it a financial cushion for this year, but not forever.

 

Tribune Co., which acquired the Cubs and Wrigley Field in 1981, remains in talks with the state agency for it to possibly acquire and pay for an estimated $400 million in renovations to the aging baseball shrine, Major League Baseball's second-oldest ballpark, as well as neighborhood improvements and additional parking.

 

It is estimated that structural repairs can be delayed no more than 10 to 15 years, and there is considerable financial incentive to modernize the ballpark's high-priced suites as soon as possible to put it on a par with similar moneymakers in other professional sports facilities.

 

Tribune Co. shot down the state agency's latest proposal, which was structured to counter public criticism by funding the overhaul without state or city tax money. But neither side will rule out an agency deal of some sort for the ballpark, which would enable the team to be sold separately and maximize the potential return for Tribune Co., despite a Chicago Sun-Times report Tuesday that the company now planned to peddle the team and ballpark privately.

.................

Cubs Chairman Crane Kenney said Tribune Co. would leave its options open by continuing to work "with the city and state and, at the same time, begin the private process to explore interest in the team, stadium and our ownership interest in Comcast SportsNet."

.................

Sources involved in the bidding process said word is filtering back to those potential buyers that Tribune Co. is saying it will hold onto the team rather than sell at distressed prices if would-be buyers drop their prices too steeply in anticipation of having to pay for Wrigley Field renovations themselves.

.................

Tribune Co. is on the hook to pay its banks $650 million on Dec. 4, money it originally anticipated would come from a Cubs sale. But the Newsday deal will reap $630 million in cash that can be applied to that payment, and Tribune Co. has about $200 million in cash that can be drawn upon to pay the rest, said Mike Simonton, an analyst with Fitch Ratings in Chicago.

 

Depending on market conditions, analysts also estimate Tribune Co. will generate between $150 million and $200 million in cash flow this year, which also can be used to pay down debt.

 

The respite is only temporary, however, in that Tribune has to pay another $750 million on June 4 of next year, Simonton said. Fitch believes that cannot be funded through internal cash sources, so Tribune likely will have to sell another big asset by then.

I'm sure it's just posturing, but I'd imagine that some of the potential buyers are becoming a little frustrated.

[nilodnayr]

Yeah, its posturing, but pretty damn well played posturing. While reading the article I was thinking, bluff, bluff, bluff...until the Newsday sale. Zell was really under the gun to have to get the $650M by Dec 4th, forcing him to take an offer, even a sub-par offer. Now, he can drag this out much longer, increasing his leverage.

 

In regards to the park/team. I dont see how the ISFA can come up with a proporsal that doesn't include taxpayers money (anyone know how they generated $ to buy U.S. Cellular?). And given the current economic lanscape and the state/city budgets, I don't see how they can do it with taxpayer money.

[nilodnayr]

Yeah, its posturing, but pretty damn well played posturing. While reading the article I was thinking, bluff, bluff, bluff...until the Newsday sale. Zell was really under the gun to have to get the $650M by Dec 4th, forcing him to take an offer, even a sub-par offer. Now, he can drag this out much longer, increasing his leverage.

 

In regards to the park/team. I dont see how the ISFA can come up with a proporsal that doesn't include taxpayers money (anyone know how they generated $ to buy U.S. Cellular?). And given the current economic lanscape and the state/city budgets, I don't see how they can do it with taxpayer money.

 

http://www.isfauthority.com/managex/index.asp?x=142&y=142&articlesource=142

 

ISFA provided the public contribution, a total of $406 million, of the $606 million needed for the Chicago Lakefront Development project, including the significant restoration of Soldier Field. ISFA financed this operation through the issuance of municipal bonds backed by an existing 2 percent Authority Hotel Tax. This revenue did not come from State or City general revenue funds, nor is it a result of increased taxes for Chicago or Illinois residents.

[Jon]

Another nail in the ISFA-owned Wrigley proposal's coffin:

Trib[/url]"]The Illinois Sports Facilities Authority was attempting to pull off the deal without any use of taxes, and Tribune said no way, according to Thompson, chairman of ISFA, which owns and operates U.S. Cellular Field, home of the Chicago White Sox.

 

Tribune Co., which also owns the Chicago Tribune, believes the acquisition "requires either the transfer of future sales and amusement tax revenue from transactions at Wrigley Field for the next 30 years, or the imposition of new taxes, or the transfer of existing ISFA funds now pledged to projects at U.S. Cellular.

 

"ISFA cannot agree to this," Thompson said in a prepared statement late Monday afternoon. "In our judgment, there are no votes in the City Council or in the Illinois General Assembly for transferred or new taxes for Wrigley Field. And we cannot break the promises we have previously made to the White Sox under our lease terms."

 

"As an employee-owned organization, Tribune has been clear and unwavering in its commitment to a transaction that is favorable to the public, to the company, and to the Cubs," Tribune Co. said in a statement. "Unfortunately, ISFA's proposal did not meet this criteria and would, in fact, violate the policies of Major League Baseball. We continue to see a strong benefit for the state and the city in public ownership of the ballpark, but we cannot execute a transaction at the expense of our employees or in violation of MLB rules."

 

Chicago Cubs Chairman Crane Kenney agreed that the two parties were at an impasse.

 

"We appreciate Gov. Thompson's interest and involvement," he said, adding he did not expect a resumption of talks.

...........

ISFA had proposed acquiring the park by issuing taxable bonds that would be paid off by lease revenues and the sale of partial naming rights. And it proposed constructing new seats, and selling equity rights to those seats to finance renovation of the park, which is estimated to cost about $400 million.

 

This concept involves the sale of seats to fans for a fixed annual price for the duration of a long-term contract. Tribune felt "those seats belong to the [team] owner," said Thompson. "On the other hand, if we built them, the owner would be getting a fully restored stadium, so we thought it was a fair trade.

 

"Those seats don't exist now, so we're not taking away anything," he said.

 

He declined to say how many seats were proposed and where they would have been built, though sources have said that the plan included 1,000 new seats. Thompson also declined to say how much ISFA had offered to pay for the ballpark.

[Clem Fandango]

To me it was madness to separate the two, but that's just me.

 

Insert overused "300" joke