Tribune Co. in the Wall Street Journal

[moorecg]

Hopefully this has no effect, but you never know...

 

In the What's news section of today's WSJ it shows that the Tribune Co. lost a tax court decision that could cost it 1Billion dollars...

 

Makes me think we should cut vetran guys like Neifi and Macias and go with a youth movement to save money huh? :D

[MeatampPotatoesMan]

i wish someone would buy out the trib. co.

[goonys evil twin]

For all the "sell to Mark Cuban" people out there, here's some fuel to add to your fire.

 

By Joseph T. Hallinan

 

Of THE WALL STREET JOURNAL

 

CHICAGO (Dow Jones)--Shares of Chicago-based Tribune Co. (TRB) jumped in early

trading Thursday after the company said it was considering selling or swapping

certain of its assets.

 

"It wouldn't make a lot of sense for us to get specific right now, but believe

me, we're looking at the portfolio," said Chairman and Chief Executive Dennis

FitzSimons during a conference call with analysts to discuss the company's

third-quarter earnings.

 

Shares of the company, which have been depressed lately, were up 79 cents, or

2.5%, to $32.60 in midday trading on the New York Stock Exchange.

 

Tribune, which owns newspapers, television stations and the Chicago Cubs

professional baseball team, said net income for the quarter fell 80%, to $24

million, or 7 cents a share, from $121.7 million, or 37 cents a share. Revenue

was down less than 1%, to $1.4 billion.

[USSoccer]

Goony, thanks for the article.

 

That is a massive drop in profits.

 

How much do you think that the Cubs are worth on the open market?

[moorecg]

Goony, thanks for the article.

 

That is a massive drop in profits.

 

How much do you think that the Cubs are worth on the open market?

 

I've got no idea...but I'd have to think the Cubs franchise would be worth easily in the top 3 in baseball (Yankees, LA?, Who would be worth more?). I would love to have some random rich guy owner that wanted to be the guy that made the Cubs win...

[Exile on Waveland]

No idea how much they'd be worth.

 

The Redskins were bought by Dan Snyder for $800 million a few years back. While I'd have to think the Cubs are more valuable, maybe NFL franchises are just that much more valuable or maybe Snyder overpaid.

 

But I'd have to think it'd be at least somewhere in that range.

[Jon]

Going into the 2005 season, Forbes had the Cubs at $398 million, 6th in the majors.

 

The Tribune is not going to be selling them, though. There's just no way. Not only will the Cubs continue to bring in money at high rates, but there are two things off the top of my head that are huge factors. 1) The Tribune gets a good chunk of change by broadcasting games on WGN and CSNC without having to sell the rights to an outside company. They can hide money from revenue sharing and get a large share of the money that CSNC brings in. 2) The Tribune Co. (NOT the Cubs) is putting in nearly $50 million to Wrigley Field over the next two offseasons with the bleacher expansion and triangular building. Those are huge investments that they fully expect to pay off over the long run.

[goonys evil twin]

Goony, thanks for the article.

 

That is a massive drop in profits.

 

How much do you think that the Cubs are worth on the open market?

 

I'm not an investment banker, and I don't play one on tv. And I didn't even stay in a Holiday Inn Express last night.

 

If the buyer got the Cubs, as well as their stake in CSN, I would think they'd be about $750-900 million. The stadium isn't all that valuable, but the expected revenue stream from continued attendance sure as heck is. If that happened, I could see Andy MacPhail moving on to a DC ownership group. He'd be the perfect point man for any money man who lacks baseball knowledge. Maybe the Trib would want to pull a Lurie and sell one team only to buy another.

[frostwyrm]

Hopefully this has no effect, but you never know...

 

In the What's news section of today's WSJ it shows that the Tribune Co. lost a tax court decision that could cost it 1Billion dollars...

 

Makes me think we should cut vetran guys like Neifi and Macias and go with a youth movement to save money huh? :D

 

This is old news.

 

viewtopic.php?t=25465&highlight=stock

[TheDude]

Going into the 2005 season, Forbes had the Cubs at $398 million, 6th in the majors.

 

The Tribune is not going to be selling them, though. There's just no way. Not only will the Cubs continue to bring in money at high rates, but there are two things off the top of my head that are huge factors. 1) The Tribune gets a good chunk of change by broadcasting games on WGN and CSNC without having to sell the rights to an outside company. They can hide money from revenue sharing and get a large share of the money that CSNC brings in. 2) The Tribune Co. (NOT the Cubs) is putting in nearly $50 million to Wrigley Field over the next two offseasons with the bleacher expansion and triangular building. Those are huge investments that they fully expect to pay off over the long run.

Yeah, but, regarding point 2, wouldn't the Tribune Company also be able to roll those improvements into the sale price as value added (using standard real estate improvement logic)?

[goonys evil twin]

Hopefully this has no effect, but you never know...

 

In the What's news section of today's WSJ it shows that the Tribune Co. lost a tax court decision that could cost it 1Billion dollars...

 

Makes me think we should cut vetran guys like Neifi and Macias and go with a youth movement to save money huh? :D

 

This is old news.

 

viewtopic.php?t=25465&highlight=stock

 

Please note the date of the original post. I remember the topic was brought up, and after TRB had their conference call today I figured I'd just bump the old thread instead of start a new one.

[Jon]

Going into the 2005 season, Forbes had the Cubs at $398 million, 6th in the majors.

 

The Tribune is not going to be selling them, though. There's just no way. Not only will the Cubs continue to bring in money at high rates, but there are two things off the top of my head that are huge factors. 1) The Tribune gets a good chunk of change by broadcasting games on WGN and CSNC without having to sell the rights to an outside company. They can hide money from revenue sharing and get a large share of the money that CSNC brings in. 2) The Tribune Co. (NOT the Cubs) is putting in nearly $50 million to Wrigley Field over the next two offseasons with the bleacher expansion and triangular building. Those are huge investments that they fully expect to pay off over the long run.

Yeah, but, regarding point 2, wouldn't the Tribune Company also be able to roll those improvements into the sale price as value added (using standard real estate improvement logic)?

Not that I know anything about real estate, but that would be really complicated because the value of the Wrigley isn't what's worth the most money. It's what those improvements will bring in through primarily increased bleacher ticket sales (and those ticket prices will continue to increase) and beer sales. I'm not sure you can put a monetary value on that just yet. Who knows how much a bleacher ticket is going to cost in 25 years (aside from a lot)? The Tribune would be risking a lot to give up on that future at this point.

[goonys evil twin]

Not that I know anything about real estate, but that would be really complicated because the value of the Wrigley isn't what's worth the most money. It's what those improvements will bring in through primarily increased bleacher ticket sales (and those ticket prices will continue to increase) and beer sales. I'm not sure you can put a monetary value on that just yet. Who knows how much a bleacher ticket is going to cost in 25 years (aside from a lot)? The Tribune would be risking a lot to give up on that future at this point.

 

If that's the case, it's always going to be that way. You don't know what the cost of a skybox in Boston will cost in 25 years. You don't know what the cost of any ticket will be in 25 years. What they'd have to do is sit down and negotiate the sale based on their own numbers. There's absolutely no reason whatsoever that they couldn't sell in the middle of these improvements. It's like selling a condo mid-construction. If the buyer has confidence the job will get done, he'll offer a price, if the seller likes the price, he'll take it.

[don_kessinger_was_good]

One possibility the Tribune has at their disposal is to follow the Boston Celtics model from years ago, and make the Cubs asset a limited partnership, with publicly available shares. The Trib could raise a lot of cash from selling a stake in the team, yet still retain majority control. Given the passion of Cubs fans nationwide, it's not hard to see the Trib raking in several hundred millions in up-front cash, but to make it work, they'd need to commit to spinning off some real cash flow to shareholders in the form of a promised dividend. It all works similar to the real estate investment trust (REIT) concept, shares of which trade on the exchanges. So perversely, the discipline imposed on running the team from needing to generate a profit, in order to pay the dividend, could actually make matters WORSE in terms of a tighter payroll.

 

Bottomline is that if you're wanting the Cubs to be free-spenders, the only way it can happen is if the Trib outright sells the team, Wrigley, and all the associated accroutements lock, stock and barrel. And while the Trib would show an enormous book profit gain from doing so (IIRC they bought the team from the Wrigleys for less than $25MM), management in the Tower is too conservative to get it done.

[mhuber92211]

To avoid the $50 million loss from the renovations, couldn't the Tribune sell the team and keep ownership of Wrigley and then have a lease with the team? This might keep the team in Wrigley for a more definite period of time and could be an immediate recoup of the renovation cost.

 

The new owner would like this as well because he could lease Wrigley and then use that as a term for when the new owner can build "New Wrigley".

 

As far as the Trib not selling the Cubs because they are a cash cow for them, this doesn't make sense. WIth a debt that needs to be paid right away, the best thing to sell is the one with the most value. That is the Cubs.

[oldcubsfan]

I think they would sell their stake in the WB network first. I'd look for that before the end of the year.

[RockTheIvy]

I think they would sell their stake in the WB network first. I'd look for that before the end of the year.

 

Seriously. Dawson's Creek babes have nothing on lookers like Zambrano or Ohman. :lol:

[J.R.]

http://www.tribune.com/

 

What would you want?