Buyers not Bearish on Zell’s Cubbies
The real estate magnate’s push to eliminate debt will see its most aggressive play of 2008 in the near term as the Tribune Co. preps an auction for its baseball team, cable channel share and Chicago landmark stadium.
July 21, 2008
A lineup of bidders has emerged to buy Sam Zell’s Chicago Cubs, a storied—and beleaguered—baseball franchise anticipated to fetch $1 billion at the auction block.
It’s been reported that Sports Properties Acquisition Corp., run by Andrew Murstein in New York; John Canning of private equity shop Madison Dearborn Partners LLC; Tom Ricketts of Incapital LLC and Hersch Klaff, president of Klaff Realty LP are each in the running for one of Major League Baseball’s most prized assets.
Other bidders unveiled in previously published reports included Rocco Landesman, a Broadway theater owner; Don Levin, owner of a minor-league hockey team in Chicago and Jim Anixter, president of A-Z Industries Inc.
However, the most conspicuous name on the list of allegedly interested parties is that of Dallas Mavericks owner Mark Cuban, a newly-notorious pro team owner whose antics—including jawing at referees and his constant courtside presence—have turned him into a pariah in the club of typically more reserved team owners. Cuban telegraphed his interest when, purporting to be a fan of the people, he took a seat in Wrigley Field’s fabled bleachers to take in a contest with Chicagoans.
Buying the Cubs will, likely, not just entail the team itself. It was first rumored that Zell, ever the real estate whiz, would sell the stadium apart from the team, but this seems to no longer be the case. Now, a package deal would include the team, their stadium and a 25% stake in the Cubs’ regional cable network. All of this could top $1 billion, but the Tribune has been mum on the process thus far.
Zell’s sale of the Cubs is all but certain to reap his biggest check of 2008; earlier plays for beating back debt—which the dissolving media conglomerate has successfully done to this point—included real estate sales and some divestitures, most notably, the Long Island paper Newsday for $650 million earlier this summer. It is likely that the sale of the Cubs will keep Zell’s Tribune buoyant through 2009 debt calls.
Perhaps best for Zell, because of maximum debt requirements imposed upon teams by Major League Baseball, the deal will almost certainly be one where cash is provided to him immediately.
The Tribune declined to comment through a spokesman; bids for the Cubs were due on July 18.
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