SBD/Issue 234/Franchises

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  • Tribune Co. Finalizes Sale Of Cubs To Ricketts For About $800M

    Ricketts Family Will Have
    Full Control Of Cubs
    Tribune Co. Friday announced that it has "signed an agreement to sell" the Cubs and related assets to the Ricketts family, according to Ameet Sachdev of the CHICAGO TRIBUNE. The Ricketts will pay about $800M to acquire a 95% interest in a package of assets: the Cubs, Wrigley Field and Tribune Co.'s 25% stake in CSN Chicago. The agreement values the team and related assets at $845M. Tribune will retain a 5% ownership stake in the joint venture to "minimize tax on the sale," but the Ricketts will have "full management control." The deal still is pending approval by the bankruptcy court and MLB owners, "which is expected in the fall." The family will "not gain control of the team until after the baseball season ends because there are still a few conditions of closing." Tribune Co. said that as part of the bankruptcy court's approval process, it will "place the Cubs in Chapter 11 bankruptcy so that the franchise can 'emerge free and clear' of the company's financial obligations." However, the filing will "not interrupt team operations, and player contracts and other agreements with ticket holders, sponsors and suppliers are not expected to be affected." Sachdev noted Tribune Co. selected the Ricketts family in January as the "winning bidder in a protracted auction," but the negotiations "took much longer than anyone expected and resulted in a lower price than initially anticipated" (CHICAGO TRIBUNE, 8/22).

    COVERING THE BASES: In Chicago, David Roeder noted Tribune Co. currently is negotiating with lenders over a $13B debt load, and "how the proceeds of the Cubs sale will be handled will be decided at future hearings." Tribune Co. Chair Sam Zell said, "The Ricketts family will be a great steward of the franchise. They have a strong respect for the team, for the fans and for what the Cubs mean to the city of Chicago" (CHICAGO SUN-TIMES, 8/22). Meanwhile, the TRIBUNE's Sachdev cited sources as saying that WGN radio and TV will "retain long-term broadcast rights to the team under the deal." WGN Radio VP & GM Tom Langmyer said the station will "remain as the radio play-by-play home for the Chicago Cubs, and we look forward to our continued partnership with the club for many years to come." Sachdev noted the media rights "became a source of contention in negotiations," as the rights provide a "significant source of revenue" for team owners. But both sides "ended up compromising on media rights," lowering the purchase price originally set to close at about $900M (CHICAGOTRIBUNE.com, 8/21).

    OVER-ZELLOUS: The SUN-TIMES' Roeder reported Zell's "long process" for selling the Cubs "probably cost his debt-strapped company at least" $150M. Sources close to the sale claim that Zell could have attracted about $1B for the team "if only he'd acted quickly a year ago." However, he instead "hatched a plan" to sell Wrigley to the state of Illinois, which "delayed the sale of the team for months, at a time the economy was worsening and lenders began cutting off promises of credit." By late '08, getting $1B in the sale was "out of the question" (CHICAGO SUN-TIMES, 8/23).

    Crane Kenney's Future As Cubs Chair Will Be
    Crucial Decision For The Ricketts Family
    WAITING ON DECK: In Illinois, Mike Imrem writes Tom Ricketts should be "patient before making a decision as important as a club president responsible for reshaping the organization." Too many new sports owners "come into new situations and act like they have all the answers to all the questions." A "key to the process is whether Ricketts has cultivated enough contacts in the game while waiting for the Tribune to ordain him" (Illinois DAILY HERALD, 8/24). In Chicago, Phil Rogers writes Ricketts, "if he's as smart as we think he is, will run from Tribune Co. ties, beginning with" Cubs Chair Crane Kenney. Ricketts would "do well to hire someone" like former Padres CEO Sandy Alderson and "stick with him" (CHICAGO TRIBUNE, 8/23). ESPN CHICAGO's Jon Greenberg wrote Ricketts should replace Kenney "with a baseball guy, an experienced front-office hand who could work" with GM Jim Hendry to "build a consistent winner from the farm system on up or eventually usurp him" (ESPN.com, 8/23). In Chicago, Paul Sullivan offered "10 quick suggestions" for Ricketts, including "Thank Crane Kenney, tell him good-bye." Kenney "helped generate revenues at Wrigley Field, and the Captain Morgan Club is a huge success," but he also "oversaw ticket pricing changes that forced the average fan to stay at home and watch the games on TV" (CHICAGO TRIBUNE, 8/22). In Boston, Nick Cafardo wrote the Cubs "need a CEO/president who knows baseball, not marketing types," who will "hire the right GM and the right baseball staff." MLB Commissioner Bud Selig has a "lot of influence in these matters, and he has a short list of good people who have run successful franchises and want to do it again" (BOSTON GLOBE, 8/23).

    Sources Indicate A $200-250M Project Will
    Create New Bars, Restaurants At Wrigley Field
    HONEY-DO LIST: ESPN CHICAGO's Bruce Levine wrote the "ultimate goal for the new owners will be to find new ways to generate revenue," and a "big part of the future picture" is renovating Wrigley Field. Sources indicated that a $200-250M project will "create new bars and restaurants both in the ballpark itself as well as outside the park in a new building next to the existing structure." The new facility will be an "extension to the park all the way to Clark Street and Waveland Avenue, where parking lots now exist," and will house the team's front-office staff, "Cubs-based retail outlets as well as a projected area" for a Cubs HOF. In addition, a "multitiered parking structure where the present players' parking lot now exists also is promised to the city as part of the new renovation" (ESPN.com, 8/21). ESPN CHICAGO's Greenberg noted Cubs fans "need to know how Ricketts plans to add more talent while keeping ticket prices under control." Greenberg: "My guess is that the pricey seats, which top out at $100 for 'platinum games,' will see either a price hike or the addition of personal seat licenses, or probably both." The auctioning of "prime seats has delivered some extra revenue for the club, and could be expanded" (ESPN.com, 8/23).

    A FEW WORDS OF ADVICE: In Chicago, Mary Ellen Podmolik wrote Ricketts should "go into the community, be accessible, state a goal and back that up with the team's behavior." The team "isn't owned by a corporation anymore, and after so many months of uncertainty it's time for fans to get a feel for the personalities and the perspectives of the Ricketts family." Blackhawks Chair Rocky Wirtz said, "Go out there and talk to people. The fans need to know the owner." Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard: "Ownership can set the tone for the operation. Fans do care that the owners are, in essence, committed to the same thing that they are" (CHICAGO TRIBUNE, 8/23).

    Soriano Hopes New Owner Will Lead To
    Better Team, More Shots At Winning
    IMPACT ON CUBS: Chicago Tribune reporter Chris Kuc said, "I think that the Ricketts family has shown that they’re going to spend the money and do what it takes" ("Chicago Tribune Live," CSN Chicago, 8/21). Cubs 1B Derrek Lee said he hoped the Ricketts are "in this to win and not just to say they own the Cubs, and they're willing to keep the payroll the way it is and we can do what we need to do." In Chicago, Gordon Wittenmyer noted Cubs management, including Hendry, this season have been "hamstrung in addressing" issues with the franchise "because of the ownership instability." Lee said of the sale, "I wish it came about a month earlier. I think Jim's hands were a little tied. Actually, I wish it came about eight months earlier" (CHICAGO SUN-TIMES, 8/22). Cubs LF Alfonso Soriano: "I'd like to meet my owner, my boss. Three years with no boss? Now we know what we can do. With a new owner, if he shows he wants to win, we can have a better team and we can play together more and have more shots (at winning)." Cubs manager Lou Piniella: "This thing here has been in a bit of a flux in the three years I've been here. And now things are heading in the right direction, I think it's very positive and very encouraging for this organization" (CHICAGO TRIBUNE, 8/23).

    GONE WITH THE WIND: In Chicago, Dan McGrath wrote the sale relieves Chicago Tribune Sports Editor Mike Kellams of an "obstinate problem: how to provide fair, balanced and objective coverage of a team your parent company happens to own." McGrath served as Sports Editor from '98-'02, and he wrote, "'Covering' the team objectively hasn't been difficult." McGrath: "Colleagues past and present have followed the Cubs with a highly critical eye for the entire 28-year run of common ownership. ... It's the perception that we're soft on the Cubs or that we favor them over the White Sox -- that's what has given us all frequent heartburn." Former Tribune Sports Editor Tim Franklin said, "The larger issue was dealing with the public perception that the Tribune gave the Cubs favorable treatment. I heard complaints from senior people with the other pro teams in the city. More than that, though, I heard it from readers." But McGrath noted in his 12 years as an editor with the paper, there was "not a single instance of a top editor or a suit from the Tower suggesting we go easy on the Cubs or play down the White Sox" (CHICAGO TRIBUNE, 8/23). McGrath added, "It’s been hard for us, the joint ownership thing. No matter what we did, we could not convince people that we were neutral as far as covering the two teams is concerned" ("Chicago Tribune Live," CSN Chicago, 8/21). A CHICAGO TRIBUNE editorial stated, "The fact that the Cubs and this newspaper have been corporate cousins is a constant vexation for Tribune sportswriters and editors: No matter the coverage, some readers ... will accuse the paper of rampant favoritism. ... In future years, we'll miss the cousins" (CHICAGO TRIBUNE, 8/23).

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  • Sansone Jr. Looking Into Joining Barrie As Lightning Owner

    Sansone Jr. May Soon Join
    Barrie As Lightning Owner
    Sansone Group Principal Tony Sansone Jr. said his group is "in the advance stages of due diligence" to determine whether to join Lightning co-Owner Len Barrie as an owner of the team, but he  "would not say" when he will make a final decision, according to Damian Cristodero of the ST. PETERSBURG TIMES. Sansone: "There's a lot that has to be done and a lot that has to be handicapped." Barrie is currently "in the midst of a league-mandated 60-day window to buy out" Lightning co-Owner Oren Koules, and if Barrie "fails by what is thought to be a mid-September deadline, Koules will get a chance to buy out Barrie." Sansone "may provide Barrie's best and last chance" to get a sale done. Sansone said, "I like what the NHL is doing from a brand standpoint. I think the leadership is superb. The [CBA] that was negotiated is something that makes a great deal of sense. ... It has the potential of being a nice investment. But, again, we're still trying to ascertain what this all really means with the numbers and personnel" (ST. PETERSBURG TIMES, 8/22).

    TOO LITTLE, TOO LATE? The GLOBE & MAIL's David Shoalts cited sources as saying that Barrie is "likely to throw in the towel on his one-year run as co-owner ... next Saturday, clearing the way" for Koules to take over. It "looks as if Barrie has to drop out before his September deadline because he is fighting to save" his B.C.-based Bear Mountain Golf Resort & Spa. Barrie "needs to work out a new financing deal" on the development, as he and his investors have been "whipsawed by falling prices and the drying up of bank credit" (GLOBE & MAIL, 8/22).

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  • Glendale Seeks To Have Moyes Disqualified As Coyotes Creditor

    Glendale Contends Moyes
    Received Improper Payments
    The City of Glendale in a filing Friday asked U.S. Bankruptcy Court Judge Redfield Baum for an emergency hearing to have Coyotes Owner Jerry Moyes "disqualified as a creditor" in the team's bankruptcy case, according to Steve Milton of the HAMILTON SPECTATOR. The filing refers to $104M Moyes loaned the team "over the past year" and claims that the loan "dilutes how much other creditors will receive." Glendale also "contends Moyes has received 'improper payments on account of the 'loans,' 'that those transactions are avoidance actions under bankruptcy law and that due to Moyes's 'misconduct as an owner and manager' his claims should be subordinated." Milton noted neither bids for the Coyotes from Bulls and White Sox Chair Jerry Reinsdorf nor Ice Edge Holdings "contain provisions for paying off" the loan, and if Baum "agrees to hear the case against the Moyes's loan and agrees with Glendale's assessment, it would make those stay-in-Glendale bids more agreeable to the bankruptcy court" (HAMILTON SPECTATOR, 8/22). In Phoenix, Carrie Watters reported Glendale in the filing also "called into question" Coyotes Managing Partner & coach Wayne Gretzky's "claim as a creditor" of the team. Glendale "wants to eliminate or cap" the $9.3M Gretzky "might receive through the team's sale." Glendale requested that Baum "rule on the issues on or before the team's auction" on September 10 (ARIZONA REPUBLIC, 8/22).

    MELNYK UNHAPPY: The CP's B.H. McKenna reported Senators Owner Eugene Melnyk Friday took RIM co-CEO Jim Balsillie "to task" and called himself the "victim of a Balsillie 'cheap shot.'" Melnyk, who Thursday issued a "lengthy statement responding to the latest court filings on behalf of Balsillie," said that Balsillie "simply isn't playing by the rules." Melnyk: "Yes, it's etiquette, but it's more than that. It's about fair play." Melnyk said that he has "spoken with Balsillie twice" since the court filing, but Melnyk "dismissed his response as 'unsatisfactory'" (CP, 8/21). Sources close to Balsillie said that he "never meant to embarrass Melnyk by bringing up his fines with the Ontario Security Commission." A source said that Melnyk's name was "brought up 'reluctantly' and only as a means 'to show context into how (Balsillie) has been portrayed by the NHL." The source: "We don't feel character is an issue at all" (TORONTO STAR, 8/22). In Toronto, Steve Simmons wrote among the "really stupid things Jim Balsillie has done in his attempt to secure an NHL franchise, nothing was dumber than taking a pot shot" at Melnyk, who was "one of Balsillie's few allies around" (TORONTO SUN, 8/23).

    Writers Upset With How Coyotes
    Situation Has Been Handled
    GETTING UGLY: In Toronto, Damien Cox wrote the Coyotes situation has "degenerated into one of the ugliest, nastiest and messiest squabbles in NHL history, a thoroughly tawdry affair that has soiled the credibility and integrity of everyone involved." Cox: "What was the point of alienating Melnyk? Why denigrate the NHL as an organization filled with shady characters when it is precisely the organization you wish to join?" (TORONTO STAR, 8/22). The GLOBE & MAIL's Bruce Dowbiggin wrote there "was a time when discreet, private assassination was the preferred method of blackballing a sports rival such as Balsillie," but the "subtler arts have given way to a more public process of story leaks, open letters and good-old intemperate media availabilities with reporters." Dowbiggin: "Salvoes from both sides have continued to any reporter who could spell bankruptcy" (GLOBESPORTS.com, 8/23).

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  • MLB Franchise Notes: Nats Reaching Out To Blogging Community

    Introductory Press Conference For Strasburg
    Includes Fireworks, Jersey Presentation
    In DC, Bob Cohn notes the Nationals yesterday held Bloggers Day at Nationals Park, the second of the season, and the club is making an effort to "reach out to their blogging community." Nationals President Stan Kasten: "They're clearly a presence on the Web, which is clearly a presence in our lives. ... I think we're all better served when they have as much good information as they can have." Sixteen bloggers participated in yesterday's event, and Kasten added, "A year ago we didn't do things like this. A year from now we'll probably have a better fix on what's appropriate or what's not appropriate" (WASHINGTON TIMES, 8/24). Meanwhile, the Nationals' introductory press conference for P Stephen Strasburg on Friday included "fireworks, a No. 37 jersey presentation, and a VIP seating area" where Owner Ted Lerner sat. Several hundred fans "peppered the sections directly behind third base" (WASHINGTON POST, 8/22).

    KEEPING THE THRONE: Mets Owner Fred Wilpon Saturday, when asked about the future of GM Omar Minaya, said, "Am I going to bring Omar back next year? Absolutely. That's a fact." Minaya later said Mets manager Jerry Manuel "is my guy," inferring Manuel will return for the '10 season. In N.Y., Joel Sherman wrote Wilpon "just assured that the main faces of the 2009 humiliation will return next year." What will be "interesting now is how the Mets try to spin this; how they attempt to convince their fans that Minaya and Manuel are the best duo equipped to pull them out of this death swirl" (N.Y. POST, 8/23).

    MAGIC CARPET RIDE: In Philadelphia, Michael Klein noted the Phillies last week started selling "old clubhouse carpet" from last season, cutting it into 18-by-24 inch pieces featuring player numbers, MLB hologram stickers and "World Series Champions" patches. The carpet featuring the number of a "bench player" will cost $150, while a patch for players such as 1B Ryan Howard or 2B Chase Utley is selling for $250 (PHILADELPHIA INQUIRER, 8/23).

    CLOSING TIME: In Ft. Worth, Jim Reeves reported the MLB Rangers in October will close their Legends of the Game Museum and "plan to redesign the space in hopes of better using it to generate" more revenue, "another sign of the times when it comes to the Rangers' financial distress." Rangers Exec VP/Communications John Blake: "We need to make it more financially solvent. As a stand-alone museum, it just doesn't generate any revenue." The team hopes to "have the new space ready" by the start of next season (FT. WORTH STAR-TELEGRAM, 8/23).

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