Cubs Sale Gets More Complicated As Tribune Aims To Avoid Taxes
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| Tribune Co. Aiming To Avoid Taxes In Cubs Sale |
Tribune Co. for its prospective sale of the Cubs and Wrigley Field is "suggesting a tax-advantaged, debt-heavy set of transactions similar to the one" Tribune Co. Chair Sam Zell used in May to generate $630M in cash by selling Newsday to Cablevision, according to sources who have seen documents distributed this week to potential Cubs buyers as cited by Michael Oneal of the CHICAGO TRIBUNE. However, the difference between the Newsday and Cubs situations is that Zell is "trying to pass muster" with the IRS and MLB, which "has its own set of rules and requirements." Tribune's move "adds an extra level of complexity as potential new owners prepare preliminary bids due in early July." Two sources said that the documents indicate the Cubs' '07 profit reached $31M, and one source said that revenue is "in the $250[M] range." Zell's aim is for the transaction to allow Tribune Co. to "avoid as much tax liability as it can while 'monetizing' the team." Analysts said that even if the combined sale price of the Cubs and Wrigley "falls below $1[B], Tribune's capital-gains exposure from an outright sale would be enormous" (CHICAGO TRIBUNE, 6/12). Two sources indicated that nine prospective buyers of the Cubs, who have been preapproved by MLB, have received the Cubs' financial books (AP, 6/11).
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