Ricketts Looking For More Investors To Help With Cubs Deal
Prospective Cubs Owner Tom Ricketts reportedly is "offering private investors a stake" in the team as he "works to finance" his $900M acquisition from Tribune Co., according to Ann Saphir of CRAIN'S CHICAGO BUSINESS. Sources indicated that Ricketts is trying to raise at least $100M "through the sale of preferred stock to wealthy individuals," as money raised from investors "would reduce the amount the Ricketts family would have to borrow from banks to finance the Cubs deal." Sources said that Ricketts "hopes to find five to 10 investors willing to put up" $25M apiece. Ricketts reportedly has "made only preliminary contacts with prospective investors, none of whom has agreed to invest." Sources noted that the preferred shares would "represent an ownership interest in the team but confer no voting privileges or other rights of control." Under the prospective deals, investors would get "front-row seats at Wrigley Field, opportunities to hobnob with players and a place on an 'advisory board.'" After a 15-year period, the individuals would "get their original investment back without sharing in any appreciation in the value of the franchise over that period." Sources said that the "balance of the purchase price" for the Cubs will be paid "with borrowed funds." Saphir notes selling preferred stock "could help Mr. Ricketts win approval" from MLB, which has "restrictions on how much debt franchises can carry." The Ricketts family in February sold about $403M of TD Ameritrade stock to raise money for the acquisition (CRAIN'S CHICAGO BUSINESS, 4/20 issue).
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