The sale of the Tribune company and more specifically the Cubs to Sam Zell was to be completed by now. What's the hold up? Well, several concrete issues and many rumors. First and foremost, Zell wants the Trib co. but not all of the assets. He has stated publicly, "why would anyone want to own a baseball team". He has also indicated that he will sell of the 25% stake in Comcast sports.
The major issue holding up the vote is the FCC. They are to vote within days as to whether the Trib will receive a waiver to own TV stations in the same market. If granted the waiver, it will last for 2 years. If not granted the waiver, Zell will be forced to sell his TV stations in many markets. The second hold up is an IRS ruling on his attempt have this sale declared an ESOP. This ESOP ruling would change the tax status of the Trib Co. when he takes them private.
The biggest indicator that this deal won't go through as planned is the arbitrage community. These are the guys who play the spreads between the sale price and the current price. The greater the likelihood a deal will get done, the narrower the spread. In this case the spread is huge for a deal about to close imminently. The sale price is $34 and the current price is $31.70, a difference of almost 10%! The arbitrage guys are amongst the shrewdest and most clued in traders, so they obviously know something.
What does this mean for the Cubs? It means that everything else is still up in the air. They can continue to sign players to outrageous contracts because, regardless, their will still be many offers for the team. They won't ever be on the hook for the contracts because there will be new owner. The biggest clue that confusion is setting in at 1050 W. Addison is that John McDonghough left to go to the Hawks. He waited 15 years to get the coveted role of President of the Cubs to go to the lowly NHL. True the Hawks are rebuilding with the exciting death of Bill Wirtz, but the two positions aren't even in the same league. What does he know?
If Zell doesn't get the deal done, the likelihood that someone else will step up to bat for the Trib is not good. But Zell knows how to wheel and deal with the best of them. He also knows hidden value when he sees it. He is after all selling the Cubs and keeping Wrigley.
2 comments:
I understand that MLB mita not wanted him, but what about Mark Cuban? That would have been a kool situation for the Cubs. he would have spent $$$, regardless of the salary cap.
what about devein hester as a pinch runner-no one is faster and he could make money year around because the bears arn't paying him shit.
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