Assets Being Assets: Debt Problems Vex Would-Be Cubs Owners

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Run by a massive, emotionless corporation for too long, it's about time the Cubs fans get their George Steinbrenner: a shrewd, hard-headed businessman with a fat wallet and a burning, bloviated desire to win. Unfortunately for the Wrigley faithful, the Tribune Corporation is stuck choosing between two Big Steins, each with less-than-desirable offers on the table.

Earlier this week, the long-awaited Cubs sale seemed to be wrapped up as a $900 million bid from the Ricketts family was submitted to MLB and bankruptcy courts for approval. Il Famiglia Ricketts made their monies from TD Ameritrade and Thomas Ricketts, the figurehead in the deal, is a lifelong Cubbies fan. Seems like a good deal, no?

Unfortunately, the $900 millon bid that had been announced in January was a little light when current Tribune Co. honcho Sam Zell weighed it in his mitts. The Ricketts pulled back some coin because the Trib pays less than market rate on the portion of the TV station bundled in the sale. The Ricketts weren't going to settle for that kind of back-scratching, no sir.

Enter a new group, headed by Marc Utay, with a higher offer but less cash upfront and more debt. What does more debt mean for an already cash-poor organization? A lower ceiling for player payroll and the possibility that manager Lou Piniella will have to take on extra duties like mowing the lawn and sweeping up the dugout.

To top it all off, Zell might retain a portion of the club so the transaction doesn't legally qualify as a sale so he can save a few hundred million in taxes. The question still remains: can either possible ownership group scrounge up enough money under their sofa cushions to keep the Cubs from having a positive cash flow and paying off Milton Bradley's $30 million contract and $5,000 monthly repair contract for the Gatorade machine? If not, this would-be sale could fester in its pending state for quite awhile.

What does this all mean? Either the Utay offer is just a red herring to get the Ricketts group to bring their offer back up a few million sheckels, or Lenny Dykstra is going to start a massive Ponzi scheme to raise enough dough to buy the Cubs.

(Many thanks to Maury Brown's Biz of Baseball for making sense of the Cubs sale.)


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9 Comments

Full disclosure: I have no idea what I'm talking about and only wanted a chance to use Money Baby.

"Run by a massive, emotionless corporation for too long, it's about time the Cubs fans get their George Steinbrenner"

Yes the Cubs have been limited by there small payroll, that's why they haven't been winning.

2009 Payrolls
New York Yankees $201,449,189
New York Mets $149,373,987
Chicago Cubs $134,809,000
Boston Red Sox $121,745,999
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There is a difference between a corporation running a team and a single owner, I've seen it in Atlanta. Its not a coincidence that the team started their slide after Ted sold them to TimeWarner

As a baseball fan, it's unfortunate that one of the leagues most storied franchises has such a debt problem.

As a Cardinals fan, HAHA.

@BC Twins Fan
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Nationals $59,328,000
Pirates $48,743,000
Padres $42,796,700
Marlins $10,412,000 and 14 gift cards to the Coconut Grove Cheescake Factory.

I am leaving the office in a couple of minutes to go to the Dome, root for my team to avoid the sweep, and get sauced on whiskey.

Marc Utay made his fortune in Pig Latin translation software.

Hey BC, tell the Metrodome that the Yankees will miss consistently beating the living shit out of the Twins in it.

Ah, the 2003 ALDS and 2004 ALDS, how I miss you so.

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