October 24, 2005
(We're all baseball, all the time.)
With its stock price down nearly 27% over the past year, the company is apparently looking at going beyond mere "cost-cutting" and will be considering selling off any of a number of non-core businesses, a list which includes a certain underachieving cash cow at Clark and Addison. (Along with all of the usual problems and revenue drains that attend newspaper publication in this digital age, Trib Co has also been slapped with an inherited IRS tax liability of up to $1 billion.)
Tribune Co. CEO Dennis J. FitzSimons is considering selling assets to prop up his company's shares, and that's got some wondering if the Chicago Cubs could go on the block.
Investors expect Mr. FitzSimons' search for salable assets to focus on holdings not fundamental to the company's primary businesses of publishing and broadcasting.
Selling the Cubs "makes more sense now than it has in a while," says John Miller, a vice-president at Chicago-based Ariel Capital Management LLC, Tribune's fifth-largest shareholder. "They're trying to get the stock turned around, so they tried buying back their shares, and that didn't work. Now, they move on to non-core assets, like the Cubs."
Asset: Chicago Cubs (100% Tribune-owned)
Estimated sale value: $400 million to $550 million
Why sell? With Wrigley Field expansion set to begin and attendance at all-time highs, the team would fetch a premium. Tribune could demand long-term broadcast rights in any deal.
Why not? Tribune bought the team for $20.5 million in 1981, so the tax hit could be large. "They'd also be very wary of ever being in a position to bid for the Cubs' broadcast rights, no matter how far in the future it is," says Barrington Research Associates Inc. Analyst James Goss.
In what's probably little more than regurgitated AM radio speculation, my lunch-hour interlocutor has it that maverick billionaire benefactor Mark Cuban is an interested party. Bet he'd keep those purse strings loosened.
"For Sale: $400 Million OBO"
Posted by Dan at 05:35 PM
Chicago Cubs Official Site
Crain's Chicago Business: Tribune Co. taking hard look at holdings—Jeremy Mullman
Google Search: 'purse strings' 'tribune company' cubs
Google Search: stingy 'tribune company' cubs'
Metromix.com: Mustard's Last Stand in Evanston
NPR: Critics Say Tribune Cutbacks Affect Coverage—by David Folkenflik
New Tork Times: Profit Declines at Tribune Company After a Tax Claim Ruling (Bloomberg)
Poynter Online: Tribune Company: Aggressive, Indeed—Geneva Overholser
Tribune Company: Historic Stock Quote Data— 1 Year Chart (Percent)
Wikipedia: Mark Cuban