CHICAGO – The Ricketts family’s $900 million purchase of the Chicago Cubs from Tribune Co could close soon, despite disagreements on the value of broadcast contracts, two sources familiar with the talks said.
“The sides are not that far apart,” said one source, who asked not to be identified. “Hopefully, it will be a matter of a week or two.”
On Thursday, Sam Zell, chief executive of bankrupt Tribune Co, indicated a deal with the Ricketts is not a sure thing and the company could sell to others if an agreement was not finalised.
“If the Ricketts deal doesn’t get done, I’m sure there will be other ones,” Zell told Bloomberg TV.
Tom Ricketts, chief executive of Chicago investment bank Incapital LLC and son of the founder of TD Ameritrade Holding Corp, is leading his family’s bid, which was selected in January as the winning offer. A spokesman for the family could not be reached to comment.
Industry observers viewed Zell’s comments as a way to pressure the Ricketts family to come to favourable terms.
“It sounds like he’s putting pressure on Ricketts,” said Robert Boland, professor of sports management at New York University. “The only problem is Zell doesn’t have a great deal of leverage. With the bankruptcy problems of Tribune Co, he does need to sell the franchise.”
Tribune Co, which owns the Chicago Tribune and Los Angeles Times newspapers, filed for bankruptcy in December due to its heavy debt load and the weak U.S. publishing sector. It put the Cubs, the team’s storied Wrigley Field home and a 25 per cent stake in a local sports TV network on the block in April 2007, when Tribune agreed to an $8.2 billion buyout led Zell.
The Ricketts family and Tribune Co have been unable to agree on a value of TV and radio contracts to broadcast Cubs games, according to the sources.
The Ricketts family raised more than $400 million in February through the sale of TD Ameritrade shares back to the online discount broker. The sources said the Ricketts also have lined up $450 million in financing with JP Morgan Chase, Citigroup, Bank of America and two other institutions.
Ricketts is eager to take control of the National League team, which despite not winning a World Series title since 1908 has a huge fan base helped by its “loveable losers” image and national exposure on cable TV.
The initial hope in January was for owners to vote on the Ricketts’ bid this month, but an agreement was not finalised in time for last week’s meeting of Major League Baseball owners. The bid requires the approval of 75 per cent of the 30 team owners.
As part of the Cubs’ sale, Tribune Co is expected to maintain a stake of at least 5 per cent in the baseball club.
Bankruptcy lawyers have said that once baseball owners approve a deal, it could take a further two to four weeks for bankruptcy court approval. The Cubs are not part of the Tribune Co bankruptcy, but the court must OK any deal.
MLB officials will likely hold a special meeting to vote on the matter via telephone because the next owners’ meeting is not scheduled until August.
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