Sale of Cubs May Be Completed Before End of Civilization
Some more news has trickled out on the impending sale of the Cubs and Sam Zell is hinting that the Ricketts may not be the new owner afterall (emphasis added).
"These are very difficult times. These are difficult
times to arrange financing," Zell said in an interview, adding that if
the Ricketts deal falls through, he is confident the media
company--which filed for Chapter 11 bankruptcy protection in
December--will find another buyer for the ballclub.
"We’ve made it very public that the Cubs don’t fit into the long
term picture of the Tribune," he said. "So if the Ricketts deal doesn’t
get done, I’m sure there will be other ones."
Sure, a lot of people have $900M or so lying around to spend on the Cubs as evidenced by the three legitimate bids Zell actually received. Of those three bids, Ricketts was supposedly not the highest but offered the most money up front, so if financing is the issue, a deal that would require even more to be financed is probably not going to have much more luck than the Ricketts are having now.
Of course...financing really isn't the issue it appears. According to this story dated May 19th, the Ricketts already secured a little over $850M of that $900M original bid; $403M from the sale of stock in Ameritrade and another $450M secured in bank loans (Clarification: Technically $753M is secured with a $100M coming from a private placement by Barclays which we do not know the status of, although the Ricketts claim they can cover it if it falls through). There was that story of Ricketts looking for 10 or so investors at $25M a pop, including celebrities like John Cusack, Bill Murray and Jim Belushi, but that round of financing was supposedly not critical to get the deal done according to "sources". Crain's Chicago Business also echoes that the financing is already in place and explains the real delay.
Thomas Ricketts, who is leading his family’s bid for Tribune Co.’s Cubs, has lined up financing for the deal, but a dispute over price is delaying the transaction.
The Ricketts family, whose original bid was close to $900 million, now
believes the real price should be closer to $850 million, a source
said. The sides disagree over the value of the team’s multiyear
contract to broadcast games on Tribune’s WGN network.
At issue is about $40 million to $50 million — roughly 6% of the
original bid, which also includes Wrigley Field and a 25% stake in
regional cable channel Comcast Sports.
So the Ricketts are either short $50M in financing and trying to talk Zell down or they really are unhappy with the broadcast rights. I'm going with option B here. It appears the Tribune made sweetheart deals with WGN radio and television to broadcast the Cubs games at below fair market value for a contract up to 10 years sometime last fall. Ricketts isn't buying any stake of WGN, but is supposedly getting a 25% stake in the Comcast sports channel that already broadcasts about 80 games a year. So naturally, if he owns the cable company he'd like more games to go on there or be sure he's getting paid the appropriate amount in any licensing deal to WGN.
So don't believe the Zell lies, the money is there for Ricketts, Zell just isn't liking the terms.
Hat tip to waxpaperbeercup that has been all over the sale process, also check out Mark Cuban's blog on why he bowed out and wasn't going to pay anything near the $1 billion asking price at this time. End of the world coming Decemeber 21st, 2012...John Cusack (Cub fan) is starring. Coincidence? I think not.
btw...Thanks AZ Phil. I'm really enjoying your take on this trade.
I'm a bit disappointed on the Warren experience. Essentially they gave Castro away for crickets (OK, well they signed Zobrist with the Castro salary dump). Otherwise one might look at it as Chapman for Castro and our #1 minors prospect (Torres) + McKinney/Crawford. Seems pricey for a 2 month rental. We will see if this price tag is that steep in a relative way based on the remaining deadline deals for relievers.
Yep. One of the great things about this team (in addition to being really good at baseball) was the "likable" factor. Feels a bit different now. Who knows...maybe Chapman will be the king of the dance parties.
Here are some possible corresponding minor league moves we might see in the aftermath of the Chapman trade:
SOUTH BEND to MYRTLE BEACH: OF Donnie Dewees and INF Bryant Flete
EUGENE to SOUTH BEND: OF Robert Garcia and INF Vimael Machin
There is really no reason to replace Billy McKinney at Tennessee because both Chris Coghlan and Jorge Soler are doing their rehab at Tennessee.
And there are plenty of pitchers at Iowa. No need to replace Warren at AAA. .
I am 70 years old. The Cubs last played in the World Series in 1945. I was born in 1946. I hate to lose a prospect like Torres, but when the opportunity is there to get that World Series ring, you go for it. This was the idea in stock piling all this young talent. I would like to see Reddick added now and the Cubbies should be done.
I would expect Richard to accept an optional assignment because based on how he's played this season, there is a decent chance that he won't find work elsewhere. Rather stay and potentially get a ring. Same goes for Coghlan since he's struggled mightily this year.
Edwards should not go down. He's pitched very well and Maddon is very impressed with him. I would expect Grimm to go down for Cahill so he can get back on track (he's pitched better in July, but he's not getting enough appearances).
chitownmvp01: Indeed Clayton Richard would seem to be odd man out once Chapman reports, but Richard might accept a minor league assignment if he is promised a return to Chicago on 9/1 when MLB Active List rosters expand (Richard has minor league ioptions left).
The only player in the deal that would cause me a second thought is Gleyber Torres.
McKinney and Crawford are decent prospects but both are redundant/replaceable in the system and Warren was really only a middle-reliever or #6 starter, so to me it's really just Torres for Chapman.
There is no Comp pick for players traded mid-season. 2+ months of Chapman is it.
to get one of the best you have to give up one/some of your best...but it's a bit painful to watch the system's best prospect walk for any 2-3 month rental, especially one that's not an everyday player.
I assume Chapman will replace Richard on the roster, but who goes down when Cahill gets activated? Maybe Grimm?
And when Soler and Coghlan get healthy, how do they fit them on the roster when they're ready to be activated?
We are giving up a lot, but it's not like we're trading Addison Russell for 2+ months of Jason Hammel. When impact players become available, they are going to cost you. The other bids could also have been high.
Having Chapman as a rental is potentially less disruptive than having him come in with an extension in place.
Billy McKinney had season-ending knee surgery last August and came to Minor League Camp this year somewhat restricted. (He was used mostly as a DH in Cactus League Minor League Camp games), and I'm not sure he's 100% right now (he's repeating AA, and his XBH numbers are way down, like he's not getting good rotation in his lowev half). That might have been part of the reason why the trade wasn't completed right away.
Rashad Crawford was a basketball star in HS (he was known as "Baby Jordan", and baseball was only his second sport) and he has plus-speed and athleticism, so when the Cubs drafted him (Keith Lockhart was the scout) he was seen as a long-term project.
I was at Fitch Park the day that Rashad Crawford became a LH hitter, He waa never a switch-hitter, He went directly from being a RH hitter to a LH hitter, which I had never seen before.
I'm with Rob G and Johann here. It's not about Chapman as a pitcher. I just don't want to have to block out a real problem (the domestic violence) in order to try to enjoy the frivolous ball and stick game.
ROB G & BOB R: You're right. The QO can only be extended if the player spends the entire previous season with one club, so only the Yankees could have offered one to Chapman (if he wasn't traded). If an Article XX-B FA is traded during the season, the new club can't offer a QO. .