Will Someone, Anyone, Buy the Chicago Cubs?

The Chicago Cubs: Lovable Losers. The Curse of the Billy Goat. Bartman. On the field of play -- in this case, the Friendly Confines of Wrigley Field -- one team reigns in the negative superlative as the most hapless of all time, famously innocent of championships for more than a hundred years.

All superstition aside, your average Cubs fan, desperate for victory, has come to blame the team's celebrated run of futility on one thing: that ancient fan bugaboo, Ownership.

So it's no surprise that when Sam Zell officially put the Cubs up for sale in 2007, after the billionaire Chicago native acquired the Tribune Co., parent of the team, in an $8 billion leveraged buyout, intense interest was paid on the Northside to the person, or more likely people, who would replace the faceless corporation that had owned the franchise since 1981.

Almost immediately, a menagerie of hopeful bidders (click "Lineup of Bidders" below) either expressed interest in owning the team, or had it expressed for them, from the high profile (Mark Cuban, and even Bill Murray) to the relatively low (real estate mogul Hersch Klaff, theater impresario Rocco Landesman).
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No one thought it would take nearly three years -- encompassing not only the bankruptcy of Zell's Tribune itself but a historic financial collapse and an ongoing global recession -- for a new owner at last to arrive. It was as if the Cubs' haplessness on the field of play had somehow spread, like a vicious strain of influenza born of the barnyard, into the boardrooms of not only Sam Zell and his many baseball-team courtiers, but Wall Street, the nation, the Western World.

Indeed, the financial meltdown and the credit crunch put a halt to the proceedings last fall and winter. No one could afford to buy anything. No one knew what anything was worth. Asset values crumbled. So did predictions of a $1 billion Cubs price tag.

And then suddenly, in January, Cubs fans appeared to have their new owner: Tom Ricketts, a Nebraska-born heir to the billions made by his father, Joe Ricketts, founder of the discount Internet brokerage TD Ameritrade. With a bid of around $900 million, Zell had chosen the winner.

It was a number that struck even the Cubs-fan diehards among the bidder groups (and there were many of these) as too sweet. "Nine hundred million is absolutely too high," says Thomas Mandler, a native Chicagoan and a prominent lawyer in town who put together one group of investors to make an offer for the team. "And it was on the outward edge of what would have been reasonable two years ago, before the markets took a nosedive."

But evidently it was the right price for Ricketts. And that he is, reportedly, a deep and lifelong Cubs fan gladdened the masses. But none of this not helped him close on a deal.

Or perhaps it's the Cubs (as owned by the Tribune Co., as owned by Sam Zell) that are the ones having the trouble.

As one person involved in the process says, "These negotiations have been the most dragged out and difficult that I've ever seen."

Over and above the bankruptcy of a parent company (it's true that the Cubs as an entity have been held outside the Tribune's Chapter 11 proceedings, but the media conglomerate's creditors nevertheless have an interest in the sum any sale of the team brings), and over and above the notorious deliberateness of Major League Baseball when it comes to approving new owners, two main issues seem to be gluing up the works. (And it's no longer financing, which has come unglued.)

First, on the Zell side: taxes. When the Tribune bought the Cubs 28 years ago, it paid around $20.5 million. To sell the team for nearly $1 billion today would then mean a massive capital gains tax. Zell is therefore trying to structure a deal by which he would maintain some slim ownership in the club, effectively holding back on his cash windfall so as to avoid the revenuers.

The idea would be to ratchet down that ownership piece over time until none remained. At issue in striking a deal, therefore, is not only the percentage, but also the duration.

On the Ricketts side, the alleged hold up has been: Media. The Tribune has long owned WGN, the superstation, which holds broadcasting rights for a bulk of the Cubs' games. (The Tribune had come to see the Cubs not as a team with title ambitions but, instead, a source for reliably high-rated WGN programming, which would bring the ad dollars.)

At this point at least, the Tribune is not selling WGN, and a new broadcasting agreement -- at arms' length, as they say, between the channel and a separate Ricketts' owned club -- needs working out. The rights fees and to what degree those fees escalate over time is at present a big source of contention between Zell/Tribune and Ricketts.

So tense did discussions become that the Zell people, several months ago, brought the "runner-up" bidding group back into the picture. The group is led by Marc Utay and Leo Hindrey, two old deal veterans.

The negotiations with both groups have progressed far enough that they've lawyered up, so to speak. It's with the attorneys, at this point, and Ricketts remains in the lead. Major League Baseball itself is right now reviewing what documents the Ricketts-Tribune talks have produced. Expectations are for the announcement of a deal, with signatures, in ink, and MLB approval, by early August.

And that would put the Cubs back into private hands for the first time since the chewing gum people took it over in 1921.

Corporate ownership of sports teams in general has a tortured history, of course -- when it comes to both on the field success as well as the bottom line. Perhaps the most inept example of this was CBS's ( CBS) brief control of the New York Yankees from 1964 to 1974. It bought the team for $11 million and unloaded it to George Steinbrenner for more than $2 million less. (After winning the title in '64, the Yankees commenced the longest championship drought in the team's history, all while under CBS ownership.)

Other corporate owners (they tend to be, as in the Tribune's case, media conglomerates) include or have included Liberty Media ( LMDIA), which bought the Atlanta Braves from Time Warner ( TWX) in 2005; News Corp. ( NWS), which held the Los Angeles Dodgers from 1998 to 2005; Disney ( DIS), which formed hockey's Anaheim Might Ducks in 1993, based on a movie, and sold it in 2005 to Broadcom ( BRCM) co-founder Henry Samueli; and the St. Louis Cardinals, owned for more than 50 years by Anheuser-Busch, which of course has been subsumed to form AB InBev ( ABI).

As for Cubs fans, they await as the team plays on in a kind of ownership limbo. With the Cubs one game out of first (and chasing archrival St. Louis), a Cubs fan might reasonably ask: Does the team need an owner at all?

One way or another, they'll get one.

Chicago Cubs

1. Who is the best owner in sports?

Jerry Buss (Los Angeles Lakers)
John Henry (Boston Red Sox)
Robert Kraft (New England Patriots)
Rooney Family (Pittsburgh Steelers)
Steinbrenner Family (New York Yankees)

2. Who is the worst owner in sports?

The Tribune Co. (Chicago Cubs)
Al Davis (Oakland Raiders)
James Dolan (New York Knicks)
Tom Hicks (Texas Rangers)
Donald Sterling (Los Angeles Clippers)

3. Which franchise would you most want to own?

Chicago Cubs
New York Yankees
Los Angeles Lakers
Manchester United
New England Patriots
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