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Cubs to be Sold Within Six Months?


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Tribune to Sell Cubs, Wrigley Field in Next 6 Months (Update2)

By Sarah Rabil and Leon Lazaroff Dec. 12 (Bloomberg) -- Tribune Co., the newspaper owner being taken private by billionaire Sam Zell, plans to sell the Chicago Cubs baseball team and the Wrigley Field stadium in the next six months to cut debt.


The sale may fetch more than $1 billion, according to John Puchalla, an analyst at Moody's Investors Service. Tribune reiterated today its going-private buyout will close by year-end, in a deal that will leave it with about $12 billion in debt.


Providing a timeframe on the Cubs' sale, announced in April, may ease investors' concerns that Tribune will have too much debt after the $8.2 billion buyout closes. Tribune bonds are trading at distressed levels and credit-default swaps tied to them narrowed today, a signal that investors see a greater probability Tribune will be able to repay its debt in the next five years.


There's ``substantial interest'' in owning the Cubs and their stadium, said Puchalla, who is based in New York. Tribune wants to get the debt ``down as quickly as possible to build up some financial flexibility.''


Tribune, based in Chicago, rose 33 cents to $31.87 at 12:57 p.m. in New York Stock Exchange composite trading.


The stock has been trading below the buyout price of $34, slumping as low as $25.26 in August, partly on concern that further advertising losses may prevent Tribune from complying with loan covenants and getting financing needed for the buyout.


Revenue fell 3.3 percent last month as classified advertising sales declined 26 percent, the company said today in a statement.


Chicago Cubs


Tribune also plans to sell real estate assets related to the Cubs and its 25 percent stake in Comcast Corp.'s regional sports television network, Comcast SportsNet Chicago, in the first half.


Mark Cuban, the billionaire owner of the National Basketball Association's Dallas Mavericks, said in July he had sent Major League Baseball an application to buy the Cubs.


In November 2006, Crain's Chicago Business reported that industrialist Thomas Begel and William Marovitz were interested in the Cubs. Other potential buyers included private-equity investor Bruce Rauner, William Wrigley Jr. and Chicago Wolves hockey team owner Don Levin, Crain's reported at the time.


Tribune purchased the Cubs in 1981 for $21 million.


A collapse in the housing market led to fewer property listings and a 40 percent slump in real estate ads in November. Retail ads increased 7.3 percent, helped by gains from department stores and the fashion and electronics categories. National ad sales rose 1.9 percent.


Credit-default swaps tied to Tribune's bonds narrowed. Today, investors demanded 30 percent upfront and 5 percent a year to protect Tribune bonds for five years, according to CMA Datavision in New York. That's down from 32 percent upfront and 5 percent a year yesterday. The contracts trade on upfront payments when investors see a high risk the company won't be able to make its debt payments.


The Tribune buyout came closer to completion Nov. 30 after the U.S. Federal Communications Commission approved the deal and granted permanent exemption in Chicago to own both a newspaper and a TV station, and temporary waivers in four other markets.


To contact the reporter on this story: Sarah Rabil in New York at [email protected] , or Leon Lazaroff in New York at [email protected] .


Last Updated: December 12, 2007 13:28 EST


Just an FYI copy and paste. I thought it was interesting.

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