Should The Ricketts Sell Some Or All Of The Cubs?

DewsSox79

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great read on mlbtr.


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beckdawg

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I don't see why they would. Whether or not they should is entirely another matter but if they are selling off now they likely make next to nothing on the deal and potentially might even have lost money. I find it hard to believe soemone would go into close to a billion dollar purchase without having thought it through to this point of the "oh shit" situations.

From my understanding the cubs are less hamstrug with the sale price and more with the leveraged partnership from Zell since from as far as I'm aware that partnership stops them from paying down debt from the sale of the team. Additionally, from my understanding the cubs are paying around $35 mil in interest per season because of that debt. I believe that partnership has to run 7 years which would put them at around 2017 before they are out from under it. I am not even sure they could realistically sell the team prior to that anyways because the sale would be a real mess and would likely drive off some potential bidders.
 

Sunbiz1

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Yes, sell the entire team.

I will pay for the billboard on the Dan Ryan.
 

beckdawg

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I'm not going to pretend to be a tax attorney but here's the way I understand it. When Zell sold the cubs he didn't just sell the team. He forced the buyer to engage in what's called a leveraged partnership. The way that is supposed to work is the seller uses his assets as collateral for a loan that helps the buyer pay for the team. However, this isn't really what's going on. Leveraged partnerships allow the seller to take out money after 7 years(not 100% on that year but it's something like that) tax free because of the risk they put up by guaranteeing the sale. The trib obviously went bankrupt so clearly that guarantee for the loan the cubs took out was rather useless.

Anyways to the point you bolded, the government monitors these leveraged partnerships very highly because Zell is saving like $300 mil in taxes by doing this. If the Ricketts were to pay off the debt incurred from the sale before the 7 year mark when Zell can take out his money tax free the government could go after Zell for that tax money. From my understanding, they are already monitoring it closely anyways and it may end up he gets forced into paying taxes anyways but he was able to pull this same scheme off when he sold newsday. So presumably part of the agreement to sell the team would be that the Ricketts would not try to pay that down.
 

patg006

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but if they are selling off now they likely make next to nothing on the deal and potentially might even have lost money.

As usual, just dumb.

The Cubs were purchased for $700 million. They are now valued at $1.2B.

Exactly how are they going to lose money?

As I have posted before, they could likely sell 1/3 of the team for the $500M they need to build the hotel and jumbotron. Opps, I mean renovate the stadium.

That would leave the Ricketts with 2/3 of a team worth $1.2B, a shiny new neighborhood playground with a new mega TV deal in the near future for $200M.

And people say they have no idea what they are doing. lol
 

The Bandit

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As usual, just dumb.

The Cubs were purchased for $700 million. They are now valued at $1.2B.

Exactly how are they going to lose money?

As I have posted before, they could likely sell 1/3 of the team for the $500M they need to build the hotel and jumbotron. Opps, I mean renovate the stadium.

That would leave the Ricketts with 2/3 of a team worth $1.2B, a shiny new neighborhood playground with a new mega TV deal in the near future for $200M.

And people say they have no idea what they are doing. lol

Was sold for more then 700 million as I recall. 852 or something along those lines if I remember correctly.

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Parade_Rain

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My favorite teams
  1. Chicago Cubs
  1. Chicago Bulls
  1. Chicago Bears
  1. Illinois Fighting Illini
$700 mil? Maybe just the Cubs but with Wrigley added in the deal was close to $900 mil, IIRC.
 

Shawon0Meter

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Sell it to Cuban for a billion and let everyone walk away happy.
 

Ari Bear

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Here's who should've been the owner of the Cubs!
Dallas-Mavericks-owner-Mark-Cuban.-Larry-Busacca-AMA2013.jpg
 

Ari Bear

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Will never happen. Owners didn't even let him in on the bidding process last time.
Bud Selig is also a Brewers fanboy and knows Cuban will make the Cubs better than the Brew Crew for many years.
 

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