Tribune Co. reaches deal to sell Cubs, Wrigley
After more than five months of negotiations, Tribune Co. has a written agreement to sell the baseball team and other assets to the Ricketts family for about $900 million. The two sides reached a deal over the weekend and forwarded an outline of their transaction—what is known as a term sheet—to Major League Baseball for its initial comments, according to sources who declined to be identified because an agreement has not been announced.
The two sides still have details to work out that will be included in a definitive agreement, sources said. The term sheet sent to MLB includes information on the deal’s capital structure and how the Ricketts family will finance the transaction, sources said.
A Tribune spokesman said, “We continue an active dialogue with the Ricketts family with an eye toward reaching a definitive agreement. We don’t intend to comment on the specifics of any potential transaction.”
A spokesman for the Ricketts family did not immediately return a phone call for comment. The family’s pursuit of the Cubs has been led by Tom Ricketts, an investment banker who resides in Wilmette.
The agreement marks a milestone in protracted talks between Tribune Co., parent of the Chicago Tribune, and the Ricketts family. The family emerged in January as the winning bidder in an auction Tribune Co. organized nearly two years ago to sell the Cubs, Wrigley Field and its 25 percent stake in Comcast SportsNet Chicago, a regional cable sports network.
But negotiations to reach an agreement took longer than anticipated. The Ricketts family, which made its fortune through the Omaha-based online brokerage TD Ameritrade Holding Corp., faced hurdles securing debt to finance its offer because of the recession and tight credit markets.
Talks hit another snag in May when the two sides could not agree on how to value the Cubs’ broadcast rights. The disagreement led the family to consider reducing its bid by as much $50 million, sources have said.
Several weeks ago, Tribune Co., unhappy with negotiations, invited a group led by New York investor and former Chicagoan Marc Utay to make a second run at the Cubs. Utay’s group had been one of three finalists in the auction.
Tribune Co.’s negotiating tactics may have been the prod needed for the Rickettses to reach a compromise.
Terms of the deal are sketchy at this time. One of the sources said the price is “slightly less” than the nearly $900 million bid the Rickettses made in January.
The agreement also retains the capital structure that Tribune Co. has desired in its disposition of the Cubs and other assets. In the Cubs deal, sources said, a new partnership would be formed to own the assets Tribune Co. is unloading. Tribune Co. would own about 5 percent; the Rickettses the rest.
Completion of a transaction with the Rickettses is still several weeks away. The agreement, in addition to receiving MLB approval, has to be vetted by Tribune Co.’s creditors.
The company filed for Chapter 11 bankruptcy in December.