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Bankruptcy Won't Exempt Cubs From Contracts
The Tribune Co. may take the Cubs to bankruptcy to complete the sale of their team to the Ricketts family, but the club will still be responsible for its players' contracts, according to David Roeder and Fran Spielman of the Chicago Sun-Times. Major league baseball guarantees payment on player deals, so the Cubs won't be able to avoid contracts like Alfonso Soriano's and Milton Bradley's.
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There is a lot to say on this story and have a feeling this could turn into something nasty with some fans having strong feelings both ways. I don't care one way or the other, insolvent teams just need to go away, but the Chicago area supports BB and they sell out every game and this is good for the area and it is going to work out, however a media giant probably had no biz ever buying out Wrigley in the 1st place, but that is hind sight now.
Posted by: johns | July 14, 2009 at 09:13 AM
Hello again it's your fav Cub fan/attorney here.
I heard some people calling into the local sports talk show here in Chicago last night hoping the Cubs could void the contracts and knew that wasn't going to happen. All this will do is make it easier for Ricketts because he won't have to worry about any creditors chasing him once he takes control. Normally this wouldn't matter when an entity's parent company files for bankruptcy, but remember the Cubs (for whatever reason) weren't included in the original filing. My guess is the biggest reason this is being done for the long term is that Ricketts plans to sell the naming rights to Wrigley Field and doesn't want any creditors to have a chance to get the money the Cubs will get for it, which presumably would be part of his 2014 plan to renovate the park we heard about late last year.
Posted by: ibleedcubbieblue | July 14, 2009 at 09:30 AM
The Cubs aren't insolvent- this is just a move to separate out the Cubs from the debts of the Tribune Co. Especially the debts incurred by Zell who leveraged his acquisition of TribCo massively. The company's stake in the Cubs was part of the collateral.
Before Tribune ownership, and early on, the Cubs were playing in a half empty park and the upper deck was frequently closed. Being owned by a media conglomerate is probably the biggest reason they're what they are today.
Posted by: Minoso | July 14, 2009 at 09:33 AM
Zell bought the cubs for somewhere in the billion dollar range, and wants to sell them for about that much. But with the economy the way it is, no one has a billion dollars lying around to pay for the cubs. Since the time Zell bought the cubs to now, the cubs value has dropped from 1 bil to 750 mil. So Zell is simply filing for backruptcy because no one wants to buy the cubs at what Zell values it and what he had bought it for. Not to mention that Zell has plenty of debts piling up with the trib.
Posted by: mark | July 14, 2009 at 09:53 AM
I think the important part of the article is the time frames mentioned. It is nice to know the paperwork could take as little as 20 days, means shouldnt tie it up more then like maybe a month. Also nice to know both sides are really pushing to have the sale done by the end of the season.
I guess there is a bad part though, as pushing for the end of the season would mean they are probably filling as soon as possible. But cant imagine we can add anything in the way of new contracts while the procedure. Does this mean the Cubs will not be able to do anything at the deadline? We knew the lack of flexibility made it difficult before, this seems like it may have made it impossible.
Posted by: SuzysMan | July 14, 2009 at 10:48 AM
" Does this mean the Cubs will not be able to do anything at the deadline?"
That is a good question.
Texas supposedly borrowed money from MLB, then went out and signed some IFA's. The Cubbies have probably been making payroll and have been signing some of the draft choices (according to PG Crosschecker) so they must have some capitol to use Suzysman.
Hopefully MLB will let them have some spending cash for transactions like they did Hicks in Texas for acquisitions.
Posted by: johns | July 14, 2009 at 11:27 AM
Yeah, but everything to this point has been pre-bankruptcy. If the paperwork was to be filled tomorrow, I would think it would put a hold on any contracts we would be able to sign or obtain until the process is completed.
Posted by: SuzysMan | July 14, 2009 at 11:47 AM
"The reason the Cubs are where they are at now has almost nothing to do with Tribune and everything to do with its early partnership with WGN and its national recognition."
A partnership cemented by WGN and the Cubs having the same owner. Sweetheart, in-house, deals for broadcast rights gave the Cubs a nationwide promotional platform matched only by the Braves. That's what made the Cubs. It's inseparable from Tribune ownership.
Posted by: Minoso | July 14, 2009 at 12:07 PM
The Cubs started playing on WGN in the 1950's. The Tribune bought the Cubs in 1981. So pre-1981 the Tribune had an indirect role in the Cubs popularity, just not in an ownership role.
Posted by: GlenallenHill | July 14, 2009 at 01:41 PM
@johns - to confirm Minoso's post earlier, the Cubs are not insolvent. This is purely a legal move to get out from under the Tribune Company's chapter 11 filing.
http://www.bloomberg.com/apps/news?pid=20601079&sid=aZEZwNu3qwbw
The Rangers got money from MLB because they were defaulting on their debt.
Posted by: FourSixThree | July 16, 2009 at 03:08 PM