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  • Cubs for sale?

    Wonder if this would turn their fortunes around....

    Apparantly, a few years ago, they also put out feelers to judge interest, but it never went further than that.

    Source

    Tribune Co. taking hard look at holdings
    Tribune Co. CEO Dennis J. FitzSimons is considering selling assets to prop up his company's shares, and that's got some wondering if the Chicago Cubs could go on the block.

    Investors expect Mr. FitzSimons' search for salable assets to focus on holdings not fundamental to the company's primary businesses of publishing and broadcasting.

    Selling the Cubs "makes more sense now than it has in a while," says John Miller, a vice-president at Chicago-based Ariel Capital Management LLC, Tribune's fifth-largest shareholder. "They're trying to get the stock turned around, so they tried buying back their shares, and that didn't work. Now, they move on to non-core assets, like the Cubs."

    Ownership stakes in the WB Network, the Food Network and the CareerBuilder.com Web site also could be sold for cash to pay down debt, buy back shares or make acquisitions. In all, Tribune has a portfolio of ancillary assets worth as much as $2 billion, analysts say.

    Focusing on core businesses may give the stock a boost. The company is struggling with dwindling audiences and lagging advertising. Tribune shares have plunged almost 27% this year, closing Friday at $30.91.

    "We're looking at the portfolio and looking at everything we can do to improve shareholder value," Mr. FitzSimons said during a third-quarter earnings call Oct. 13. Net income declined 82% to $21.9 million, or 7 cents a share, in the quarter, largely because of a $1-billion judgment in U.S. Tax Court.

    Mr. FitzSimons also is exploring swaps and sales of TV stations. Cost savings from owning two stations in one market are so attractive that Tribune could swap some for stations in markets where the company already owns one. Or the company could sell stations to other media concerns willing to pay hefty prices to create their own duopolies.

    A Tribune spokesman declined to elaborate on the strategy, but analysts say Tribune probably isn't eyeing sales of major operations like WGN-TV/Channel 9 or the Los Angeles Times

    Pricing items in a Tribune yard sale

    Tribune may sell some assets to pay debt, buy back its own stock or make acquisitions. Here's a look at some things that could be sold and their estimated values as determined by an informal survey of five analysts and investors.


    Asset: Food Network
    (31% stake)

    Estimated sale value: $750 million

    Why sell? A sale would cover much of the additional debt the company incurred as the result of a lost tax case. Owning part of a cable channel poses few benefits to the company's 26 TV stations.

    Why not? The value is rising as ratings soar, making stars of Emeril Lagasse, above, and Rachael Ray. If the FCC ever clears Tribune to buy more TV stations in markets where it has newspapers, the company could swap the stake with majority owner Scripps in exchange for that company's struggling Baltimore ABC affiliate.


    Asset: Chicago Cubs (100% Tribune-owned)

    Estimated sale value: $400 million to $550 million

    Why sell? With Wrigley Field expansion set to begin and attendance at all-time highs, the team would fetch a premium. Tribune could demand long-term broadcast rights in any deal.

    Why not? Tribune bought the team for $20.5 million in 1981, so the tax hit could be large. "They'd also be very wary of ever being in a position to bid for the Cubs' broadcast rights, no matter how far in the future it is," says Barrington Research Associates Inc. Analyst James Goss.


    Asset: WB Network
    (22% stake)

    Estimated sale value: $150 million to $300 million

    Why sell? Tribune doesn't need the stake to continue to air WB programming — like "Charmed," above — during prime time on 19 of its 26 stations.

    Why not? The minority stake gives Tribune some say in the network's programming decisions and overall direction. Mr. Goss says Tribune could even take control by buying the remaining 78% from Time Warner Inc., which is regularly rumored to be shopping its interest.


    Asset: CareerBuilder.com (33% stake)

    Estimated sale value: $300 million

    Why sell? Known for its humorous TV ads, above, this may be the least likely big asset to sell. However, it would bring in a lot of cash to help pay off debt and buy back shares.

    Why not? With classified advertising migrating from newspapers to the Internet, this joint venture with Gannett Co. and Knight-Ridder Inc. lets Tribune keep a share of the want ads its newspapers are losing. "That's basically a core asset," says John Miller, a vice-president at Ariel Capital Management LLC.
    Selling the Cubs "makes more sense now than it has in a while," says John Miller, a vice-president at Chicago-based Ariel Capital Management LLC, Tribune's fifth-largest shareholder. "They're trying to get the stock turned around, so they tried buying back their shares, and that didn't work. Now, they move on to non-core assets, like the Cubs."

    Ownership stakes in the WB Network, the Food Network and the CareerBuilder.com Web site also could be sold for cash to pay down debt, buy back shares or make acquisitions. In all, Tribune has a portfolio of ancillary assets worth as much as $2 billion, analysts say.

    Focusing on core businesses may give the stock a boost. The company is struggling with dwindling audiences and lagging advertising. Tribune shares have plunged almost 27% this year, closing Friday at $30.91.

    "We're looking at the portfolio and looking at everything we can do to improve shareholder value," Mr. FitzSimons said during a third-quarter earnings call Oct. 13. Net income declined 82% to $21.9 million, or 7 cents a share, in the quarter, largely because of a $1-billion judgment in U.S. Tax Court.

    Mr. FitzSimons also is exploring swaps and sales of TV stations. Cost savings from owning two stations in one market are so attractive that Tribune could swap some for stations in markets where the company already owns one. Or the company could sell stations to other media concerns willing to pay hefty prices to create their own duopolies.

    A Tribune spokesman declined to elaborate on the strategy, but analysts say Tribune probably isn't eyeing sales of major operations like WGN-TV/Channel 9 or the Los Angeles Times.
    Official sponsor of: Pepsi Zero Sugar and Jordan Almonds.

  • #2
    I think the team would go for much higher than $400-550m.
    The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life. -TR

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    • #3
      QUOTE(lasvegasreb @ Oct 24 2005, 01:10 PM) Quoted post

      I think the team would go for much higher than $400-550m.
      [/b][/quote]
      Maybe, maybe not. The Tribune would try to keep the broadcasting rights, which is where a lot of money is made.
      Official sponsor of: Pepsi Zero Sugar and Jordan Almonds.

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