San Jose Bankruptcy Attorney comments on the Chapter 11 bankruptcy filing of the Chicago Cubs parent company
San Jose Bankruptcy Attorney comments on the Chapter 11 bankruptcy filing of the Chicago Cubs parent company
The Tribune Company, owners of Major League Baseball’s Chicago Cubs filed for Chapter 11 bankruptcy reorganization in October as a means to speed the sale of the Cubs, Wrigley Field and related properties to Omaha-based billionaire, Joe Ricketts, founder of TD Ameritrade. The bankruptcy filing is designed to shield the Tribune Company from creditors as it seeks to finalize the $845 million sale of the team to Ricketts.
The Cubs have been for sale since 2007, but the collapse of the credit markets coupled with the ensuing recession have made structuring a deal difficult and bankruptcy more attractive. Ricketts will assume a 95 percent ownership stake with the Tribune Company retaining the remaining 5 percent. The deal has already been approved by the other Major League Baseball owners, which is required before any team can change owners.
The economics of professional sports has changed in the past few years. In sports such as baseball and hockey, without lucrative national television contracts, the local economic situation plays a much more significant role than it does with the National Football League and its multi-billion dollar television contracts. Baseball is very dependent on ticket sales, and the team’s on-field performance and the local economy are significant factors in teams’ budgets in a league that has no salary cap. Earlier this year, the Phoenix Coyotes, a National Hockey League franchise that has not shown a profit in 13 years filed for Chapter 11 bankruptcy protection.
Chicago Cubs file Chapter 11 to speed team's sale, Yahoo News, October 12, 2009
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