Nothing seems to come easy for the Chicago Cubs.
The last two years of excruciating playoff losses. The Bartman game. The century without a championship.
Maybe all that will change under new ownership by the Ricketts family, but events leading up to Friday’s deal fit the tortured history of the franchise.
More than two years after the team was put up for sale, interrupted by the global financial meltdown and Tribune Co.’s bankruptcy filing, the Cubs finally are set to get a new owner.
Tribune Co. said Friday that it signed an agreement to sell the team to the Rickettses, a wealthy family from Omaha that made its multibillion-dollar fortune building an online stock brokerage.
The Rickettses will pay about $800 million to acquire a 95 percent interest in a package of assets: the team, Wrigley Field and Tribune Co.’s 25 percent stake in Comcast SportsNet Chicago, which broadcasts many Cubs games on cable television.
The agreement values the team and related assets at $845 million, making the Cubs one of the most valuable franchises in sports. Tribune Co. will retain a 5 percent ownership stake in the joint venture to minimize tax on the sale. The Ricketts family will have full management control. The deal requires approval by the bankruptcy court and Major League Baseball owners before closing, which is expected in the fall.
“Our family is thrilled to have reached an agreement to acquire a controlling interest in the Chicago Cubs, one of the most storied franchises in sports,” Joe Ricketts, the family’s patriarch, who founded what is now online brokerage firm TD Ameritrade Holding Corp., said in a statement. “The Cubs have the greatest fans in the world, and we count our family among them. We look forward to closing the transaction so that we can begin leading the Cubs to a World Series title.”
The announcement is somewhat anticlimactic because in January Tribune Co. selected the Ricketts family as the winning bidder in a protracted auction for the franchise. The family defeated nine other prospective buyers.
But negotiations took much longer than anyone expected and resulted in a lower price than initially anticipated. Two months ago Tribune Co. executives unexpectedly solicited a potential rival buyer, setting up a second bidding war. A group led by New York investor and former Chicagoan Marc Utay, which had been a finalist in the initial auction, was back in the running until about two weeks ago, sources close to the matter said.
Tribune Co. picked the Rickettses again.
“This joint venture will provide dedicated, local family ownership and management for the team,” Tribune Co. Chairman Sam Zell said in a statement. “The Ricketts family will be a great steward of the franchise. They have a strong respect for the team, for the fans and for what the Cubs mean to the city of Chicago.”
The Rickettses became die-hard Cubs fans in Omaha by watching games on Tribune Co.’s WGN cable superstation.
Joe Ricketts spends most of his time raising bison on his ranch in Jackson Hole, Wyo., so his four adult children — Pete, Tom, Laura and Todd — will be involved in running the team. Tom Ricketts, a low-key investment banker in Chicago who met his wife in Wrigley’s bleachers, led the family’s pursuit of the Cubs. Laura and Todd also live in the Chicago area.
It isn’t known what specific plans the Rickettses have for the Cubs and Wrigley or what style of ownership they foresee, because Tom Ricketts has not spoken publicly since the family became a bidder.
A family spokesman said the Rickettses declined to comment Friday.
The transaction represents a return to family ownership for the team. Before Tribune Co. bought the Cubs in 1981, the Wrigley family, founders of the chewing-gum company, owned the team for 65 years. The Wrigleys sold the ball club and the stadium to Tribune Co., which owns the Chicago Tribune, for $21.1 million.
While Tribune Co. has been criticized for its failure to put a championship team on the field, it’s hard to argue with its success off the field. The transaction’s $845 million value is more than 40 times what Tribune Co. paid nearly 30 years ago.
Thanks to Tribune Co.’s marketing efforts, the Cubs attract more than 3 million fans a year to an aging ballpark that lacks most of the amenities of modern stadiums but is beloved by fans. The team has a national following because the games have been broadcast for years on the WGN cable superstation. WGN radio and TV stations will retain long-term broadcast rights to the team under the deal.
The team, however, is not immune to outside forces. In January, the Rickettses’ offer valued the franchise at about $900 million, sources familiar with the transaction said. But during negotiations, the family had concerns about future revenues, considering the ongoing recession and the team’s mediocre performance this year, sources said.
The value of the Cubs’ media rights also became a source of contention in negotiations and threatened to throw the deal off course. The family claimed that broadcast contracts weren’t worth as much as originally thought. The Rickettses sought concessions in the contract language or a $40 million to $50 million reduction in the sale price.
Both sides came to a compromise that resulted in a lower purchase price and an extension of the existing broadcast contracts, sources said.
The family is financing the deal by selling stock in TD Ameritrade and borrowing money from banks. Joe Ricketts has an estimated net worth of $1.2 billion, according to Forbes magazine, and his children also are wealthy.
The family will not gain control of the team until after the baseball season ends because there are still a few conditions of closing. Tribune Co. has been in Chapter 11 bankruptcy since December, and a major disposition of assets requires the court’s blessing.
As part of the court’s approval process, Tribune Co. said, it will place the Cubs in Chapter 11 bankruptcy so that the franchise can “emerge free and clear” of the company’s financial obligations.
The company said that the Cubs’ bankruptcy will not interrupt team operations, and player contracts and other agreements with ticket holders, sponsors and suppliers are not expected to be affected. Creditors are not expected to challenge the sale because Tribune Co. has kept them informed throughout the sale process, sources said.
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asachdev@tribune.com
