The Tribune Co. proposed selling Wrigley Field to the state of Illinois for $45 million and then saddle the new owners of the Cubs with a 30-year, $750-million lease. The plan died only when former Gov. Rod Blagojevich was indicted.
In the financial world, Tribune Co. owner Sam Zell is renowned for complicated financial deals — deals that at one point benefited him greatly but now backfiring as they collapse under their own weight.
That’s been the case with his purchase of the Tribune Co. and the subsequent privatization of the corporation, as Zell is scrambling to sell assets to stay afloat. Some of those assets: The Chicago Cubs, Wrigley Field and a stake in a local sports cable network.
In a relatively straightforward deal — at least for Zell — the family of Tom Ricketts is buying the three assets, though negotiations are still ongoing in terms of specifics.
But papers released by the Illinois Finance Authority shows how complicated any deal involving the Cubs and Wrigley Field could have been. Indeed, Zell proposed a sale of Wrigley Field to the state of Illinois that’s fairly breathtaking in its audacity.
Zell had proposed selling Wrigley Field to the state for $45 million, while retaining a 5 percent stake. (Zell always tries to retain a stake for tax purposes; it lowers the tax liability on any transaction.) The state would then spend $300 million on a renovation of Wrigley Field.
The Cubs would then sign a 30-year lease for Wrigley Field, paying $25 million annually in rent — a total of $750 million.
The deal doesn’t pass the smell test. It pushes the costs of Wrigley Field renovations onto new owners, but when this was proposed the Tribune Co. was still in negotiations with several suitors, all of whom we’re told were heavily against this deal. It gave Tribune Co. instant cash — $45 million — without having to put out a dime for renovations. The calculation from Zell was that Wrigley Field and the Cubs were worth more when sold separately — something not borne out during negotiations, as all buyers were heavily committed to keeping the package intact.
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