The sale of the Chicago Cubs to the Ricketts family — despite higher bids from the like of Mark Cuban — is a great argument for eliminating MLB’s antitrust exemption, according for former U.S. lawmaker Jim Bunning.
Bunning is also a former MLB pitcher, so he’s seen the business of the game from all sides. And he’s using the Cubs as a prime example of why the exemption needs to be struck down. The Ricketts family ended up with the Cubs not because they were the higest bidders; Cuban, the flamboyant owner of the NBA’s Dallas Mavericks, says he submitted a bid of $1.3 billion, about double what the Ricketts paid. The winning bid was structured to address Sam Zell‘s tax situation; Zell was willing to accept the lower bid after consultation with MLB officials.
Because the Ricketts didn’t have the cash to go through with the deal, they borrowed heavily to acquire the Cubs. That debt is one reason why the Cubs are being run more as a small-market team than a major-market franchise among the top MLB teams in revenue, keeping the team out of the free-agent market. Bunning says fans would have been better off if MLB had allowed the sale of the team to the highest bidder — and one with the financing plan in place that would allow the team to compete right off the bat. As a result, attendance and revenues are down for the Cubs, and there’s a definite sense of frustration in Wrigleyville. From the Chicago Sun-Times:
“If somebody like Mark Cuban wants to buy a team and offers something like $2 billion, and they tell him he can’t. If they made an exception for a specific sale, it would be against the antitrust laws [and spirit of the exemption].”
Multiple sources confirm the open secret when it comes to Cuban and baseball: MLB wants no part of an outspoken, deep-pockets owner who might drive up player salaries and challenge the establishment.
The impact on the Cubs was a highly leveraged partnership purchase by a secondary bidder that has crippled the team’s short-term spending ability because of the biggest debt burden in the game, along with spending restrictions through related bank covenants.
The irony is that Cuban has turned into a pretty good NBA owner: he’s toned down the act and worked in a very businesslike fashion with other league owners. And it would have been a hoot to see Cuban cheering on the Cubbies in the Wrigley Field bleachers. But the $700-million sale of the Cubs may go down in history as the last deflated franchise sale, what with the Dodgers going for $2 billion.
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