Tribune Company files for Chapter 11 bankruptcy
Tribune Co., the owners of the Chicago Cubs and Wrigley Field, filed for Chapter 11 bankruptcy earlier this week. The owner of Tribune Co., Sam Zell, purchased the company in 2007 for $8 billion—most of that was borrowed money. Now, after failing to turn around the media conglomerate, the company has finally given in after it appeared likely that it would be in violation of some of its debt covenants at year end.
The announcement was made just days after Crane Kenney, the chairman of the Cubs, announced that the club would be sold by spring training. This isn’t a huge surprise, because the company needs cash more than ever. That $1 billion asking price would go a long way towards Tribune appeasing its creditors.
Also noteworthy is that the Cubs were not part of the bankruptcy filing, so they’ll basically continue to operate as they’ve done in the past. Still, I’m sure a lot of fans would like to see the sale get pushed through sooner rather than later so the whole matter has some closure.
Rays to open academy in Brazil
Late last week, the Tampa Bay Rays announced that they’ll open a baseball academy in Brazil. The Rays will be the first team to have a presence in Brazil, the largest country in South America. The construction of the facility is expected to begin early in 2009 and the complex in Marilia will include two full playing fields, two youth diamonds and dormitories with a capacity for 40 players.
For now the Rays look at it as a long-term play, because there is little baseball tradition in Brazil. Still, by creating an interest in the sport, they could see some significant benefits down the road.
Minneapolis City Council doles out money for improvements near Target Field
Earlier this week, the Minneapolis City Council approved $2 million in funding for improvements set to be made around the Minnesota Twins’ future home, Target Field. This will consist of 11 different improvements that will help people get around near the new ballpark. The money came from a one-time inflow of funds because some tax-increment financing (TIF) districts are temporarily expiring. This will allow those extra property taxes to go into the general coffers rather then going to the specific projects designated by the various TIFs.
Reds radio ads bump could result in increased payroll
In 2007, the Cincinnati Reds came to an agreement with WLW-AM to sell their own advertising. The deal hearkened back to the Big Red Machine days when the team did the same thing, but when Marge Schott took over the team, they negotiated a deal that turned into a rights-holder arrangement. While the Reds are nowhere close to the team they had back in the 1970s, the advertising deal has been boon and Reds chief operating office Phil Castellini has recently said that total corporate sales revenue is up 140 percent since the new deal has been in place. The end result is that because of the extra revenue from advertising, the Reds are going to bump up their payroll from the $74.1 million they had last year to close to $80 million.
Cubs involved in Illinois governor scandal
Political scandal hit the state of Illinois yesterday when governor Rob Blagojevich was arrested for a variety of corrupt acts. One of those was that Blagojevich made an attempt to use the Illinois Finance Authority (IFA) as a carrot to get Tribune Co. to end its campaign for the governor’s impeachment. Blagojevich apparently said that if Tribune wanted financing from the IFA to help with the sale of the Cubs, then Tribune had to fire those people who have been critical of the current regime. At least now the Cubs will get a fair shake like everyone else when it comes to IFA funds.