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Cubs Sale Cont.:Tribune Weighs Bankruptcy

The Tribune Company, owner of the Cubs, the Chicago Tribune, Los Angeles Times, Baltimore Sun and other media properties is weighing the possibility of filing bankruptcy as early as this week. The company has hired Lazard as an investment advisor and the law firm Sidley Austin to advise it on bankruptcy. The company is experiencing cash flow problems and is likely to be in violation of some its debt covenants by the end of the year.

What does this mean for the sale of the Cubs? It makes selling the team as quickly as possible even more important. Clearly now the Tribune Company does not have the luxury of waiting until next spring. It also may mean that any sale may wind up as a bankruptcy auction which may mean different rules for the auction, giving more weight to the highest cash bidder. While a bankruptcy auction buyer will still need the approval of the Lords of Baseball, the bankruptcy judge will also be a vetoing power. The buyer will need to be approved by both and that may give a buyer who is a baseball outsider a better shot at winning the team. It will also likely open the bidding anew to potential buyers, if there any, who did not participate in the Tribune's sealed bid auction.

Full post as published by Sports Biz on December 08, 2008 (boomark / email).