Talks to sell the storied Chicago Cubs baseball team have reopened with a rival bidding group, and are continuing alongside negotiations with the original Ricketts family buyers, sources familiar with the situation said on Thursday.
Bankrupt media company Tribune Co, owner of The Los Angeles Times, has been trying to sell the Cubs for more than two years to reduce its debt burden. It agreed in January to sell the prized team and other assets for $900 million.
An exclusivity period between Tribune and the Ricketts group has ended and the media company is now talking to a group that includes private equity investors Marc Utay and Leo Hindery, three sources familiar with the situation said.
We know that they went back to the Utay group, said one of the sources, who asked not to be identified because the sales process has not closed.
Spokesmen for Tribune Co and Tom Ricketts, who is leading his family's bid, said their talks are ongoing and Ricketts spokesman Dennis Culloton described them as positive. Utay and Hindery declined to comment.
Sports franchises' values have been hurt by the recession and tighter credit markets as analysts had expected the Cubs to draw bids topping $1 billion.
Buyers are eager to take control of the National League team, which despite not winning a World Series title since 1908 has a huge fan base helped by its lovable losers image and national exposure on cable TV.
Tribune Co, which also owns the Chicago Tribune, filed for bankruptcy in December due to its heavy debt load and the weak U.S. publishing sector. It put the Cubs, the team's famous Wrigley Field home and a 25 percent stake in a local sports TV network on the block in April 2007, when Tribune agreed to an $8.2 billion buyout led by real estate magnate Sam Zell.
Tribune Co agreed in January to sell the Cubs to a group led by Tom Ricketts, chief executive of Chicago investment bank Incapital LLC and son of the founder of TD Ameritrade Holding Corp.
However, the deal with Ricketts was not finalized before an exclusivity period ended. Several sources said that Tribune and Zell are now able to negotiate with other buyers.
It is crystal clear that he's talking to others and the outcome's not determined, a second source said. Until someone has signed a purchase agreement, anything is possible.
Tribune Co and its banker, JP Morgan, have entered into formal talks with the Utay/Hindery group and a deal could be reached late next week, a third source said.
However, others said the re-emergence of the Utay/Hindery group, which finished just shy of the Ricketts' offer in January, also could be Tribune Co's way to pressure Ricketts into settling on terms desired by the media company. Two sources described the sides as on the verge of a deal.
That's just a way to keep the fire on the Ricketts, the first source said. The Ricketts have never been closer to getting a deal done.
While the Ricketts group has lined up its financing, sources previously told Reuters that the sides have been unable to reach agreement on the value of Cubs' broadcast contracts.
(Reporting by Ben Klayman and Megan Davies; Editing by Lisa Von Ahn, Maureen Bavdek and Matthew Lewis)