Market turmoil may delay Cubs sale, hurt price

By Ben Klayman

CHICAGO (Reuters) - The sale of the Chicago Cubs may be delayed by the global financial crisis unless owner Tribune Co is willing to accept a lower price for the storied baseball team, people involved in the sale said.

Tribune was expected to pare the list of bidders this month for the Cubs, the club's historic ballpark, Wrigley Field, and a stake in a regional sports television network.

Analysts had expected the deal to top $1 billion due to the Cubs' national TV exposure and history of being "lovable losers."

But stock markets have been hit hard by the global credit crisis. The benchmark S&P 500 index dropped below 900 points for the first time in five years on Friday after having already fallen for seven straight sessions.

"It's going to impact price," said one person close to the auction. "If they're looking to get top dollar on the Cubs, they better wait.

"People are just not going to be willing to play when they don't know where markets are, where credit markets are, where capital markets are, where the fans are going to be in terms of buying tickets," added the person, who asked not to be identified as the sale is ongoing.

Internet billionaire Mark Cuban, who reportedly submitted a bid of $1.3 billion early in the process, said on Thursday night the deal's price and timing could not help, but be affected by the market turmoil.

"Any time the cost of capital goes up, the cost of assets goes down, which is what you're seeing in the stock market," Cuban told reporters at a basketball game in Chicago, where he watched his Dallas Mavericks beat the Chicago Bulls.

If the value of a popular property like the Cubs can be hurt, others could be under pressure, analysts said.

"All sports franchises are under pressure, more so this week than three or four weeks ago because the value of the revenue streams that they're basing their profit on are all impaired," said Robert Boland, professor of sports management at New York University.

Major League Baseball officials said they have not been advised of any delay and the sale appears to be moving forward. Tribune Co declined comment.

But real estate magnate Sam Zell, who led the $8.2 billion buyout of Tribune Co last year, told CNBC on Wednesday he still expected to sell the Cubs before year end and that Tribune would soon narrow the list of five bidders to two.

Tribune is selling assets to help pay down debt, which stood at $12.5 billion at the end of the second quarter. Declines in readership and advertising dollars at such newspapers as the Chicago Tribune and Los Angeles Times have added to the pressure to secure funds to avoid default.

Fitch Ratings media analyst Jamie Rizzo said Tribune needs to sell assets to meet debt obligations or negotiate an extension with its banks.

"Not only have potential buyers probably lost a decent amount of wealth, but also their alternatives for getting financing are drying up," he said. "Not many people willing to lend and anybody who's going to come in and buy this is going to rely on debt. Nobody's going to come in and write a check for hundreds of millions of dollars for a baseball team."