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While bankruptcy typically implies debt issues, the Cubs are not in financial trouble. Rather its filing is connected to Tribune Co.'s own Chapter 11 bankruptcy case that began in December.
The baseball team and related assets were left out of Tribune Co.'s case while the parent of the Chicago Tribune was in the process of finding a new owner for the franchise. Tribune Co. put the Cubs on the market in 2007, as part of a transaction that took the media company private.
Now that Tribune Co. has finalized a deal to sell the team to the Ricketts family, it is passing the Cubs through bankruptcy court to give the new owners comfort that the creditors in the original case have no claim against the sold company. When it filed for bankruptcy, Tribune Co. was $13 billion in debt.
The Cubs' stay in bankruptcy is expected to last just one day. The bankruptcy judge in the Tribune Co. case has scheduled a hearing on Tuesday.
The judge has already approved Tribune Co.'s transaction with the Ricketts family. Under terms of the deal, the Cubs, Wrigley Field and 25 percent of Comcast SportsNet Chicago will be placed in a limited partnership owned 95 percent by the Rickettses. Tribune Co. will retain 5 percent in the complex structure intended to reduce the sizable tax bill that would otherwise accompany an outright sale. The Ricketts family will contribute $823 million to the partnership. Tribune Co. will receive about $740 million after taxes and other adjustments.
Once the bankruptcy judge clears the Cubs' bankruptcy case, the Ricketts family is expected to close its deal with Tribune Co. by the end of the month.
asachdev@tribune.com
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