• by Erik Sass  @eriksass1, July 7, 2009

The long, drawn-out sale of the Chicago Cubs by Tribune Co. appears to be nearing its end -- maybe. After the deal seemed to be on the verge of failure, the Chicago Tribune reported earlier this week that the baseball team and its home at Wrigley Field would go to the Ricketts family. But on Tuesday the newspaper reported that a different deal with a group of New York investors was still under consideration.

This is just the latest twist in an auction that has been filled with reversals and false starts.

Faced with declining ad revenues and a grim economic situation, Zell has been trying to sell the Cubs to service Tribune's debt for at least a year and a half.

In January of this year, it seemed he' had finally succeeded in striking a deal with the Ricketts family, which made their fortune from TD Ameritrade. But then the deal stalled, as Tribune and the Ricketts argued about the price of various TV assets packaged with the Cubs franchise, including Tribune's quarter-stake in Comcast SportsNet Chicago.

As the two sides haggled, Tribune looked for other potential buyers, including a group of investors led by Marc Utay -- previously a rival bidder who lost out to the Ricketts in the first round. Utay, who is still interested in the Cubs franchise, claims to have lined up a group of investors who could fund the deal on somewhat more favorable terms for Tribune.

On Tuesday, the Chicago Tribune quoted a source familiar with the Utay negotiations to the effect that they were still proceeding and "making quick progress."

Whoever ends up buying the team, the cash will go to paying off Tribune's monster debt of about $12 billion, most of which was acquired as part of a deal engineered by Sam Zell in 2007 to take the company private.

The $900 million price tag is considered reasonable for Tribune, especially in light of current economic woes and the paralysis of global credit markets. In 2007, Andrew Zimbalist, a professor of economics at Smith College and an expert on professional sports finance, speculated that the Cubs team by itself was worth $500 million-$650 million.

Around the same time, Forbes valued Wrigley Field at $90 million-$120 million--although others said it could fetch $200 million or more. Tribune's quarter interest in Comcast SportsNet Chicago, a joint venture with Comcast and the owners of three other Chicago teams, is said to be worth at least $50 million.

Crunching these numbers, the entire Cubs franchise was worth anywhere between $640 million and $900 million, meaning that Tribune came out on the high end.

However, Tribune boss Sam Zell had hoped to get $1 billion or more for the franchise. The deal is certainly still a step down from the $1.3 billion offered by sports franchise impresario Mark Cuban, according to a New York Times report from last August. That deal was effectively scuttled when Cuban was charged with insider trading by the SEC in November. This last-minute foul-up sent Zell scrambling to find another buyer for the franchise.

At one point, Zell turned to the Illinois state government, hoping to sell Wrigley Field to the Illinois State Finance Authority. However, this deal became entangled in a long-running dispute between Illinois governor Rod Blagojevich -- now being impeached by the Illinois State Assembly -- and the writers for the Op-Ed page of the Chicago Tribune.

In essence, Blagojevich said he would block the sale to the ISFA unless Zell muzzled the writers by firing or reassigning them. Blagojevich's chief of staff John Harris, who served as an intermediary for these secret negotiations, told the governor that Zell had agreed to silence his critics at the paper. However, the staffers were never fired or reassigned.