• by Erik Sass  @eriksass1, January 23, 2009

On Thursday, the Tribune Co. announced the long-awaited sale of the Chicago Cubs sports franchise, ending the two-year auction about a month and a half too late to save Tribune from bankruptcy. The Chicago Cubs, Wrigley Field and Tribune's 25% stake in the Comcast Sports Network Chicago, a regional cable net, were bought by the Ricketts family for $900 million.

The Ricketts family is led by J. Joe Ricketts, who founded TD Ameritrade Holding Corp.

The price 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, but the tightening credit crunch meant that banks were leery of lending money to potential takers.

Faced with the crushing burden of about $11 billion in debt, including about $8 billion assumed in the transaction he engineered to take Tribune private, Zell turned to the Illinois state government, hoping to sell some or all of the Cubs franchise 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.

After the second deal fell through, Tribune had no choice but to file for Chapter 11 bankruptcy protection on Dec. 8--the day before Blagojevich was arrested and charged with corruption by U.S. District Attorney Patrick Fitzgerald for trying to sell the Senate seat vacated by President Barack Obama.