Tribune Company Purchase of Chicago Cubs
COPYRIGHT 1981 PR Newswire Association, Inc.
PR Newswire
June 16, 1981, Tuesday
DISTRIBUTION: TO SPORTS DESK
LENGTH: 648 words
DATELINE: CHICAGO, JUNE 16
BODY:
CHICAGO, JUNE 16 -- STANTON R. COOK, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF TRIBUNE COMPANY, ANNOUNCED THAT TRIBUNE COMPANY HAS ENTERED INTO AN AGREEMENT WITH WILLIAM WRIGLEY, WHO CONTROLS 81 PERCENT OF THE STOCK OF THE CHICAGO NATIONAL LEAGUE BALL CLUB (CHICAGO CUBS BASEBALL TEAM), UNDER WHICH MR. WRIGLEY WILL SUPPORT THE SALE OF ALL OF THE ASSETS AND MOST OF THE LIABILITIES OF THE CHICAGO CUBS TO TRIBUNE COMPANY. MR. WRIGLEY ALSO HAS GRANTED TRIBUNE COMPANY AN OPTION TO PURCHASE ALL OF HIS SHARES OF STOCK IN THE CLUB. THE PURCHASE PRICE AGREED UPON FOR ALL OF THE CLUB'S ASSETS IS $20.5 MILLION. THE PURCHASE IS EXPECTED TO BE ACCOMPLISHED PROMPTLY FOLLOWING THE CLUB'S CORPORATE APPROVAL AND APPROVAL BY THE NATIONAL LEAGUE.
MR. COOK EXPRESSED HIS ENTHUSIASM IN PURCHASING THE CLUB, NOTING THAT THE CHICAGO CUBS AND TRIBUNE COMPANY BROADCASTING PROPERTIES HAVE BEEN ASSOCIATED FOR MANY YEARS. THE FIRST WGN RADIO BROADCAST OF CUBS' BASEBALL WAS IN 1924 AND WGN-TV BEGAN ITS TELEVISION COVERAGE IN 1948. MR. COOK SAID AS A LIFELONG RESIDENT OF THE CHICAGO AREA, HE IS AWARE AND RESPECTFUL OF THE GREAT TRANDITION OF THE TEAM AND THE NATIONAL LEAGUE.
MR. COOK SAID THAT TRIBUNE COMPANY NEWSPAPER AND BROADCAST
SUBSIDIARIES WOULD CONTINUE THE INDEPENDENT COVERAGE OF THE NEWS OF BASEBALL CONSISTENT WITH THE COMPANY'S EDITORIAL TRADITION.
TRIBUNE COMPANY IS PRIVATELY OWNED. IT HAS NEWSPAPERS, RADIO AND TELEVISION STATIONS AND CABLE TV OPERATIONS IN THE UNITED STATES AND NEWSPRINT/FOREST PRODUCT OPERATIONS IN CANADA.
TRIBUNE COMPANY IS ALSO RELEASING THE FOLLOWING PRESS RELEASE FROM OFFICE OF WILLIAM WRIGLEY:
WILLIAM WRIGLEY, WHO CONTROLS APPROXIMATELY 81 PERCENT OF THE OUTSTANDING STOCK OF THE CHICAGO NATIONAL LEAGUE BALL CLUB (INC.), CHICAGO CUBS BASEBALL TEAM, ANNOUNCED THAT HE HAS TODAY SIGNED AN AGREEMENT TO SUPPORT THE SALE OF ALL OF THE ASSETS OF THE CHICAGO CUBS TO TRIBUNE COMPANY, A MAJOR MEDIA COMPANY HEADQUARTERED IN CHICAGO. MR. WRIGLEY SAID HE ALSO GRANTED TRIBUNE COMPANY AN OPTION TO PURCHASE ALL SHARES OF STOCK IN THE CLUB THAT HE CONTROLS. THE PURCHASE PRICE AGREED UPON FOR ALL OF THE CLUB'S ASSETS IS $20.5 MILLION IN CASH (WHICH IS BEING PLACED IN ESCROW, PENDING CLOSING), PLUS THE ASSUMPTION OF ESSENTIALLY ALL OF THE LIABILITIES OF THE CLUB. THE SALE OF THE CLUB IS SUBJECT TO THE APPROVAL OF THE CLUB'S BOARD OF DIRECTORS, THE NATIONAL LEAGUE AND THE CLUB'S STOCKHOLDERS WHO WILL BE INFORMED OF THE TRANSACTION IN A PROXY STATEMENT TO BE MAILED TO ALL SUCH STOCKHOLDERS.
MR. WRIGLEY SAID THAT FOR SOME TIME HE HAD BEEN WRESTLING WITH THE ESTATE TAX PROBLEMS CAUSED BY THE DEATHS OF HIS PARENTS WITHIN A SHORT TIME OF EACH OTHER, AS WELL AS WITH ATTEMPTING TO FIND A SOLUTION FOR THE LONG-TERM FINANCIAL NEEDS OF THE CHICAGO CUBS. HE ALSO STATED THAT HE BELIEVED THE ARRANGMENTS WITH TRIBUNE COMPANY WILL TRANSFER THE CLUB TO A STABLE AND WELL ESTABLISHED ENTITY COMMITTED TO KEEPING THE TEAM IN CHICAGO. IN ADDITION, MR. WRIGLEY STATED THAT HE IS CONFIDENT THAT TRIBUNE COMPANY IS FINANCIALLY ABLE TO MEET ITS COMMITMENTS TO THE SHAREHOLDERS OF THE CHICAGO NATIONAL LEAGUE BALL CLUB, THE TEAM AND THE NATIONAL LEAGUE AND WOULD BE FULL SUPPORTIVE OF THE PLAYERS RELATIONS COMMITTEE.
MR. WRIGLEY ADDED THAT THE BOARD OF DIRECTORS OF THE CUBS WOULD MEET TO CONSIDER TRIBUNE COMPANY'S OFFER AND THAT HE HAD NOTIFIED THE NATIONAL LEAGUE AND THE COMMISSIONER OF HIS ACTION.
MR. WRIGLEY ANNOUNCED THAT HE WOULD HAVE NO FURTHER COMMENTS CONCERNING THE TRANSACTION UNTIL IT HAS BEEN VOTED UPON BY THE CLUB'S BOARD OF DIRECTORS AND, IF APPROVED, A PROXY STATEMENT HAS BEEN PREPARED AND MAILED TO THE SHAREHOLDERS.
CONTACT -- SUE GALLAGHER OF TRIBUNE COMPANY AT 312-222-4527 OR CLAUDE BROOKS OF OFFICE OF WILLIAM WRIGLEY AT 312-644-2121, EXT. 203
Chicago Cubs are sold by Wrigley to Tribune Co. for $25.5 Million
Copyright 1981 The New York Times Company
The New York Times
June 17, 1981, Wednesday, Late City Final Edition
SECTION: Section A; Page 1, Column 2; Sports Desk
LENGTH: 1151 words
HEADLINE:CHICAGO CUBS ARE SOLD BY WRIGLEY TO TRIBUNE CO. FOR $20.5MILLION
BYLINE: By NEIL AMDUR
BODY:
The Chicago Cubs, one of major league baseball's least successful franchises on the field in recent years, were sold yesterday for $20.5 million by William Wrigley to the Tribune Company, parent of The Chicago Tribune and The Daily News in New York.
In announcing an agreement for the transfer of his 81 percent ownership and all remaining 1,900 shares in baseball's only publicly owned corporation, Mr. Wrigley, a Chicago chewing gum manufacturer, ended a family association with the National League team that began when his grandfather became a minority shareholder in 1916.
That family tie, which was strengthened when the grandfather acquired a majority interest in 1921, was the oldest in major league baseball.
The sale of the Cubs, which includes Wrigley Field and all the team's debts, was the second involving a Chicago baseball franchise this year. Last January a Chicago-based group purchased the White Sox for $20 million.
The record price for a baseball franchise was paid a year and a half ago by a group headed by Nelson Doubleday which bought The New York Mets for $21.1 million.
Mr. Wrigley cited as factors in the sale estate tax problems following the death of his parents in recent years and attempts to find a solution to the long-term financial needs of the Cubs. The Cubs lost $1.7 million last season and are reportedly headed for even greater losses this year.
''Baseball is becoming more demanding of tremendous financial capacities,'' William J. Hagenah Jr., the president, chief operating officer and treasurer of the Cubs, said by telephone from Chicago. ''You've got to just have an awful lot of money to play ball these days. That's what prompted these changes.''
Mr. Hagenah said negotiations for the Cubs' sale began long before the current strike that has idled the sport's 26 major league teams. The Cubs have the worst won-lost record in the National League this year.
The sale is subject to the approval of the club's directors, its 600 stockholders, the National League and the Securities and Exchange Commission. The Cubs' stock was valued yesterday at between $1,400 and $1,500 a share. If the sale is approved, the stockholders, some of whom have held their shares for generations, will receive about $2,000 a share.
pick up first ad cubs
Commissioner Bowie Kuhn, who objected to one attempted ownership chnage for the White Sox last year, issued a statement yesterday that praised the role of the Wrigley family in baseball. Mr. Kuhn offered no comment on the Tribune Company's purchase, but last year he supported the sale of the Oakland A's to executives of another corporate giant, Levi Strauss & Company, for $12.7 million.
''The Wrigley family, first with Phil and later with Bill, has been very dedicated to the best interests of the game,'' Mr. Kuhn said, referring to William Wrigley and his father. ''For over 60 years, indeed from the time of the first commissioner, Judge Landis, they have vigorously supported the integrity of the game. While they have gone through thick and thin days on the field, their franchise has produced some of the game's premier players - people like Gabby Hartnett, Billy Herman, Hack Wilson, Billy Williams and Ernie Banks. They have always been first-class executives for baseball.''
Team Can Be Highlighted
The Tribune reported last month that first-quarter earnings had fallen 25.8 percent from the first three months last year despite a 13.2 percent revenue increase.
The Cubs lost $1.7 million last year, according to Mr. Hagenah. But the ''intrinsic value'' of owning a professional sports franchise has drawn renewed interest by corporations in recent years. Although mired with a losing record, the Cubs play in a populous market, and they have a long baseball tradition. Further, the Tribune Company's ownership of cable television subsidiaries, in addition to newspapers and radio and television stations, offers opportunities to highlight the team.
The purchase is not the first of a baseball team by a communications company. CBS purchased 80 percent of the New York Yankees for $11.2 million in 1964 and maintained the controlling interest until George Steinbrenner led a group of investors who purchased the club for $10 million in 1973. In addition Ted Turner, owner of the Atlanta Braves, is the head of cable television network.
Conflict of Interest?
William Jones, the managing editor of The Tribune newspaper, said yesterday that he saw no potential conflict of interest over coverage of a baseball team owned by the parent company.
''It is not going to affect our coverage in any way whatsoever,'' Mr. Jones said. ''The Tribune owns WGN, and there's never been any pressure on our television columnist.''
Radio station WGN has been the flagship station for the Cubs' radio network since 1924. WGN-TV began televison coverage of the Cubs in 1948.
Stanton R. Cook, the president and chief executive officer of The Tribune Company, said in a prepared statement that the newspaper and WGN would continue an independent coverage policy.
''As a life-long resident of the Chicago area, I am aware and respectful of the great tradition of the team and the National League,'' Mr. Cook's statement said.
Will There Be Lights?
Tribune Company officials were not available to comment on whether the shift in ownership would bring the installation of lights to 37,000-seat Wrigley Field. The Cubs are the only team without lights at their home ball park, and Mr. Wrigley had resisted efforts to install them, an addition that critics contend might have improved home attendance figures that fell from 1,648,587 in 1979 to 1,206,776 last season.
Andrew J. McKenna, a director of the Chicago White Sox from 1975 through 1979, was named as chairman of the Tribune's new subsidiary that will operate the Cubs.
The Wrigley identification with the Cubs was almost legendary. William Wrigley Jr. became a partner in the club in 1916 and a majority stockholder in 1921. After his death in 1932, his son, Philip K. Wrigley, became majority stockholder. The younger William Wrigley assumed control upon Philip's death in 1977.
The Cubs won the World Series in 1907 and 1908 and National League pennants in 1929, 1932, 1935 and 1938. But they have not won a pennant since 1945, and, with the free-agent market driving up player salaries in recent years, the Cubs have not finished higher than third since 1972.
President Reagan, who as a young man was a broadcaster of Cub games, was quoted by an aide as having said yesterday, ''It's the end of an era, but hopefully the beginning of another era.''
Wrigley Takes A Walk
Copyright 1981 The New York Times Company
The New York Times
June 21, 1981, Sunday, Late City Final Edition
SECTION: Section 4; Page 10, Column 4; Week in Review Desk
LENGTH: 117 words
HEADLINE: Headliners;
WRIGLEY TAKES A WALK
BODY:
William Wrigley, heir to a family fortune built on chewing gum, last week sold a badly tarnished family jewel. He unloaded the Chicago Cubs, major league baseball's most consistently inept team, on the Tribune Company, parent of The Chicago Tribune and New York's Daily News. The Cubs, owned by the Wrigley family for 60 years, have not won a pennant in the last 36. When the baseball players' strike began earlier this month, they were in a familiar position - last in their division - and attendance by their eternally optimistic fans had dropped to 9,000 a game. Nevertheless, for a club projected to lose $3 million this season, the Tribune Company paid $20.5 million.
GRAPHIC: Illustrations: photo of William Wrigley
American Baseball; And now, a word from our sponsors
Copyright 1981 The Economist Newspaper Ltd.
The Economist
June 27, 1981
SECTION: Business, finance and science; WORLD BUSINESS; Pg. 75 (U.S. Edition Pg. 79)
LENGTH: 620 words
HEADLINE: American baseball; And now, a word from our sponsors
BODY:
On the face of it the Tribune company, the owner of the Chicago Tribune and the New York Daily News, needs its head examined. After seeing its profits fall by 26% in its latest quarter and its New York steed being beaten into a pulp by Mr Rupert Murdoch's sensationalist New York Post in a battle for New York's afternoon-newspaper market, it plans to fork out $20.5m to buy one of the worst teams in major league baseball.
In reporting the Tribune's proposed purchase of a four-fifths interest in the Chicago Cubs, from Mr William Wrigley of the Chicago-based chewing gum multinational, the American press has had great fun recalling old jokes made at the Cubs' expense. Sample: ''Will the lady who lost her nine children at the Chicago Cubs' park please pick them up immediately. They are beating the Cubs, 10-0, in the seventh.''
The jests have bite. The Cubs, who lost $1.8m in 1980, routinely lose more games than they win. Yet somehow they have commanded a bid topped only once in the history of baseball--the $21.5m paid by the publishers Doubleday for the New York Mets. And the bid has come in the midst of a strike by baseball players already earning an average of $170,000 a year; a strike that is ruining the summer for millions of Americans and which baseball owners say threatens to ruin them as well.
Why then is the Tribune, a communications group with revenues of $1.23 billion in 1980, a group that has recently introduced savage economies to cut costs, proposing to put up $20.5m in hard cash to buy the Cubs? Scarcely any one in the newspaper or baseball business wholly believes the reason the Chicago Tribune has given its readers: ''Heck, we may as well admit what's really behind it. We've always wanted to have a ball team in the family.''
A better small clue to the Tribune Company's motives is perhaps the way baseball in North America (see chart) has triumphantly bucked the trend to smaller crowds that has hurt so many other sports and entertainments (eg, professional soccer in Britain, circuses and cinemas almost everywhere). And a better big clue may be the recent decision of the Seattle SuperSonics to become the first basketball team to broadcast all their games on pay television, at a cost of $1.30 a game to subscribers paying for a package of 90 games.
The Tribune recently more than doubled the size of its cable television subsidiary by buying the Douglas Communications Corporation for $33m. Many assume that it can see big profits (eventually) in also owning a professional sports team that attracts a large television audience.
If this is the gamble and it pays off, other corporations are sure to follow the Tribune Company's lead. That would break the common pattern of sports franchises being mainly the plaything of American businessmen who have already made their pile. Men like Mr Ray Kroc, the founder of the McDonald's hamburger chain, who bought the San Diego Padres, and members of the Haas (Levi Strauss jeans) family who recently bought the Oakland A's. Not all of them have made money at it, but so what? As oilman H. L. Hunt said when told his son had lost $1m on an American football franchise: ''Well, at that rate Lamar can't last longer than 150 years.''
Much now depends on the National League, to which the Chicago Cubs belong. It will have to pass judgment on the deal and people are already muttering about a conflict of interest when the owner of a baseball team also owns a newspaper that writes about its deeds and television services that broadcast its games. By the time the dust has settled, the Tribune Company might have been forced to concede an (unprofitable?) arm's length between the Cubs and its other interests.
GRAPHIC: Picture, Not all the press are against us; Graph, Baseball attendance
The Cubs' New Owner
Copyright 1981 McGraw-Hill, Inc.
Business Week
June 29, 1981, Industrial Edition
SECTION: IN BUSINESS THIS WEEK; COMPANIES; Pg. 62
LENGTH: 120 words
HEADLINE: The Cubs' new owner
BODY:
Chicago-based Tribune Co. has agreed to buy the Chicago Cubs baseball team for $20.5 million, underscoring its intention to expand its cable TV operations (BW -June 22). A good part of cable industry revenues will come from sports broadcasts, and the Tribune's WGX-TV has televised Cubs games since 1948. The agreement was reached with William Wrigley, the chewing gum company executive who owns 81% of the Cubs' publicly traded stock. Although the team lost $1.8 million last year and its game-losing rate this year equals the record-setting pace of the inept 1962 New York Mets, the Tribune also gets ownership of well-maintained Wrigley Field and what is possibly baseball's strongest fan franchise.
URL: http://www.businessweek.com/index.html
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