The Tribune Co. "is considering retaining a larger ownership stake" in the Cubs as it attempts to sell the club "amid the nation's worst financial conditions in decades," according to sources cited by Ameet Sachdev of the CHICAGO TRIBUNE. With banks "reluctant to make loans," Tribune Co. "faces increasing risk of prospective buyers dropping out of the auction or being unable to close a deal in the next few months no matter how creditworthy they are." Sources said that company officials have discussed "the idea of keeping more than 5[%] of the franchise." The buyer thereby "would have to come up with less cash but still gain controlling interest in the team," and when lending markets "open up, the buyer would have the option to buy Tribune Co.'s ownership interest." A source said Tribune Co. is "looking for ways to get the deal done." But Sachdev noted Tribune Co. Chair Sam Zell "also wants [the] company to pay as little tax as possible on the sale," as the company "faces enormous tax exposure from an outright sale of the team because it bought the Cubs in 1981 for $20.5[M]." To minimize the tax bill, the company "proposed a deal structure that would require the buyer to borrow heavily to pay for the team," but "such a highly leveraged transaction would be challenging under normal circumstances." The company also "is considering a larger minority stake that would give them enough cash upfront and still retain the tax benefits," but sources said that "how large a stake is unclear" ( CHICAGO TRIBUNE, 10/16 ).
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