The Tribune Company has finally named a preferred bidder to purchase the Cubs. The Ricketts family of TD Ameritrade fame is putting up $900 million to purchase a team that had a selling price of $21 million in 1981 when the Tribune bought them from the Wrigleys.
Thats a pretty good return on investment. I'm taking MBA classes so I should know. Over those 28 years, they earned almost 15% per year in value. Not too shabby.
I don't know much about the Ricketts, but I'm sure we will learn more in good time, and the opinions of wanna-be managers and owners will fly across the internet. I'm more concerned about the proposed purchase price.
For one, it drives home the fact that I will never own the Chicago Cubs.
I came to grips with the fact that I would never play for the Cubs a few years back. Its a sad day when you realize you will never be able to hit a curveball well enough to get a scout to notice you without hitting him with your car, but I got over it. Sort of.
But I always dreamt about hitting the Mega Millions jackpot and using the hundreds of millions to purchase the Cubs. Then I could remake the farm system, stop signing injured players, and keep the Cubs at Wrigley Field for as long as I live.
But the record Mega Millions jackpot is $390 million. Even if the goverment let me keep every nickel of that money, I would not have enough to outbid the Ricketts.
They are digging $450 million out of their own pockets and then borrowing $450 million more to complete the sale. The numbers are staggering.
Supposedly, the other offers were for more than $900 million, but those proposals involved more debt and less cash up front. Given that the Tribune has filed for bankruptcy, they are interested in getting as much cash up front as they possibly can, so the Ricketts take home the prize if they get approved by MLB and the owners.
I can never compete with that. If someone lended me $2,000 right now and I invested it so that I had 100% return each year (about the same likelihood as me learning to hit a curveball 400 feet), it would take me 20 years to raise the money to put down a similiar down payment as the Ricketts. The problem, however, is that by then, the Cubs will be worth over $13 billion.
So its not going to happen. I'd like to try though. Anyone have a couple thousand dollars laying around that they could lend me?