Why We May Help Pay for Tribune to Unload the Cubs

[Commentary] The Chicago Cubs aren't going to win anything this year despite having one of baseball's largest payrolls. But their bankrupt owner, Sam Zell's Tribune Co., may be about to hit a home run -- at your expense. Zell, whose tax dodging is a frequent topic of Sloan's, is trying to unload the team in a deal that would divert almost $300 million from taxpayers to the creditors of Tribune, the nation's second-biggest newspaper company. The proposed Cubs deal, involving a "leveraged partnership" using lots of borrowed money, is so aggressive that a leading tax expert, Robert Willens expects the IRS to challenge it. The Ricketts family, founders of Ameritrade (now TD Ameritrade), would put $150 million of cash into a partnership that would also borrow up to $698 million. Tribune would put the Cubs, Wrigley Field and related assets into the partnership. Tribune would emerge with $740 million of cash and 5 percent of the partnership, while the Ricketts family would have 95 percent and operating control. Call me naive, but it sure seems to me that when you start with 100 percent and full control and end up with 5 percent, $740 million and no control, you've sold 95 percent. Zell's tax folks, however, will argue that Tribune is getting nontaxable proceeds from a leveraged partnership. They'll also argue that Tribune's guarantee of some of the partnership's borrowings makes it a true partner of the Rickettses. Hello? A debt guarantee from a bankrupt company?