October 10, 2008
BY BRIAN HANLEY firstname.lastname@example.org
The credit crunch and the failing economy have put the brakes on the sale of the Cubs, said Dallas Mavericks owner Mark Cuban, one of the finalists to buy the team.
”Yeah, it’s going to affect the deal structure,” Cuban said Thursday at the United Center, where the Mavericks played the Bulls in an exhibition game. ”It’s going to create a challenge. Anytime the cost of capital goes up, the cost of assets goes down, which is what you’re seeing in the stock market. Honestly, they’d be crazy to do something now because it’s not optimal for them and it’s not optimal for the buyer. So there’s not really a rush.
”In a market like this, when there’s so much uncertainty and IBM and General Electric don’t know how much they’re going to pay on a loan, Mark Cuban doesn’t know, either. Six months ago, you could say: ‘Here’s how much this debt is going to cost you. Here are the terms that are available. Yes or no?’ Now you can’t do that anymore. Even if we wanted to close the day after tomorrow, the banks might not be able to close. There’s that uncertainty that gets involved. So that just changes the tenor of it.”
Cuban said he’s content to let time take care of the purchase particulars of a deal some value at $1 billion or more. And he wouldn’t hazard a guess as to when the sale would be finalized.
”I really didn’t have an expectation,” he said. ”It’s a fluid process. There are a lot of pieces that need to be put together and a lot of elements. It’s still moving forward, just not moving forward as quickly. I’m in no rush. There’s no drop-dead date.
”As is typical, my offer was a lot more creative than most, so there were more moving pieces. Again, until there’s more certainty in the financial market, then uncertainty is expected. So it’s going to cost either me, [Sam Zell] or both of us money. So unless there’s some pressing issue to sell it now, it doesn’t make a lot of sense to do it.”
So Cuban will watch as Cubs CEO Crane Kenney and general manager Jim Hendry move to improve the team this winter.
”Nothing’s going to change,” Cuban said. ”They weren’t asking everybody about whether they should opt in on Rich Harden. They’re doing what they need to do. I just have my fan hat on, and they’ve done a good job so far. Sports are a crazy business. If there was a template, we’d all be champions, right? But there’s one winner and 29 or 30 losers. That’s the way it works.”