Is Private Ownership Good For The Cubs?

In the last 24 hours news has come out that the Tribune Company accepted the bid of the Ricketts family. This sale could have far-reaching consequences for the Cubs, but what seems most interesting is the differences between a public owner, like the Tribune, and a private owner, like Ricketts.

In Chicago, we have had mostly private owners except the Tribune and the Cubs. Reinsdorf and his ownership group with the White Sox and Bulls has had mixed results. There seems to be some kind of commitment to putting a winning product on the field/court there, though clearly old Jerry can be a stingy bastard at times.

The Halas/McCaskey family has owned the Bears since the beginning of time. They are a good example of what can happen when a family owns a team. Obviously Papa Bear Halas was committed to winning, but since Virginia McCaskey took over, it has been unclear what their goal is. Obviously profits are a major driving force, since it is a business. But was she really hiring the best personnel to make decisions regarding players and coaches? We all remember the Mike McCaskey fiasco, when she "hired" her son to run the team and he was just terrible. On the other hand there have been periods of prosperity under Virginia (high school class of 1938 by the way, I looked it up, she's an old lady).

The Tribune corporation on the other hand, was in it purely for profit. It was clear from the crummy teams they put on the field the last 20 years or so. In recent years things have changed. They hired competent individuals to run the teams operations (Hendry, MacPhail, McDonough, etc.). As a business, they had a vested interest in hiring the best people for the job, not just their family members.

So what does the future hold under the Ricketts regime? There is no way to tell, but we can only hope that they continue to hire competent people and spend money to put a good team on the field. Word is that massive renovations must be done to Wrigley Field. Also there is also the possibility that there will be a change in personnel, as happens when a new regime takes over. But if I hear anything about Ricketts' long lost cousin Joey taking Hendry's job, I will be the first one outside the Cubs offices with a torch and pitchfork.

Today's Links

• If the Cubs get Peavy, are they going to look to deal big Z? (The source is totally unreliable)
  
• God explains Week 14 of the NFL season.
• It looks like Kerry Wood is going to be a Cleveland Indian. I'm glad we don't have to face him now that he'll be in the American League. I'll be cheering for you Kerry.
• Did the Tribune disrespect Ron Santo? No wonder this guy can't get respect from the Veteran's Committee, his hometown paper doesn't even respect him!
• Some quick hits about the Bears from WCG.
• Personally, I think Kobe Bryant should not be compared to Michael Jordan. Kobe should be Kobe, not the next Michael. That being said, MJ was way better than Kobe is, and this guy proves it with all kinds of crazy metrics and statistical analyses.
  
• So apparently the Peavy deal is done. No wait, my bad, it's not even close. This is why I refuse to write anything extensive about the Peavy story until it is a done deal.
• Bulls beat the Knicks in a shootout. Well both teams shot a lot, not many went in. Either way Bulls win.
  

Crazy Cuban in Trouble With SEC For Insider Trading

It looks like Mark Cuban's bid to buy the Cubs may have hit a major road block:

Mamma.com is some sort of lame search engine that no one has ever used ever. Way back in 2004, Cuban made a sizeable investment in the company that made him its largest shareholder. (About 600,000 shares.) Later that year, Mamma decided to raise cash using something called PIPE financing. This would essentially create more shares for the public to buy, which raises cash for the company to use, but reduces the value of all existing shares.

The company called Cuban in for a meeting and told him what they were planning. (The hope was that he would buy many of these new shares, in order to maintain his investment and interest in the company.) This is totally allowed, but only with the understanding that any information the person is given must be kept confidential and they may not act on that information until it is revealed to the general public. The CEO of Mamma and others involved in the situation say that Cuban was well aware that the information was confidential and that he would not be able to act on it. This is allegedly well-documented, too.

Cuban did not approve of the PIPE strategy and wanted out. However, once the PIPE was announced the value of his shares would have gone down no matter what, so he instructed his broker to sell all of his shares immediately, which he did. By selling the shares before the announcement was made (and before the price could drop) he saved himself about $750,000. Cuban's reported net worth is a little over $2 billion.

If the allegations are true, this is textbook insider trading. The SEC has charged him with a civil complaint and if he is found guilty, he would likely have to forfeit the profits from the trades, plus pay a penalty which can be up to three times that amount. Also, if his actions can be shown to have hurt other investors, he can face additional penalties that can skyrocket depending on how much damage was allegedly done.

At the moment, this is only a civil action and not a criminal action, which means he will not face jail time. That could change in the future, but it is unlikely unless some new information comes to light. The most famous insider trading case in recent memory is Martha Stewart, but remember—she did not go to jail for trading. She went to jail for obstruction of justice and conspiracy, because she lied to federal investigators about the case.

And just in case anyone is wondering how this is related to the sale of the Cubs, I was informed by a reliable source this morning (some old crazy guy in the booth next to me at Lou Mitchell's) that his daughter works for the Tribune and the Tribune purposely leaked this information about Cuban to take him out of the running to buy the Cubs. I don't know how likely that is, but either way it doesn't look good for people hoping Cuban would be the next owner.

Somewhere, Sam Zell is menacingly cackling in a smoky back room.