Stars Aligning for Cubs

The bids are in for prospective buyers of the Chicago Cubs, a team that's in danger of winning its division for the second straight year. That hasn't happened in 100 years. But if the Cubs do go on to excel in the playoffs and win it all, the new owners will get a little extra bang for their big bucks. In his April analysis of the Cubs' franchise value, Duff McDonald wrote:

How much does a team's win-loss record matter? Analyzing sales of European soccer teams, A.E.G. researcher Ilhan Geckil found that the market value of a team may not be overly affected by any particular year's results. But the value is clearly influenced by whether the team is consistently in the running for championships...A.E.G. research suggests a team's value can rise by 20 to 30 percent if it's a bona fide contender. Anderson gives the Cubs a 20 percent premium, adding another $100 million to the value.

The winning bid is expected to break the record for the largest sum ever paid for a baseball team. This mark was set by the new owners of the Boston Red Sox -- John Henry and his associates paid $660 million for the Sox in 2002. Inflation-adjusted, that comes out to about $800 million. Will I be in the first wave of fearless nerds that'll point out a sub-$800 million winning bid isn't really a "record"?

(Yes)

The Tribune Co. bought the Cubs back in 1981 for $20.5 million, meaning a $1 billion sale - the top of the range for expected bids -- would represent an annual average return of 177 percent. (In order for the new owners to see the same kind of return 27 years down the road, they'll have to sell the Cubs for $49 billion in 2035.)

Incidentally, 1908 was also the last time the Cubs won a World Series. That year, the 99-win and yet-to-be-Lovable Losers beat the Detriot Tigers in five games thanks to two complete games by staff ace Orval Overall. The series was a rematch from the previous year's Fall Classic -- which the Cubs also won.

World Series favorites, the Tigers' slow start probably means that a 100-year rematch is out of the question, although the team has been able to claw its way back into contention:

But while a World Series ring would add to the Cubs' value, their free agent shopping spree during the 2006-07 off season probably knocked a couple of dollars off the final sale price. All added, there is about $310 million in contractual commitments to players like Alfonso Soriano and Aramis Ramirez following this season. There are only two teams with more tied-up dollars: the New York Yankees with $1.3 billion and those Tigers again with $330 million.