Fred Malek Makes a Play for Chicago Cubs

Monday, August 11, 2008

Fred Malek, the Washington private-equity tycoon who ran Northwest Airlines and Marriott Hotels, is after the Chicago Cubs baseball team.

Malek, 71, has joined up with former Washington Nationals president Tony Tavares, former congressman and Republican vice presidential candidate Jack Kemp, home-run king Henry "Hammerin' Hank" Aaron and New York City taxicab king Andrew Murstein in a bid to buy the legendary Chicago franchise.

All in all, the team, Wrigley Field and a share of a Chicago-based regional sports network may fetch more than $1 billion, according to published reports.

Malek, who declined to comment, headed his group alone until a few weeks ago, when the Tavares-Murstein-Kemp alliance joined forces with him.

It's not clear which bidder has the upper hand, but the J. Joseph Ricketts family of Omaha, founders of TD Ameritrade, is thought to be a strong candidate. Other bidders include real estate executive Hersch Klaff, media investor Leo Hindery and Mark Cuban, who owns the NBA's Dallas Mavericks and made a fortune in the Internet bubble.

The Cubs and Wrigley Field are owned by the Tribune Co.

Malek's group is using an unusual vehicle to buy the team. The entity is called a special-purpose acquisition company, or SPAC. Also known as blank-check firms, SPACs raise money by selling stock to the public and then scouring the world for businesses to buy.

Kemp, Tavares and Murstein formed a SPAC -- known as Sports Properties Acquisition -- in January to buy sports teams, stadiums and other entertainment companies. The company has had an initial public offering but has not yet purchased anything with the proceeds. Shares have traded between $9.50 and $9 since the IPO.

Malek and Tavares are well known and trusted among baseball insiders because of their experience running teams. Malek was an owner of the Texas Rangers. Tavares ran the Montreal Expos and then the Nationals.

But it's not clear whether the big wheels at baseball will allow a SPAC to own a team. Most professional leagues prefer a deep-pocketed individual to a publicly traded company because it makes it easier to control the team. Sports leagues don't like answering to shareholders.

Malek, who is a national finance co-chair of Sen. John McCain's presidential campaign, grew up in Chicago. He made a tidy profit buying and selling the Rangers with a fellow investor named George W. Bush. Malek also made a run at buying the Washington Nationals, but came in second to Ted Lerner.

-- Thomas Heath

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