Tribune Media et al. v. Comm’r, Nos. 20940-16 & 20941-16, T.C. Memo 2021-122 | October 26, 2021 | Buch, J. |

Opinion

Short Summary:  In 2009, Tribune Media Co. (“Tribune”) formed Chicago Baseball Holdings, LLC (CBH) with the Ricketts family.  Tribune contributed the Chicago Cubs Major League Baseball team and related assets (“Chicago Cubs”) (with a fair market value of approximately $770 million minus liabilities of approximately $35 million) and the Ricketts family contributed $150 million of cash.  CBH then distributed approximately $700 million of cash to Tribune.  After the transaction, the Rickett family became majority owners of CBH with Tribune holding a minority share.

To finance the large cash distribution to Tribune, CBH was funded with $425 million of senior debt from unrelated parties and approximately $250 million of debt from RAC Finance, an entity closely related to the Rickett family (“RAC”).  Tribune executed two guarantees on the closing date:  a senior guaranty and a sub-debt guaranty.
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