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Cubs win -- so does Tribune
But analysts say team's first post-season win in 95 years will provide only modest lift in profit.
October 6, 2003: 11:55 AM EDT
By Meghan Collins, CNN/Money Staff Writer

NEW YORK (CNN/Money) - The true-blue success of the Chicago Cubs could translate to a little more real green for the team's parent company after the normally hapless baseball club eliminated the Atlanta Braves Sunday to win its first post-season series since 1908.

But since the Cubs' Major League Baseball franchise is only a small piece of the Tribune Co. (TRB: Research, Estimates) media and entertainment conglomerate, analysts said the company's earnings will get just a slight bump up from the stellar performance of the Wrigley Field denizens.

"It's definitely going to be a positive for the bottom line, but we're talking pennies here," said Edward Atorino, an analyst at Blaylock & Partners. "All of this is gravy."

With the players' salaries accounted for, and little in the way of additional park-related costs, the Cubs stand to benefit from extra TV and radio advertising money, as well as increased ratings for its WGN radio and TV stations, post-season ticket sales, and food and merchandise sales. Analysts say most of the Cubs' extra revenue -- minus park employee salaries, taxes and other related costs -- will go straight to Tribune's profit.

"It could add a few million bucks to the bottom line," Atorino said.

In 2002, Tribune Co. posted net income of $443 million, or $1.87 a share, which was about 300 percent growth over the prior year, according to Hoover's Online. As of Monday, Wall Street had forecast the company will earn 65 cents a share in the fourth quarter, and $2.11 a share for all of 2003, according to tracking firm First Call.

And the further the team goes, the more the company stands to benefit. The Cubs start the National League championship series at home Tuesday against the Florida Marlins. If they win that series, they'll go on to play the American League champions -- either the New York Yankees, Boston Red Sox, or Oakland Athletics -- in the World Series.

Still, the effect on earnings could be slight -- as the Cubs business accounts for only a small portion of Tribune revenue.

"It probably could move earnings a penny, just the fact that they are in the playoffs," said Mike Kupinski, analyst at A.G. Edwards and Sons. "But that's fractional. We view it as a modest benefit that could help the company overcome softness in other areas."

In addition to the Cubs, Tribune Co. owns 12 daily newspapers, including the Chicago Tribune and Los Angeles Times, several television and radio stations, and has stakes in a number of Internet ventures.

Tribune Company
Chicago (Illinois)

The Cubs franchise falls into the company's radio and entertainment segment, which includes the radio and TV stations that broadcast the team's games. The unit accounted for $231 million of the company's revenue and $23 million in cash flow in 2002, when the company's revenue was $5.38 billion and cash flow was $552.8 million, according to First Call.

If Tribune can boost its incremental cash flow by $15 million-to-$20 million, its earnings could see a jump of 2 cents a share, according to Kupinski.

But the earnings contribution from the Cubs' post-season play may act only to offset some weaker areas, such as advertising on the WB network, of which the Tribune owns 22 percent, Kupinski added.

Officials of Tribune Co. weren't immediately available for comment.

Tribune's shares slipped 17 cents to $47.45 at midday Monday.  Top of page

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