A deal to sell the Chicago Cubs baseball team was originally supposed to be clinched last year. That’s slowly slipped and now some fear it could even take till after the 2008 baseball season before its owner Tribune finds a new owner for the loveable losers.

To be sure, there’s a lot of activity going on behind the scenes, with talks to sell Wrigley Field to Illinois state moving forward. But the complexities involved mean it’ll likely be months before a deal for all the assets — the field, the team and a stake in a sports TV network - is sorted out. 
    
The flip side is that for real estate tycoon Sam Zell, who led the $8.2 billion buyout of Tribune, it doesn’t matter much. Since Tribune is now a privately owned company, it doesn’t have the pressures of quarterly deadlines and vocal shareholders.
    
However, the pressure is at an all-time high for the Cubs team, which is trying to win its first World Series title in 100 years.  
    

Sirius Satellite Radio Inc Chief Executive Mel Karmazin said on Wednesday he hoped U.S. regulators would rule by the end of March on the satellite radio company’s proposed merger with rival XM Satellite Radio Inc.

Speaking at the Bear Stearns 21st Annual Media Conference, Karmazin said he “took heart” about recent comments by U.S. Federal Communication Commission Chairman Kevin Martin, who indicated that his agency aimed to rule on the deal by the end of March.

Shares of the satellite radio companies immediately jumped on hopes the deal could actually close soon. The stocks had been under pressure amid investors’ fears the deal could get blocked by regulators.

Shares of Sirius, whose programming includes “shock jock” Howard Stern and NASCAR auto racing, hit a high of $2.95 and traded at $2.86, up 11 cents, or 4 percent. Shares of XM, whose programming features Oprah Winfrey and Major League Baseball, hit a high of $12 and traded at $11.58, up 49 cents, or 4.4 percent in afternoon trading.

Karmazin’s predictions on timing, however, may prove false since the companies have been wrong before. The satellite radio companies previously predicted that regulators would sign off on their their proposed $4.2 billion merger by the end of 2007.

XM Satellite Radio Holdings Inc Chairman Gary Parsons was less specific than Karmazin when he spoke at the Bear Stearns conference. He merely said he was confident the regulatory review was moving forward “in a timely manner.”

The deal, which was announced on Feb. 20, 2007, must meet certain standards, such as being in the public interest and not harming competition, as some critics have claimed.

“Clearly if there was a big problem with the merger, it wouldn’t take the (regulators) this long to figure it out. Either you believe we compete with a whole bunch of audio choices or you think there’s a distinct market called satellite radio,” Karmazin said.

Phillip Zane, an antitrust lawyer with Baker Donelson PC, said “the market definition is crucial as it is in any antitrust case. If the market is only satellite radio, then the parties have a problem because they’re the only satellite radio.”

The Department of Justice appeared to have all of the information it needed on the deal, but the companies were having active discussions with the FCC, Karmazin said. Talks with the FCC had recently accelerated, he said.

Unless the DOJ sued to stop the proposed merger, the deal could close immediately after the FCC ruled, Karmazin said.

Still, the DOJ would be wary about bringing a case to block the deal unless it was sure it would prevail, Zane said.

“The market’s changed a lot just since the merger’s been announced,” Zane said.

(Additional reporting by Diane Bartz in Washington)
(PHOTO: Reuters)

It’s hard to think of venture capitalists giving up their peaceful deal-gathering and startup-hunting activities to participate in the kind of rabble-rousing that is the hallmark of activist investors.

But two venture capitalists are playing prominent roles in two ongoing battles — one is a full-on proxy fight and the other is threatening to turn into one.

In January, a consortium led by hedge fund JANA Partners locked horns with CNET Networks to oust the online media company’s board and nominate its own candidates. The consortium’s nominees include Santo Politi, founder of the Boston-based VC firm Spark Capital. Politi is supposed to have been instrumental in spearheading the dissidents’ approach, according to Thomson Financial’s editor-at-large and PE Week Wire creator Dan Primack. A recent meeting between the two sides aimed at avoiding a proxy battle didn’t get anywhere, a source told Reuters.

Meanwhile, hedge fund Harbinger Capital Partners, which has amassed an impressive stake in the New York Times Co. in recent weeks, also began fighting in January, though the formal proxy was only filed last month. It too has a slate of nominees for election to the Times’ board, among them, Allen Morgan, a managing director at the storied Silicon Valley venture firm Mayfield Fund.

Morgan, a lawyer by training, has remained mostly quiet, except to emphasize his passive play in the activist game. “Because of my longstanding interest in, and experience with, Internet and new media companies, I was approached by a group of stockholders of the New York Times Company to see if I would agree to become a nominee… and I’ve agreed,” Morgan wrote on his blog, www.allensblog.typepad.com,on Jan. 29.

Photo credit: Reuters file

Is video game maker Take-Two a “diamond” or a “depreciating asset” for Electronic Arts? When EA publicly announced its $2 billion takeover bid for Take-Two a few weeks ago, EA’s chief financial officer Warren Jenson told reporters Take-Two was a “depreciating asset” that had to be picked up quickly so that the two companies can be integrated ahead of the holiday season. “The longer we wait, the less value it has,” he told the New York Times.

Cut to the more recent Morgan Stanley tech conference, where Jenson sweetened his talk a little, calling Take-Two’s assets “diamonds,” according to GamesIndustry.biz, a trade publication.

“We consider the people at Take-Two, and the studios and IPs, as diamonds,” he said. EA would take these Take-Two diamonds and show them off to the “global marketplace,” Jenson said.

Take-Two has been mum ever since it spurned the offer, saying it was ill-timed and undervalued the company. Although EA’s sweet-talking might mollify Take-Two shareholders a little, it’s cold, hard cash they’re waiting for in the form of a higher offer.  Of course, it all comes down to how much EA is willing to shell out for these diamonds.

Photo credit: Reuters file

Sprint Nextel’s earnings may have been weak, but its conviction to keep its long-distance network remains strong.

Sprint’s former Chief Executive Gary Forsee had resisted selling the long-distance business, despite continued calls from analysts for a sale of the unit after he spun off the company’s local telephone business.

On Thursday, Forsee’s replacement Dan Hesse sounded even more attached to the business. While he would not rule out a sale of the unit, he said there were many reasons why Sprint should hold on to it.

“People forget when you talk about a wireless network, it’s primarily wireline. The backbone is a core part of the network.” Hesse said, adding that the wireline network was important to helping Sprint support high-speed data services.

“If somebody came with an incredible number of zeros behind a check or what have you, we’re always open to it, but it would be, number one — a huge distraction — and, number two — for the variety of reasons I’ve described, it’s a tremendous asset for this company,” he said.

Hesse also noted that his biggest rivals Verizon and AT&T had both bought long-distance networks.

AT&T has a “a backbone network because they know it’s crucial to their wireless business.” he said. “Verizon bought a backbone network because it’s crucial to their wireless business and it’s also crucial to competing in the enterprise segment which is the most valuable segment in the market.”

Although some investors have previously said that Sprint’s weak financial position, management changes and customer losses might make it vulnerable to a buyout, Morgan Stanley analyst Simon Flannery said in a research report “we do not believe that Sprint is likely to be acquired.”

Sprint posted a $29.45 billion quarterly loss due to a huge goodwill write-off, forecast deepening customer losses and ended dividend payments for the foreseeable future. Fitch Ratings cut its rating on the No. 3 U.S. wireless telephone company to junk status. Shares of Sprint fell to a five-year low and closed at $8.09, down 86 cents, or 9.6 percent.

(PHOTO: Dan Hesse, from Sprint website)
(Reporting by Sinead Carew and Jesssica Hall)

Tech stocks are plummeting, bankers are warning venture-backed companies away from IPOs, and many are convinced that we’re heading into a recession. But start-up companies, the little babies of Silicon Valley, have no cause for fear, because the tech grand-daddies — Microsoft, Cisco, IBM — continue to be bullish about dealmaking.

Their capacity for huge acquisitions, like Microsoft’s bear-hug offer for Yahoo, may be limited, but these cash-rich tech titans love to buy lots of small companies that take them to new markets or make sense for their corporate strategies. At a Redwood City venture capital conference today, executives from across the tech spectrum, including Microsoft, Cisco, News Corp’s Fox Interactive Media (which owns MySpace) and McAfee, said they remain gung-ho on acquiring start-up companies. The worsening economy hasn’t changed their attitude, it seems — two months ago, at another VC conference, they said the same thing.

Cisco dealmaker Rob Salvagno said the company has made between 10 and 15 acquisitions every year for the past few years, and he doesn’t see that changing this year. They’re going to keep up their hunt for the coolest start-ups in international markets as well, he told the crowd.

Fox Interactive Media’s Jack Kennedy said they were more opportunistic about buying companies, but are energetically prowling for “game-changers”.

And if you thought Microsoft’s eyes were trained solely on Yahoo, think again. Dan’l Lewin, Microsoft’s head of emerging business development, said the company will do “a lot more of what we’ve been doing,” which is, picking up about 20 companies a year.

Separately, Ebay’s M&A chief Lorraine McDonough in a chat with Reuters, said the Web auction giant has the ”financial flexibility” – meaning about $2.4 billion in free cash flow — to pursue attractive opportunities this year.  Ebay, best known for its buyouts of PayPal and Skype, will continue making targeted acquisitions, she has said before. For start-ups, obviously things are still green in the Valley.

Bill Gates may have splashed cash on Facebook, but that doesn’t mean he has to be on it. U.K.’s tabloid newspaper, The Sun, reported last week that the Microsoft billionaire had to delete his Facebook account after being hassled by thousands of fans.

The story also said Gates used to spend up to 30 minutes a day catching up with his buddies via Facebook, but he signed off after he started getting more than 8,000 friend requests a day and “spotted weird fan sites.”

But can Gates have really deleted his Facebook account? The New York Times reported earlier this week that being a member might mean you’ve signed a “lifetime contract” with Facebook. Apparently, Facebook servers keep copies of user information even after they have deactivated accounts, although the network responded to the story, saying it’s made it easier for users to delete their accounts permanently.

Facebook’s got ya, Gates.

Photo: Facebook founder Mark Zuckerberg, Reuters file

Every buyout rumor in the tech world seems to lead back to Google these days.  In the past week, blogs have linked at least three companies to Google. The latest is that Bebo, the social networking site with a huge fan following in the U.K., has sold itself for $1 billion and Google is the likely buyer. Now, as TechCrunch — which reported this on sources – says, Bebo would make perfect sense for Google because it fits nicely with Orkut, the Google-owned network that’s popular in Brazil and India.

Why it would make sense for Google to buy Plaxo is less clear, but that hasn’t stopped the rumor-mongering. Talk that Plaxo — unfortunately, still best remembered for relentlessly spamming users — put itself up for sale first emerged a few weeks ago, with a price tag ranging from $100 million to $200 million. The New York Times even reported Plaxo had hired Revolution Partners to handle the sale, but bankers at the firm were mum when we tried to reach them.

Both Plaxo and Bebo have cozied up to Google by joining its OpenSocial initiative, which is basically the tech giant’s response to the successful Facebook platform.

Not only that, but market talk of Google being interested in snapping up CNET Networks, currently battling a  bunch of activist shareholders, also pushed up CNET’s share price last week.

Google has declined to comment on these rumors, but at least we know that its enthusiasm in an advertising tie-up with Yahoo may be waning. So who is Google interested in? Potentially any number of companies going by the list of deals it has struck, but maybe it’s waiting for the Micro-Hoo outcome to announce its next step.

Photo: Reuters file

“This is a strategic offer by a cash rich company going through menopause and looking to blossom in its next phase of life.”
– Herb Greenberg, MarketWatch

“Here’s the ironic part: The 2 most visible losers in the search area may be getting together — and somehow, that’s worth 150 point swing to the Dow futures.”
– Barry Ritholtz, The Big Picture

“For Yahoo shareholders, the message is clear: Take the money and run. The message is also clear for Microsoft shareholders: The onus remains on Redmond to sell, sell, sell its case. This has the feel of AOL/Time Warner 2.0 until proven otherwise.”
– Dennis Berman, Deal Journal

“Given the plunge in Yahoo stock and the prospect of a damaging recession this year, if now isn’t the right time, it’s hard to imagine what is.”
– Colin Barr, Fortune Daily Briefing

“We all knew this was coming. Yahoo! was cheap. Too cheap. And a mess. Rats were leaving the sinking ship en masse. It was not sustainable. Something had to happen.”
– Fred Wilson,A VC

“With it’s I-shall-have-it bid for the troubled Internet giant, Microsoft has made a bold, slightly insane lunge to ensure that it is not sidelined in war with Google to control the Internet. You have to guess the phones were ringing at Google HQ this morning, as other companies-from News Corp. to eBay to Comcast are trying to figure out how to make a competing bid to the $31-per-share offer Microsoft lobbed today. The obvious scenario: That Google would guarantee billions of dollars of revenues from search monetization for another company, so it could enter the race to grab one of the most trafficked sites on the Web.”
– Kara Swisher, Boomtown

“It’s a shotgun wedding, and Google’s holding the shotgun.”
– Bryan Stolle, Partner, Mohr Davidow Ventures

“In general, cross-organizational cooperation has not been a strength of Microsoft, but with barbarians like Google at the gate, it might be time to break down some silos.”
– Forrester’s Rob Koplowitz and Kyle McNabb

How is Steve Ballmer like a White House contender? In the heat of the presidential primary season, it seems Microsoft has taken a few lessons from Clinton, Obama, McCain and Romney: Draw a contrast with your opponent and explain how you will prevail, but don’t mention them by name if you can help it.

You’ll never find the word “Google” in Microsoft’s press release or its letter to the Yahoo board, but the search engine and online advertising giant is implicitly ubiquitous:

• “Today this market is increasingly dominated by one player. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.”
• “The industry will be well served by having more than one strong player.” [Admitting there is only one now? Ouch.]
• “Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers.”

Not that naming or not naming Google will make much difference. In a highly unscientific poll based on a leading news search engine (ok, it was Google News), roughly 80 percent of coverage about the Microsoft-Yahoo offer mentioned Google in the first sentence.

Yahoo didn’t even have the Microsoft bid on its front page until about 10:00 am EST, some three hours after the news broke. Even then it was buried about 11 headlines below the story that Yahoo considered the most important of the day: “How scratching brings relief.”

UPDATE: Ballmer’s internal email to Microsoft employees, obtained by TechCrunch, doesn’t mention Google either, but states: “Together, we’ll create a company that is in a much better position to compete against an increasingly dominant player in this market”