Jolly old England is full of medieval castles, built by the wealthy and privileged in part as a symbol of status and station as well as protection from enemies. Today, these beauties are no longer practical. A very precious few can afford to maintain them so many are for sale with buyers in short supply.
There are definite parallels with the baseball operation in Memphis and its palace.
The Triple-A Memphis Redbirds, long in financial difficulty, have been for sale. Their “white knight”, the parent St. Louis Cardinals, signed a letter of intent last fall to purchase the team, but backed out once they had a full view of the financial mess. No other potential owners have publicly appeared.
AutoZone Park is one of the top facilities in minor league baseball, but it didn’t come cheaply. The park was built in 1998 with the backing of $72 million in bonds that require three yearly payments totaling $5.4 million to US Bank, trustee for the bond holders.
These debtors apparently became testy when the operators of the team, Blues City Baseball, were unable to meet their scheduled payments. Those owned money demanded an immediate change in management. The fact that it is midseason did not matter.
As of Thursday, Global Spectrum, a national facilities management firm, took over management of the Redbirds and AutoZone Park. Their goal is to get the “financial house in order,” Redbirds Foundation president Roy Pohlman told the Memphis Commercial-Appeal.
Some Redbirds employees have already been released with the rest stuck in an uncomfortable 30-day limbo period as the new operators make their assessment as to who stays and who goes.
Ever been there or know someone who has? It is not a good place to be.
Team president/general manager Dave Chase will remain until the end of the season, but Global Spectrum has already said they will be bringing in their own general manager. What does that say to other team employees about their job stability?
While “the baseball fan won’t see any difference,” according to Pohlman, anyone who has been anywhere near a takeover, downsizing, outsourcing or any of the other corporate-speak mumbo-jumbo for cutting jobs, knows how hollow that promise may turn out to be.
It gets worse.
With no apparent care about community reaction, the club’s Returning Baseball to the Inner City program (RBI), begun twelve years ago to foster baseball among inner-city youth by providing uniforms, equipment, lunches and places to play, was abruptly ended this past week.
As a result, the season-ending championship rounds of the summer baseball program serving 1,100 youths were canceled, reports FOX channel 13 in Memphis.
The people who put their money down to finance the ballpark certainly deserve to be paid, but these latest moves illustrate a complete disregard for the community of Memphis and the hard-working and committed employees of the team.
With all due respect to Global Spectrum, why do they think they can put the financial house in order now? Given the size of the debt, the suggestion the club was mismanaged seems off the mark.
Now studies are being commissioned on how to staff a minor league team and how to promote it. That work should have been done long ago and the management of the team and ownership should have established a viable operating plan. Perhaps it was and they just couldn’t get there from here.
It is really believed that rearranging these deck chairs will fix the fundamental problem? Memphis appears to own a castle they cannot afford.
Anyone with a thimbleful of public relations sense would not have pulled the rug out from under 1,100 kids, potential future Redbirds fans and children of current potential Redbirds fans, right before their championship games.
The complicated ownership and management situation in Memphis is no clearer than before. Now one operator, Blues City Baseball, is out and another, Global Spectrum, is in.
Big deal. What can change for the good?
The ones who will lose out are the youth of Memphis and the team’s employees, the serfs who serve at the beck and call of the noblemen, who are being forced to admit that they cannot afford the lofty lifestyle to which they committed.
MyFOXMemphis report entitled “Redbirds “RBI” Program Out of Business”:
Agree about the bad PR move but the fact the studies you mention apparently weren’t done earlier does signal the need for a change.
I believe Chase is the president not the GM.
We obviously don’t have all the facts as to the internal workings of the team, but I hold ownership accountable. They made the financial commitments that are not being met. They apparently hired both management groups (the second one by demand).
Chase correction made. He is president/general manager. Thanks.
I’m not surprised at the PR gaffe – these Harvard MBA’s who come in to run companies like baseball teams and casinos know nothing of the business of which they’re running – I bet this Chase guy has never been to a ballgame in his life; he’s been spending too much time playing polo and tennis.
Wait until they start releasing ballplayers. The Cards had better anticipate that by sending the guys they really want to keep down to Springfield, where at least they’ll be protected until we can get a new AAA team.
Don’t be surprised if Springfield is the new AAA team next year; we’ll have to find a new AA team, of course, but I suspect the Cards/Memphis relationship is all but over.
Jmo, among the places Dave Chase used to work is Baseball America, so he has been around the game for some time. Someone with access to a lot more background info than me believed at one point that he had the qualifications to be team president. More importantly, I am pretty sure he didn’t arrange the financing of AutoZone Park that has handcuffed the team.
I don’t understand the comment about releasing ballplayers. All minor league players are employed by the Major League organization, not the individual minor league affiliates.
I don’t think there is imminent danger in the Memphis club folding. In fact, last fall when the Cardinals announced their intent to purchase the Redbirds, they re-upped their Player Development Contract at the same time, too. What was surprising given the turmoil is that they did it for four years when only two was required. I was there when the announcement was made and asked Mo why. He basically said it was a vote of confidence and said all the right things about Memphis as a city, the history between them and club officials.
At any rate, there are three more seasons remaining on that contract after this one, so I certainly wouldn’t expect changes soon. That PDC would seem to be one of the positive assets the team has to offer to prospective buyers.
Brian, do you have a feel for whether there is any chance of the team re-emerging as a potential buyer? Perhaps after the “house-cleaning” has been completed?
Hmm….it seems like the team made its debt payments for about 10 years. The sagging economy must have taken them over the edge.
It probably is a good example, as if there were not enough others, of living beyond your means and too high on the hog. Memphis is a pretty good sized metropolitan area. It is a good place for a AAA franchise. The problem would be, building something glitzier than the market really supports. Which has happenned all over the US, not just in baseball. Overbuilding, whether McMansions, condos, retail, etc., adding up to the big dopey greedy bubble of overvalued assets that has finally popped (after decades in the inflating), with the ripples by no means finished. Maybe we will learn a lesson out of it, but I am not confident yet.
Its probably normal to replace management incumbents, once they crash and burn financially. This has probably been an over-stretched franchise for a while, a reason why they were hesitant to re-up with the Cards and wanted to sell out.
While its lousy public relations to wrap up the RBI season, which cant save much money, I guess it sends a signal that the new guys want to be pinch pennies. Angry bond-owners may like hearing about that.
Good stuff on the silly castles.
PHE, I love that gravatar!
I will ask around, but I really don’t think the signing of a new management contract is going to change anything substantive in terms of how attractive (or should I say, non-attractive) a purchase target the club may be.
Thanks Brian.
I know that the team has moved toward a “wholly-owned” philosophy with their minor league clubs (as I recall, Memphis was to be the third owned by the parent, after Palm Beach and Springfield?) – which made the original deal a logical move – thus, my curiosity if the business acumen of DeWitt and partners isn’t taking over and they figure they can buy low at a future date.
After all, with a four-year development agreement, they’ve bought themselves some time, so to speak.
If I remember correctly, all payments have been made, albeit the last one being late and paid from a reserve fund.
Scout.com subscribers can check out the article I posted on the homepage that provides significant background detail about the man who will reportedly be named the new Memphis GM.
A very good in-depth view from the Memphis Flyer: “Redbirds, Red Ink”.