AutoZone Park: A Solution after a Decade of Debt

Posted on January 23, 2014

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By Casey Black

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On January 7, City Council voted to acquire AutoZone Park for $24 million, keeping the Redbirds and, subsequently, the St. Louis Cardinals in Memphis for at least 17 more years. The decision arrived after a petition organized by the Redbirds front office and a spirited “Rally for the Park” hours before the final 8-4 vote.

Let’s go back to the start.

The Memphis Redbirds Baseball Foundation was organized by Dean and Kristi Jernigan as a non-profit. The objective was to return all profit to the RBI Foundation for the purpose of returning baseball to inner-city Memphis. AutoZone Park was consistently named the most beautiful minor league baseball park in America. Baseball continued to be played in the park 72 days a year. Things looked glamorous from the outside.

Behind the scenes, the numbers were not adding up.

The non-profit model was untested and proved to be a failure.

Jernigan’s management group, Blues City Baseball, struggled to make the semi-annual payments on the $72 million bonds and stepped down in 2009 to be replaced by Global Spectrum, a Comcast Corporation. In 2010, the Redbirds Foundation defaulted on its debt, and a Manhattan-based private equity firm, Fundamental Advisors bought the debt at discount for $24 million.

The bondholders looked to turn around and sell the team with a higher price tag. First, they needed to find a group that could buy AutoZone Park, the most expensive minor league ballpark in America.

Redbirds Foundation Treasurer, John Pontius, said he and Redbirds Foundation President, Ray Puhlman, have been the “shepherds for about six years.”

“Some time between late 2007 and early 2008 the Redbirds, Dean Jernigan, and I approached the Cardinals about the possibility of buying the team,” said John Pontius. “The Redbirds’ expectation of value wasn’t in line with the Cardinals’ at the time, so the transaction didn’t proceed.”

The Foundation entertained a dozen other potential buyers, but AutoZone Park remained a looming issue, as there were not many buyers that could afford both the franchise and the park. For AutoZone Park, the City was the only feasible buyer.

“So, we came up with this transaction with the Cardinals and approached the mayor,” said Pontius.

This proposed deal was the only way to satisfy all parties. The bondholders could avoid losing their investment, the Cardinals could absorb their forth minor-league team, and the City could benefit from the prosperous downtown commerce Redbirds games supply. So, when City Council seemed hesitant about such a large price tag, Memphians had to envision a city without Redbirds baseball.

“People were concerned. Whenever you’re using public money its good to have a healthy debate,” said Pontius.

Redbirds General Manager Ben Weiss knows the impact an empty AutoZone Park would have had.

“Our downtown partners in particular truly value what we bring to the downtown community 72 nights a year,” said Weiss. “We bring heads and beds. They need us, want us, and without us there would be a summertime void absolutely.”

With the recent vote and the upcoming Cardinals’ purchase of the Redbirds, it looks like Memphis won’t need to worry about that summertime void.

After more than six years of work, John Pontius finally saw the successful sale of the team.

“We were working for the good of the public as a not-for-profit,” said Pontius.

“We think the transaction was best for all parties,” continued Pontius. “The bondholders sold the team. The City bought at a fair price. The community wins because that stadium operated by the Cardinals will put on the highest quality product at Third and Union.”

“Everybody wins.”

Casey Black is a Memphis native who now is a junior at the University of Tennessee in Knoxville. Read her coverage of the Grizzlies atwww.bearsofbeale.wordpress.com.

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Posted in: Redbirds, Sports