Cardinals Close In On Memphis Purchase

Memphis is Cardinals Country.

AutoZone Park

The Cardinals’ purchase of the Memphis Redbirds could make AutoZone Park the place to be again.

That has been the case since the Pacific Coast League franchise debuted in 2000 and filled AutoZone Park with 859,851 fans, many donning Cardinals’ red. And it remains so, even after the shine has come off the Redbirds’ stadium, long considered one of the best in baseball but also an anchor on the team’s financial stability.

Built for $80.5 million—still a minor league record—AutoZone Park’s attendance has been cut nearly in half since that debut season (bottoming out at 462,041 in 2010) and the team has struggled to meet its annual $5.4 million bond payment—yet another minor league high—on the ballpark, forcing it into default in May 2009.

Now the Cardinals are looking to make the marriage with Memphis official.

For the second time in five years, St. Louis has agreed to buy the club from the Memphis Redbirds Baseball Foundation, the not-for-profit charitable organization that owns the team.

And this time, the proposal has promise.

The Cardinals have offered to buy their Triple-A affiliate for an undisclosed sum. As part of the deal, the city of Memphis would purchase AutoZone Park, which would be operated by the Cardinals. The deal was due to be presented to the Memphis city council on Dec. 3.

“You think about the relationship we’ve had here in Memphis over the last decade,” Cardinals general manager John Mozeliak told a gathering of Memphis business leaders in late November. “Now knowing that we can secure that for many more years is vitally important.

“When you think about having your players play in a ballpark like this, making that transition to St. Louis becomes much more seamless.”

So does a lower price tag than when the Cardinals first broached the subject with the team’s original bondholders in 2008. St. Louis backed out of that deal in January 2009, thanks to a combination of a sinking economy and the bondholders’ refusal to accept a discount on the $72 million in bonds issued for the construction of AutoZone Park.

Six months later Memphis went into default after missing a $1.625 million payment, leading to the restructuring of its front office and the dismissal of longtime general manager Dave Chase and a new operating agreement with Philadelphia-based Comcast Spectator in July 2009.

Better Days Ahead

The team gained greater flexibility in meeting its obligations when its debt was consolidated after a New York private equity firm purchased it for a discounted $24 million in 2010. That company, Fundamental Advisors, reached an agreement with the Cardinals despite “pieces of the puzzle that remain undone,” Fundamental Advisors CEO Laurence Gottlieb told the St. Louis Post-Dispatch.

The combination of the purchases would relieve the Memphis franchise from the financial drag that has limited the team’s operations over the past 10 years, when its attendance began a steady decline. The sale would also give the Cardinals a third full-season affiliate under its ownership umbrella, joining Double-A Springfield (Texas) and high Class A Palm Beach (Florida State).

“The Redbirds represent the best of minor league baseball,” Cardinals chairman Bill DeWitt Jr. said in a statement. “This opens the door to countless new opportunities for our combined organization, and we are thrilled about the prospects for baseball fans in both of our great cities.”

Although a price tag for the purchases had not been revealed, one minor league official who requested anonymity said the combined figure would blow the top off of any previous minor league sales.

The restructuring of debt has also allowed the franchise to focus on ballpark improvement projects, like adding a new scoreboard prior to the 2011 season. That year marked the team’s first attendance gains in six years, when average attendance climbed 8 percent to 7,050. It has grown another 3 percent over the past two seasons.

“We have some new bondholders that . . .

allow us to do our jobs and not be buried underneath trying to make those bond payments,” Memphis general manager Ben Weiss told BA in May 2012. “It helps having a partner with the bond group. I can’t speak to the past, but I’m guessing that it wasn’t so much of a partnership five years ago. The last three years, we’ve been allowed to do our jobs, which at the end of the day is sell tickets.”

Minors | #Biz Beat #Memphis Cardinals #St. Louis Cardinals

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