By J.J. Cooper
February 4, 2004
With nine weeks until Opening Day, the possibility of the Pacific Coast League taking over the Portland Beavers franchise has become very real.
PCL leaders continue to look for a solution for the financially troubled franchise. After a potential buyer’s decision to back out of a deal to purchase the club, there aren’t any good options left.
Concerned about the team’s growing debts, the city of Portland notified Portland Family Entertainment in January of its intent to terminate PFE’s agreement to run PGE Park, planning to hand the operation of the stadium over to Big Game LLC. Since last season, the PCL worked to line up Big Game to purchase the Beavers.
Big Game, which owns the Florida State League’s Daytona Cubs, made a proposal under which principal owner Andrew Rayburn would personally guarantee future rent payments while working out a purchase deal suitable to the city, the PCL and lender TIAA-CREF, which has provided most of the money for the franchise and stadium project.
Big Game backed out of the proposed purchase last week. Without a buyer, the city of Portland is left to run PGE Park because it has already activated its 30-day notice to take over operation of the stadium. The PCL must either take over the club or find someone to run it for the 2004 season. Meanwhile, the team’s creditors are left wondering how they will be paid.
With that in mind, the PCL held a meeting Friday to discuss potential solutions, then recessed the meeting until Feb. 9 to give the league’s members time to investigate the options. The league could rescind the franchise and take over the team, try to find another ownership group or try to work out an agreement with the current ownership group. All three options face hurdles.
“There are no easy solutions to the scenario facing us,” PCL president Branch Rickey said. “The PCL board recessed in order to give further consideration to resolutions under development in an effort to avoid franchise rescission. There are many good people hard at work endeavoring to cure this very tough situation.”
If the league rescinds the franchise and takes over the club, there is some legal debate as to whether the league would be responsible for the club’s current debts, which include roughly $1.8 million in unpaid rent, $1.7 million in debt to local creditors and $350,000 in baseball debts, such as PCL dues. While some believe that the league would not be responsible for the debts, other legal opinions argue that by taking away the team owner’s prime asset, the franchise, the league is harming the creditors best hope of being repaid, and therefore assumes responsibility for the debts.
In addition to that sticky legal question, the league would also have to pay for the continued operation of the club, which would probably require a contribution by the other 15 PCL clubs, similar to how 29 major league baseball clubs fund the Expos.
If the league can find new ownership willing to purchase the club, it would be difficult to get it approved in time for Opening Day. The PCL talked to Big Game for months before Rayburn’s group agreed to purchase the club. Such a purchase also has to be approved by Minor League Baseball, Major League Baseball, TIAA-CREF and the city of Portland.
Working out an agreement with some new form of PFE (the ownership group that currently owns the club) is also an option, but any such group would have to find a way to bring new money in. A proposal by a group led by then-general manager Mark Schuster was turned down in favor of Big Game’s proposal, and since then the PCL has appointed Jack Cain as acting GM and Tom Lasley as the team’s interim president. Cain and Lasley are running the team while retaining much of the Beavers existing staff. “We needed someone to keep the forward momentum of the offseason going,” PCL director of business operations George King said. “The people we selected are people who are respected in the industry and in Portland.”
Cain was already working as a consultant for the Beavers. He was the owner of the successful Portland Rockies Northwest League club before selling the franchise to PFE in 2001. The Rockies were moved to Pasco, Wash., and renamed the Tri-City Dust Devils, while PFE also bought the old Albuquerque Dukes franchise and moved it to Portland to become the Beavers.
While Cain is now running the club day-to-day, there is little he or the staff can do until after the Feb. 9 meeting. So while Cain has had preliminary conversations to line up a radio contract, most major decisions have to be put off.
“We’re in a wait and see situation until next Monday,” he said. “We’ll try to keep things together. It’s a little bit frustrating because you’d like to get something done.
“The baseball business isn’t an easy business. When you get a slow start, it makes it even harder. But the staff that we do have are dedicated people. We’ll get it done.”