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Putting the Fun back into things

by Will Lingo
January 13, 2005

The company is Fun Entertainment, and after talking to Alan Stein you feel like it's an apt name.

Of course, it's easy to have fun when you've just sold a baseball team for $15 million.

Stein was the president of the Lexington Legends, who joined the South Atlantic League in 2001 and have been a success from day one. He was the team's second-largest investor, behind principal owner Brad Redmon. They were purring along in Kentucky when Bill Shea came calling.

Shea is the chairman and CEO of Buckeye Partners, a company based in Pennsylvania that, among other things, operates pipelines that carry oil and natural gas. He was interested in baseball, and his advisers suggested the minor leagues.

Shea came to Lexington and made an offer the Legends couldn't refuse. "The original group accomplished the goal of bringing baseball to Lexington," Stein said. "We had great success, and we were willing to sell when the price got right."

Sources said the right price was more than $15 million, as well as about $10 million for Applebee's Park, which was built with private money and owned by the team. If those numbers are correct, it's one of the biggest deals in the history of minor league baseball, regardless of classification.

And it's only the beginning for Fun Entertainment, the name of the baseball company that Shea created. He named Stein as the company's president and CEO, and the company has already bought the former Battle Creek Yankees (renaming them the Southwest Michigan Devil Rays) with plans to own as many as eight teams by the 2007 season.

"We think we'll have teams that will bring in $40 million to $50 million a year and draw two to three million fans," Stein said. "Our goal is literally to do major league attendance and revenue numbers in the aggregate."

Minor League Teams, Major Profits

Fun Entertainment will try to build a major league-sized operation with minor league teams because Stein and Shea believe minor league baseball can be more profitable than a major league team. Owning several teams will create efficiencies that will make all the franchises more successful, Stein said, but more importantly minor league teams don't have to pay players' salaries.

"We avoid the number one expense the big leagues have," he said, pointing out that the tax on ticket sales minor league teams pay to the big leagues has increased in the last decade but remains manageable and predictable. "It's higher than we think it should be, but we know what it costs."

It makes perfect sense. The path to this point wasn't exactly smooth, however.

Once Shea decided he wanted to get into minor league baseball, the first person he hooked up with was David Hersh, a longtime minor league operator who seems to attract controversy wherever he goes. Shea and Hersh came to Lexington first and saw it as the linchpin for the company's bigger plans.

With Stein's help, the Lexington sale got preliminary approval from the Sally League. Fun Entertainment also moved forward with plans to buy Tacoma (Pacific Coast), Harrisburg (Eastern) and Battle Creek, but when the deals went to the respective leagues for approval, each was denied.

No one came out and said so, but Hersh's involvement with the group was believed to be the impediment to approval. Hersh didn't have any of his own money invested in the deals, so Fun Entertainment simply took him out of the picture.

After that, the group finally closed the Lexington purchase in January, then went back to Battle Creek and moved forward with that deal. It's not clear if Shea and Stein plan to revisit the Harrisburg and Tacoma sales, but they'll definitely pursue other deals. "We get offers every day," Stein said.

Planning For Success

As for Stein, he couldn't be happier with the way things have developed. He said he wanted the original Legends ownership to pursue other franchises, "but they really didn't have the appetite for it."

Fun Entertainment clearly does have the appetite, and as chief executive of the new enterprise Stein will get to oversee it all. He will continue to work in Lexington but has moved out of "the big office" as the Legends' boss to a new office where he will try to put Shea's money to work.

"(Shea) has told us his job is to bring the resources to us so we can succeed," Stein said. "My job is to make sure we do. I'm just thrilled to be part of it."

As an example of the company's approach, the size of the staff in Lexington has increased from 12 to 27 employees--though some of the new employees will have corporate responsibilities beyond just working for the Legends. Perhaps more notably, the Southwest Michigan club will have 14 people in its front office this year, up from a measly three last year as the previous owners expected to move the club.

Those plans fell through, Fun Entertainment bought the team, and if Battle Creek builds a new ballpark the team will stay around. The outlook for that is better now than at any time in recent years.

Stein plans to spend a lot of time in Battle Creek making sure things go well there, and plenty of time looking for new markets or new deals for the new company. "It's all a puzzle," he said. "Each deal that presents itself we'll look at on its own merit."

Fun Entertainment won't reinvent the concept of multiple franchise ownership, done successfully by several organizations include The Goldklang Group, but it does plan to be as successful as those companies.

"We're not building a better mousetrap, but we think the mousetrap we're building is going to work," Stein said.


You can contact Will Lingo by sending e-mail to willlingo@baseballamerica.com.

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