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VOL. 125 | NO. 109 | Monday, June 7, 2010

Rally Time

How the Redbirds are fighting to bounce back from financial left field

By Eric Smith

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As soon as he heard the Memphis Redbirds were coming to town in 1998, Buddy Young bought season tickets and has renewed them every year since.

From the first two seasons at the old Tim McCarver Stadium to the debut of AutoZone Park in 2000, from Albert Pujols’ walkoff home run that won the Pacific Coast League title the first season at AutoZone to last year’s championship run, Young has been a die-hard Redbirds supporter.

A self-described “baseball fan, St. Louis Cardinals fan and Memphis fan,” Young’s attendance has fallen off a bit during the past 13 seasons, but he said that’s only because of a busy work schedule and not waning interest.

Young, who splits his season tickets with a friend, still makes it to 20-25 games each season, giving away the rest or donating them back to the team’s owner, the nonprofit Memphis Redbirds Baseball Foundation.

He called baseball games at AutoZone Park the best entertainment dollar he’s ever spent in Memphis, but he also understands why attendance has dropped at AutoZone Park since the team started playing there 10 summers ago.

“It sold itself so easily in the beginning, and they didn’t have to do anything,” said Young, a lawyer in town. “I don’t think the organization has done a good job of getting people in the ballpark. I haven’t seen a whole lot done to get the word out.”

Getting the word out is now mission critical for the Redbirds, whose financial woes forced the team’s nonprofit owner to replace its management company and put the franchise on the market.

With attendance declining over the years – from a high mark of 887,976 tickets sold in 2001 to last year’s 474,674 – there’s also a need to improve the fanbase as well as the financials.

To borrow some baseball parlance: The count is full with two out in the bottom of the ninth. Can the pinch hitter deliver a game-winning hit?

Home base

The Redbirds foundation last August fired Blues City Baseball and hired the national management firm Global Spectrum to run the baseball team, the Triple-A affiliate of the St. Louis Cardinals.

“We’re competing for that disposable dollar, and it’s a real competitive atmosphere.”

– Ben Weiss, General manager

Global Spectrum, a division of the Philadelphia-based sports and entertainment firm Comcast-Spectacor, is 10 months into its management contract and two months into its first full season, which includes 72 home games.

The company is charged with righting a ship that has veered off course over the past few years despite such a promising start more than a decade ago.

Specifically, the Redbirds ran into an all too common ignominy last year when they defaulted on a $1.63 million bond payment to U.S. Bank, trustee of the $72 million in tax-exempt bonds issued in 1998 for the construction of AutoZone Park.

Foundation treasurer John Pontius said the organization is doing what it can to address its dire economic straits, highlighted by a forbearance agreement with the bondholders. That allows the team to “continue to operate despite the fact that we were in violation of our loan covenants,” he said.

“Since that time we have not been paying them the full amounts due under the loan,” Pontius added. “But it’s been a very good relationship during that period. We’ve changed management and we’ve been allowed to service our ongoing operation obligations in a timely manner and even apply some cash toward old outstanding obligations.”

Pontius said “there’s no chance that the operations of a Triple-A baseball team in Memphis can service the amount of debt that we have outstanding,” but the organization is on track to refinance the debt or “sell the franchise and reduce our outstanding obligations, mostly through forgiveness of a portion by the bondholders,” he said.

While the foundation doesn’t have a specific timetable for either avenue, the club’s most likely option is to sell the Redbirds and AutoZone Park. Pontius said a sale would be contingent on the new owner keeping the team in town.

“The good news is that the franchise would be sold to someone who either owned the stadium or entered into a lease with whoever owned the stadium at that point in time,” Pontius said. “Baseball would continue to be played in Memphis and it should be relatively transparent to the fans.”

Eye on the ball

Transparency is the goal of Global Spectrum, whose 53 front office employees are doing what they can to make the franchise profitable – and popular – once again.

Redbirds general manager Ben Weiss and marketing director Adam Goldberg worked for other Global Spectrum sports franchises around the country, and while their short-term goal was to “stabilize the situation financially,” Weiss said, the long-term goal is pretty simple.

“Sell more tickets and sell more sponsorships and ultimately give the fans the best fan experience possible,” he said.

That means everything from distributing more pocket schedules throughout the region to increasing on-field promotions between innings, from boosting concessions to selling more Redbirds merchandise.

The overall goal is to rebuild brand awareness for a franchise whose shine lost some luster over the years.

After all, the ballpark is far away from the city’s population core and the city landed another professional sports team, the Memphis Grizzlies, since the Redbirds arrived, providing more competition for sports dollars.

Charles Vail hawks gameday wares to the crowd.  Photo by Lance Murphey

But, perhaps most notably, the economy tanked in the past three years, and demand for any kind of extracurricular activity declined.

“We’re competing for that disposable dollar, and it’s a real competitive atmosphere,” Weiss said. “How do we separate ourselves? We make sure that we let people know we’re the complete entertainment experience.”

One of the team’s advantages is AutoZone Park, a big-league quality stadium about one-third the size of facilities in the majors.

Baseball America ranked the 14,320-seat, 48-suite AutoZone Park as the top minor-league ballpark in the country, with one contributor to the list saying that “second place is all any other park can hope to assert.”

“We’ve got the best minor league baseball stadium in the country, and it’s a gem,” Weiss said.

“The way baseball is going to stay in Memphis is by people coming out and supporting us.”

Goldberg, the team’s marketing director, said Global Spectrum is selling the fan experience to Memphis – no matter if the team wins or loses – in hopes of getting more people in the park.

That means enhancing the “family entertainment value,” Goldberg said, from the moment fans walk through the concourse to the moment they leave.

“We felt like that will help us close that revenue gap is getting the families that might come only twice a year, get them in early to see what has changed as far as game presentation and entertainment, then all of a sudden they come five or six times a year,” Goldberg said. “We feel like that will happen.”

Shared turf

Redbirds foundation president Ray Pohlman feels like it will, too. He said Global Spectrum is “working very hard to make sure we maximize our season-ticket sales.” The company launched new 10-, 20- and 30-game fan packs that give buyers more flexibility and don’t require them to buy all 72 home games.

Also, the company added more “fireworks” games – a summer favorite at the park – and added a host of promotional events such as Moe’s Mondays, where fans who show a receipt from Moe’s Southwest Grill to the box office will receive $1 off Monday’s gameday ticket prices.

“AutoZone Park is still a great place to spend a summer afternoon or a summer evening,” said Pohlman, a vice president for AutoZone Inc. “Global Spectrum has brought a fresh perspective to the marketplace, we think. They’re doing some things that are heretofore not tried at the ballpark, including using the outfield walls as sponsorship revenue for signage.”

One of the new corporate arrivals at AutoZone Park this season is TruGreen, title sponsor of the “TruGreen Bluff” in left field. The grassy area where fans can lounge on blankets while watching the game is now treated by TruGreen products and bears TruGreen marketing throughout.

“We’ve changed management and we’ve been allowed to service our ongoing operation obligations in a timely manner and even apply some cash toward old outstanding obligations.”

– John Pontius, Memphis Redbirds Baseball Foundation treasurer

Stephen Donly, president and chief operating officer for TruGreen, a division of ServiceMaster (itself a longtime Redbirds sponsor), called the company’s financial commitment a “sizable investment.”

Although TruGreen doesn’t receive game tickets for its sponsorship, it partners with ServiceMaster for ticket giveaways to employees, including passes for the parent company’s club suite.

Donly said sponsoring the Redbirds – who give back to the community through programs like RBI (Reviving Baseball in the Inner Cities) – is a worthy use of corporate funds because the money supports a “family-oriented Memphis landmark.”

“The Redbirds, and particularly the bluff area, is all about enjoying open green spaces with family and friends, which fits perfectly with the values of our company,” Donly said. “The Redbirds are a Memphis institution – a Downtown staple – and a great place for Memphians of all ages to enjoy an age-old American pastime.”

For the fans

How well the new management approach translates to an improved bottom line remains to be seen, but so far the Redbirds’ new game plan appears to be on track, said Richard Irwin, director of the Bureau of Sport and Leisure Commerce within the University of Memphis’ Health and Sport Sciences department.

One of his initiatives, the Sport Sales Training Program, formerly teamed up with the Redbirds to help them with part of their ticket sales campaign. Although Irwin’s program is now partnering with the Grizzlies, he is familiar with the Redbirds’ problems during the past few years and how they can work out of this current slump.

He said the Redbirds need to continue adapting to the market by assessing revenue-producing inventory and looking for new ones, most notably sponsorships. And, as Irwin can tell, from ramped-up sales efforts to additional marketing and sponsorships, the Redbirds finding their groove once again.

“I think they’re doing all the right things,” he said. “They’re doing what needs to be done to solve their financial challenges.”

But plenty of challenges remain for the Redbirds as they work to rejuvenate the fanbase and restore their financial balance.

“They’re not new,” Irwin said. “They were new and sexy back then, and now it’s a matter of keeping it fresh. It’s a tough marketplace.”

For Pohlman, overcoming a tough marketplace means emphasizing the RBI program and AutoZone Park, a stadium that might have been too much home for the franchise when it was built – like what’s happened in the residential real estate sector lately – but remains alluring.

“I think of the things we have going for us is AutoZone Park, which is a community treasure,” he said. “I think most people in this community would realize that we did something right by putting that ballpark at Third and Union. This is now the 11th season, and it’s still a draw.”

But how, exactly, can Global Spectrum and the rest of the Redbirds organization increase that draw? It comes down to the simplest of tasks: Inviting fans back to the park.

“The business plan is all about putting butts in the seats,” Pohlman said. “Every time you sell a ticket, you increase that by another $17 to $20 in per caps (per capita revenue) with concessions and retail sales. The same thing we do at AutoZone. It’s about footsteps, it’s about traffic and making sure we’ve got what the customer wants.”

If you build it ...

Young, the season-ticket holder since day one, has a pretty good idea what customers want, and he believes AutoZone Park and Redbirds can be an even bigger draw if they ask longtime fans like himself and others.

As someone who has gone to games from the beginning, and who also attended numerous Memphis Chicks games, Young has a “bunch of ideas” for getting more people to the ballpark.

He’d like to see more schoolchildren given tickets.

And he would love to see a lottery-style cash prize given out at games. If the person whose ticket is drawn isn’t there, the money carries over to the next outing, increasing the jackpot and perhaps drawing more people through the turnstile for their chance at the money.

But regardless of why people come to AutoZone Park, he said, their true reward for going to Memphis Redbirds games is experiencing the stadium, the game and the American pastime.

“People that don’t go are missing out on a prize for this city,” Young said. “I think they need to get the word out and get people in the stadium again. People get out of the habit of going, but if you give them a reason to come back, I think they’ll come back.”

PROPERTY SALES 61 61 6,453
MORTGAGES 46 46 4,081
BUILDING PERMITS 113 113 15,474
BANKRUPTCIES 19 19 3,289