The St. Louis Cardinals are showing renewed interest in purchasing the Memphis Redbirds, but any deal that would transfer ownership of the team and AutoZone Park from the nonprofit Redbirds Foundation almost certainly would require “city involvement,” foundation president Ray Pohlman said Thursday, April 4.
The Wall Street Journal reported Thursday morning that talks were serious and quoted Cardinals chairman William DeWitt Jr. as saying, “The city of Memphis is Cardinal country. We’ve been there since this park opened and we hope this transaction would keep us there for many years to come.”
The St. Louis Cardinals are showing interest in purchasing the Memphis Redbirds and AutoZone Park, but any deal would almost certainly require city involvement. (Daily News File Photo/Lance Murphey)
Memphis Mayor A C Wharton Jr. released a statement Wednesday night saying there was “no definitive agreement.” A city purchase of AutoZone Park would require a vote of the Memphis City Council. So, any agreement with the Cardinals could still be a ways off.
“A lot of baseball still has to be played,” Pohlman said.
Discussions with the Cardinals go back at least six years and one component that could frame the timing of talks is that when the ballpark opened in 2000 the 47 suites were put on 15-year lease agreements. Those leases are up at the end of the 2014 season, except for a few that already were defaulted on or converted to game-by-game rentals.
“That’s a significant revenue stream,” said Pohlman, noting that the second-level suites lease for $38,000 a year and the media-level suites for $45,000 a year.
AutoZone Park opened at Third and Union in 2000. The stadium was funded by $72 million in bonds. In 2009, the foundation defaulted on a bond payment. About a year later Fundamental Advisors, a New York-based private equity firm, bought the bonds for a reported $24 million. The Wall Street Journal reported that the proposed deal with the Cardinals is being brokered by Fundamental Advisors.
“It’s important that we recapitalize the Redbirds in a right-sized manner,” foundation treasurer John Pontius told The Daily News a year ago. “The Redbirds were obligated on a tremendous amount of debt that was used to build the ballpark and it was just in excess of what a Triple-A baseball team could carry.”
In a recent email, Pontius confirmed that financial challenges remain, saying, “Our payment (on the bonds) is less than the interest that is accruing, so our balance goes up each year.”
Wharton’s statement confirmed there had been ongoing discussions about the “future of the Redbirds and AutoZone Park” and called the ballpark a “critical asset because of its strategic location Downtown. (It) continues to attract private and public investment and complements the work we are doing with Beale Street, which is now owned by the city, and FedExForum.”
Said Pohlman: “What Mr. Dewitt had to say to the Wall Street Journal and what Mayor Wharton said is certainly encouraging from the foundation’s perspective.”
The possibility of the Cardinals buying its Triple-A affiliate heated up Wednesday when members of the organization were in Memphis for a typical preseason walk-through. Rob Fischer, a sports talk show host at WHBQ-AM/FM, tweeted that the Cardinals were close to reaching a deal to buy the Redbirds.
Wharton’s statement also said the city would “exercise the required due diligence as we reach a decision as to how the city can protect its interest and this critical asset.”
Pohlman said interest from the Cardinals will give the deal a better chance to work than if the interest was from another big-league club, adding, “It will be easier politically because it’s the Cardinals. They sell more tickets in Memphis than any market other than St. Louis.”