When community ownership goes bad: Cardinals to buy Triple-A team, Memphis left with stadium upgrade costs

When advocates of community ownership want to point out that the “rich guy owns the local team and extorts tribute” model is not the only one for sports franchises, they tend to point to the several minor-league baseball teams that are owned by the public. (There are a couple of Canadian Football League teams as well.) One of these is the Memphis Redbirds, the Triple-A affiliate of the St. Louis Cardinals, which since 1997 has been owned by a not-for-profit corporation run by local civic and business leaders. The arrangement was set up by local self-storage facility baron Dean Jernigan, who declared at the time, “If the main identity of a city is tied to a sports team, who are we going to entrust this to?” — though it undoubtedly didn’t hurt that putting the team in the hands of a non-profit would enable it to get a lower interest rate on construction bonds on AutoZone Park, which cost a then-minor-league record $80 million to build.

If you were hoping that a business-leader-run non-profit designed around a tax dodge was going to end well, sadly, this is not the case: The team defaulted on its stadium bonds in 2009, was put up for sale, and now is looking at being bought by the Cardinals, while the stadium would be bought by the city of Memphis:

The agreement calls for the St. Louis Cardinals (“Cardinals”) to acquire the Memphis Redbirds and the City of Memphis to acquire AutoZone Park. The City would then lease the ballpark to the Redbirds through a long-term lease agreement. The agreement includes a significant capital investment in AutoZone Park to add features that will significantly improve the overall fan experience.

That sounds ominous: The Cardinals would get the team — the 8th most valuable minor-league franchise in baseball, according to Forbes — and the ability to sell tickets, while the city would get the stadium and the obligation to “improve the overall fan experience,” which usually means “we want all the latest scoreboards and stuff that all the other teams with stadiums less than 12 years old have.” It’s possible the Cardinals will offset that cost through rent payments, but no details are available — apparently even members of the city council have only been informed via press release.

The council is set to vote on the deal on December 3. Hopefully by then someone will have told them what they’re voting on, but as we’ve seen recently, that’s not always considered a requirement.


7 comments on “When community ownership goes bad: Cardinals to buy Triple-A team, Memphis left with stadium upgrade costs

  1. Just FYI: There are at least two lower-tier pro soccer teams that are nonprofit, as well. The Richmond Kickers and the Charlotte Eagles are both 501(c)(3) corporations. The Richmond outfit, in particular, seem to be a robust organization that runs youth club soccer as well as a men’s professional team.

    This is just in America, of course. Elsewhere in the world, community ownership schemes of various kinds are common.

  2. I’m not sure this counts as proof that NFP community owned teams can’t work. It seems as though the real issue behind the team’s failure is it’s inability to pay for the stadium bonds… which is really no surprise when even professional teams like to avoid doing so whenever they can.

    As I’ve said before, the argument can be made that stadium subsidies for publicly owned (or NFP) minor league sports are necessary (because the revenues aren’t there to pay for the facility otherwise), even enabling (IE: the minor league sport won’t be possible in a given market without subsidy).

    If the city of Memphis is going to end up stuck with an expensive (by MiLB standards) facility, why wouldn’t they buy the ballclub as well? You know if the Cardinals own the club, the city will be paying them to play in the stadium in no time.

    BTW, how’s that long delayed ballpark village wasteland around Busch stadium coming along??? I understand they are finally starting on it now, some seven years after the stadium opened…

  3. “If the main identity of a city is tied to a sports team…”
    this is the main problem, time to find a real “identity” folks or remain hogtied to the demands of those who don’t care about fiscal responsibility of taxpayer $’s.

  4. I was under the impression that Memphis’ identity was tied to something other than the Redbirds. I just can’t recall what it was, though.