Memphis buys itself a money-losing minor-league stadium after team gives out free hot dogs

That plan to have the city of Memphis bail out the minor-league Redbirds by buying their money-losing stadium while selling the money-making team to the St. Louis Cardinals is now a reality, with the city spending $24 million on the deal. The Memphis Flyer reports that “the loans would not be paid for directly from the city coffers,” but it actually seems to mean that it would be paid for by diverting tax money that the city would otherwise receive, since the bonds would mostly be paid off with “tax credits [and] tax rebates,” with the Redbirds chipping in a comparatively piddly $300,000 a year in rent.

The Flyer touts this as “keeping the Memphis Redbirds baseball team in Memphis for the next 17 years,” which I suppose it does, though given that Memphis is by far one of the largest Triple-A baseball markets, you have to wonder if the team really would have left without a bailout. (Especially since even if it left it still would have been saddled with the stadium.) It’s possible the deal could work out okay for Memphis if it gets enough revenue from the ballpark, but as I still can’t find any indication of who’d get what revenue streams (concessions, parking, etc.), it’s tough to predict. Suffice to say that it wouldn’t be much of a bailout if the Cardinals weren’t getting to keep most of the revenues, though, so I’m not overly optimistic.

The Memphis city council voted 8-4 to approve the plan, after the team rallied fans to show up at the hearing in Redbirds regalia:

Proponents of the park purchase filled the seats at Memphis City Hall Tuesday and roared with applause as the approval vote tally was read. The fans of the deal sported red, Redbirds t-shirts, foam fingers, baseball caps and rally signs that read “Vote Yes – Rally for AutoZone Park.”

Hundreds gathered at AutoZone Park Tuesday afternoon for a rally in support of the city’s purchase of the ballpark ahead of Tuesday evening’s vote. The crowd gathered were given free hot dogs, hot chocolate, Redbirds baseball hats, and beanies.

I take it all back: $24 million in public funds in exchange for free hot dogs is totally worth it.

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.