Monday, August 22, 2011

John Pontius Talks Memphis Redbirds Baseball

Posted By on Mon, Aug 22, 2011 at 9:23 AM

John Pontius is a baseball fan. If you’re a regular at AutoZone Park, you’ll likely see the president of Pittco Management sitting right behind the Redbirds’ dugout, along the third-base line. More than a fan, Pontius also happens to be treasurer for the Memphis Redbirds Baseball Foundation, owners and operators of the downtown ballpark. (Sitting next to Pontius more often than not is Ray Pohlman, president of the Redbirds Foundation.) As the 2011 Redbirds season winds down — during a still-sagging economy — we visited with Pontius about the state of things at Third and Union.

click to enlarge John Pontius
  • John Pontius

In general terms, how is business at AutoZone Park?

It’s been a very good year for the Redbirds. From a financial and operating standpoint, we’re better managed than we were. That’s enabled us to do a better job at everything we do.

What’s made the difference under the Global Spectrum management team (now completing its second full season)?

The biggest difference is that we’ve been able to come out from under some significant financial distress. We spent most of our time [before Global Spectrum’s arrival] trying to deal with financial matters and not operating issues. We weren’t paying our bills on time, so we were fielding lots of phone calls, having to explain why we weren’t meeting our obligations.

Since we first entered a forbearance agreement with the bond-holders and through this period with new management, and the sale of the bonds to a new bond-holder [Fundamental Advisors, based in New York], it’s just gotten steadily better. We meet all our new obligations on a current basis. Our vendors and lenders have all been informed as to where they stand with us. We seem to have satisfied everyone that it’s in all of our best interests that we play baseball and continue to operate the Redbirds in the high-quality manner that was originally envisioned. The fans are happy, as evidenced by the last two years of increased attendance. After lofty beginnings, we basically had 10 years of decreasing attendance. The last two years, we’ve seen an increase. [Global Spectrum will return for the 2012 season.]

On the subject of attendance, the figures are up from recent years, but still considerably lower than the ballpark’s first few seasons. Is the turnstile count where it should be?

Those first years were lofty numbers, unprecedented in minor-league baseball. But our lowest years were lower than they need to be for this quality of franchise in this town. We have quite a ways to go up from those lowest levels. We’ve made some reinvestments in the ballpark, and it’s paid off in increased group sales. Minor-league baseball lives and dies around the group-sales effort. It’s an event, and [AutoZone Park] is an event location. We have so many different venues within the same ballpark. It’s a pleasant setting. And the baseball is high-quality. The difference-maker is group sales.

What has Global Spectrum done to boost group sales?

It’s mostly just time and attention to the right things. Rather than spending our time and attention dealing with a disgruntled vendor, we’re focusing on serving our customer, and finding new customers. This is still an activity that has to be sold. You can’t just open the doors and they will come. People need to be reminded that this is a value proposition.

There is now a single bond-holder (Fundamental Advisors) as opposed to multiple. How has that changed the business climate?

The change in ownership of the bonds has helped us in two ways. First, it’s much easier to deal with one party than multiple parties. Secondly, the current owner of the bonds is approaching the Redbirds operationally. They are interested in understanding what we can do to improve our position, and allowing us the freedom to operate that we didn’t have when we were operating under the most significant financial distress.

They’re realistic about what needs to be done to maximize the value of the franchise. I don’t think they or I know what the ultimate value will be and how that will relate to our indebtedness to them. We agree that we’re doing the right things to maximize the value. That’s exactly what’s good for Memphis, and what the fans in Memphis want. We’re seeing some payback in the actions we’ve taken.

Does the bond-holder, based in New York, have eyes and ears in Memphis?

They’re our lender; not owners and operators. So they behave very much like a lender. They’re hands on in monitoring their investment, but not managing.

Has the environment for a potential sale improved over the last two years?

Ultimately, the franchise needs to be in the hands of a long-term owner, one that’s able to recapitalize the team, settle the obligations to our bond-holder and vendors, and move on to the next era. The sole reason Ray Pohlman and I stay involved — and the rest of the foundation board — is to see this have a soft landing for Memphis. To see that AutoZone Park stays around for a long time.

Have you been approached by a potential buyer?

We get a number of inquiries, but [the franchise and stadium] haven’t been for sale. It was important to right the ship first, so that we can sell from a position of strength.

Turning to baseball, recent Redbirds — Fernando Salas, Jon Jay, and Daniel Descalso to name three — have played significant roles for the Cardinals this season. Do you get the impression local fans follow former Redbirds after their promotion to the big leagues?

The affiliation with the St. Louis Cardinals is very important in Memphis. Memphis is a Cardinal town. The people who come to AutoZone Park enjoy knowing this is a farm team of a major-league team that they feel a connection with. I don’t think how those players do when they move on to the Cardinals has a lot to do with how we do on a game-by-game basis here in Memphis.

It’s probably a bigger deal to the Cardinals than it is to the Redbirds. That segment of Redbird fans that most fervently follow baseball are more likely to go to St. Louis because they know the players than they would if we were not a Cardinal affiliate. The Cardinals value the relationship with Memphis significantly.

The Cardinals’ top prospect — pitcher Shelby Miller — will likely play in Memphis next season. Can star power sell tickets in the minor leagues?

It can. From time to time, there’s a star that’s a significant draw. When Bo Jackson was here [as a Memphis Chick], and when Michael Jordan passed through town [as a Birmingham Baron]. Rick Ankiel was a draw. But the larger segment of our fan base remembers Rockey more than they do a star player.

Do you have a favorite Redbird over the years?

I was a Lou Lucca fan. [Lucca played third base for the 2000 Pacific Coast League champions.] He was quite a good fielder, and I enjoy pitching and defense more than I do hitting. He’d be my favorite player.

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