Wednesday, April 26, 2006

Southern Neighbors

How does Memphis stack up against the majors and the minors?

Posted By on Wed, Apr 26, 2006 at 4:00 AM

A combination of business and personal travel has taken me to Atlanta, New Orleans, Nashville, and Jackson, Mississippi, for extended stays this year. As Yogi Berra supposedly said, you can observe a lot by watching. Some observations about our Southern neighbors and occasional city rivals:

New Orleans

Headliner: Mayor Ray Nagin is fighting to keep his job. There is an interesting comparison here with Memphis. Under our rules put in place in 1991, Nagin would have been reelected by virtue of outpolling 21 opponents last Saturday. But he got less than 50 percent of the vote, hence the runoff with second-place finisher Mitch Landrieu.

Migration: Katrina cost New Orleans more than half of its 495,000 residents.

Advantages: French Quarter, Tulane University, and Garden District remarkably unscathed. Skyline makes city look so much bigger than it is.

Albatrosses: Superdome. Will big-league football and basketball survive in the Big Easy? More important, is the city governable by Nagin or anyone else?

Oddity: New Orleans has seven, count 'em, elected assessors.


Headliner: Bernie Marcus, co-founder of Home Depot, set the standard for philanthropy by spearheading the privately financed $250 million Georgia Aquarium. Located in the central city, the aquarium opened last year and has already attracted 1.5 million visitors.

Migration: Metro Atlanta has four counties among the national top 20.

Advantages: Major public and private universities, including Georgia Tech, Emory, and Morehouse. Four major-league teams. Midtown skyscrapers are architectural gems, especially when lit up at night.

Albatross: Traffic and sprawl. Public transit does not reach many areas.

Oddity: Atlanta proper is less than half the size of Memphis in population and area.


Headliner: Mayor Frank Melton, elected in 2005, is a crime-fighter. The former television station owner and head of the Mississippi Bureau of Narcotics (and how's that for a unique bio?) totes a gun and personally leads cops on raids of crack houses and pursuit of bad guys. But his act seems to be wearing thin, and he has fallen out with the daily newspaper and the district attorney.

Migration: Mississippi is the only Southern state to lose population since 2000, despite fast-growing DeSoto County.

Advantages: State Capitol, government offices, and mainstream churches assure a downtown base. Suburban Rankin County has landed a Bass Pro superstore and a new baseball stadium for the Atlanta Braves AA affiliate. Jackson State University is booming, thanks to the Ayers higher-education lawsuit decision on funding for historically black colleges.

Albatrosses: Mississippi Memorial Stadium, once host to Ole Miss and Mississippi State football games, is orphaned and may be demolished. Redevelopment of historic icons Farish Street and King Edward Hotel still pending.

Oddity: Nissan plant north of Jackson has probably accelerated urban flight.


Headliner: If Steve "Air" McNair doesn't play for the Tennessee Titans this year, the team could slide into the lower tier of the NFL. Quick, name his back-up.

Migration: Most of Tennessee's 66,500 population gain between 2000 and 2004 was in greater Nashville and Middle Tennessee.

Advantages: State Capitol, Vanderbilt, the Titans, and country music. Bull's-eye of the new landscape of domestic and foreign car makers and suppliers in Tennessee, Alabama, Kentucky, and Mississippi.

Albatrosses: Estrangement from and condescending attitude toward Memphis and Memphians. And Atlanta-style traffic.

Oddity: Despite baseball-friendly demographics, Nashville can't get it together to build a new minor-league baseball stadium a la Memphis and Jackson.

Friday, April 21, 2006

Perfect Storm

Redbirds are slumping, but AutoZone Park was still a home run for Memphis.

Posted By on Fri, Apr 21, 2006 at 4:00 AM

In April 2000, the Memphis Redbirds opened AutoZone Park, and nearly everything, it seemed, went right that season.

The parent team, the St. Louis Cardinals, played a weekend exhibition game in front of a packed house of 15,000 fans. Major-league baseball was on a high, centered around Cardinal slugger Mark McGwire breaking the home run record in 1998.

The ballpark was brand-new, and the Redbirds were good. With players such as Stubby Clapp and Albert Pujols, the team went to the AAA World Series and set a minor-league season attendance record by drawing more than 1,300,000 fans. AutoZone Park and visionaries Dean and Kristi Jernigan were the toast of the town -- and the Redbirds were pretty much the only game in town.

Six years later, the perfect season has turned into something like the perfect storm.

After losing Monday night, the club's record is 1-11. There are no crowd favorites such as Clapp, much less a budding Pujols.

Attendance Monday -- a beautiful spring night, although one when kids are still in school -- was reported at 6,501 but looked closer to 2,001, before fans headed for the exits. Sunday's game under sunny skies drew an announced crowd of 7,699.

There's big-league competition from the Memphis Grizzlies, who could be playing for another month if they can advance through the first round of the NBA playoffs. FedExForum is the new toast of downtown.

Major-league baseball, and McGwire in particular, have been scarred by the steroid and performance-enhancing drug scandal.

Gasoline costs more than twice as much as it did in 2000, and utility bills and property taxes have also soared. That $3.50 hot dog from the ballpark concession stand now sounds uncomfortably like the price of a gallon of regular. (Not the kind of mental association you want if you're running a sports franchise.)

An inter-family squabble between the Jernigans and heirs of Willard Sparks, whose wife Rita Sparks is head of the Memphis Redbirds Foundation, wound up in Circuit Court earlier this year. The Jernigans were dismissed from the lawsuit over bank loan guarantees, which was settled last week on terms that were not disclosed. The nonprofit Redbirds Foundation is losing money, according to its most recent tax forms.

The baseball turnaround is a reminder of how risky it is to pronounce something a success or, for that matter, a failure before it has been around awhile. The Pyramid was just 13 years old when it essentially closed. Beale Street was about the same age when it really began to take off. The Wonders Series had a run of nearly 20 years before hitting the wall. FedExForum is only two years old, and the Grizzlies, who are bemoaning a decline in attendance, have been in Memphis only five years.

AutoZone Park and the Redbirds should be okay if season attendance, which has declined every year, settles in at something like 500,000. A caveat: That must be actual attendance -- butts in seats -- not tickets sold. Sports teams that inflate attendance because everybody does it are kidding themselves. No-shows can't buy soft drinks and nachos, and that's a minor but important revenue stream.

The ballpark should rank with the reopening of The Peabody in 1981, the completion of the Auction Street Bridge to Mud Island which made Harbor Town and other developments possible, and the arrival of the Grizzlies as one of the three most important downtown stories of the last 30 years. AutoZone Park is part of a package that includes a parking garage, office building, public school, and apartments. Ten years ago, those blocks of downtown included a porno theater, parking lots, the empty William R. Moore building, and a historic mule barn. Maybe some of that would have gone away anyway because of an improving Memphis economy. Maybe downtown Memphis would have rallied anyway because of low interest rates. And maybe the Grizzlies would have come to Memphis anyway, because it's better than being in Vancouver.

But I doubt it. The total transformation wouldn't have happened without the ballpark and the vision of the Jernigans, who hit a home run in 2000, even if the 2006 season is a stinker and the financial shocks aren't over.

Friday, April 7, 2006

The Valuation Game

The $3.25 bottle of water, $10 beer, and $75,000 fund-raiser get "full value."

Posted By on Fri, Apr 7, 2006 at 4:00 AM

Let's play a game called valuation. Actually, we have no choice.

Water used to be undervalued. Now it costs $3.25 in a bottle at Studio on the Square, or you can sip it out of an undervalued fountain by the bathrooms for free.

Coffee was undervalued until Starbucks and others started dressing it up and selling it for $3.50 a cup.

Gasoline was undervalued at $1.50 a gallon and maybe at $2.50 a gallon.Beer is still undervalued. I bought a 12-pack for $7 at the grocery store, while a friend who took me to the Grizzlies game Sunday paid a fully valued $10 for a 24-ounce cup.

Ever see people lined up to buy lottery tickets? They may be undervalued. A 10 percent surcharge probably wouldn't cause a blip.

In sports, autographs were undervalued before card shows and traders. Hockey great Gordie Howe signed for free during his career and in retirement. I would have paid $10. Pro football tickets were undervalued before modern stadiums, club seats, and $1,000 seat licenses. The best college basketball players were undervalued before they started turning pro after a season or two. The talent in the NCAA tournament has been devalued, but the overall product is fully valued if more teams have a chance to win.

Financiers have found undervalued assets all over Memphis. Elvis is undervalued, according to Robert Sillerman, the new majority owner of Elvis Presley Enterprises. Corporations are so undervalued they get paid just to stay here. Last week, Harrah's got comped $2.6 million in tax credits for being a loyal customer. The credit is for eight years, or $325,000 a year -- paltry compared to the $5,959,826 plus options earned by Harrah's fully valued CEO Gary Loveman in 2005. MLGW and Shelby Farms are undervalued assets, but we'll never know how much because of political reasons.

Tools of the business world that were once valuable quickly became overvalued. That would include stock quotes and stock trading commissions, newspapers, and long-distance phone calls. Unionized automobile factory workers were overvalued at $30 an hour in wages and $65 an hour in wages and benefits. Real estate agents are overvalued at 6 percent commissions if FSBO and Internet listings can compete with them.

Some valuable things are free because their inventors and owners are either not motivated to make a fortune or can't figure out how to do it. That would include the Firefox Web browser,, Spybot software, and restaurant reviewer, which refuses restaurant advertising. For a discussion of them, see Richard Siklos' recent story at It's free and undervalued.

In politics, city councilman Rickey Peete raised more than $75,000 last week for his campaign fund. For that kind of money, you might think he is running for mayor this year, but he's running for City Council in October 2007. Contributors ponied up $250 to $1,000 because Peete's superdistrict includes 128 precincts and downtown, and he is a board member of the influential Center City Commission and Riverfront Development Corporation. The City Council job pays $6,000 a year by City Charter. Amendments have pushed that to $30,600, pegged to the pay of the Shelby County Commission.

Apparently, the pay does not reflect the value of a council seat. The only people who have voluntarily given one up lately are John Vergos, who served eight years, and Janet Hooks, who got a city job. The term limits endorsed by the Tennessee Supreme Court last month only apply to the county mayor and commissioners.

Public service is undervalued. Crooked lobbyist Jack Abramoff and partners got $66 million from Indian casinos. But honest Harvey Johnson, a Mississippi lawyer and former mayor of Jackson, by all indications got nothing for casting the decisive vote on the three-member Mississippi Tax Commission in 1993 that opened up Tunica County to inland casinos worth billions to Harrah's, the casino industry, and the state of Mississippi.

If the Tennessee Waltz indictments are true, corrupt lawmakers sold themselves cheap to E-Cycle Management, the bogus computer recycler. John Ford got $10,000 -- others as little as $1,000 -- to put a sham company in position to make millions. Wake up, folks! We're a major-league city, and $10,000 is small change. Graft is undervalued.

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