Source: Brailsford & Dunlavey

Sidebar: Build It and They Will Come

Alan Stein spent 14 years trying to convince city officials to help build a minor league stadium in Lexington, Kentucky. Although home to devoted fans of the University of Kentucky Wildcats football and basketball teams, Lexington had no summer sports. "There's nothing to do here," says former restaurateur and radio magnate Stein, a Lexington native. "If you'll pardon the pun, our research said baseball would be a home run."

So, in 1998, when city officials failed to act on a $10 million stadium commitment from the state legislature, Stein had had enough. "We realized the only way to make this project happen would be if we could do it on a fully private basis," he recalls.

Stein's Lexington Professional Baseball Co., which only a few months earlier had been little more than an advocacy group, raised $8 million in private funds. To get banks to cough up an additional $12 million, he says, "we did something unusual that most do not have the courage to do. We had no choice." Anyone buying stadium advertising, corporate suites (about $30,000 for three years), the concession franchise, or season tickets ($497 to $1,065) was required to sign a minimum three-year contract. "The long-term value of those contracts--a guaranteed revenue stream of $21 million--became collateral for our lenders," explains Stein.

It turned out to be solid collateral. In 2001, its first year of operation, the Lexington Legends broke the previous South Atlantic League attendance record while only halfway through the season, operating at an average 104 percent of the stadium's 6,033-seat capacity.

To this day, says Stein, the city has provided no financial assistance, not even tax abatements, and midway through the first year, it stopped providing game-day traffic control. Indeed, when it came to zoning changes and construction approvals, he says, "the city made it very difficult for us because we were private." But with the only wholly-owned, unsubsidized stadium in professional baseball, he says, "we control 100 percent of our revenue stream, and everything that goes on in our facility does so without politics or interference." Indeed, the city has turned out to be a good customer, frequently using the stadium for public events. "We charge them full price," adds Stein. --T.R.

Behind in the Count

Portland Family Entertainment, owners of the start-up Portland Beavers, had a rough rookie year.

• Bank Loans: $23 million
• Private Financing: $5.5 million up front, $6 million midyear
• Municipal Funds Provided for Stadium Renovation: $33 mill.
• Annual Lease Payment to City of Portland: $908,000
• Additional Considerations to the City: 10 percent of ticket sales, 18.8 percent of gross revenues over $10.7 million, 25 percent of distributable cash at year-end, 35 cents per ticket for public transportation subsidy, $40,000 payment to the parks department
• Gross Revenues from 2001 Operations: $11 million
• Operating Loss from 2001: $10 million

Source: Portland Family Entertainment

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