Stadium For Rent: 17. Deep Pockets, Short Arms

STADIUM FOR RENT:
Tampa Bay's Quest for Major League Baseball
By BOB ANDELMAN

17. Deep Pockets, Short Arms

Unfortunately for Porter, someone leaked his financial plan to the press. Who? Well, Porter did ask the St. Petersburg Times to become an investor.

"Porter knew much earlier that [his group] had a problem," Times reporter Stephen Koff says.

Koff caused a sensation in the Tampa Bay area when he reported that Sidney Kohl withdrew or dramatically reduced his stake, mortally wounding Porter's best efforts. Anyone looking to point a finger of blame need look no further than Kohl -- at least according to Koff.

Koff understood the multimillionaire may have reduced his investment from $50-million to between $5-million and $15-million, leaving Porter to thrash about for a new white knight. Porter desperately tried to boost the equity contribution of his limited partners -- and increase the number of limited partners -- without giving them any more control.

The Porter/Schur cousins and Bostick were each thought to be in for $15-million at this stage. To reach that number, Porter and his cousin Joel Schur probably put up the territorial rights to the St. Petersburg Cardinals, whose value they may have over-optimistically estimated to be worth between $2-million and $7.5-million ($2-million was a realistic, high-end figure), and the future value of their shares in the franchise, which they also put at up to $7.5-million. Neither cousin was believed to have more than $1-million cash in the deal, although Schur had more resources to draw upon than Porter. Bostick, meanwhile, planned to come in with a mix of cash and bank loans equal to $15-million.

The problem with Koff's theory is the assumption that Kohl ever planned to invest such a huge figure. More likely is that from the beginning, Kohl promised to put up a cash figure of between $5-million and $15-million, then planned to bring in additional investors -- such as Roy Disney -- who would contribute between $50-million and $60-million under his direction. With the support of his investment group, Kohl would control more than 51 percent of the team.

In all likelihood, when the cousins first approached the brothers about being their primary investors, the Kohls said they would take controlling interest in exchange for bringing in their own circle of wealthy friends. The Kohls told Porter and Schur to worry about raising the remaining amount; their share was covered.

A partnership agreement was written -- although never executed -- in anticipation of the National League setting its franchise fee at no more than $75-million.

"When Joel and I first met with the Kohls and they ran to [Roy] Disney," Porter says, "Joel and I clearly understood that what the Kohls were going to do was put an investment group together. When the Kohls first got into this thing we were speculating about a $65-million to $75-million price. We were all staggered when it came in at $95-million. Then we felt [the National League] would let us pay it over a 5-year period without interest; that's how they would get their $95-million.

"My theory," Porter says, "is that the Kohls did not increase their cash contribution and did not go outside to the investment community network that they had when baseball announced the $95-million price. At that point the Kohls had made a commitment and they lived with their commitment. They might very well have said we are not interested any longer."

Percentages were assigned within the potential ownership group based on the Kohls' commitment to raise the controlling share. No one paid in a dime, except perhaps for operating expenses. The Kohls would control the team financially; Porter and Schur would be managing partners. They organized the minority partnership, attracting Tampa Bay investors Henry Esteva, Rex Farrior Jr. and Claude Focardi.

The cousins then represented to one and all that the Kohls controlled the majority interest in the ownership group. Because the cousins were intentionally short on details, this was interpreted to mean an investment of more than $50-million on the $95-million expansion fee. Certainly that's the way the expansion committee understood it.

"The picture that they were presented in New York never said that anybody was putting in $30-million or $50-million," Porter says. "I defy anybody to find anything that says that [in writing]. Maybe that was the impression they had. But they were always dealing with me as the spokesperson."

Rick Dodge takes issue with that assertion.

"Kohl was the serious money," he says, "initially described to us as being in the $50-million to $60-million range. Porter said that. Privately, not publicly. That was confirmed to me by Mark Bostick early on in the process. Disney was going to be an incidental investor. I later heard he never gave [Porter] permission to indicate he was an owner. Joel Schur certainly had some financial capital, $10-million to $20-million range. Porter was a sweat equity investor, just like Morsani."

Something went awry, however, when the Porter group made the National League expansion committee's short list. Perhaps Porter counted on merging with Frank Morsani's group to generate the remaining equity his group needed. Maybe the Kohls did lose interest. But when Porter went back to Sidney Kohl in January 1991 to confirm the dollar figure of his investment group, Kohl sneezed. And Porter came down with the flu.

"Sidney never promised to put up the kind of money that was bandied about by Steve Koff," Porter says. "Even with the smaller cash contribution, it was a business deal to him. He was going to put up as little as he could personally, get the money raised on the outside and keep as much control as he could. Part of his frustration was that the rest of us were not willing to go along with that. What they wanted and expected was to maintain a fairly substantial percentage of ownership, in effect, as a carried interest for 'putting the group together.' "

As Rick Dodge later understood it, Porter paid a heavy price for not signing Sidney and Allen Kohl to a partnership contract before the announcement of the short-list finalists.

"After you're selected and you're Sidney Kohl," Dodge says, "you're in an incredibly powerful position in the deal. You can name your deal. 'You got selected because of my connection. I delivered you to this point in time. I'm seen as the guy. It's going to be my way or it's not going to be anything.' Steve had a very difficult time getting the partnership structured. Kohl understood the leverage of his position.

"I think Steve was in a dilemma here," Dodge says, "trying to move this ahead and not lose. Kohl is the guy that got him there. They both knew that. They needed his influence. They needed his money."

"Part of the difficulty," Porter says, "was that I brought in Bostick and I wanted Sidney and Allen Kohl to trim back their ownership holdings. I said, 'If you're not going to bring in investors then you have to make room for some of the other people.' That was an arduous negotiation but we ultimately reached an agreement in which Sidney no longer controlled [the group]. We revised our percentage ownerships and he made it clear he wasn't going to either increase his contribution or raise money."

The bad guy in many scenarios, Porter spent the entire six months between the short list announcement on Dec. 18, 1990, and the franchise picks on June 10, 1991, scrambling. Three things challenged him: 1) raise more cash; 2) force the Kohls to reduce their controlling interest since they were not going to produce the promised investors; and 3) negotiate a lease with the City of St. Petersburg for use of the Florida Suncoast Dome.

You would not have wanted to see the world from Steve Porter's bleary eyes during those days. He worked up to 20 hours a day, let his law practice slip away and unintentionally angered the community of Tampa Bay by trying everything he could think of to fulfill Tampa Bay's baseball dreams.

That Kohl's arm needed to be twisted for him to appear in St. Petersburg during the expansion committee's February visit was bad, bad news. Rick Dodge smelled Porter's fear but there was only so much the assistant city manager could do; Porter kept financial details scrupulously private.

"I think he trusted me more than anybody else," Dodge says. "I told him absolutely everything that I knew. Anything we had I wanted him to have. I would ask him, 'Steve, how about this and that?' 'It's fine,' he'd say. 'Dismiss it.' They never communicated with us that there was any change. We had no idea. When we heard that Kohl had been a stand-up guy [during the committee's visit] we didn't consider that an issue: Here's the guy who got selected -- he must know how to do it. We would question Steve about stuff but his attitude for a long period of time was, 'I don't mind you questioning me, but we got selected. We know what we are doing. They picked us. We are going to get the franchise.' How could you argue with that? I've thought about that so many times. What could we have done?"

Porter says the National League didn't explain its payment terms for the $95-million franchise fee until it visited each city on the expansion list. (According to H. Wayne Huizenga, "We had to come up with a $25-million line of credit. Then on May 15, 1992, we had to come up with another $70-million line of credit. In December 1992, we had to write the check for the entire $95-million. Baseball would let you borrow some. They wouldn't let you borrow a lot.")

"The Kohls were unhappy with the terms," Porter says, "but they made a commitment -- several million dollars -- and they would live with it. But they weren't increasing it and, given that they were unhappy with it, they just never really went out into their investment network to try and bring in investors.

"I want to make something absolutely clear," Porter says. "Sidney Kohl did not welch on his deal. He did not. He never reduced the contribution that he had pledged to put into the transaction."

Mark Bostick's presence buoyed Porter's sagging spirits and the young man worked hard to replace Kohl's support.

"Mark was very bullish about his own contacts," Porter says. "We ended up with Mark's entire investor network. We had room for them because Sidney trimmed back. We went to SunTrust, Mark's investment bankers, and we retained them for a fairly substantial amount of money. I can't say they failed but at the time of the announcement they certainly didn't [produce] $95-million in equity. [SunTrust] found out it was a considerable problem."

The St. Petersburg Times reported that five bay area banks -- advised by SunTrust -- were prepared to lend up to $40-million to Porter's group in a final effort to prop him up. According to the Times, SunTrust advised Porter on raising equity through limited partnerships and structuring the group's debt. Partnership units were priced at $500,000 each.

Dodge hated the SunTrust syndication idea that emerged. He didn't know Porter and Bostick were doing it until late and tried to talk them out of it.

"It was never part of the original strategy from Porter. It was a fire drill at the end," Dodge says. "Barry Rona, Frank [Morsani], Lance and I said months earlier this syndication won't work. This will not fly. This is debt being served up as equity. Baseball will pierce through it and it will not work. They said everybody else in baseball does it. I said everybody else in baseball does it after they are in."

Porter, lacking other options, went forward with Bostick's plan.

"We presented baseball with all the money that we had from cable advances and our own capital contributions and what SunTrust raised," he says. "I'm not saying that we failed for lack of funding but it was diffused: $5-million from this group and $2.5-million from this one and $2.5-million from that group, personal borrowings that you put from the holding company into the operating company. We met the 60/40 test of equity to debt. We were there. I think the juggernaut of a single individual [Huizenga] in South Florida and the backing of Coors in Denver made the difference."

Expansion committee chairman Douglas Danforth indicated for months there were no financial problems with Tampa Bay's bid. By the point in late May when St. Petersburg witnessed the fiasco of Porter, Bostick and SunTrust desperately casting about for big-ticket investors, a sure thing became a lost cause.

"We were out in the community for a couple of months with this investment," Porter says. "Everybody saw the capital plan and they knew how much money we were raising and what all the projections were. There wasn't a major business in that area of Florida that didn't know [the situation]."

Porter accused a lethargic, disjointed Tampa Bay business community of failing to ante up for baseball in the pinch.

But he was wrong there. The reason Tampa Bay's business community failed to respond to Porter was that, until he was desperate, he oversold the commitment of the Kohls and kept details so close to his vest that local business people didn't feel comfortable with him. And few of them -- no matter how badly they wanted to bring a baseball team home -- could or would commit $5-million to $20-million on such short notice. Wouldn't be prudent.

Had he done his homework, Porter would have realized that two of the institutions that he looked to for help would never invest in baseball. The St. Petersburg Times was one of the last financially and editorially independent newspapers in the country. Its profits go to a nonprofit organization, the Poynter Institute for Media Studies. To be an owner of a baseball team would create an unacceptable conflict of interest for the newspaper.

As for Florida Progress, the huge utility always maintained that it would not invest more than a token amount to attract a team. Lightning rod for attracting private investors, yes; invest itself, no.

Roy Speer, chairman and co-founder of the Clearwater, Florida-based Home Shopping Network, once expressed interest in buying the Florida Suncoast Dome, but never wanted to own a ballclub. The Jack Eckerd Corporation, another billion-dollar local industry, didn't feel sympatico with baseball.

"It was clear to me that the business community, no-how, no-way, wanted to be involved with our group," Porter says.
* * *

Tampa Bay experienced emotional whiplash shifting from Frank Morsani's warmth to this brazen and secretive Washington, D.C., attorney who, when he was in Florida, maintained a jam-packed, tension-filled schedule. Steve Porter had to accomplish this, this and this. There was no time for pleasantries.

"Porter was always bitching about something," St. Petersburg Progress executive vice president Martin Normile says. "He was abused. He was -- I don't know, paranoid. I never had the impression that he had the strength that he claimed he had and that I assumed was needed to get the job done.

"But you'd meet with him and you'd think, whoever he is, he's ours. He was designated to lead this effort by Major League Baseball and we've got to support him."

Normile recalls that baseball booster Bob Byelick pressed others to support Porter even in the face of the man's chilly indifference to members of the community. "We'd have meetings [with Porter] to say, 'We're here, we're a resource,' " Normile says. "And he would say all the right things. Byelick's group was ready to do some things, rally support. But Porter's attitude was, don't bother me with that stuff."

Mike Davenport remembers a January after-hours meeting with Porter in the office of Porter's St. Petersburg attorney, Dave Robbins. Present were Porter, Robbins, Davenport, Byelick and attorney Doug Williamson.

"We, as a community, wanted to let Mr. Porter and Mr. Schur know we were ready, willing and able to help. 'Talk to us,' " Davenport told the would-be baseball owner. "But Porter basically talked in circles."

Porter said, "I want your input. Here's my number in Baltimore, leave a message."

About 40 minutes into the meeting, Porter was overheard whispering to Robbins, "I've got to get the hell out of here." Says Davenport: "It was apparent he didn't need us. 'Don't call us, we'll call you.' "

Williamson left the meeting with the others and went to the chamber of commerce offices. He felt sick. "We are not in the loop," he told the others, "and he does not want us in the loop."

"Maybe I was naive," Williamson thought later.

The selection of Schur and Porter "made it hard for the community to be supportive," Anita Treiser, keeper of the "Join The Team" reservations and funds, says. "While I believe the Porter Group was working hard, the fans felt cheated. And it was difficult to get input from Porter.

"When they were here," she says, "they weren't. People didn't have a chance to get to know the people they thought would own the baseball team. I think Porter and Schur felt they could do it on their own. You already had community support, so that wasn't the area that needed support at the time. Depending on who I talked to in the ownership group I didn't get the same story. Porter would say Farrior was in charge of this and I'd go to Farrior and he'd say, 'Talk to Porter.' "

Rick Dodge heard all these concerns and criticisms of Porter. He understood them -- and he dismisses them.

"He didn't have time to be a community cheerleader," Dodge says. "Besides, as Steve would say, 'Community cheerleading won't get you the franchise.' And he's right. It didn't matter what we thought of him, it mattered what the committee thought of him. Anything he was doing to influence them was the better use of time."

"I don't think it made a damn bit of difference anyway," Porter says. "People are naive. This was all about money. It was as crass as that. There was time for civic cheerleading later. Ticket drives don't make a damn bit of difference. Can I write a check for $95-million or not? Can I sustain the losses after I write the check? That's all it amounted to."

END CHAPTER 17

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