Month: March 2001

Frank Deford, one of the most distinguished sportswriters in America, wondered aloud this week in a commentary on National Public Radio, “But who, for example, would dish out a couple hundred million now to buy a team in the NBA at a time when pro basketball is as out of fashion as day-trading.”

The answer, it appears, is at least two of the wealthiest men in Memphis: AutoZone founder Pitt Hyde and Southeastern Asset Management President Staley Cates. Ironically, Cates is known as a talented “value” investor in stocks that are supposedly underpriced. The Vancouver Grizzlies are one of the worst teams in a league whose image and television ratings are plummeting.

Go figure.

Other Memphis media reported this week that Hyde’s other partner is Andy Cates, Staley’s younger brother. Reliable Flyer sources who have been involved with the so-called “pursuit team” said Southeastern Asset Management CEO and founder O. Mason Hawkins is a partner. But his spokesman, Lee Harper, denied Friday that Hawkins is or ever was an active partner, secret partner, silent partner, or any other kind of partner.

The would-be Memphis investors have been involved in the pursuit of the NBA for several months, first with the Charlotte Hornets, which are staying put, then with the Grizzlies and their owner, Michael Heisley. Staley Cates is a highly regarded mutual fund manager who is occasionally featured in investment magazines but rarely appears in the local press. Hyde, in contrast, has been actively involved with AutoZone Park, AutoZone’s downtown headquarters, the NFL drive, the National Civil Rights Museum, and support for public education. He was also a key backer of building The Pyramid, which he called “a slam dunk” at the time.

Southeastern Asset Management is manager and adviser to the Longleaf Partners Fund, the Longleaf Small-Cap Fund, as well international and realty funds. Unlike CEOs of public companies, whose wealth in stock can be readily calculated from public disclosure forms, Cates’ wealth is harder to gauge. But Southeastern has earned around $50 million a year in fees in recent years.

Calls to Staley Cates Friday were not returned.

The identities of the potential buyers is much more than an interesting guessing game. Unlike the construction of The Pyramid and the pursuit of an NFL team, which were publicly vetted by their political and private-sector backers for years, the NBA quest has been something of a stealth project until this week. If the bidders are successful, they will essentially be handing Memphis, Shelby County, and Tennessee taxpayers a major-league franchise and saying, here it is, now build us a $250-million arena and line up for tickets.

One problem with that approach is that no one knows how much demand there is in Memphis for the NBA. League television ratings are down, the Grizzlies have never had close to a winning season, and season tickets cost upwards of $2,000. As Deford said on NPR, “The question now is, as the world economy stutters, as Wall Street staggers, as every other industry pays the piper, will the business of sports finally show some losses.”

Whether a new arena and, say, a sales tax increase to pay for it would pass a public referendum, as Commissioner Buck Wellford proposed, is questionable to say the least.

Hyde said this week he has two other investors, and shortly thereafter the Cates brothers stepped forward, supposedly to keep the mystery from being a distraction. Some Memphis businessmen were not convinced.

At a mid-week meeting of business leaders at The Crescent Club, FedEx CFO Alan Graf announced the company’s willingness to make a substantial investment in naming the team and the new arena. He said the investment would be a good deal for FedEx, and that one of its biggest shareholders, Southeastern Asset Management, agreed. The project was praised as a great example of supply-side economics by Hawkins, accordiing to someone who was at the meeting.

FedEx is not investing in the ownership of the team corporately or, so far, via key individuals. But Hyde said he would welcome additional investors. He also said, however, that he did not expect to make money on the deal.

In a press conference Tuesday at AutoZone Park, J.R. “Pitt” Hyde III, founder and former CEO of AutoZone revealed his long-time plans and involvement in wooing an NBA team to Memphis. “I and a small group have been trying to secure this franchise for about a year now,” Hyde said. “We are extremely optimistic that we will be successful in our efforts.”

“Memphis has all the kind of attributes that make for a great NBA city,” Hyde said. “We have received very strong support from both our mayors in this city as well as the governor of Tennessee.”

However, for all those attributes, Hyde says that the city lacks an NBA-quality arena, stating that an upgrade to the Pyramid would be far too costly (an estimated $190 million). “We quickly came to the conclusion [that] it would be far better to build a new arena from scratch and we are looking at that possibility,” he said.

The proposed new stadium will cost between $200 million and $250 million. “The majority of the funding can come from state tax rebate [for major corporate sponsors] and incremental sales-tax rebate,” Hyde said. “With that combined with a similar package to what the state did for the Titans, we think we can come up with a program where the funding amounts in city and county will be at a very acceptable level.”

In terms of location, Hyde says that the group was “obviously looking at the downtown area. We have several very promising sites that the league as well as the franchise owners were very enthusiastic about. We feel like an NBA team and a new arena downtown would have a similar impact [as did AutoZone park] and just add to the momentum we have been able to create here in Memphis.”

Yesterday’s press-conference also revealed FedEx as a major player in the city’s efforts to land the NBA team.

“While FedEx will certainly have no role in the ownership group, FedEx is prepared to step forward and make a commitment to the city’s efforts to attract an NBA franchise by submitting a significant long-term proposal for the new arena and team naming rights,” said FedEx executive vice president Mike Glenn.

Memphis is competing with Louisville, New Orleans, and Anaheim for the NBA team. There is also a Vancouver group that is attempting to buy the team and keep it in Canada. Louisville’s bid got a boost yesterday after Tricon Global Restaurants, the corporate entity that owns Kentucky Fried Chicken, Pizza Hut, and Taco Bell, reportedly offered $100 million to Heisley. Tricon officials will not confirm or deny that number.

According to Glenn, a new stadium can do much for the already strong growth downtown. “First and foremost, it’s critical to move our city forward and I think that has to start with downtown economic development,” he said. “I point no further than to the Redbirds and what they have done for the community and the significant success FedEx has had in its partnership with the Redbirds.”

However, Glenn also believes FedEx has much to gain from its involvement with a new stadium. “Clearly, we look for a return on investments in every sports marketing opportunity we pursue. We expect the same from an investment we would be making in a new arena.”

FedEx sponsors a number of sports endeavors including Memphis’ FedEx St. Jude Classic in golf, the FedEx Orange Bowl in college football, the FedEx Championship Series in Champ Car racing. The Memphis-based cargo company paid a record amount to the Washington Redskins for the naming rights to FedEx Field.

According to Glenn, a new team in Memphis will significantly impact FedEx’s employee recruiting efforts.

“Attracting highly talented employees to our company and many other companies in the community is critical to our long-term success,” Glenn said. “In order to be successful here we have to attract talent to our community. Quality of life issues is first and foremost in the minds of young professionals as they consider where they want to further their careers.”

A major question revolving around a new stadium involves its impact on the University of Memphis basketball program. Since FedEx has a major investment in that program, the question becomes even more relevant.

“We began talking with R.C. Johnson about this some time ago because we were not going to be comfortable if the University of Memphis would not be comfortable about a new arena,” said Al Graf, FedEx executive vice president and chief financial officer.

Memphis basketball coach John Calipari attended a meeting of key Memphis businessmen on Tuesday morning. “I’ve been in the loop for a while,” Calipari said after beating UTEP Tuesday night. “They’ve been terrific. FedEx has never done more for the university than what they are doing next year. This may be three times what they have ever done.”

Graf confirmed that FedEx will up its investment in the U of M. “Next year,” said Graf, “we will substantially increase our support. You’ll see a lot more FedEx signage, you’ll see a lot more ticket sales, and you’ll see more FedEx people involved.”

The meeting also served as a rallying cry to get potential investors and ticket buyers in on the drive for the NBA team.

“Our challenge today is to reach out to the rest of the community,” Graf said. “This is not going to be done simply with the FedEx corporation. Now is the time for everybody to step up to the plate and be involved both with the University of Memphis and with the potential new NBA team.” According to Graf, the ownership group has already sold over 40 suites, more than any other city involved in the race for the Grizzlies.

Hyde said that there were two other Memphians who were partners with him in pursuing the NBA team. He refused to name them. He did say that there would be a significant local ownership group.

“Though negotiations have not been finalized É we plan on a significant local ownership in this team if we are successful in our efforts,” Hyde said. “All the people currently involved in this effort as potential owners are all in it because they think it is the right thing for Memphis.”

Let’s begin by repeating all the known quantities and by doing so in the simplest of all possible terms. The Civil War isn’t over. It lives on in the hearts and minds of Southerners whose ancestors gave their lives fighting for the “Stars and Bars” and everything for which it currently stands: a fiction, an idealized past imbued with the kind of passionateGone With the Wind romanticism that is ever the legacy of failed causes.

The African-American community, whose first significant taste of citizenship came not with the Emancipation Proclamation but rather the civil rights movement of the 1960s, is likewise still fighting the Battle of Bull Run. To them the Confederate flag also represents heritage, but a heritage of hardship, oppression, and slavery; a heritage that no amount of equal-opportunity legislation can temper or erase. The issue has been compounded by the number of hateful, often violent, white supremacist groups who have taken up the Rebel banner and effectively branded it as their own.

The battle lines around the flag have been drawn — hate versus heritage — with one side fighting to keep the flag, the other attempting to ban it. Oddly enough, at least in this writer’s opinion, the opposing sides on this hot-button issue are both actually working against the fulfillment of their agendas. But there is a solution which will weed out the hatemongers and either allow the Confederate flag to continue flying proudly with general public approval or cause it to fall into the dustbin of irrelevant (yes) pop culture.

The problem is that no one who is taking part in this conflict seems to understand the nature of language and symbols. The opposing sides are fighting like a family over a disputed inheritance, with deeply divisive and ultimately negative results. To understand a symbol one has to know that once it has been brought into the world it takes on certain physical, almost Newtonian, properties that are not entirely unlike those ascribed to matter and energy. Language — of which symbols like flags and insignia are an important subset — has both weight and mass. It can even, in a certain sense, create its own gravity. Consider how drawn we are, as a culture, to buzzwords, catchphrases, and the like, and you will see that this theory is not so far-fetched. Notice how we “rally round the flag” like little patriotic satellites. Much like matter and energy, such symbols cannot be destroyed, but the terms of their meaning and relevance can be changed.

Placing a ban on the public display of the Confederate flag creates a common cause for its supporters, whether they be on the hate-group or the heritage-minded side of the fence. If you ban the flag, suddenly the two disparate support groups are no longer so very disparate; they are on the same team. History has proven that few actions can galvanize a group to action more than the legal suppression of a beloved symbol. If the flag is banned from public display its influence will be amplified and its general use limited to those who seek to energize their racist causes. Any misty-eyed nostalgia associated with the flag will be changed to vital, contemporary concern. Such is the nature of symbols. Note the history of the swastika — an image which is banned in Germany — and its continued use by neo-Nazis around the globe.

So if we don’t ban the Confederate flag, how then should we deal with the issue? The solution is simple really, though it will require the cooperation of the African-American community. They must stop protesting the flag and let it wave freely. But this is just the beginning; step two requires a bit more chutzpah. African-American role models — athletes, musicians, politicians, ministers, and corporate leaders — must begin the transformation of the flag’s image by absorbing it into their culture. Imagine Spike Lee at a Knicks game sporting a warmup suit proudly emblazoned with the Rebel flag. Imagine O.D.B. with it tattooed on his chest. Imagine the African-American community taking the flag’s fundamental meaning — that of rebellion — and with it creating an all-out fashion revolt against small-mindedness and hate.

In the ’80s and ’90s, many gays began calling themselves “queer,” thereby turning a formerly derogatory label into an empowering brand. They began sporting the word on T-shirts with the whimsical image of a $3 bill. An even more potent statement could be made by incorporating the Confederate flag into black iconography. Those white supporters who now cling to the banner out of a sense of heritage rather than hate should have no problem with this, since their beloved emblem will no longer be an inert reminder of past defeat but rather a vital, relevant symbol for defiance and progress. It will again be what it once was, a glorious rallying point for Americans who feel unduly oppressed. Once the flag has been captured and fully incorporated into black culture to the point of ubiquity it will naturally be relinquished by the hate groups who want nothing to do with the signs and symbols of their enemies. Besides opposing forces can’t ride into battle sporting the same flag, now can they?

Let’s fix this problem once and for all. Steal this flag.