No loan, no sponsorship of Rays for First Union
By JEFF HARRINGTON and MARC TOPKIN
© St. Petersburg Times, published April 6, 2001
The Tampa Bay Devil Rays have severed ties with the bank that brought it to the ballgame.
First Union Corp., a key Rays backer that financed the launch of the baseball team six years ago, is out as a corporate sponsor. The move came after Rays managing general partner Vince Naimoli arranged to swap the team's primary loan with First Union for a cheaper deal obtained through Major League Baseball.
John Higgins, Rays senior vice president, compared the loan switch arranged through the league with "financing your mortgage with a bank. . . . They approached us and other teams. When you look at the financial terms and the like, it makes very good economical sense."
Higgins would not discuss terms of the new loan, but the Rays are expected to save hundreds of thousands of dollars. The price they pay: First Union will dismantle one of the Ray's deepest and broadest corporate sponsorships.
The First Union mini-branch at Tropicana Field is expected to be closed by next month. The bank's four ATMs around the stadium will remain as a convenience for fans, perhaps until the end of the season, unless the Rays strike a deal with a new bank before then.
But all the remaining First Union tie-ins will be eliminated.
"When we look at sports marketing, it's a bundled product," First Union area president Paul Mellini said Thursday. He said the sponsorship "was part of the loan being paid off. So the sponsorship goes away when the loan goes away."
Some of the Rays' major corporate sponsorships are worth about $1-million a year. Neither First Union nor the Rays would discuss terms of the bank's sponsorship, except to say the five-year contract was supposed to run through 2002.
First Union held a lien on the Rays' partnership as part of the $75-million loan that was used to finance the purchase of the franchise six years ago.
Mellini confirmed the loan was paid off and a lien against the team was discharged in December, but he cited bank policy in refusing to discuss details of the loan or payment history. The Rays would not discuss how much was left on the loan, though the balance was believed to be about $50-million.
Neither the bank nor the ballclub talked about the split earlier, but signs were evident on Opening Day in Tropicana Field this week: First Union's prominent sign in left center field was covered with a tarp that said "Rays of Hope," a reference to the team's philanthropic foundation.
The connections between the team and its bank have been strong from the start.
Ken Thompson, now chief executive of Charlotte, N.C.-based First Union, stepped up to the plate to finance Naimoli's purchase of the franchise from Major League Baseball in early 1995. At the time, Thompson ran First Union's Florida operations from headquarters in Jacksonville.
Later that year, First Union was the leading contender to buy naming rights for the stadium, but Tropicana Products emerged as the namesake in late 1996.
In subsequent years, Mellini and other First Union execs have thrown out the opening pitches at games. Twice a season, the bank gave away trinkets like First Union helmet banks or Nascar minicars at games.
When First Union opened its branch at Tropicana Field in 1998, Mellini hailed it as the first of its kind inside a professional sports stadium.
Rays and First Union employees even co-sponsored an annual stock-picking game, giving players a chance to bet on a combination of imaginary stock and the performance of a given Devil Rays player.
All the while, the Rays have struggled on the field.
With a mediocre record, the Rays have had trouble filling seats since their opening season. With less cash coming in, the team has one of baseball's smaller player payrolls. Like most clubs, it is looking for ways to save money.
Such a cost-cutting opportunity arose last season when Major League Baseball and a consortium of banks led by FleetBoston Financial began offering teams cut-rate loans. "It's part of a league-wide lending facility," Higgins said. "It's nothing MLB did especially for us."
Higgins insisted the move does not indicate the team is in any sort of financial trouble or that it needed MLB to step in and help bail it out as the Arizona Diamondbacks did last year.
Both Higgins and Mellini played up the ongoing relationship between the two corporations, insisting the parting was amicable.
"We did enjoy and still enjoy a very good working relationship with First Union," Higgins said.
"We've enjoyed our relationship," echoed Mellini, who was among those in the First Union corporate suite cheering the Rays on to an 8-1 home opener victory Tuesday.
The Rays are in talks with several banks as a possible replacement for First Union.
Whatever bank is picked, Mellini said First Union intends to keep its corporate suite for entertaining clients and rewarding employees.
- Jeff Harrington can be reached at email@example.com or (813) 226-3407.
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