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Devil Rays financial trade a bust for bank

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By ROBERT TRIGAUX

© St. Petersburg Times, published April 6, 2001


The Tampa Bay Devil Rays quietly engineered one of the franchise's biggest trades. And it did not even involve a player.

The Rays released veteran team bank First Union and brought in FleetBoston Financial as the new lender to the team. The key difference between the financial institutions? Cheaper loans, it seems.

For First Union, the end of its lending relationship with the Devil Rays can't be comforting. The Charlotte, N.C., bank has been on the financial skids for the past few years. Only recently has it shown signs of paring back costs and trying to bounce back to its old form.

Losing the Devil Rays -- a new Major League franchise First Union backed with $75-million in 1995 -- is perhaps a puny matter to a big bank stretched along the nation's East Coast. But it is surely a loss of prestige and momentum. Aspiring Southeast banks such as First Union and Bank of America love the hype, muscle and ego of big-time baseball and football. That's why First Union jumped at the chance to team up early with the Devil Rays, just as Bank of America (then NationsBank) had become the official bank of the Florida Marlins and other sports franchises.

But at Tropicana Field this week, First Union's huge outfield billboard is covered by a cloth replacement banner. It may as well be a shroud.

Fleet, an aggressive bank with deep New England roots, won the Devil Rays over by offering cheaper financing terms and the blessings of Major League Baseball. In 1998, Fleet arranged $425-million in financing for Major League Baseball. A year later, Fleet cut a deal to become the official bank for Major League Baseball.

It was a clever marketing move.

"The love of baseball is a common denominator in this country," Fleet chief Terrence Murray said at the time. By sponsoring Major League Baseball, Fleet spreads its name nationwide at just about the time the bank seems poised to expand beyond the New England states.

(Is it a coincidence the Wall Street Journal reported the rumor in January that Fleet might try to buy First Union?)

Fleet is helping the owners of the Boston Red Sox in their current effort to sell the team. Last summer, Detroit Tigers owner Mike Ilitch hired Fleet and Merrill Lynch to refinance a $145-million loan that helped build the new Comerica Park baseball stadium.

Fleet even hired New York Yankee Derek Jeter and Boston's Nomar Garciaparra as celebrity spokesmen.

But Fleet's big move came in late December. In what may be the largest sports finance transaction yet, a $1.2-billion credit facility for 18 Major League Baseball teams was assembled by a syndicate of banks led by Fleet.

Among the 18: the Devil Rays.

Short takes

WHAT'S AN IPO? The bay area market for initial public offerings still looks grim. The latest victim: Palm Harbor's Dynacs Inc. (digital technology) and Silver Springs' Intellon Corp. (smart home technology). Both withdrew their plans for an IPO because of the weak market. . . . HOW ABOUT DENNY'S INSTEAD? Cost-cutting is a relative term. An internal memo at Credit Suisse First Boston seeks to trim excessive spending at the investment bank, Bloomberg News says. Among the favorite suggestions: "Try to keep dinners below $10,000, particularly when no travel is involved." . . .

SORRY, CAN'T LEAVE THE OTHER LEMMINGS. Washington, D.C., resident Robert Mills may own only 60 shares of Progress Energy, but that did not stop him from introducing a shareholder proposal at the power company's upcoming annual meeting May 9. Smith wants the parent company of Florida Power to start adding solar and wind power to its mix of electricity generation. No way, Progress Energy says in its proxy statement defense. So much for thinking outside the meter box. . . .

WHAT'S WITH THESE GLAZER LOSSES? Tampa Bay Bucs owner Malcolm Glazer looks pretty savvy in building up the value of his NFL team. But Zapata Corp., the public company the Glazer family controls, lost $26-million last year. Company shares continue to trickle south. . . .

TIRED OF FAT CAT CEOS GETTING ALL THAT PAY? Go to the AFL-CIO-backed Web site at www.paywatch.org. For the first time, the site lets shareholders fed up about big pay packages for chief executives e-mail their concerns to corporate boards. If directors begin receiving not just dozens but hundreds of e-mails, something might change. Who knows?

-- Robert Trigaux can be reached at trigaux@sptimes.comor (727) 893-8405.

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