Devil Rays financial trade a bust for bank
© 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.
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-- Robert Trigaux can be reached at firstname.lastname@example.org (727) 893-8405.
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