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What Stephen Porter had to say Wednesday

Stephen Porter, leader of the area's unsuccessful bid for a National League expansion franchise, faced a questioning public Wednesday. Following are excerpts from a news conference at the Florida Suncoast Dome. Some of the names he refers to are R. Mark Bostick and Sidney and Allen Kohl, three of his partners; Douglas Danforth, chairman of the league's Expansion Committee; and Rick Dodge, St. Petersburg assistant city manager. "When our ownership group was selected I was asked in my Washington office by two or three TV reporters that day why I didn't seem more ebullient. I told them then I felt a tremendous weight on my shoulders as the managing partner of our group to bring major league baseball to Tampa, and with that responsibility I could not be joyous until we were victorious. It was just this outcome about which I was concerned.

There has been and there will continue to be much speculation regarding why Denver and Miami were chosen over the bid by Tampa/St. Petersburg. I am afraid that today I can give you no definitive answer. Over the past weeks and months there have been a lot of internal politics by all the applicants. We also participated in that process. Perhaps we were out-politicked. We heard of the concerns about the National League taking two Florida cities. We heard that some western clubs did not want two teams in the eastern time zone. We have all read the recent negative articles about the financial problems of baseball and the networks. All of us are aware of what is happening on the players' salary front. Our group knew that with its eyes open and we went forward.

Perhaps baseball believed that in these difficult economic times in our industry that there would be a single billionaire or multibillion-dollar company to cushion an expensive expansion franchise against the possible coming of hard times in baseball. We don't know why Denver and Miami appear more attractive to baseball. Perhaps the rumors that surfaced last week that the Denver and Miami groups have more equity made a difference. Maybe the names Blockbusters and Coors had more impact. However, I can report to you unequivocally, that we were never told that our equity was inadequate.

Just last week Mr. Danforth publicly stated that our plan was well within the guidelines of baseball _ the only guidelines with which we were ever supplied. When Bill White, president of the National League, called me two days ago, he too re-asserted that our financial plan was perfectly adequate. I can report to you today that our group was prepared to put up the money necessary to bring an expansion franchise here. We have long said publicly and privately that we wanted to add local equity to our club so as to reduce our debt. He saw no reason to complete that process immediately.

Frankly, I wouldn't be surprised if in the final analysis Denver's group has as high a percentage of debt as ours would have had. Nor would it shock me if Mr. Huizenga decided to borrow a substantial portion of the money he may invest in baseball.

Over the past few months we shared our financial plan with many Florida business leaders _ most of them local _ and invited them aboard. For them to now appear surprised at our financial plan is hard for me to swallow. Our group spent many hundreds of thousands of dollars on this process. We worked very hard... and it should not shock you that we are the most disappointed of all.

Contrary to the rumors that have been rife in the newspapers the last few days, no member of our group defaulted on any obligations. Some members of our group have been unfairly singled out in this regard. Financial commitments made have been met. This is the time when the people of this community...should begin thinking optimistically about the future rather than engaging in recriminations.

I believe baseball is coming to Tampa Bay, and to this facility. I can't promise the time frame, but I believe that the economics of baseball make it an absolute necessity that an area like this must get a baseball team. Our group has already begun the process of inquiry about existing teams. For obvious reasons, we did not do that while we were an expansion candidate. We hope that we will still be able to play a role, perhaps a major contributing role, in bringing baseball here. And we will all be thrilled and delighted to be joined in that effort by any other business leaders and major companies who are located in this area.

One thing is for certain: I offer you no apologies for not being successful in this round... Let us all look forward together to a happier press conference some time in the future when a member of our group _ or God bless them, any other business leader _ is standing before you announcing that Major League Baseball is coming to Tampa Bay. I'll be happy to answer any questions you might have."

Q. Mr. Porter, it wasn't speculation by the newspapers but comments from people within baseball who said you did not meet the financial requirements. Who's right?

A. I guess my answer to that, and I'm probably going to shed less light on this debate than we'd like...We filed our plan before they asked for our plan. I'm the managing partner of this group. I worked on it longer and harder than anybody. Nobody ever called me and told me that it was inadequate. I cited two examples today of why I was told that it was adequate.

You know, baseball needs to explain why it chose two cities and didn't choose this one or any others. Even the issue of adequacy, to be honest with you, is something different than the issue of requirements. Baseball didn't give us any different guidance than I think you people of the press have. The initial expansion application itself was an extraordinarily sparse document for a $95 million dollar investment. And along the way, over the several months, both before we made the short list and afterward, we'd been given no contracts, no affiliation agreements, no specifications. This is what you must do. This is what you must not do.

This is how your partnership must be structured. Basically they asked us to submit something...Whatever the requirements were _ there were very few, one being the so-called infamous 60/40 rule _ we met. The 60/40 rule, by the way, as I've seen that quoted frequently in the press here, I don't know that it's properly quoted, but it's been given to me to understand, is that not how much personal debt one can have. I don't think it makes any difference under baseball's rules whether you reach into your piggy bank and take money out or do you go to your bank personally and borrow the money or do you pledge collateral.

We had different members of our group and I never asked any of them where their money was coming from. It was just coming. I don't know where Mark Bostick was writing his check from and I don't know where Sidney Kohl and Allen Kohl were writing theirs from. I do know how Joel Schur and I were raising our portion of the funds. But I can tell you this: the 60/40 rule means that you may not pledge as collateral more than 40 per cent of the franchise. And we weren't going to do that.

It may very well have if we come to the conclusion with the banks and all the participants in July at the time of the first dose of money was due that we might have well exceeded the 60/40 rule. But everybody knew what the rule was and that we could not exceed 40 percent of collateralization in the entity operating the franchise. And that we met. So if, in fact, those members of the (National League) Expansion Committee, the Ownership Committee, or any of the other 26 owners who have to act on this process are now to say that our plan wasn't as good. Well, I didn't see the other plans...I wasn't the fly on the wall in those meetings. I'd like to be. I'd probably have liked to know the answer to that question as much as you would like to know the answer to the question...

And today I stand before you telling you that I think we complied. And I tell you unequivocally, had we been selected, when the first down payment was due in July of this year, we were prepared to pay it...If our money wasn't as green, I'm sorry.

Q. Mr. Porter, Mr. Fred Kuhlmann...has just said in California today that the St. Petersburg group could not meet the 60/40 rule. I'd like you to comment on that and also comment on the fact of what was said yesterday by Mr. Danforth (Douglas Danforth, chairman of the Expansion Committee) that your group was adequate but where he was concerned was the fact that the point man, the principle owner, kept changing back and forth.

A. You know, when he says kept changing back and forth, I just don't understand that. Now we filed an application in late August or September. At that time we had a different percentage of ownership. At that time we didn't have Mr. Bostick in our group. That percentage of ownership shifted. At the time, back in September, there was no specific amount of money that anybody said they were putting in. There was a percentage ownership and the percentage did shift. But they were well aware of that. We let them know that more than a couple months ago.

If that was a concern, if they wanted this area, one would think that shortly after that was filed, I certainly, if I were running the process, would call some lead person up in the group and say, "Hey look, there's a concern I have..."

With respect to Mr. Kuhlmann's comment, I don't know what to say about that. We filed our plan. We had well-known baseball counsel in New York. We were counseled by a national accounting firm. They met frequently. We described our plan. We were advised that the plan met the 60/40 rule. I would have to sit down with Mr. Kuhlmann and make sure that he's adequately focused on our plan. I've been told that basically our plan has not even been sent forward to him _ that the only two plans that they are looking at are the plans of the two cities that were selected by the Expansion Committee.

Q. Did the Kohl brothers dramatically reduce their investment at any time from their original stake in the group or not?

A. The Kohl brothers percentage interest in the group...went down. We made a press statement. We put out a public announcement. It went down when Mr. Bostick came in, that is the percentage ownership. Their actual dollar amount _ what I would call the check they were writing, apart from how much of the borrowing that they were participating in _ was never reduced because they never...made any representations to baseball as to what their stake was going to be in flat dollar terms.

Q. So it is absolutely untrue that their stake in this was going down from $50-million to $5-million.

A. That is absolutely untrue. Baseball would be hard-pressed to find any statement in which the Kohls said they were putting in $50-million. That's absolutely untrue.

Q. Do you feel that you've gotten a fair shake out of this...?

A. I didn't come here to complain about not getting a fair shake...My basic view was we are what we are. We can't move the area. We can't move the Dome...I don't even know if that made the difference. I don't know if the much vaunted rivalry between the National League and the American League over the issues of two Florida territories made the difference. I don't know the answer to that. Obviously, I have an opionion at this point and my opinion is that the American League would like to have part of this action and, why not? So I don't know if there is any one answer.

I can tell you that you're probably could to ask 26 owners and they'll give you 26 different answers. I don't know that 22 or 23 of the owners have even seen our financial plan that they are so careful to comment on. In answer to your question, I'm not here to tell you that we didn't get a fair shake...To my knowledge the expansion committee tried to be scrupulously fair. Whether they made the right or wrong decision is a matter for everybody's opinion. I think they made the wrong decision, obviously. I am biased in that and I am sure that almost all of you are, too. But I have no reason to believe that the Expansion Committee did anything other than consider everything that they possibly could and make a decision. And when a jury makes a decision, that's the decision. We're unhappy with it, but that's the way it is.

Q. Will all of your group stay together at this point?

A. Our group has already talked about that. We are prepared to stay together. We are prepared to continue to talk to other business leaders in the community. If the perception is that there's just got to be a lot more local heavy business participation _ the equivalent of a Coors or interest in this area so that baseball knows that the rest of the team, a major local corporate presence as it were...If, in fact, in discussions with local business leaders, the view is that the community would be better served if we stepped aside or if some of us stepped aside...we'll step aside.

We are not here to block baseball from coming to Tampa Bay. We will do whatever we can to facilitate...And we'd like to be joined in the effort by others and I'm not trying to apply some salve to the wounds when I tell you I think baseball's going to come here. This was the only show in town, the expansion process for a long period of time. And may very well be...other opportunities. Whether they are before 1993 or after 1993 I don't know.

Q. Can you just address the battle you face in bringing another franchise here. It hasn't been done in 20 years.

A. "I know that. I know that. And I don't think I can add much to that process. The commissioner has publicly said what past commissioners have said. I'm not going to contradict commissioner Vincent on the subject. It seems to me that over the last year while expansion has been the front story about the baseball map changing, you couldn't say anything other than, "No franchise can move.' It would just totally undercut the process. ...I don't think baseball can at this point acknowledge that they may have to have some teams move in order to save themselves. That would also undercut the process. I'll tell you this, I'd be plenty unhappy today if we had been designated and were going to pay...$95-million for the franchise fee, $15- to $20-million in start-up losses in 1991 and 1992 to put two or three minor league teams and a full staff on the field, and then, number three, not share the TV revenues in 1993. I'd have been plenty uphappy if a couple days after I'd been so designated, somebody moved their club for $90-million in 1992 _ existing team, set farm system, the whole works.

So I don't think baseball's going to undercut its own process in the immediate future. But if, in fact, there are some of baseball's brethren who get into financial trouble...and someone says, "I can't compete, I've got to move, I'm not so sure that the moratorium or the embargo on moving will stay in place forever. So I'm not expecting to be able to announce that the Los Angeles Dodgers are moving here in the next month, to go from the ridiculous to the sublime. But I am saying to you that I think that there's light in the end of that tunnel."

Q. Mr. Porter, have you talked to teams specifically, and what has their reaction been.

A. "Well, I don't want to get into that. We have quickly put out feelers. I'm not going to specifically say where. I can tell you this: Individual owners whose teams are for sale differ on the subject. Almost all of them would rather ...sell to an ownership group in their own city. It's much easier to do that. Most of all you've got the commissioner's rule, so obviously the first thing to do is to try and do that. But if in fact someone wants to move badly enough, there are owners who prepared to sell out or move themselves to a relocated site if they could just get permission to do so. They realize they're going to have to convince their fellow owners of that. They know what the commissioner's rule is, but the commissioner is hired by the owners. I'm sure commissioner Vincent is absolutely deadly sincere that he doesn't want to have teams move. So I'm not here to contradict the commissioner. Far be it from me. He determines what's in the best interests of baseball. But the best interests of baseball may shift.

Q. In the last week there was a real movement locally here among business leaders literally scrambling to find new investors. Was that something initiated by you? How did that happen?

A. "...That flurry of activity occurred almost immediately after Mr. Danforth made a public statement that there was more equity in the Miami and Denver plan. And when some of us, both in the group and outside the group, started hearing word that we were running behind Miami and Denver and that it might have been...that there was more equity in the Miami and Denver groups. That's when a bunch of people assembled down here. There was one investment banker who stepped to the table and was organizing a group, and a bunch of business leaders were getting together...But it was not something in which at the last minute we panicked and said: "Get us $40-million worth of equity. We've known all along we're short and now we're going to fess up to it.' That just did not happen.

Q. (From Stephen Koff of the St. Petersburg Times): Mr. Porter. You have today refuted some of the things said by important owners of Major League Baseball and from members of the St. Petersburg community who said they were very familiar with your group's finances. The bottom line is that St. Petersburg does not have a baseball team. Who should the public believe?

A. "Mr. Koff, I think the public should believe you because you write whatever you want. You're calling Mr. (Allen) Kohl at 5:30 in the morning and you're writing a completely phony story this morning that got headlines. I think they really ought to believe you. Because I think you are really are the greatest expert down here and you have been for several months."

Q. If the Kohls feel that they have been so maligned...why have they not come forward themselves...We haven't heard a word from them.

A. "I'm sorry I can't speak for the Kohls. The Kohls have been private people from the very beginning. It wasn't my job to come down here today and just say the Kohls have done this and the Kohls have done that. I told you my perspective. They are my partners in this deal and I denied here publicly with respect to what people have reported have been their commitments and what have not been their commitments. Sidney and Allen Kohl don't like publicity. Unfortunately, they're getting plenty of it right now. They simply have taken a back seat position in this enterprise from the very beginning.

And they're paying for that now by appearing indifferent to it. I've spoken frequently with Sidney Kohl. I speak with him almost every day and I've spoken with him this morning. He's certainly not indifferent to this and he's certainly outraged by the lead story in the St. Petersburg Times this morning, which implied that he made another investment. Not implied, flat out stated that he made another investment, and therefore reduced his involvement from $50-million to $5-million, which is why I so sharply answered Mr. Koff. I expect press stories to have at least to have some modicum of accuracy, a modicum of accuracy.