Pulitzer's New Prize

The Cardinals have billed Michael E. Pulitzer as an owner, even when he wasn't. Now that he is, can we trust the Post to tell the truth?

The St. Louis Cardinals have always been cagey when it comes to cash.

The owners, who bought the team five years ago, claim they consistently lose money in the best baseball town in America, a city that led the National League in attendance last season. Just two weeks ago, team president Mark Lamping told the Kansas City Star that the team lost between $5 million and $10 million last year, when attendance at Busch Stadium surpassed 3.3 million, a franchise record. But the Cards' owners aren't willing to back their words with proof. They've never said what the team may be worth, nor do they want anyone to know exactly who owns how much of the franchise that's asking taxpayers for a new ballpark. City officials privy to the team's financial books during negotiations for a new stadium have signed confidentiality agreements stipulating that they won't share numbers with the public.

This much is known: The owners paid $150 million for the team in 1996, a purchase that included Busch Stadium, adjacent parking garages and land beneath two downtown hotels. Within a year, they sold the garages for $91 million and the land for $9.7 million, leaving them with an investment of $49.3 million, quite a bargain for a team worth well over $100 million.

Danny Hellman

It appears Pulitzer Inc., the parent company of the St. Louis Post-Dispatch, and its chairman, Michael E. Pulitzer, may also have gotten a bargain.

On March 23, the Post reported that Pulitzer -- the corporation and the chairman -- is buying a stake in the team of nearly 4 percent. Corporate officials would not divulge the exact percentage, nor would they say just how much Pulitzer and the company paid for the share. But team general partner Fred Hanser will.

Hanser tells the Riverfront Times that the Pulitzer investment equals the amount of money Pulitzer Inc. loaned the team back in 1996, when Major League Baseball rejected a direct investment on the grounds that a Pulitzer subsidiary already owned a 5 percent stake in the Arizona Diamondbacks (under league rules in effect at the time, individuals and entities can't own pieces of more than one team). Instead of buying a piece of the Cardinals, Pulitzer Inc. loaned the franchise $5 million to help finance the parking-garage part of the purchase, but that loan was repaid within a few months, when the team sold the garages. In 1998, the Post reported that Pulitzer subsequently loaned the team another $5 million to pay for stadium renovations, but that story was wrong. "That was incorrect," says Ronald Ridgway, Pulitzer senior vice president for finance. Ridgway says Pulitzer never loaned money for stadium renovations and had no outstanding loans to the team after the garage loan was repaid. Nonetheless, even though neither Michael Pulitzer nor his company held any ownership interest in the franchise, the chairman has been listed as a team owner in the team's media guide [Bruce Rushton, "The Midas Touch," RFT, Feb. 7].

In 1999, Pulitzer Inc. spun off its broadcast properties, including the subsidiary that owned the Diamondbacks share, resolving the league's conflict-of-interest concerns. Hanser also says Major League Baseball has changed the rules to allow entities to own shares in more than one team, so long as the stake in any one team doesn't exceed 5 percent.

Although he won't discuss dollar figures, Hanser tells the RFT that the amount of Pulitzer's latest investment is the same amount as the 1996 loan. In discussing the deal, Hanser says he considers the corporation and its chairman to be a single entity.

"It's the same amount he loaned the team originally," Hanser says. "He had debt in the team, actually, some of the real estate. The intention was, as soon as baseball changed its mind [about allowing ownership in more than one team], we were, in effect, switching the debt for stock. Although that's not exactly what happened, that's what happened in effect."

At $5 million, a stake in the team of 4 percent or less would peg the value of the team at a conservative $125 million -- an amount considerably less than most informed estimates, including one published last year by Forbes magazine, which estimated that the Cardinals franchise was worth $219 million. If nothing else, the figures demonstrate that team owners, even without a new stadium, have more than doubled the value of their investment since selling the parking garages. A more sinister view is that the team, in the midst of a public-relations battle to get a $250 million taxpayer subsidy for a new ballpark, has given the parent company of the city's daily newspaper and one of its largest shareholders a sweetheart deal, granting Michael Pulitzer and Pulitzer Inc. a stake worth substantially more than what they paid.

Ridgway says he doesn't know whether Pulitzer and its chairman paid fair market value for their share in the team. "I presume we did," Ridgway says. "I really wasn't part of the negotiation. As you well know, on an athletic team, it would be pretty hard to determine the fair market value unless you sold the whole thing, lock, stock and barrel. You just assume the parties were happy with what they came up with, both sides."

Regardless of who owns the team or what they may have paid, the Post insists the Pulitzer ownership interest won't affect news coverage or editorial positions.

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