PawSox owners disclose their stake in ballclub is worth $11.2M

PROVIDENCE, R.I. (WPRI) – Under pressure from lawmakers as they weigh whether to authorize a new stadium, the Pawtucket Red Sox on Wednesday revealed additional details about the privately-owned ballclub’s finances.

In documents provided to the Senate Finance Committee, the team’s balance sheet showed $7 million in liabilities and $18.2 million in assets as of Dec. 31, giving the owners $11.2 million in net equity. The majority of its debt is a long-term loan from Bank of America that was used to finance the current ownership group’s purchase in 2015. The majority of the team’s assets – $14.5 million – is goodwill, which the team said “represents a portion of the initial purchase price.”

The current PawSox owners have never disclosed how much they paid the Mondor family to buy the team in 2015, but The Boston Globe has reported the price was more than $20 million.

“We are a small, stable, but declining business,” PawSox Chairman Larry Lucchino and Vice Chairman Mike Tamburro wrote in a letter to the committee. “Nonetheless, in our opinion, the business is unsustainable over time if we continue operating at McCoy Stadium and declining trends continue.”

Lucchino and Tamburro said the owners’ equity in the team decreased by $2 million during 2016, and also noted that the owners’ proposed contribution of $12 million cash to the $83-million new ballpark in Pawtucket is more than the value of their current net equity. They also said a new investor who recently bought a stake in the PawSox – presumably Paul Salem of Providence Equity Partners, who made an investment earlier this year – increased the team’s cash position to about $2 million.

PawSox balance sheet as of Dec. 31, 2016.

 

The materials released Wednesday did not provide dollar amounts for the team’s annual revenue and expenses, which would show the owners’ annual profits, if any. A Senate spokesman said that information has not been given to the committee.

“The information provided today appears to address some of the questions committee members have been asking,” Senate Finance Chairman William Conley, D-East Providence, said in a statement. “However, additional follow-up will be necessary. We look forward to continued cooperation by the team to enable the committee’s full and transparent vetting of the proposal.”

The team did include charts showing that its top sources of revenue this year were sponsorships (28%), food and beverage sales (28%) and tickets (27%). The team also said the ballclub generated $2.3 million in tax revenue last year and will generate an estimated $2.4 million this year.

On the attendance front, the owners noted that a decade ago the PawSox “were regularly among the International League leaders in attendance and are now in the bottom tier of clubs.” Attendance at McCoy Stadium slumped 31% from 2006 to this year, dropping from 613,000 to 410,000. However, attendance did tick up slightly this past season versus last year, with about 3,000 more fans coming to games.

The new information was released as House and Senate committees continue a series of hearings about the proposed ballpark, which won majority support from the Pawtucket City Council on Tuesday night. Lawmakers who support the stadium – which would involve at least $71 million in public borrowing, some of it to be repaid by the team – are hoping for a vote on the plan this fall.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook