Fresno Grizzlies still up for sale, losing money – but new contracts could sweeten outlook

The Fresno Grizzlies remain for sale, going on a third straight year.

But the Fresno Baseball Club, the ownership group of the Triple-A franchise, remains hopeful a revised stadium lease along with a new and likely more lucrative concessions deal will attract more potential buyers this offseason.

According to Managing General Partner Chris Cummings, the Fresno Baseball Club has received inquiries about the Triple-A franchise this year. The group even had reached an agreement to sell the Grizzlies each of the past two years – only for the prospective buyer to pull back the offer later, Cummings said.

“I just had a phone call with all of our limited partners and everybody’s thinking is if we find a buyer, terrific, and I think there are things in place that make the Grizzlies attractive to own,” Cummings said. “If we don’t get a buyer, we’ll move forward. We’re going to be here, doing our best to put out a great product.”

In the meantime, the Fresno Baseball Club continues to lose money each year. Attendance dropped from an average of 6,457 in 2015 to 6,189 fans per game this season – ranking ninth in the 16-team Pacific Coast League and 18th out of 30 Triple-A baseball clubs.

Despite that decline, general manager Derek Franks said the Grizzlies cut their losses from $1.2 million last year during the franchise’s first season as a Houston Astros affiliate to roughly $700,000 by the end of this year.

That’s largely because the Grizzlies are on pace to set the franchise merchandise record for a third straight year and surpass last year’s revenue of $525,000, benefiting from the popularity of the Fresno Tacos line and other catchy promotions such as the Three Amigos uniforms.

Franks added that the Grizzlies sold more group tickets and suites compared to their cheaper seats, helping offset the decline in attendance.

And he projects that with a new food service agreement in the works that will offer more favorable terms for the Grizzlies, the Fresno franchise should be on path to break even by 2018.

“It’s my understanding that a lot of (minor league) clubs operate at a small loss or don’t turn a big profit,” Franks said. “While no ownership group wants to lose money, we have a group that can and has sustained losses, and envisions the long-term turnaround by outliving bad contracts.”

The new concession stands deal that remains to be negotiated is one of the contracts the Grizzlies are happy to see expire at the end of this season. Under that contract, the Grizzlies benefited early on financially with their deal with Ovations Food Services, which later became known as Spectra. But in the later years, the Grizzlies did not receive as much of a share from concessions sales, with the club’s commissions ranging from 10 percent to 25 percent, Franks said.

“There’s probably another 10, 20 percent that the club will get in a new market deal,” Franks added.

The Grizzlies GM also would like to see more debit/credit card point-of-sale terminals in place under the new agreement.

“The expiring food service agreement is going to be big for us,” Cummings said. “Will it solve all of our problems? No. But it’s a big step in the right direction.”

In addition, the lease modification approved by City Hall last year allows the new buyer to pay annual rent of $750,000 in monthly installments of $150,000 from April through August when the Grizzlies have their most cash. And the city will contribute up to $1 million for stadium repairs/improvements if the new owner contributes a match.

Cummings declined to state how much the Fresno Baseball Club is asking for the Grizzlies.

In a Forbes magazine article published in July, the Grizzlies were considered the 11th most valuable minor-league baseball club and valued between $20 million and $25 million. The rival Sacramento River Cats were rated No. 1, valued at $49 million.

Broker Jimmy Fox, who is helping the Fresno Baseball Club find a buyer for the Grizzlies, said an ideal new owner would already own another minor-league baseball club and have a strong background in how to operate and make money running the franchise.

Cummings said the first buyer to make an offer from the Grizzlies backed out of a handshake agreement because of health reasons in 2014. And a second buyer rescinded its offer partly because of “negative press coverage,” Cummings added.

Cummings said the partnership group remains patient in the search for a new buyer and continues to look for someone who’ll meet their asking price and be a good fit for the city.

“We’ve been close in the past to a sale and, of course, I’d like to close it out,” Cummings said. “But I’m sitting here in my office that’s decorated with three World Series championships (when the Grizzlies served as a San Franciso Giants affiliate) and another championship when we won it all (the Grizzlies’ Triple-A title in 2015), and I’m thinking it’s disappointing that we haven’t been able to complete the sale.

“But it’s the most enjoyable disappointment I’ve ever experienced. I believe when the time is right, the sale will happen.”

This story was originally published September 20, 2016 at 6:20 PM with the headline "Fresno Grizzlies still up for sale, losing money – but new contracts could sweeten outlook."