Secret deals, loan payments kept Generals in Tenn.
JACKSON, Tenn. – Jackson taxpayers have spent $13.4 million over the past 10 years to keep the city’s minor league baseball team, the Jackson Generals.
This is equivalent to $1 out of every $50 that the city collected in taxes going toward baseball-related expenses over the last 10 years.
The true cost, which has never been revealed before, is hidden in a web of potentially nonbinding side agreements, loan payments and secret funds, a Jackson Sun investigation has found.
The state comptroller is investigating. Meanwhile, the Generals are on a list of 42 teams in danger of being cut by Major League Baseball in an attempt to shrink its minor league system.
On June 7, 2011, the Jackson city council approved a renewed lease agreement with the team. The day after it was signed, former Jackson Mayor Jerry Gist and Jackson Generals team owner David Freeman —
the controversial former co-owner of the Nashville Predators — signed side agreements related to the lease that were never presented to or voted on by the city council, and which directly contradicted several parts of the lease agreement.
Those side agreements led to the city secretly sending $3.6 million to the team — and the costs are skyrocketing.
In the two years before the new agreement went into effect in 2012, the city spent an average of $855,852 on the team.
Since the new agreement, Jackson taxpayers have spent $1.45 million a year.
Meanwhile, attendance numbers plummeted 62% from the team’s first year in Jackson to 2010.
❚ 1998 attendance: 313,375
❚ 2010 (the year before the new deal was signed): 118,503
❚ 2019: 107,131
“The numbers speak for themselves,” Jackson Mayor Scott Conger said. “For now we are holding up our obligations per the lease agreement.”
Jackson’s lease agreement with the Generals ends on Dec. 31, 2020, but the team can renew for 24 more years without city interference.
The city of Jackson is under investigation by the Tennessee comptroller’s office for contracts signed by Gist, including the secret side agreements between Gist and Freeman.
The Jackson Sun examined hundreds of city financial documents to de
termine every payment that went toward expenses related to the Jackson Generals. The Sun was only able to determine taxpayers’ expenses from the last 10 years because of the data available. The investigation found:
1. The side agreements made the city liable for everything from field maintenance to concession repairs, despite the original lease stating the club was responsible for these expenses.
2. The city used over 90% of its marketing and community relations budget to reimburse the Generals for everything from fireworks and jersey giveaways to local chamber of commerce membership dues and charity golf tournaments. The city never informed the city council it was doing this.
3. The city stopped reporting the specifics of its payments when it refinanced the debt in 2009, making it nearly impossible to determine how much money it has left to pay on the original bonds that built the Generals’ stadium, The Ballpark at Jackson.
Gist responded to the Sun’s request for comment Feb. 6. He defended all the actions he took to keep the Generals in Jackson.
“We felt the team was worth supporting,” Gist said. “If you look at the growth of the development built around the stadium, I think it was worth it.”
What do the side agreements include?
The Jackson Sun received the side agreements between Gist and Freeman through a public records request in July 2019.
The side agreement was broken into two sheets. One clarifies a vague reference in the lease agreement to reimbursing the team for marketing costs. The second directly contradicts clauses in the approved lease agreement.
The original lease agreement states the city would provide “marketing and advertising” to the team at a rate equal to or greater than the amount spent throughout the 2010 baseball season.
However, the clause in the lease agreement doesn’t contain an actual number for what the city spent on marketing and advertising in 2010. Instead, the side agreement contains a specific number: $321,928.
The payments were obscured in broad line items covering Jackson’s overall publicity and marketing budget, making it difficult for city council members to track the spending.
When it came to the marketing payments, Gist said it was his decision.
“It was how (the fund) had been put together for years,” he said.
The lease agreement says the Generals are responsible for concession equipment and repairs, stadium services and field preparation. The side agreement contradicts this, making the city responsible for up to $500,000 worth of repairs, services and preparations. Invoices from the team to the city show on multiple occasions the city has paid for these services, including replacing a lemonade crusher, ice cream machine and fryer.
Freeman’s long history in sports ownership
Freeman has a long history in sports ownership and is no stranger to controversy. He was once a co-owner of the NHL’S Nashville Predators and now owns another minor league baseball team outside Orlando, Florida.
Freeman sued his fellow Predators co-owners for $250 million after they diluted his shares, claiming Freeman failed to make certain payments related to the team. The case was dismissed but went into arbitration with the NHL, and no information has been released on any settlement.
His other minor league team, the Florida Fire Frogs, were bought out of their lease in 2019 for $500,000 after the team’s poor attendance led local leaders to repurpose the baseball stadium into a soccer stadium.
What happens with the team when the deal ends on Dec. 31, 2020?
The city’s lease with the team ends Dec. 31, 2020, but the team has eight three-year options to renew the deal. If the team does nothing, the lease will automatically renew.
The legality of the side agreements could factor into whether the team stays. Freeman said the team doesn’t make enough money and those extra payments are critical to keeping the team in Jackson. But the team is willing to make some concessions.
“Absolutely we would sit down and
have a conversation with the city,” he said.
Jackson city attorney Lewis Cobb called these agreements “nonbinding” due to the mayor signing them without council approval. The lease states any amendment must be approved by the team and city, but the original lease agreement doesn’t specify whether “city” means mayor or council, or both.
Gist countered his own city attorney, calling the side agreements legally binding because he had the “right” as mayor to negotiate and it was necessary to keep the team. “I feel comfortable in the lease and side agreement I made,” he said.
Freeman says the agreement was signed on the side because it was “what Gist and Cobb wanted.”
“This was all done as part of the deal at the specific request of the mayor and city attorney,” Freeman said.
Cobb declined to comment on Freeman’s allegations.
Freeman added that it would be “ridiculous” to call these agreements nonbinding but said if they were, he would question whether the city was trying to defraud the team.