May 13, 2013

City audit of National Baseball Congress’ books reveals quarter-million-dollar debt, delinquent payments

An internal audit of the city-owned National Baseball Congress’ books shows its operators are more than a quarter-million dollars in debt and two years in arrears to the city on lease payments for Lawrence-Dumont Stadium.

An internal audit of the city-owned National Baseball Congress’ books shows its operators are more than a quarter-million dollars in debt and two years in arrears to the city on lease payments for Lawrence-Dumont Stadium.

The tournament’s financial problems threaten its future, city officials said Monday, as they launch a study on how to rescue the flagging now-regional college baseball tournament that has been a fixture in Wichita since 1935. The tournament has been barely in the black over the last two years, netting only $1,100 in 2012.

First up are plans through 2014 to market the tournament and seek corporate sponsorships through buy-out nights, two efforts city officials say have been largely ignored by the tournament’s current managers, the Wichita Wingnuts, a privately owned independent league baseball team that plays at the stadium.

“Can it come back? I think it can,” council member Jeff Longwell said. “We just need to make sure that everyone is on the same page and understands the consequences of the tournament not working, because the city’s not going to subsidize it. We just can’t.”

“It’s like a garden full of weeds that hasn’t been watered for quite awhile,” said Bill Pintard, the manager and owner of the tourney’s dominant team, the Santa Barbara Foresters. “It needs someone to care for it. It needs new energy.”

The audit, ordered by City Manager Robert Layton last fall amid persistent – and now confirmed – reports that the tournament has been delinquent paying its bills, also showed that the 78-year-old tournament’s books have been “co-mingled” with those of its operator, the Wichita Wingnuts, for the past two years. It also found no clear accounting of ticket revenue from the tournament.

Layton said there are no immediate plans to inject city money into the tournament. He said city officials will insist on changes in the tournament format to make it profitable enough to grow.

“We are totally committed to this tournament and bringing it back to its glory days,” Layton said. “I think that everyone agrees the tournament can be better and should be better.”

Mayor Carl Brewer echoed the city manager, saying the tournament is essential in “a very passionate baseball town.”

“We need to figure out how we can help them make the tournament more profitable,” Brewer said. “But at the same time, it’s their business and we have to let them run it.”

Wingnuts president Josh Robertson was similarly optimistic Monday.

“I think that our ownership group and the city can form a partnership to make this work,” he said. “Our ownership group has dug deep into their pockets on several occasions to keep baseball in Wichita. I want baseball to work in this city.”

Longwell said Monday the city failed in its partnership responsibility.

“Should we have kept a better eye on everything? Absolutely. No one should go two years without making a lease payment without anyone knowing it. That’s proof enough we weren’t keeping the kind of watch on the operation we should have,” he said.

Pintard said he was shocked by the audit’s results.

“You’ve got to find a way to keep the tournament going,” he said. “It’s such a great thing. We beg, borrow and steal to come to Wichita.

“Think about Satchel Paige there in Wichita in 1935. Twelve years before major league baseball integrated, Wichita and Hap Dumont integrated baseball. There’s nothing but baseball tradition in Wichita. Don’t lose it.”

As a result of the audit, city officials have put in place a series of financial requirements, Layton said Monday, including a demand that the Wingnuts pay off a $138,000 debt to the city – $66,000 in back lease payments for 2011 and 2012, along with a delinquent $72,000 water bill – by Nov. 1.

Robertson said he questions how the stadium’s annual water bill could jump from $20,000 in 2010 to its current level.

The tournament is now being operated on its own set of books and the computerized NBC ticketing operation will be modified for a more accurate accounting of ticket sales, specifically whether ticket buyers have paid full or discount prices, Layton said.

The audit also showed that Wingnuts management has exhausted a $147,500 line of bank credit on the tournament taken out in 2009. Layton said Wingnuts officials have been making interest payments but have not retired any of the loan principal.

The Wingnuts ownership does not receive a management fee for operating a city facility, unlike the deal with the Steven family for the Wichita Ice Center. Brewer said Monday he didn’t know that and would like an explanation.

However, the tournament is plagued by some outside issues that will be difficult to fix, Layton said, not the least of which is the economic downturn that has claimed several long-time NBC standard-bearers. Pintard said on Monday that the Foresters lost $8,000 last summer – despite winning the tournament and its $18,000 first prize.

Competing non-NBC leagues like the Cape Cod and Northwoods have also siphoned off large numbers of big-time college players, Layton said.

Longwell said Monday – as city officials have since last fall – that the Wingnuts themselves are in “some degree of (financial) trouble.”

Robertson declined to discuss the Wingnuts’ balance sheet.

But he said, “It’s public record online that two-thirds of minor league teams lose money every year. That’s a pretty small one-third. It’s tough, I’ll tell you.”

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