Dean Jernigan, 55
It is Saturday, April 1. An overcast spring day in Memphis, and the man who surpassed Roger Maris's home-run record, a guy accustomed to inspiring awe and astonishment, has stumbled onto a sports achievement that impresses even him. Mark McGwire and the St. Louis Cardinals have come to town for an exhibition game against the Memphis Redbirds, their Triple-A minor-league affiliate. It is, frankly, the kind of game that most major leaguers would rather blow off. The night before, the Cardinals played an exhibition game in Texas. Monday, they would embark on the exhausting grind that is a 162-game regular season. McGwire has a bad back and can't even play. If it weren't for this Memphis stop, the Cardinals players would be home, resting in St. Louis.
But Memphis was opening AutoZone Park, the most expensive baseball complex ($72 million) ever built below the major-league level. Cardinals management thought it was obligated to help put on a good Opening Day show. So the team flew into Memphis, boarded two buses, and headed toward downtown.
That's when Redbirds employees dropped a videotape into the VCR at the front of each bus. The mood of the Cardinals players began to change. The videotape told the story of a team, a business, and an owner, Dean Jernigan, that was unlike any story in professional sports. In a business in which the only thing anyone seems to have in common is greed — $10 million salaries; $400 million, publicly financed stadiums; $40-a-seat tickets — Jernigan seemed different. He was a businessman, certainly: chairman, president, CEO, and founder of Storage USA Inc., the country's second-largest self-storage operation. And he was a man who seemed to have no problem charging $2 for Cokes and $4.50 for beers at his stadium. But he wouldn't pocket a dime's worth of profit from those Cokes and beers. Neither he nor his wife and partner, Kristi Jernigan, 37, would ever draw a salary for running the team. Every cent earned by the organization would go to one of two local charities, designated in advance, working to bring baseball back to youngsters in the inner city.
It was a breathtaking notion — and it got the attention of two buses of professional ballplayers, who are as cynical about baseball ownership as anyone is. By the time that McGwire made it to the pregame press conference, he was quiet, in awe. "A lot of guys were like, 'You've got to be kidding me,' " McGwire said, stroking his red beard. "Why can't everybody do that?"
(I) It's a New Ball Game
During a game in July, a Redbirds employee noticed a young girl leaving the team souvenir store, looking downcast. The employee asked what was wrong. The girl's mother had given her $3, but there was nothing in the store for her to buy at that price. At the team's next monthly operations meeting, Kristi Jernigan instructed the team's retail manager, over his protests, to stock some items for less than $3.
Play Ball! (But Play By Different Rules)
Dean Jernigan is up front: He says that he "despises" the traditional role of sports owner. You don't have to watch him for long to see that this is true. Anywhere else, if an owner built a new ballpark, if he built it in a place where everybody said it couldn't be built, financed by a business plan that had been rejected by one of the biggest banks in America — and if that ballpark turned out to be a city's glory, a steel-and-brick dream that conjured the best parts of Camden Yards and Turner Field — you'd expect the owner to be front and center on the day that it opens, right? Taking batting practice. Throwing out the first ball. On April 1, Opening Day in Memphis, Jernigan, 55, took the opposite approach. At the celebration that featured McGwire, Jernigan actually retreated from the happy tumult to write the copy introducing the 46 men and women who would throw out first balls. Then he concluded that there was a better, more efficient way to do it. "I'm going to announce all these guys for today's first pitch,'' he said.
Jernigan slipped into the press box at just the right time. He made all 46 introductions, from memory, pointing out how each person had been instrumental to the Redbirds or to the creation of the stadium. He never let the fans know that the man most responsible for the park was playing PA announcer, that he was the man. "That's just not Dean," said Kristi Jernigan. "He doesn't want the spotlight."
Jernigan never wanted to be an owner. What he wanted was a chance to reimagine what sports ownership could be. In his vision, a sports franchise isn't just another rich man's trophy, something to put on display. It's an essential part of the texture of the town to which it belongs. Jernigan wanted a team that would flourish to the benefit — not at the expense — of its community. He wanted a team that could never threaten to leave. What he got, in the end, was a baseball team with the same corporate structure as the American Red Cross and the United Way — a 501(c)(3) nonprofit enterprise, the only one of its kind in professional sports.
That doesn't mean the Redbirds are a monastic outfit. The team has a large, fairly compensated staff, including three full-timers who do nothing but keep the stadium grass lush and green. AutoZone Park, four blocks from the Mississippi River, has armrests and cup holders at nearly every seat and has carpeted concourses at the club level. Indeed, the team must be run like a business. After all, it has to wring as much money as it can from its operations in order to pay off $72 million in bonds issued to pay for the complex.
But as a nonprofit, no matter how much cash the team generates, nobody but the community will ever profit. "I'm not an owner,'' Jernigan said. "I'm a founder. This team is a community asset. We've taken the greed out of sports. We've eliminated the greed factor.''
In a city that that has long seen itself as a victim of the old style of sports ownership, Jernigan's new ethic has had a transforming effect. The Redbirds drew more than 850,000 fans this season, shattering the city's all-time attendance record before the season was half over. In a downtown that had withered, and that many suburbanites considered irrelevant, the stadium has sparked a revival. A new apartment complex is going up next to the ballpark. A theater-and-entertainment complex is expected to open a few blocks away. The city even has plans for a new downtown school. "It's become the most important facility in the city," said Steve Cohen, a state senator from Memphis. "It's a great symbol of hope for the future."
In just three years, the Memphis Redbirds Baseball Foundation has brought baseball and softball back to 34 inner-city junior-high and middle schools in Memphis, and has started a summer-league program for underprivileged kids — providing free lunches as well as batting tips — at 12 inner-city sites. "This is nothing like it's going to be,'' Jernigan said. "I don't think people have any idea. When we get the bonds paid off, if our models are right, we're going to be churning out $8 to $10 million a year."
(II) It's a New Ball Game
The bylaws of the Memphis Redbirds Baseball Foundation, which owns the team, provide that "approximately 50%" of its elected directors "shall be females and that the ethnic diversity of the Elected Directors shall approximate, as closely as possible, that of the at-large community." The bylaws also provide that one of those directors must be a "senior executive currently employed in not-for-profit community service," and one or two must be "experienced in fund-raising for not-for-profit organizations."
Alphabet of Failures
As a businessman, Dean Jernigan is a lot like he was when he was a shortstop at Messick High in Memphis in the 1960s and in adult leagues around town until his rotator cuff gave out when he was 43. He's relentless, dogged, and successful, if not graceful. He is not at all a glamour player. He will tell you, in fact, that he wound up building self-storage units for those same reasons. In the mid-1980s, casting around for a business in which to make his way, Jernigan chose self storage over economy hotels — he turned down the chance to own a Hampton Inn franchise — precisely because storage had so little intrinsic appeal.
Hampton Inns "made perfect sense to me,'' he says. "I knew that they would be a success. I also knew, and this proved to be true, that there would be a lot more competition. There's no sex appeal in self storage. That alone keeps a lot of capital from finding its way into our business. There's no sex appeal — and that's good."
Jernigan started with one storage facility in 1985. To the high hilarity of some colleagues and friends, he named it "Storage USA." "I had a lot of friends jab me," Jernigan said. "They said, 'You've got a lot of courage, Jernigan. You have one storage facility, and you name it Storage USA?' " Today, Storage USA is a publicly traded company. Last year, it posted $250 million in revenue, $64 million in profit, and nearly $1 billion in market value. It owns, manages, or franchises 521 self-storage facilities in 31 states and Washington, DC. Every facility is connected by satellite. Customers can log on to an automated-reservation system and can reserve space at any Storage USA site in the country. "And now it's amusing to me that my vision wasn't big enough when we named that first storage facility 'Storage USA,' " Jernigan said. "Now it's limiting, because we're looking into taking our company into international opportunities."
That is quintessential Jernigan. He's a blue-collar dreamer. He's an exacting, relentless man who bends the world to fit his conception of how it should be. It was no accident, then, that when the owner of Memphis's longtime Double-A franchise threatened to move the team, someone called Jernigan and asked him to get involved. It was a Wednesday night in 1996. Jernigan says that he and Kristi were already in bed when they got the call. To understand what happened next requires understanding a little bit about Memphis and a little bit about Jernigan too.
Memphis may be the most beaten-down, embittered sports town in the country, a city that has been discouraged by a series of failures, each more humiliating than the previous. An entire alphabet of minor leagues have been through Memphis — among them, the ABA, ABL, AFL, USBL, USFL, and WFL — none to any good end. The NFL repeatedly wooed then rejected Memphis during a three-decade tease. When the NFL passed over Memphis the last time, in 1993, a cartoon appeared in Memphis's Commercial Appeal of a hound dog — that was to be the franchise's name. The dog was lifting a leg and urinating on the NFL logo. The cartoon was put on T-shirts and sold throughout the city.
Jernigan, who had been a minority owner in a minor-league baseball team in Memphis in the early 1980s, understood the city's frustration. So when he heard that Memphis might lose its Double-A baseball franchise to Jackson, Tennessee, he knew instinctively that he could not let the city get treated that way. He started making phone calls the next day. He called David Hersh, the owner of the Double-A franchise, to open negotiations to buy the team. He called friends who were connected to baseball's Triple-A expansion committee about lining up an expansion franchise if the Double-A negotiations fell through. And, in the back of his mind the whole time, an idea brewed: If he was to get a team, he would create something like the Green Bay Packers, an organization that was so woven into the fabric of Wisconsin that people framed their Packers stock certificates and hung them on their walls.
"That first night, he said that if we did it, we were going to do it a completely different way,'' said Kristi Jernigan. Negotiations to buy the Double-A franchise fell through. In October 1996, Jernigan held a press conference and said, "I will do everything in my power to bring professional baseball back to Memphis and bring it back at the highest level possible." Three months later, in the Peabody Hotel — just four months after he had received that initial call — Jernigan held another truly extraordinary press conference to announce that he had acquired a Triple-A franchise. "We are bringing baseball for the fans,'' he said. "I'll never take a salary, I'll never take a profit, and I'll never take an appreciation value for the baseball team."
In the corner of the room, Pat McKernan, head of baseball's Triple-A expansion committee, just watched and grinned. "He turned it around for this city," McKernan says. "Remarkable man, isn't he?"
(III) It's A New Ball Game
Early on, an architect looked at the space that the Redbirds ownership selected for its ballpark and identified a corner of the property where the team could build a hotel to maximize revenue. The Jernigans nixed that idea and built a public plaza instead. Go there any day of the year, and you can enter under the legs of the giant baseball player, walk on the mosaic baseball diamond, and listen to "sound art" — recorded baseball-game sounds — as you round first, second, and third.
Some years ago, Jernigan was driving through Kansas City when he happened to see the lights on at what was then Royals Stadium. As if in a spell, he followed the lights straight to the park. "I had my family with me," says Jernigan. "I pulled in and said to them, 'Give me 30 minutes. Y'all come in if you want to, but I want to see this ballpark.' "
Sometimes, Jernigan imagines that he was destined to build a ballpark. Never did he imagine that building one would be quite so hard. Problem number one: Where to put the ballpark? It was an article of faith in the city that any new stadium should be built in the city's booming eastern suburbs. Hersh, the owner of the Double-A franchise, had concluded that a downtown ballpark would be doomed — despite the success of downtown stadiums in both Baltimore and Cleveland. Memphians, it was thought, were too scared of crime, too fond of convenience, too reluctant to commute.
"Kristi knew intuitively that downtown was the right place,'' says Jernigan. "I did my homework and quickly decided that she was absolutely right. Downtown, a ballpark can have an impact beyond baseball. To build a ballpark like this and then surround it with parking lots would have been a crime."
Problem number two: How to structure the team's ownership? Jernigan knew that he wanted to operate the franchise to benefit the community. He didn't have the slightest idea how to structure the franchise to achieve that goal. The answer came from Jim Rout, Shelby County's mayor. "I remember exactly where I was,'' says Jernigan. "Mayor Rout was at a bond closing for the county in New York, and we had flown up there to gauge his support. While we were there, we told him a little bit about what we planned to do with the club and he said, 'Why don't you do it as a 501(c)(3)?' It was the first time I had ever heard that term."
Under that framework, Jernigan would sell the team to the Memphis Redbirds Baseball Foundation, which would be run by a volunteer board. The Redbirds foundation would then contract with Blues City Baseball — headed by Kristi Jernigan — to run both the team and the stadium for 15 years. "It was a perfect, legitimate structure for what we were going to do," Jernigan says. "If we had not done it, and we were out there saying that we're not taking any money from it, well, nobody would ever know for sure. But by putting it in this tax structure, we absolutely have no way of taking any money out of it, nor does anyone in the future — which pleases us to no end."
Problem number three: How to pay for the new stadium? The city and county said that they could offer $8.5 million combined in assistance for a new ballpark. These days, that barely buys cup holders. Jernigan said that he'd line up private financing for the rest. Jernigan's first banker in the deal, NationsBank, came up with the idea of financing the stadium through the sale of $72 million worth of tax-exempt bonds, which would be paid off by contractually obligated income from the park itself. If the Redbirds could get local companies to agree to long-term deals for naming rights, for box suites, for exclusive concessions deals, and for club-level seats, the team's ownership could use those contracts to support the bonds.
The catch, of course, was that the Memphis business community had a dismal history of supporting minor-league sports. And why would any company want to hitch its future to a Triple-A baseball stadium, especially one to be built in a place where everyone seemed to agree that it would fail miserably? "The not-for-profit angle helped immeasurably,'' says Allie Prescott III, 53, the team's president and general manager. "So did Dean's credibility in the community. People wanted to get on board."
AutoZone agreed to pay $365,000 a year for the first 10 years and $250,000 a year for the next 5 years to put its name on the new ballpark. Coca-Cola agreed to pay $250,000 a year for 15 years to obtain exclusive beverage rights at the stadium. FedEx guaranteed the sale of 750 club seats a year at the park. The Redbirds leased 47 luxury suites for $38,000 or $45,000 a year, almost all of them in long-term contracts. "One thing that you should know about Dean," says Kristi Jernigan. "His mother used to work in Shainberg's, a local department store. And every year, she won the award for selling the most blankets in the month of July."
Even after all of the contracts were in place, it took two years and a change in banks to push the transaction through. NationsBank never felt comfortable enough to pull the trigger on the deal. Opening Day at AutoZone Park, originally scheduled for the 1999 season, was pushed back to 2000.
This was a point when some people might have given up, or at least might have modified their vision for the team. The holdup meant an enormous hole at the stadium site — the Jernigans paid for initial demolition and for excavation work themselves — that triggered a string of jokes about what might become of the hole when the project inevitably failed. A giant wave pool was a popular idea.
Dean Jernigan neither wavered nor scaled down his plans. Instead, he switched to a local bank, First Tennessee, and to a local investment firm, Morgan Keegan & Co. Inc., to handle the deal. "My mistake was not changing sooner," he said. "I gave credit to NationsBank for being with us at the start, and so I stayed with them longer than I should have. But once we got the right financial team in place, the process went pretty quickly."
By late 1998, the financing was in place. A huge crane moved in to resume working on the project. The wrecking ball was painted like a big, white baseball — red stitches and all.
(IV) It's A New Ball Game
At a baseball game this season, Jernigan stopped to watch some children play a game called "Kiddie Striker." It's a sledgehammer game in which youngsters pay to swing a sledgehammer and try to ring a bell. Jernigan watched child after child ring the bell. He decided that it was too easy to be fun. "It's a rip-off," he told members of his staff, and he asked them to make the game free if it was going to be so easy to play.
More Than a Game
Dean Jernigan's parents moved to Memphis when their son was in the seventh grade. They didn't have a lot of money. He had three shirts to wear to school all year long.Both of Jernigan's parents worked. His father was a carpenter, and his mother was a saleswoman at Shainberg's. Growing up poor in a Mississippi River town, Dean and his four siblings often had to take care of themselves.
Yet, there was baseball, which gave Jernigan a place to go, a community, a connection to something larger than himself. "We spent so much time on the sandlots," Jernigan said. "My parents worked, but they always knew where I was because I was always at the park. My Memphis was a wonderful place to grow up. You have to put 'wonderful' in quotes because, with the discrimination we had in the deep South, it was an awful place at the same time. But, as far as my little world, it was a Happy Days kind of world."
As an adult, Jernigan is technologically savvy and up-to-date. Email is his preferred method of communication. Nobody is hired — at his ball club or at Storage USA — without being matched to a position by a Meyers-Briggs exam (Jernigan is an "INTJ"). Storage USA has outstripped its competitors in large part because it's more wired, more connected, and more current than any other outfit.
And yet Jernigan is also thoroughly nostalgic. He is a man who not only remembers what it was like to grow up in the 1950s in Memphis but wishes that he could re-create the best parts today. At the very least, he's determined to re-create the baseball part.
In AutoZone Park, Jernigan has designed a baseball park that tweaks his own memories and that conjures the past: It is all angles and quirks and intimacy. Although the Redbirds hired the famed stadium architecture firm HOK Sport of Kansas City to consult on the design of the park — and the Jernigans do say nice things about the firm — it wasn't HOK that gave the place its distinctive feel. "Architects can tell you how many points of sale you need, how wide the seats need to be," Dean Jernigan says. "But they can't put the soul in a ballpark. We had to do that."
Jernigan insisted on 7-foot outfield walls so that outfielders could leap up and bring home-run balls back into play. He insisted that the dugouts, the clubhouses, and the press box feel major-league. The Redbirds solicited designs for the outfield clock — someone suggested shaping it like a huge guitar — but scrapped them all for a design that Jernigan remembered from Camden Yards.
And then there's the 40-foot statue of a baseball player who stands astride the plaza entryway, a left-handed hitter poised to swing. Originally, before the franchise had settled on the "Redbirds" nickname, it needed a temporary logo. The Jernigans used a sketch of an old-style player that their advertising agency happened across one day. The player became so wildly popular with the community, such a perfect symbol of everything that the franchise stood for, that he now stands astride the park. Fans call him "Nostalgia Man." "He really tapped into something," Jernigan said. "He is one of the most recognized symbols we have."
It's away from the park, though, in the Redbirds burgeoning programs to bring baseball back to the inner city, where Jernigan finds his deepest baseball satisfaction. One Wednesday in August, he presided over Storage USA's quarterly board meeting and then attended an end-of-summer dinner for volunteer coaches in the team's Returning Baseball to the Inner-City (RBI) program. After listening throughout most of the program, he asked for the microphone, then made a request: He wanted to hear stories — particular stories about particular kids.
Last year, a coach told a story about a girl who, after getting her free lunch, politely sat on the bleachers with the untouched plate of food on her lap.
"Why aren't you eating your lunch?" the coach asked.
"Because I'm taking it home for my brother and sister."
Another coach told a story about a boy who tugged at the coach's jersey and asked him where he could find the "top of the third."
"The coach had told him that the team would get ice cream,'' Jernigan recounted, "at the top of the third."
Sometimes, Kristi Jernigan wonders if, despite her husband's sincerity, all of this doesn't sound a little too cheesy. "Sometimes I chide him that he can sound trite," she says. "This idea of saving the world through baseball. But Dean knows what it's like. He sees himself in some of these children. He thinks that he has an obligation to help them have the same opportunities that he had."
Jernigan is no critic of capitalism. He believes in profit. On behalf of his shareholders at Storage USA, he would like to make as much money, as much profit, as he possibly can. His larger point is that people confuse the places where capitalism is appropriate and those where it is not. He wants the Redbirds organization to be as businesslike and as efficient as possible. He also wants every penny to go back into the town. "Baseball is different," he said. "It's a monopoly, like an airport. I think that if you are the holder of a monopoly, of a community asset like that, then you have an obligation not to run it just for the benefit of yourself."
Jernigan doesn't imagine that NBA, NFL, or NHL franchises will start converting themselves to operate like the United Way or the Red Cross. He suspects, at least at the highest levels of sports, it will take a very long time before a community-centered attitude returns. But he stays focused on his town's new ballpark, he fishes for more stories about his kids, and he doesn't fret too much about the sports world beyond. "It's enough for us," he says, "that we've shown there is another way."
Geoff Calkins (email@example.com) is the sports columnist at the Commercial Appeal in Memphis. Contact Dean Jernigan by email (firstname.lastname@example.org), or learn more about the Memphis Redbirds on the Web (www.memphisredbirds.com).
What does it take to build a different kind of sports franchise?
A vivid imagination, an open mind, an iron will, and an appreciation for youth baseball. Here are some of the core principles of Dean Jernigan, owner of the Memphis Redbirds Triple-A baseball team:
Just because something could be a business doesn't mean that it should be a business.
That idea was Dean Jernigan's central insight. A baseball team is, and should be, part of the soul of a community. A maximum return to owners shouldn't be the goal — maximizing returns to the community should be. So Jernigan registered it as a nonprofit 501(c)(3). All income above expenses goes to two charities that organize youth baseball leagues.
Just because something isn't a business doesn't mean that it can't be run like a business.
This season, the Redbirds drew 850,000 fans and did about $20 million in business, from tickets and luxury boxes to barbecue nachos and apparel. The Redbirds are aggressively marketed, and Jernigan just hired a director of analysis and development to, as he describes it, "take our existing cost centers and create more revenue."
Predictable plans lead to expected outcomes. And doing the unpredictable often leads to extraordinary outcomes. Dean and Kristi Jernigan could easily have followed conventional wisdom and then built their new, beautiful baseball stadium in the heart of Memphis's eastern-suburban sprawl. The park (yes, they did build it, with only about 10% public money) would have been a success and would have had little more impact on its surrounding community than a new shopping mall. By taking the risk of putting the stadium in the heart of downtown Memphis, the Redbirds have sparked a central-Memphis revival.
Good ideas don't always win — at least not at first.
Jernigan had two interesting structural ideas for his baseball team — one was its nonprofit status, the other was to finance the team with $72 million in bonds with contractually obligated income from the stadium. That second clause gave Jernigan's financiers at NationsBank some hesitation, enough that he had to postpone construction of the stadium by a year and find new bankers.
What is least glamorous is often most gratifying.
Jernigan had a chance to own a franchise of the Hampton Inn hotel chain. Instead, figuring that there would be plenty of competition, Jernigan founded a self-storage company. No glamour there, but plenty of demand — and plenty of money. Jernigan's Storage USA is now the second-largest self-storage chain in the country, and Jernigan is a wealthy man.
A version of this article appeared in the November 2000 issue of Fast Company magazine.