Jason Freier, Chairman and Chief Executive Officer of Hardball Capital spoke to the editors of the Times Free Press at the newspaper's office on September 25, 2018. Hardball Capital is the owners of the Chattanooga Lookouts and several other minor league teams. Chattanooga Lookouts managing owner Jason Freier helped the Double-A franchise survive contraction from Major League Baseball, and he's confident the latest hurdle can be cleared.
Lookouts co-owner and investor John J. Woods, who spearheaded the purchase of the team in 2014 and was able to convince Freier to run the franchise's daily operations, has been charged by federal regulators with defrauding more than 400 investors through a Ponzi scheme. Woods graduated from East Ridge High School in 1983 and was a walk-on football player at the University of Tennessee at Chattanooga before transferring to Tennessee Tech.
"We were deeply troubled to learn of the enforcement action by the Securities and Exchange Commission against one of our minority investors," Freier said Monday in a statement. "My No. 1 priority is protecting the interest of the Lookouts, and John has shared with me personally that he will do whatever is best for the team, including divesting his interest if appropriate.
"We are taking all steps necessary to ensure the Lookouts remain a treasured part of the greater Chattanooga community."
Freier, the CEO of Hardball Capital that also operates the Fort Wayne (Indiana) TinCaps and the Columbia (South Carolina) Fireflies, said by phone that more than 75% of Lookouts ownership is through Hardball Capital and its investment group, which does include investors from Chattanooga but not Woods.
Less than 25% of Lookouts ownership, Freier continued, is from Chattanooga-specific investors including Woods.
The Lookouts, the Class AA affiliates of the Cincinnati Reds, were spared contraction late last year by Major League Baseball, which is seeking quality facilities for players as they move through the minor leagues. AT&T Field will be the oldest park in the Double-A South once the Tennessee Smokies build their new home in downtown Knoxville, and AT&T's location at the former "Hawk Hill" hinders expansion.
Tennessee Gov. Bill Lee included $13.5 million in the state's 2021-22 administrative budget for Knoxville's proposed $65 million stadium that would anchor, according to Smokies owner Randy Boyd, $142 million in new investments. A new Chattanooga stadium with a similar developmental objective with retail and restaurant opportunities would be mostly funded by taxpayers with help from Freier's Hardball Capital.
(Read more: Chattanooga Lookouts investor faces fraud charges for running 'massive Ponzi scheme')
The location for Chattanooga's new stadium would be at the 141-acre former U.S. Pipe/Wheland Foundry site.
"We are still trying to figure out how to move all of that forward, so I would say this doesn't change that at all," Freier said. "John is a minority investor and hasn't had anything really to do with the day-to-day operations of the Lookouts. He's been a partner and a valued partner, but he doesn't affect anything we actually do. My thought and hope would be that this is a good project for Chattanooga that would benefit the community.
"We're still going to put our heads together and figure out how to accomplish that regardless of this, and I believe that by the time anything moves forward, almost certainly John will have been divested from the Lookouts. I believe that's something Major League Baseball will insist on with its rules and policies."
Freier insists he's more optimistic than ever that a new Chattanooga Lookouts home can become a reality.
"Obviously we've had COVID and lots of other things that have gone on in the world," he said. "We still believe the Lookouts have a bright future in Chattanooga, and we still believe we're going to figure all this out and have the Lookouts around for another 100 years. Our projects in other cities have continued to go extremely well, and I think the keys for doing this have only gotten stronger in the past year or two.
"We continue to take our time to make sure we're doing this the right way while at the same time being cognizant of the needs of the Reds and Major League Baseball and their dictates that we move as quickly as we can."
Back in town
The Lookouts are back in town this week to host the Smokies, with the opener of the six-game series set for Tuesday night.
This week's schedule has "College Football Night" accompanying Thirsty Thursday, a Friday night featuring the inflatable Zooperstars and postgame fireworks, and a Saturday in which another used car will be given away. Both "College Football Night" and the Zooperstars were added to Chattanooga's entertainment lineup long after this season started.
"When we got back into the office in March, we were putting the season together and trying to throw things out there," Lookouts President Rich Mozingo said. "At that point, we weren't positive that a college football season would happen, so we didn't put that on the promotional schedule. We've pivoted since then, but now it falls on a Thirsty Thursday. We typically don't have the Zooperstars on a fireworks night, either, because they're both great stand-alone events, but you're getting two-for-one entertainment because of how we've had to adjust our schedule as the season has gone along.
"I'm so glad we've got the Zooperstars back out here. I think we've had those guys two times a year for 10 straight seasons until we didn't have them last year. This is one of the few acts where people will come up to me at the grocery store and say, 'When are the Zooperstars coming back in?'"
Contact David Paschall at dpaschall@timesfreepress.com or 423-757-6524.