The immaculate reception of Park Sausage

Black Enterprise, Sept, 1996 by Eric L. Smith

Thanks to former NFL star Franco Harris, there will be more Parks sausages. But returning the Baltimore-based B.E. 100s company to glory will be his toughest challenge yet.

FRANCO HARRIS HAS A FLAIR FOR THE dramatic. The former Pittsburgh Steeler running back--best known for "The Immaculate Reception," his improbable 60-yard ricochet reception and run for the winning touchdown in the final five seconds of the 1972 AFC playoff game against the Oakland Raiders--now is making a bold move on corporate America, one that could make his football heroics look like child's play. Harris is leading a group of investors purchasing Parks Sausage Co., a once-thriving black business institution that had fallen into bankruptcy and closed its doors.

While catching a football and scoring a touchdown in the clutch is no easy feat, carrying Parks Sausage to pay dirt will prove to be a far more difficult task. Obtaining Parks is not enough. Harris must restore Parks to its glory days when the "More Parks Sausages, Mom, Please!" slogan evoked the company's status as an industry leader. By taking on the challenge of resurrecting Parks, Harris is engaged in the equivalent of a "sudden-death" overtime: He must make an open-field run to profitability, through excessive debt, large competitors and dwindling market share, before the clock runs out.

CAN HE DO IT?

Just as his historic 1972 catch propelled the Steelers on to the first of four Super Bowl victories during the '70s, this deal may bring Harris similar glory in the corporate arena. For one thing, as CEO of one of the largest black-owned businesses in the nation, the purchase lifts him into the ranks of The BE 100s. Even with its financial woes, Parks managed $20 million in sales last year, ranking No. 93 on the BE INDUSTRIAL/SERVICE 100 list.

Secondly, it gives him an opportunity to expand his solid reputation as an institutional food service industry innovator. Harris, majority owner of the Pittsburgh-based Super Bakery Inc., has been lauded for running the $10 million doughnut manfacturer as a high-quality, low-cost, efficient 10-employee operation, known as a virtual corporation. This relatively small company achieved a national presence in niche markets that larger firms had given up on. Succeeding with Parks would give Harris two successful food industry companies, providing him with greater opportunities for other joint ventures or acquisitions.

NO MORE PARKS SAUSAGES?

In late May, Parks Sausage was all but dead. After filing for bankruptcy and sending most of its employees home, it was reduced to a dormant husk. There was no bustling of workers in the halls, and many rooms throughout the sprawling complex were dark. Production of the company's food products had come to a complete stop.

Harris's arrival triggered a rebirth. As he grew nearer to closing the deal, Harris got distribution back on line to some 350 Pathmark and Shoprite supermarkets in New York, New Jersey and Connecticut. He expects production to be back to full capacity in a few weeks. He also brought former employees back into the fold. In mid-July, approximately half of Parks employees were back to work. The company expects to be back at full strength by the fall.

At press time, a final meeting with a bankruptcy judge to approve the deal was still pending, so Harris was reluctant to fully explain the financing of the Parks purchase. Essentially, the deal is structured as follows: Harris, the majority owner, and other equity investors, including former Baltimore Colts running back Lydell Mitchell, agreed to purchase Parks for $1.7 million in cash while assuming nearly $9 million in debt. After working out agreements with Parks' largest creditors, much of that debt will be forgiven. The city of Baltimore will get back only $500,000 of its original $2.4 million loan. North Carolina-based Nationsbank will be repaid $3 million of the $5 million it's owed. The Baltimore Development Corp. will be repaid its $400,000 emergency loan in full. Meanwhile creditors were willing to make concessions after hauling Parks into court to collect their debts.

"If the company went into bankruptcy and closed for good it's likely that the debt would have been wiped out," says Daniel P. Henson III, Baltimore's commissioner of Housing and Community Development. "Now, at least, we're able to get back some money, and we're not walking away empty-handed."

Baltimore also gets to keep more than 200 jobs in the city, a gamble that many people, including Baltimore Mayor Kurt L. Schmoke, think is worth it. In addition to Parks being a significant employer in Baltimore, there are other intangible reasons for making sure the company survives, notes Schmoke. "It's served as a symbol of where we've been in terms of minority business development, and there's a great deal of pride in the history of that company," the mayor notes. "What we're hoping now is that this deal will signal that Parks will be a leader in minority business development in the future." Indeed, making Parks a player in the industry once again could help strengthen confidence in black-owned businesses nationwide.