SBJ/20081027/SBJ In-Depth

Starting over

Inside a posh Oklahoma City dining club, where local power brokers gather to cut deals and filet mignon, hang photographs of the city’s business elite. Look closely and you’ll find a picture of Clay Bennett, the NBA’s newest, and perhaps most retrospective owner, wearing a pair of thick-framed glasses dating back more than a few years.

“And I actually thought it was a great picture of me,” Bennett says with a self-effacing smile.

It’s no wonder Bennett sees himself differently these days given all the turmoil, criticism, lawsuits and cash calls he has encountered since buying the former Seattle SuperSonics for $350 million in 2006 and moving the team to his native Oklahoma City, where the newly christened Thunder is set to open its inaugural NBA season.

Since buying into the NBA, Bennett, 48, has experienced an onslaught of two things he had steadfastly managed to avoid during his business career: steep financial losses and, equally bad for the low-profile Bennett, public criticism.

This is a private man who is used to doing business from the comfort of his 31st floor, downtown Oklahoma City office, where codes must be punched into the security system to gain entrance. Lunch preferably is served behind closed doors in a back room of the members-only eatery where Bennett can pick at his Cobb salad free from distractions or notice.

But it’s hard to hide when you own a professional sports team. And when you buy a team in a city rich with more than 40 years of NBA history and move it to your hometown small market, you’d better get used to the spotlight, whether it’s public pillory in Seattle, or public praise in Oklahoma City.

“He walked into a buzz saw and I don’t think he knew what hit him,” said NBA Commissioner David Stern. “Clay has learned that as owner of a team, he will be front and center, and I’m not sure he understood it.”

Bennett admits he didn’t fully understand what he was getting into when he bought the Sonics, but holds firm to his belief that he acted honorably in what ultimately was a doomed attempt to keep the team in Seattle.

“I remember being in a meeting with David Stern when we were putting the deal together and he stopped the meeting and told me that I wasn’t just going to waltz into Seattle,” Bennett said. “Of course I didn’t take it to heart. I feel like the past two years have been 10 years.”

A family affair

Bennett uses his extensive connections in
Oklahoma City to make deals happen.

“I didn’t graduate from college,” Bennett discloses between spoonfuls of soup during a recent lunch in Oklahoma City. “And that is something that, in the past, I would have never talked about.”

It’s hardly the stuff of true confessions, but for Bennett, it’s a signal that he is growing more comfortable with the public nature of being an NBA owner.

Since paying a $30 million relocation fee to the league and a $45 million settlement to the city of Seattle, Bennett has spent the last four months trying to put the last two spectacularly contentious and expensive years behind him as he builds his Oklahoma City franchise. “It’s been an extraordinarily difficult, transformative experience,” Bennett said.

Bennett physically is a big man — he played tackle on his high school football team — but he speaks in quiet, measured sentences. Once comfortable in the company around him, he displays a wry sense of humor and is direct.

“I have learned to appreciate those who are close to me, and that has become a very small circle,” he said.

Closest of all within Bennett’s tight circle is his wife, Louise, and their son and two daughters. Bennett began dating Louise in high school. She is the daughter of Edward Gaylord, who presided over the vast Gaylord family holdings, which includes The Oklahoman newspaper. Edward Gaylord reportedly was worth more than $2 billion when he died in 2003, so Bennett for years has heard all the comments and whispers that his business success comes hand-delivered, given that he married into such a wealthy and powerful family.

“Louise and I connected so early that it never really mattered,” Bennett said. “It has been brought up so much that I’m not bothered a bit by it all.”

A key Bennett business philosophy is simple: Don’t embarrass the Gaylord dynasty, which dates to before Oklahoma was voted into statehood.

“In Clay’s case, [marrying into the Gaylord family] was motivating him to be successful,” said Tim O’Toole, president and general manager of Oklahoma State Fair Inc., who has worked for and known Bennett for 25 years. “Clay deeply admired Mr. Gaylord and took that side of his relationship very seriously. That family has done a tremendous amount for the city and state, and Clay wants to uphold that tradition.”

It’s not as if Bennett came from the wrong side of the tracks. His family runs the successful Public Supply Co. in Oklahoma City, which sells construction materials. After marrying Louise and dropping out of the University of Oklahoma, Bennett tried to work for his father, Ike, but differences led him to leave the family business and form his Dorchester Capital investment firm.

“I’m very entrepreneurial and my dad wanted me to fit in,” Bennett said. “I wanted to get along at family dinners, so I left the company.”

Establishing his own track record in the shadow of his powerful father-in-law proved to be a strong incentive for Bennett. His first business deal was to buy a condo development for less than $1 million. “And that put me in a cold panic,” he said.

Other deals followed and soon Bennett was making his own mark. What little public information is known about Dorchester is that it typically invests in private companies that have annual revenue between $5 million and $500 million and have had three years of profitability. The firm generally invests between $2 million and $25 million and stays away from startups.

Dorchester’s lobby reflects two of Bennett’s passions: golf and Oklahoma football. A glass case displays various OU memorabilia, and on a shelf rests a set of antique golf clubs and antiquarian golf books of collector quality. Bennett laments that since owning the Thunder he hasn’t been able to golf much with his buddies and whittle down what his friends say is a 16 handicap.

Oklahoma City visitors guide
Population: 1.19 million (ranked No. 44 among U.S. markets, No. 27 among NBA markets)
Population change: Up 8.8% since 2000
Unemployment, August: 3.8% (U.S. rate: 6.1%)
White Non-Hispanic
American Indian
Other race
Sports venues
AT&T Bricktown Park (opened in 1998)
Capacity: 13,066
Tenant: Class AAA Redhawks
Ford Center (2002)
Capacity: 19,711
Tenants: NBA Oklahoma City Thunder, CHL Oklahoma City Blazers, AF2 Oklahoma City Yard Dawgs
Cox Convention Center (1972)
Capacity: 13,846
Notes: The Blazers have averaged nearly 9,000 fans per game over the past five seasons and have led the CHL in attendance for 16 consecutive seasons. The Redhawks have averaged more than 7,000 during the same period and consistently rank in the top 20 among minor league baseball clubs in attendance.
Sports media
FSN Oklahoma launches with the Thunders opening game on Wednesday. The regional sports network also has local rights to select Oklahoma Sooners and Oklahoma State Cowboys football and basketball games.
KSBI-IND will be the over-the-air broadcast partner for the Thunder, televising all seven preseason games and 17 regular-season games.
WWLS-AM/WWLS-FM, The Sports Animal, has Thunder radio broadcast rights.
Major company headquarters
Devon Energy; Chesapeake Energy; OGE Energy; Loves Country Stores; Hobby Lobby; Sonic
Sources: SportsBusiness Journal research; U.S. Census; Fortune magazine

His interest in sports ownership dates to the late 1980s and early 1990s, when the Gaylord family holdings included stakes in the Texas Rangers and San Antonio Spurs. He attended NBA owners meetings, but at the same time was expanding his own investment business within what is a very cooperative relationship between Oklahoma City’s private and public sectors. Bennett also was very involved — behind the scenes, of course — in getting the New Orleans Hornets to temporarily relocate to Oklahoma City after Hurricane Katrina.

“I first did business with him when he was chairman of the State Fair Board of Oklahoma and we put together a tax package for a $60 million facility upgrade, and then fast-forward to him helping put together a $38 million revenue benchmark for the Hornets, where he was hugely important in getting the deal done,” said Tom Anderson, special projects manager for Oklahoma City. “Clay is very forthright. He tells you what he thinks and he expects the same, and you take him at his word. The city and private sector work closely in Oklahoma City, and I think he may have taken for granted that what works here doesn’t translate elsewhere.”

Hands-on role

Buying the team in Seattle was a natural evolution for Bennett after he proved so pivotal bringing the Hornets temporarily to Oklahoma City. He knew Stern not just from the Hornets negotiations, but also from when the Gaylords owned part of the Spurs. Just as important was that Stern knew Bennett — creating a built-in trust factor when it became apparent that former owner Howard Schultz was looking to sell the Sonics.

Bennett may prefer a low-key and quiet public profile, but he wasn’t shy about leaning on local lawmakers to push through the tax incentive plan that was part of the team’s relocation deal with Oklahoma City officials. According to reports in The Oklahoman, Bennett sent e-mails to potential dissenting lawmakers urging them to approve the taxpayer funding or risk losing the team. The aggressive strategy worked and the incentives were swiftly approved.

“He is very keen and I have called him to help me when, say, I have needed him to call five people in the state legislature,” said David Boren, president of the University of Oklahoma and a former Oklahoma governor and U.S senator. “He knows how to make those calls and is very savvy.”

Bennett’s approach in operating the Thunder runs counter to his style running Dorchester Capital, where as chairman he dictates vision and mostly stays away from day-to-day involvement. The Thunder also differs from Bennett’s business strategy of avoiding investing in money-losing companies.

“Owning an NBA team is a very different business model,” Bennett said. “We knew that it was a challenging and dynamic business, but until I bought the team, I never had a capital call.”

Most NBA owners leave the business operations to a team president or top executive. But there is no Thunder president because Bennett holds the position, if not the title. From selecting team colors to selling sponsorships, Bennett has been personally involved in virtually all of his team’s major business decisions since moving to Oklahoma City in early July. He lets general manager Sam Presti run the basketball operations, but Bennett gets involved in any major personnel decisions. Danny Barth is the team’s executive vice president and chief administrative officer.

“I think I am a pretty good chairman, but not a good CEO,” Bennett said. “My sense is to devote myself to [the Thunder] and once the renovations are through at the Ford Center, then at some point I will remove myself from the day-to-day operations of the business.”

Fans have embraced the team,
buying all available season
tickets in just five days.

Those who are doing NBA business with Bennett see him as a quick study, able to grasp the major points of a deal while leaving the minutiae to others.

“Clay had dealt with substantial businesses much bigger than a basketball team and he is comfortable,” said Ed Desser, a television consultant who helped negotiate the Thunder’s cable deal with Fox Sports Net. “He is not a television expert per se, but he became as knowledgeable as any other owner I’ve met in media matters. Clay’s strength is to look at the business in an empirical way and say ‘Here’s what I want. Now help me accomplish it.’”

What Bennett wants to accomplish is a profit after the Thunder’s first season. The team sold out of its season tickets at the 19,163-seat Ford Center in just five days, nailed down its local television deal, and is putting the finishing touches on a multimillion-dollar founding sponsorship program. Fuel for the financial turnaround is a publicly funded $121 million package to renovate the Ford Center and build the team a new training facility.

Terms of the deal give the Thunder final approval of the changes and Bennett is closely involved in all phases of the renovation that will bring the team revenue-generating clubs and dining facilities with more premium seating.

“Clay is very hands-on and he is very meticulous,” said Gary Desjardin, general manager for SMG, which runs the Ford Center. “He has a lot riding on [the Thunder] from a personal standpoint, so his view is that it is time to deliver. But he is fair. You always know where you stand with him, but he is not an in-your-face kind of guy.”

The Thunder also received tax credits that will allow the team to save more than $4 million annually. Bennett predicts that the team will make money after its first season in Oklahoma City.

“We have a good relationship with the city, the economy here is good, and we have a favorable lease where we control all revenue streams,” Bennett said. “We will outperform our market size and we will be profitable.”

‘Knock it out of the park’

At the league level, Bennett has been given a pass to build his franchise. He does not sit on any committees but has turned to a few of the NBA’s youngest and most innovative owners, such as Phoenix Suns owner Robert Sarver and Cleveland Cavaliers owner Dan Gilbert, for advice and support. “Clay has done a remarkable job of transitioning the team to Oklahoma City,” Gilbert said. “He faced very difficult circumstances and met them head-on. Clay has done what is best for the franchise, and I admire him for it. Oklahoma City is fortunate to have Clay leading the Thunder charge, and he’s fortunate to have such great fan and civic support.”

July: Starbucks Chairman Howard Schultz sells the Seattle SuperSonics and Storm to an Oklahoma City-based group, led by Clay Bennett, for $350 million.
Clay Bennett speaks
to the media after
announcing his plan
to buy the Sonics.
October: Bennett sets a one-year deadline for local lawmakers to come up with a new arena finance plan.
November: Seattle voters pass Initiative 91, which requires the city to receive a fair value cash profit in return for services or real estate it provides pro sports franchises. The Sonics and Storm hire HOK Sport to design a new multipurpose sports and entertainment arena in the greater Seattle area.
January: The Sonics request at least $300 million in taxpayer money to help pay for a $530 million arena.
April: The Sonics and Storm reach an agreement in principle to acquire the rights to the site of a proposed multipurpose arena in Renton, Wash.
August: Sonics investor Aubrey McClendon tells the Oklahoma Journal Record: “We didn’t buy the team to keep it in Seattle; we hoped to come [to Oklahoma City].” The NBA fines McClendon $250,000 for his comments.
September: Bennett files paperwork to break the Sonics’ KeyArena lease, after the state takes no action on the team’s request for public funding for a new arena. The city of Seattle counters with a lawsuit to enforce the lease through 2010.
November: Sonics owners file an application with the NBA to relocate the team to Oklahoma City next season.
January: Seattle-based Force 10 Hoops LLC, a local group of Seattle businesswomen, purchase the Storm from Bennett for $10 million.
April: NBA owners, by a 28-2 vote, approve the Sonics’ relocation to Oklahoma City. Former Sonics owner Schultz files suit to rescind his sale of the team to Bennett, but later withdraws his lawsuit.
July: The city of Seattle and Sonics reach a settlement that allows the team to immediately begin relocating to Oklahoma City.
September: The Oklahoma City NBA franchise announces its team nickname, logo and color scheme.
October: The Oklahoma City Thunder plays its first home game.
Source: SportsBusiness Journal research

Civic support is a key for Bennett. The Gaylord family has been one of OU’s biggest contributors. The football stadium is named the Gaylord Family Memorial Stadium. Gaylord Hall and the Gaylord School of Journalism also stand on the campus, and Bennett has donated to the school’s health sciences program.

Boren has known Bennett for more than 20 years and has called on him for other major fundraising efforts.

“When Clay was in his 20s he, like most other kids, liked to have his fun,” Boren said. “But I have watched him mature and grow wiser and more committed. College presidents talk amongst themselves about high-maintenance donors who want their names in the lights for all sorts of things, and then there are donors who are low maintenance, who trust us and want to help. Clay is in that low-maintenance category. His generosity has been very private, but he is also very firm and says ‘no’ in a way that doesn’t cause others to erupt.”

Bennett is also closely tied to other key civic organizations, including the influential Greater Oklahoma City Chamber, where he is chairing a committee charged with building the Chamber’s new $20 million headquarters. He was involved in building the city’s minor league baseball park and was executive director of the local organizing committee that brought the U.S. Olympic Festival to Oklahoma City in 1989.

“When you deal with him, you better do what you say,” said Roy Williams, president of the Oklahoma City Chamber. “If you commit to something, he expects results. He’s an emotional guy, but he keeps it bottled up well.”

While Bennett has been vilified in Seattle, Stern has been steadfast in his support.

“He stepped up and tried to answer questions in Seattle directly and he was subject to vitriolic attacks,” Stern said. “His biggest challenge will be that now that he is off to a good start, how do you build the base to improve and not go down? The owners like him, appreciate his business analysis and appreciate the size of his investment.”

When the Thunder plays its first regular-season home game on Wednesday against the Milwaukee Bucks, don’t look for Bennett to sit at center court waving a towel. Instead, he’ll likely be in a suite with friends and close business associates, settling in to watch a game that represents not only the end of two ugly seasons in Seattle but the beginning of what he insists will be one of the more thriving NBA franchises.

“There were times when I became very jaded and cynical, and I’m working to overcome that,” Bennett said. “But we are working on something positive here, and we will knock it out of the park.”

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