‘He’s all in’
Published October 25, 2010
Beneath a small canopy shading the first tee at a golf course on the outskirts of Charlotte, the man who sets the local NBA franchise apart from all others barked between puffs on a cigar.
“That’s left, Dookie,” yelled Michael Jordan, six months into principal ownership of the Charlotte Bobcats, yet not at all above needling a season-ticket holder courageous enough to sport a Duke cap at a team golf outing.
Decked out from shoulders to toes in the powder blue of his alma mater, the University of North Carolina, Jordan is famously hard on all associated with his school’s archrival. On this late September afternoon, his target was one of about 75 people — premium-seat buyers and sponsor representatives — that the Bobcats invited out for a round of golf. The highlight was a casual audience with Jordan, who sat stationed at the first tee where he posed, driver in hand, for photos with each group.
On the other side of the clubhouse, guests met Jordan pal Fred Couples, who perched at the 10th tee and hit a drive with each group. Couples, who relocated to Charlotte this summer, recently bought a pair of courtside seats across from the Bobcats bench. He said he also is interested in buying a small stake in the team.
Their friendship is a natural one — two celebrated athletes, close in age, one a baller who loves golf, the other a golfer who loves hoops, both of them guys that other guys gravitate toward and emulate.
When Couples captained the U.S. team at the Presidents Cup in San Francisco last fall, he chose Jordan as his assistant, hoping that he would help loosen the group and build camaraderie. Jordan showed up two days early, giving them time to play golf and chat. As their talks turned to basketball, and Jordan’s then-developing quest to buy the Bobcats, Couples asked what many have wondered in recent years: Whether Jordan intended to make an NBA team primary among his many commitments.
“I haven’t asked him a lot of questions, but that was one of them: Whether he was really in,” Couples said. “And he said, ‘I’m going to be here. This is not a game for me.’
“This is a lot of money invested. And he’s not about to lose money.”
A few weeks after the Bobcats golf day, Jordan joined the team for an exhibition game in Fayetteville, N.C., where he visited an army base and three schools. Then it was back to Charlotte, where Jordan and his top lieutenants, financial adviser Curtis Polk and image manager Estee Portnoy, met with Bobcats senior management to discuss plans for the team and its interplay with his other business interests.
Jordan’s friends like to joke that he finally has a job again.
What we have here is unprecedented: The most marketable athlete in America, ever, putting his own millions into principal ownership of a team which, by the way, has bled money for all six years of its existence, with losses totaling $80 million to $100 million.
Jordan says his goal is to turn the team into a winner, both in the standings and on the balance sheet; to pass it on to his children as a family legacy.
“The biggest investment I have is this team,” Jordan said of the franchise he bought for $275 million in March. “I have to make it work and I feel like I have found my niche.
“I am comfortable in this city. I know my way around. And my commitment isn’t just my name.”
Getting to work
Even before Jordan closed on his deal to buy the Bobcats, the whispers already were rustling throughout NBA circles, questioning whether he would immerse himself in the sizable effort needed to turn around the business of a franchise hemorrhaging cash.
He began his answer with a trip to the NBA’s Fifth Avenue headquarters where, armed with a league-created financial report of the team, he huddled with NBA Commissioner David Stern and Chris Granger, senior vice president of the league’s team marketing and business operations department.
“I had to dig into the business side and understand what worked and to make sure we had the right mix,” Jordan said. “I had them give me an evaluation of the franchise, and I really tried to understand what the relationships were that I needed to make, what were the phone calls I needed to make and how to put my own stamp on the franchise. I came out with the understanding of what the team needed.”
Jordan returned to Charlotte to begin the turnaround.
He picked the brain of Oklahoma City Thunder owner Clay Bennett, who through savvy drafting has built a winner in a market even smaller than Charlotte. He spoke to Dallas Mavericks owner Mark Cuban, new Washington Wizards owner Ted Leonsis, and his former boss, Chicago Bulls Chairman Jerry Reinsdorf.
“Jerry is cool,” Jordan said. “I have always had the highest respect for him. I had to challenge him and he has challenged me. He asked me at an owners meeting how it felt to be on the other side of the table. It is amazing to see how things change.”
One of his first moves was just that, a move. At Stern’s urging, Jordan became more visible to fans, purchasing a pair of seats at the end of the Bobcats bench. For almost four years as minority partner charged with running basketball operations, Jordan had watched games from the back of a suite, hidden from view. Now fans would not only see him, they would see he cared.
Jordan said the move was difficult initially.
“I am different than most owners,” he said. “People see my name and my appeal and it is easy to for them to say, ‘How much will we see you?’ I don’t grocery shop, but that is what people want to see.”
More likely, they wanted to see commitment. Through the team’s run to its first playoff appearance last season, and ever since, Jordan has been stacking up evidence of his commitment. And he has supporters lined up to testify on his behalf.
From Bobcats upper management, down to the rank and file; from the league office; from minority investors; from sponsors and other business leaders; from all corners, you will hear the refrain, backed by examples that support it.
MJ is “engaged.” He is “committed.” He is “all-in.”
“If you did a survey about how much time an owner spent in the office, [Jordan] would be right up there,” said Stern, an ardent supporter. “He is hands-on with his sleeves rolled up. He is ringing the bell.”
Though his portfolio of highly visible national endorsements sets him apart from most who buy sports teams, Jordan’s initial approach to managing it is much like that of other new owners, pairing trusted advisers from his other endeavors with top management of the team.
A six-member Jordan cabinet charts the course for the Bobcats’ business and basketball operations. Four executives — longtime Jordan friend and team President Fred Whitfield; chief sales and marketing officer and former Buffalo Bills executive Pete Guelli; general manager and former Jordan teammate Rod Higgins; and industry veteran and Chief Financial Officer Bill Duffy — run the team’s day-to day business operations from the Bobcats’ downtown Charlotte offices.
But 329 air miles to the north in Washington, D.C., sit two Jordan confidants who from behind the scenes wield an extraordinary amount of influence over the Bobcats organization.
Curtis Polk has been Jordan’s financial adviser since the early 1990s when he began working with agent David Falk to help manage Jordan’s burgeoning business affairs. From Jordan’s “Space Jam” hit movie to the purchase of the Bobcats, Polk has been involved in every major business and branding decision involving the NBA icon, and he now holds great sway within the Bobcats front office.
So, too, does Estee Portnoy, Jordan’s longtime and vigilant gatekeeper, who joined Falk’s F.A.M.E. agency in the mid-1990s. Though her title is vice president of Jump D.C., consider her Jordan’s chief access officer. All requests and most access to Jordan flow through Portnoy, who has played a key role in shaping Jordan’s public image.
“Michael uses me and my finance and law background to vet a lot of opportunities,” Polk said. “Once Michael became familiar with the financial structure and the people involved in the Bobcats, he asked me and Estee to get involved and be down in Charlotte to help make high-level decisions on where to allocate the team’s resources.”
Major decisions and strategy are plotted by regular meetings of Jordan’s inner circle at the Bobcats offices, where each provides input from a respective area of expertise, with Jordan making the final call on both player personnel and business. In late September, Portnoy and Polk flew into Charlotte and met Jordan and other top executives for six hours of meetings where they addressed a variety of topics related to the season. Earlier this month, Polk was back again.
“We reviewed everything,” Polk said. “We talk about everything from media calls to decisions on hiring. There hasn’t been a day gone by that Michael and I haven’t had a discussion about the team.”
In Charlotte, where previous owner Bob Johnson irked fans because he rarely came to town, then blamed the local business community for not supporting him, Jordan’s engagement has registered.
“Oh, he’s in. He’s way in,” said Nelson Schwab, a Charlotte-based investment banker who marshaled a local group that invested $50 million in the Bobcats startup. “I think he is setting out to earn respect and trust, and he has just begun to do that. He’s making good moves. But that’s not a short-term proposition. So I give him good marks for a good beginning. And that’s better than a bad beginning.”
When Johnson hired Whitfield as chief operating officer in 2006, his first task was to deepen the franchise’s ties to the business community, which had not embraced the team. He began by enlisting the help of Schwab and Mac Everett, a retired but well-connected Wachovia executive. Everett has worked closely with Whitfield, massaging key relationships in the community. He said he has seen a recent shift in the way many view the franchise, and Jordan’s role in it.
“They’re not asking it as much as they used to, and they used to ask it in a much more negative way,” Everett said. “It was, ‘Golly, is Michael really committed to this? Or is this just another hobby for him?’ You don’t hear that so much now that people see him.”
To be clear, Jordan is not ready to make Charlotte his full-time residence. He has a daughter in Chicago and sons playing basketball at the University of Central Florida. He works and plays all over the world. To cast Jordan as chained to a desk would be an overstatement. But by most accounts he has begun to shake the absentee image that followed him to Charlotte from his previous stint overseeing basketball operations for the Washington Wizards.
He has been around for key functions, such as the golf outing and a recent black-tie fundraising gala, and for important meetings, such as one with Duke Energy CEO Jim Rogers, whose Charlotte-based company has done little business with the team. And he has been in the office, not only to plot strategy, but to spend time around rank-and-file staff.
“Michael is there,” Stern said, pointing out that Jordan has purchased a Charlotte residence, the top floor of a seven-story condo a few blocks from the team’s arena. “He is making sure the team reflects his ownership. The challenges [for Jordan] are the very same things facing other owners in that it has become a more rigorous business. You have to support the data proposition for sponsors and suite holders. Michael has moved smartly across this. It is not just touch and feel.”
Shoring up the business
Coming off the 2008-09 season, the Bobcats’ business was reeling. As a minority owner, Jordan knew that, as of that July, the franchise had sold just 259 new full-season tickets for a paltry 3,352 total, which put them near the bottom of the league.
The Bobcats’ renewal rate was at 59 percent, miles away from the league’s 71 percent rate average at the time. Total full-season-ticket revenue was at $9.9 million, or less than half of the league’s $23 million average. Just as bad, the Bobcats counted just 55 sponsors, and deals were dropping off the table with a sponsorship renewal rate of about 40 percent.
But as the summer turned into the regular season, sales began to grow. The team’s profile had increased, thanks to a complicated, masterstroke of a deal engineered by Whitfield and others, who dangled the arena naming rights that the team had been unable to sell to convince Time Warner Cable to turn broadcast rights over to Fox Sports Net.
Up until then, most of the Bobcats games aired on Time Warner’s cable access news station, which meant they got to barely half of the 2 million cable households they reach today — and hardly any of the town’s sports bars. They were blacked out locally on NBA League Pass.
A year free of that relationship had upped their mainstream visibility. Guelli had been hired that spring and brought in Michael Wandell from the Phoenix Suns to spearhead sponsorship sales. They radically changed the way they sold sponsorships, positioning the arena as the region’s premier entertainment destination, with more than 2 million visitors annually, rather than simply the host of an NBA team.
On the ticket side, the team held its first Jordan fantasy camp for premium seat holders, which kick-started renewals.
Last year brought nearly a 10 percent increase in attendance and a slightly higher increase in sponsorship revenue. Then Jordan took the keys, the team made its first playoff appearance, and sales soared.
The first letter Guelli opened when he joined the Bobcats in 2009 was from Blue Cross and Blue Shield informing him that it was opting out of its sponsorship deal. This year, the company is back and so is Foot Locker, which also bailed out of its sponsorship deal in 2009.
“When Michael purchased the team, they got serious again,” Guelli said.
The team has a total of 90 sponsors, with 15 new deals coming during this offseason. New full-season-ticket sales have reached 2,000 with a renewal rate of 92 percent. Total full-season-ticket sales stand at more than 7,000. The team now ranks in the NBA’s top 10 in new full-season tickets.
But the turnaround is far from complete, both on and off the floor. Much of the ground they gained last year came thanks to the injection of Jordan and the club’s first playoff appearance.
Though the Bobcats have gained traction in the market, they have yet to reach a league benchmark of 10,000 full-season-ticket sales, a mark that at least 10 other NBA teams have set. The number of sponsorships sits near the league’s average, though business is on the rise.
“Many were the same prospects, but they just weren’t interested [before],” Whitfield said. “Michael’s buying the franchise repositioned the property and the community was starting to get past the negative stigma.”
Closing the deal
In April, six weeks after he closed on the franchise and two days after his team was swept from the playoffs by the Orlando Magic, Jordan made headlines playing in the pro-am at the wildly popular Charlotte PGA Tour stop, with Couples as a playing partner and head coach Larry Brown along for the walk.
A month later, Jordan waved the green flag as honorary starter at NASCAR’s Sprint All-Star Race, which annually draws more than 100,000 fans.
Both were big-time, local branding plays, appearances at large, popular events that cemented Jordan to the Bobcats, and the community. The franchise also turned them into sales vehicles.
The Bobcats built out hospitality at both events, hosting a tent at the golf course and a suite at the speedway. Jordan swung by the tent to shake hands after his golf round and spent several hours in the suite at the all-star race. In both cases, Bobcats staff had access to invitations to use as a perk for top sponsors and an incentive to close premium sales.
“I was able to say, ‘Based on what we’re talking about — a $30,000 or $40,000 deal — I have two tickets for you for Saturday night to go to the all-star race and spend some time with Michael Jordan,’” said Todd Terakedis, a Bobcats account executive who sells premium seats. “‘Is that something you’d want to do? Would that get you to jump on board right now?’
“The answer was yes.”
The pro-am appearance helped the team close a critical extension with Wells Fargo, sponsor of the PGA Tour event and the first of the Bobcats’ major sponsors to come up for renewal. The original deal was with Wachovia, which was headquartered in Charlotte. Charlotte lost the headquarters late in 2008, making the renewal a tougher sell.
When bank executives asked about Jordan playing in the event, Guelli and Whitfield told them he’d be willing to do it, but they hoped to “expedite” the renewal conversations. Jordan played, drawing a massive gallery and brightening the spotlight on the tournament.
The bank is expected to announce a renewal, likely by month’s end.
Even more valuable, Whitfield said, has been Jordan’s willingness to play in situations that are less visible but offer a greater return. During the stretch run last season, Whitfield and Guelli created a place they refer to internally as “Club 23,” remodeling an outmoded TV studio at the arena into a lounge where Jordan can entertain groups of two to four in an intimate setting. It’s ideally located, close to both the team’s court-level premium club and Jordan’s seats at the end of the bench.
“The thing people don’t understand is he’s a real person, a natural person,” Whitfield said. “He’s engaging. He’s got a personality that draws people in. What he realizes now, I think, is that as the owner — this is his. It’s his investment. And he gets to put whatever imprint on it he wants to. He wants to be involved and engaged.”
Open for only a handful of games last season, Club 23 helped the Bobcats close “significant” business, Guelli said.
“I am a closer,” Jordan said. “I will step into major deals. If it means dinner, drinks or whatever, I am open to it. But we have to use it sparingly. I am here to help, but I don’t want to do other people’s jobs.”
But it’s a start.
The general manager of the sports marketing agency that manages Bobcats sponsorships for Time Warner Cable and Lowe’s has seen the change, both through the eyes of his clients and in the stories he heard in prior years from Bobcats employees who knew that while they could tout Jordan’s involvement, they couldn’t deliver access to him.
“Previously, calling on corporate clients and making that extra effort was not a priority,” said Mike Boykin, executive vice president of sports marketing at GMR. “It wasn’t something [Jordan] wanted to do. Now, as an owner, that’s a different deal. He’s been engaging, involved, willing to make those calls and that extra effort to connect with a lot of people, and to leverage some of his national relationships to bring it down to a local level at the Bobcats.
“Night and day. It’s night and day.”
Always the competitor
During a long break between the last couple of groups at the Bobcats golf tournament, Jordan had time to swap stories and jabs with a few old golf buddies who had come by for the afternoon. When Jordan’s pokes turned particularly sharp, one of them hopped in a cart and headed for the parking lot. A few minutes later, he was back with his clubs.
“Let’s do it right now,” Jordan said, teeing up a ball.
By the time the next group of guests arrived, Jordan and his friends had already teed off and climbed into carts. The challenge was on. Couples wasn’t playing, but he too slid into a cart, intent upon seeing how the competition turned out.
“Is Michael playing now?” someone in the next group of season-ticket holders asked.
“Just this hole,” a Bobcats employee explained.
About to roll off with four other carts loaded up around him, Jordan looked over his shoulder and flashed the waiting group a smile.
“Be right back,” he said.