SBJ/March 18-24, 2013/Franchises

Haslam, owner in a hurry

Energized and impatient, Jimmy Haslam brings hands-on style to Browns

Editor's note: This story is revised from the print edition.

Early in Jimmy Haslam’s marriage, he’d often take his wife, Dee, on date nights in Knoxville, Tenn., their hometown and headquarters of his dad’s truck stop business.

Many of those outings began with detours to those stations, where Haslam mowed lawns, cleaned bathrooms and checked on stores before he and Dee left for the remainder of their evening.

Jimmy Haslam will continue to run the Pilot Flying J truck-stop company while he works to turn around the Browns.
Photo by: STEVEN BRIDGES
For those concerned the rigors of running the Cleveland Browns might be too much for their new owner as he continues to run Pilot Flying J, the sixth-largest privately owned company in the United States with more than $30 billion of revenue, understand this: Haslam, 58, a quick-talking, high-energy executive, all but lives to multitask.

“There is enough capacity in Jimmy Haslam,” said Mike Edwards, who went to the University of Tennessee with Haslam and is president and CEO of the Knoxville Chamber of Commerce. “He would be less efficient if he tried to back away. What is counterintuitive but is absolutely true is [that] the Cleveland Browns are going to have a full-time owner, Pilot is going to have a full-time owner, and this community has a full-time leader.”

Haslam agreed to buy the Browns in August. Shortly thereafter, he said he would step down as Pilot CEO, hiring former PepsiCo President John Compton as his replacement. So news last month that he’d reversed course and would be returning as Pilot’s CEO sparked concern in northeastern Ohio.

The subject of absentee ownership is a raw one in Cleveland, Haslam having bought the team from Randy Lerner, who lives in New York and owns the Aston Villa franchise of the English Premier League.

“People might disagree with [the] decision,” Haslam said of his change of heart to run Knoxville-based Pilot, “but I don’t think anybody would question our passion, our commitment [to the Browns].”

Knoxville institution

Haslam’s father, Jim Haslam II, is a legend in Knoxville, where he captained Tennessee’s 1951 national championship football team. After graduating, he stayed in the small, mountain city, and started Pilot with one station in 1958. Today, his name all but bedecks what’s become a vibrant community of more than 300,000 — visible on university buildings and charity nameplates.

Pilot Flying J Core Values
 — as told by Jimmy Haslam

1) Do the right thing all the time
2) Hands-on involved
3) Move fast
4) Lead and develop great people
5) Continually improve
6) Financially focused
7) Think like owners

It’s his two sons, however, who have transformed the Haslams into eastern Tennessee royalty. Jimmy’s brother, Bill, at one time the president of Pilot and the mayor of Knoxville for eight years, is now the state’s governor. Jimmy, while athletic and fit, did not follow in his father’s fabled sportsman path, but he more than made up for it on the business side.

After Haslam became Pilot CEO in 1997, the company expanded from 100 stations to 600, as Haslam spotted emerging trends in the business, including fast-food franchising. He also doubled down on distinguishing Pilot’s truck stops from the competition, boasting what he called the cleanest showers in the business and amenities such as workout rooms.

Throughout his business success, he has remained focused on Knoxville, as he and Dee are seen as leaders in the city’s civic and charitable efforts.

“I don’t know where Knoxville would be without them,” said local United Way chapter head Ben Landers of the Haslams.

Haslam, who raised funds for his brother’s gubernatorial run, still holds the United Way Knoxville record for greatest percentage increase in giving when he ran the 1986 drive. The runner-up, coming in one percentage point behind? The 2000 edition, helmed by Dee, Haslam’s wife, who runs a local video-production business.

Haslam is known as a hands-on CEO at Pilot Flying J, and he’s doing the same for the Browns.
Photo by: STEVEN BRIDGES
“Hands on” is a Haslam and Pilot mantra. Whether running his business or raising funds, the Browns owner does his homework. Before starting the Haslam Scholars at Tennessee, which annually awards 15 four-year entries into the university for high-achieving middle- and lower-class students, Haslam and his wife traveled the country interviewing education experts on how to make a difference.

“He doesn’t want to just give his money,” said Margie Nichols, UT’s vice chancellor of communications.

Landers recalled driving across Arizona’s Sonoran Desert and coming across a Pilot location. He tried to chat up a non-talkative cashier, so he mentioned he hailed from Knoxville and knew Jimmy Haslam.

“‘Look,’ she said to me,” Landers recalled laughing, “‘Jimmy Haslam was just here yesterday and underneath this cabinet.’”

When people ask Haslam why he visits stations so often — he’ll visit some as frequently as twice weekly — he said his response is always the same: “Because that’s our business.”

Hands-on approach

Haslam promises he will shower the Browns with his same hands-on philosophy of customer service.

“The most important job is to help the players and coaches win,” he said, seated in his spartan office at Pilot headquarters, tucked away in a leafy section of Knoxville. But after that, he added, “Everything we do should be around having the fans have a great experience.”

At one of his first games last year, Haslam sat for a half in the Dawg Pound to pick the minds of his team’s most ardent fans about what they would like to see changed for their franchise.

Back in his office, he reeled off parking, concession lines, restrooms (which presumably he will no longer be cleaning), scoreboards and security as areas he will improve in 2013. Haslam and his new team president, Alec Scheiner, and team CEO Joe Banner are meeting soon with architects to develop a renovation plan for what is now FirstEnergy Stadium. (One of his first moves as owner was to sell a corporate name to what had been Cleveland Browns Stadium.)

There are 15 years left on the 30-year lease, so Haslam is hesitant to commit a large sum to an overhaul. Already well aware of public reaction and passion for the Browns, he also declined to talk about whether a new stadium is needed in the not-so-distant future.

Haslam (left, with First Energy’s Tony Alexander and Browns CEO Joe Banner) quickly moved to sell stadium naming rights. Below: Haslam was in the Steelers ownership group with Art Rooney II and Dan Rooney before buying the Browns.
Photos: AP IMAGES (above); GETTY IMAGES (below)
But Haslam is moving quickly in other ways, looking to move a team that ranks in the bottom quarter of league revenue into the middle of the pack.

“I have got to be a little careful because Randy Lerner and I have a great relationship, but we didn’t feel that the Browns were as aggressive on the business side as they needed to be,” he said.

Others have used the term “complacent,” happy to rely on the club’s famously passionate though well-disappointed fan base. Banner, for example, mentioned that the team’s website did not even have a chat area. It does now.

In addition, the Browns are centralizing all business functions at a renovated training complex, moving sales out of the stadium so all units can operate under one roof. The club recently dropped the PSL requirement for new season-ticket holders, and the team is keeping ticket prices flat for a fifth straight year. Haslam is investing team cash flow in capital improvements like the training facility, telling his family members who invested with him not to expect dividends any time soon.

If all goes well, Haslam believes his team can double in value within his first 10 years of ownership, reflecting the aggressive growth rates the league has established but also the opportunities he sees locally.

Haslam knows that to achieve that kind of success, he must motivate his team, get involved, but then back away at the right time.

Before joining the Browns, Banner said he thought it a contradiction for an owner to profess to want to hire great people for key functions but then also act hands on. There is a deep tradition in the NFL of owners who are too down in the weeds.

“He finds a balance, leaving people here aware that he is very involved, very informed — and at the same time, we feel we have space,” Banner said. “It is a very hard thing to do as a manager.”  

The football business

Haslam joined the NFL in 2009, purchasing 15 percent of the Pittsburgh Steelers. He’d wanted to buy the Tennessee Titans, so he initially rebuffed the Steelers’ investment banker, Morgan Stanley’s Randy Campbell. But Campbell convinced Haslam to marry an upcoming Pilot station visit in Pittsburgh to a meeting with team owners Dan Rooney and Art Rooney II.

Haslam quizzed Dawg Pound fans on changes they’d like to see at the franchise.
Photo by: ICON SMI
That meeting sold him on the investment, and he never missed a board meeting or a game, said Art Rooney, the team’s current owner. The investment not only tooled him in the nuances of football, but it also elevated his name on the league’s scorecard of potential owners.

“If I had my choice, I would not have had him buy a team in our division,” replied Art Rooney, when asked how he would feel if the Browns succeeded in part because the Steelers trained their owner. Haslam will formally unwind his Steelers stake this week, with owners scheduled to vote on the sale of his remaining shares to team insiders.

The NFL approached Haslam last June with the Browns opportunity, and having learned that Titans owner Bud Adams planned to keep the team in his family, the Pilot CEO jumped at the chance to become the Cleveland owner. He first met with Lerner July 2. They signed an agreement 31 days later. Haslam paid almost $1.1 billion for the team, far and away the most for an NFL team. (Stephen Ross’ nearly $1.1 billion purchase of the Dolphins also included a stadium.)

“We didn’t choose Cleveland; it was open and available,” Haslam said, asked why he bought the Browns. “But I will be honest: I take no credit. There is a lot of luck in life; it was a great selection.”

That informed decisiveness and quick action are Haslam hallmarks.

A rapid-fire speaker, Haslam answers questions in rushed, efficient succession with no digression, reflecting his tight schedule. His nondescript, non-corner office captures that style: nothing ostentatious; only what’s necessary.

Jimmy Haslam speaks on ...
---------------------------------------------------------

What’s surprised him since buying the Browns: “The NFL is an even bigger deal than I initially thought. … Our family has lived here in Knoxville for a long time, my brother is governor, my father is by far the most influential person in town — and yet we are much better known in Cleveland than here.”

What NFL Commissioner Roger Goodell has told him: “I remember asking the commissioner, before I was an owner, what he wanted in an NFL owner. He said he wanted someone who wanted to badly win on Sunday, but Monday through Saturday understands the league is the most important thing.”

His level of involvement with the Browns: “I will be intricately involved in how we spend the cap and hiring the people who make those decisions.”

What happens if he disagrees with the people he hires: “Everybody asks who has the final say, and I laugh about it. If it is a 2-2 vote, that really says something.”

His near-term expectations for the Browns: “The Browns have not won a championship since 1964; we have won 14 games in the last three years. I don’t think we will be 13-3 next year. We want to see steady improvement over the next few years. The expectation is we will win more games next year. It does take time.”

Whether he will be a visible owner: “It is important for the head of any organization to be visible and active.”

What he told his family members who invested with him in the Browns: “This is a long-term investment. Don’t plan on getting any money out; we hope you don’t have to put money in.”

The best thing about running his company plus the Browns: “One of the advantages of running two companies, if you will: When you do lose — and the losses are tough — when you come here on Monday, it does give you something to distract you.”

Being at the Super Bowl this year, when the lights went out: “As someone who has a substantial investment in the NFL, you worry. First of all, you think ‘Is this some type of terrorist deal, something bad happening?’ I happened to be in Candlestick [in 2011] when the Steelers played [the 49ers] and the power went out, and it just takes awhile to get everything going. It is obviously not a positive experience.”

Business stats are scrawled on his white office walls, made of what appears to be malleable wallboard. A TV is tuned to CNBC, informing him of the oil and coffee prices that are key indicators in his world. The only evidence betraying his NFL connection is a football on the windowsill Commissioner Roger Goodell sent Haslam after he bought the club, resting next to a Browns candy dispenser. Goodell received the ball after the reincarnated Browns’ first game in 1999.

“Jimmy doesn’t wear a coat and tie to work,” said Nichols, of the University of Tennessee, describing Haslam’s no-nonsense style. The Haslams, she continued, “are not braggadocious people. The governor wears a Timex plastic watch. They are not the Rolex kind of people.”

Browns Day, Pilot J Day

If Haslam seems in a hurry, that’s because he is. One of the first questions he asks potential employees is, Are they in a bigger hurry than their parents? The answer better be yes.

Besides Pilot and the Browns, Haslam is a major civic and charitable figure in Knoxville, and an emerging one in Cleveland. Pilot also recently expanded into selling diesel fuel to oil and fracking businesses, so he oversees that unit, which is based in Oklahoma.

And he has no plans to cede his common touch of visiting stores and meeting the people who work for him. The CBS show “Undercover Boss” approached Pilot, but Haslam turned them down because he said almost everyone at the company knows him, and well.

To cope with his many masters, he compartmentalizes his days and environment. There is no TV tuned to NFL Network in his Pilot office because he said he wants to keep his worlds separate.

“Yesterday, [with] our energy services business, we have a big operation in Oklahoma City, and I was there from 9:30 till 5:30, and I focused distinctly on that. Today is a Pilot Flying J day. Tuesday I will be in Cleveland, and we are going to focus on our free agency process,” he said.

For the Browns, he is relying on one of his key business philosophies: Find and hire the best people, manage them, but get out of their way. He is fond of saying he is not as smart as the people who work for him, though Banner was one to call Haslam the smartest man in the room. The former Philadelphia Eagles president, Banner was Haslam’s first hire with the Browns. Proskauer Chairman Joe Leccese introduced the two prior to the closing of the sale. The duo met in July at Banner’s vacation home in Martha’s Vineyard, Haslam and his wife traveling from their place in nearby Nantucket.

Banner then pointed the way to the next personnel moves: Scheiner, a former Dallas Cowboys in-house counsel who now is Browns president, and the team’s new chief revenue office, Brent Stehlik, from the San Diego Padres.

On the football side, Haslam and Banner quickly cut ties with the old regime, naming a new head coach, Rob Chudzinski, and a new general manager, Michael Lombardi. Haslam personally spends time in the interviews, spending more than 10 hours with the new head coach.

“I am highly impatient,” Haslam said of what he expects to occur on the football field. “If we don’t win, and win consistently, it will be my fault because I picked the wrong people.”

For those from Knoxville who know him intimately, that the Browns might not turn around their on- and off-field fortunes is unfathomable.

“He is not in business just to be in business. He is in it to be the best,” said Edwards, Haslam’s old college friend. “And that will translate to the Browns.”


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