SBJ/April 14-20, 2014/Franchises

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  • David Morehouse: Power Player

    For Pittsburgh Penguins President and CEO David Morehouse, this week’s start of the NHL playoffs creates emotion beyond what others in sports might describe as a roller-coaster ride — one that could last anywhere from a disappointing 10 days to a victorious two months.

    “The playoffs,” Morehouse said, “are like having Election Day every other night.”

    Penguins President and CEO David Morehouse at Consol Energy Center.
    Photo by: COURTESY OF THE PITTSBURGH PENGUINS
    It’s a comparison Morehouse is in a unique position to make. His experience with the Penguins is deep — 10 years with the club, seven as president — but it’s Morehouse’s work prior to joining Pittsburgh that’s played a large part in where he and the Penguins stand today.

    Morehouse was an adviser in President Bill Clinton’s White House and later played pivotal roles in the presidential campaigns of Al Gore and John Kerry. Managing people in stressful political environments has wired Morehouse, 53, to maintain his composure and make smart decisions for his hometown

    SBJ Podcast:
    NHL writer Christopher Botta and executive editor Abraham Madkour discuss David Morehouse's unique political background and his work with the Penguins.

    hockey team.

    “David’s a blue-chip talent,” said Kerry, the current U.S. secretary of state who ran for the presidency in 2004 with Morehouse as his communications director and traveling chief of staff. “Even in high-pressure situations, he has a way of staying grounded and focused. Now, he’s making the Penguins one of the premier franchises in pro sports … after my Boston Bruins, of course.”

    Kerry chuckled at that last part, but his admiration for Morehouse’s work was clear. The Penguins have sold out every regular-season and playoff game since the start of the 2007-08 season, Morehouse’s first as the franchise’s president. The team garners the best local television ratings in the NHL and has developed a series of civic hockey programs that is helping the club win young fans.

    As for politics, well, there’s a story to tell about Morehouse’s road to the White House first. When he was 22, he thought he was going to lead a contented life … as a boilermaker.

    ■ ■ ■

    Morehouse was raised in Beechview, a working-class section of Pittsburgh. He played sports with his friends at Pauline Park, looking to stay out of trouble — which wasn’t always easy, given that trouble was never far away. As an adolescent, for example, he once took home a batch of hypodermic needles from the park to show his mother, who raised him after his parents divorced when he was 7. Years later, some of the kids from the neighborhood would die of overdoses.

    So when Morehouse graduated from high school in 1978 and became a boilermaker, he was very satisfied.

    “For a lot of people where I grew up, being a boilermaker was as good as it got,” Morehouse said. “Getting that job was a huge win for me. It was skilled labor, and the money was pretty good. I thought I was going to be a boilermaker for the rest of my life, and that would be just fine.”

    But when he was 22, a serious accident would change everything. As a member of Boilermakers Local 154, Morehouse was working in Stratton, Ohio, at the W.H. Sammis Plant. He was welding a T-bar — an “I” beam with one end open — onto steam pipes. A beam above him snapped and headed right for Morehouse. He ducked, but his hardhat fell off and the beam clipped him in the head, knocking him unconscious. He was taken to a hospital.

    He suffered from amnesia, headaches and dizzy spells for close to a year. During that time, there was some discussion with the union about retraining him for other boilermaker work, or possibly a desk job, that was less dangerous.

    But that time away from the plant provided for plenty of soul-searching, as well. Morehouse started to wonder if he was capable of achieving more.

    “I asked myself, ‘What am I doing?’ I’ve got to start using my head,” Morehouse said. “Yeah, you can say that beam knocked some sense into me.”

    He took classes at the Community College of Allegheny County, eventually obtaining an associate’s degree before attending Duquesne University.

    “That accident was the worst thing that ever happened to me, and it was the best thing that ever happened to me,” Morehouse said. “Before the beam took me out, I’d never thought of going to college.”

    While at Duquesne, he saw a notice that volunteers were needed for the presidential election campaign of Democratic nominee Bill Clinton. He didn’t hesitate to sign up. He had no idea the decision would change his life.

    ■ ■ ■

    Volunteer work for the 1992 Clinton campaign was about as glamorous as being a boilermaker.

    David Morehouse in his days working for President Bill Clinton
    Photo by: COURTESY OF DAVID MOREHOUSE
    When the candidate came to Pittsburgh, Morehouse drove a motorcade car. Sometimes he was shuttling the press corps, other times it was campaign staff. But for Morehouse, then 32 and earning a modest living as a docket clerk at the Allegheny County Register of Wills, the work for Clinton was a steppingstone. He made a good impression.

    “What was clear was the work ethic,” said Michael Feldman, who got his start with Morehouse as a volunteer for Clinton, became a senior campaign official for Al Gore during Gore’s 2000 presidential run, and is now managing director of the Washington, D.C., strategic communications firm the Glover Park Group. “David always recognized where help was needed and pitched in.”

    Morehouse earned his first paid position in the campaign as a member of the advance team after four months of volunteer work. Tasks included arranging crowds for Clinton campaign speeches around Pennsylvania.

    “Those big crowds you see at rallies don’t just happen. You have to make it happen,” Morehouse said. “This was pre-Internet and before social media. We got the crowds there by footwork, creating phone banks, doing mailings.”

    When Clinton defeated incumbent President George H.W. Bush to become the nation’s 42nd president, Morehouse and many other election team staffers went to Little Rock, Ark., to be part of the celebration and see if there was work for them in the administration. Morehouse got a job on Clinton’s inauguration committee. From there, he went on to work in the legislative affairs department in the Pentagon for the Department of Defense, but he returned to the administration’s staff when Clinton’s team asked him to become the deputy director of advance. For more than a year, Morehouse traveled with the president on Air Force One and was
    the advance official for his public appearances.

    “I gained confidence as I went through the different positions,” Morehouse said. “I worked hard, tried to keep a modest center, and treated people well.”

    The political work continued from there: a stint as communications director for drug enforcement czar Lee Brown; deputy director of D.A.R.E. (Drug Abuse Resistance Education); and director of strategic planning for retired U.S. Army Gen.
    David Morehouse in his White House days (from top): On the ground with President Clinton, on the move with Hillary Clinton, and in the air with Vice President Al Gore and staff.
    Photo by: COURTESY OF DAVID MOREHOUSE (3)
    Barry McCaffrey during his lead of the Office of National Drug Control Policy.

    But the call for campaign work beckoned again eight years after Clinton’s election, this time as the senior adviser and trip director for then-Vice President Gore, who was running for the presidency against George W. Bush.

    Morehouse’s time with Gore gave him a personal and up-close involvement in the recount that was part of the 2000 presidential election. His demeanor throughout the campaign left a distinct impression on Gore, who via email was effusive in his praise of his former staffer.

    “David is smart, innovative, hard-working and tenacious,” wrote Gore. “He began his career at the bottom rungs of the Clinton-Gore administration and quickly, to no one’s surprise, worked his way up to play an extremely important role in the White House and, later, in my presidential campaign. David brings with him a keen understanding of people and a rare composure that allows him to excel even in the most stressful environments. No one who knows him is the least surprised that his uncommon skill set serves him so well with the Penguins.”

    Morehouse went on to earn a master’s degree in public administration at Harvard’s John F. Kennedy School of Government before returning to Washington in 2003 to help Kerry with his 2004 presidential campaign.

    “David joined my campaign in the dog days, when we were getting knocked on our butts,” Kerry said. “He rolled up his sleeves and turned it around.”

    The campaign was not victorious, but Morehouse’s path was not complete. Just one week after Kerry’s loss to George W. Bush, Morehouse met in California with Ron Burkle, a major Democratic Party supporter, to discuss a potential position in Burkle’s private equity firm.

    Or so he thought.

    ■ ■ ■

    The Penguins at that time had been playing in Mellon Arena, the venue first known as the Pittsburgh Civic Arena and affectionately known as The Igloo, since joining the NHL in 1967. Sensing that Morehouse’s savvy could help navigate the political challenges that come with striking arena deals, Burkle, a Penguins’ co-owner, made him an unexpected offer.

    “Since you’re from Pittsburgh, why don’t you go home and help me figure out how we can get a new arena?” Morehouse remembers Burkle asking him.

    Morehouse welcomed the NHL’s Winter Classic to Pittsburgh at a 2010 event..
    Photo by: JOE SARGENT
    Morehouse accepted a role as a senior consultant in 2004, and the Penguins completed a deal for a $321 million arena across the street from Mellon Arena three years later. The arena is funded by annual payments from Rivers Casino (the city’s casino licensee), the state’s economic development fund (derived from taxes on the state’s 14 casinos), and the Penguins. The club, which was being wooed by Kansas City for relocation, committed to staying in Pittsburgh for 30 years.

    Burkle and co-owner Mario Lemieux named Morehouse the Penguins’ president soon after the arena deal was executed.

    “David is a Pittsburgh guy who really understood marketing and branding from his days in politics,” Lemieux said.

    The arena opened in 2010, branded as the Consol Energy Center after the Penguins signed the energy company to a 21-year deal valued at $115 million.

    “They’ve delivered in spades the kind of exposure we were looking for,” said Consol Energy CEO Nick DeIuliis. “The amount of major events the arena has hosted — NCAA basketball tournament, the Frozen Four, the big concerts like Paul McCartney — there’s no comparison to the old arena.”

    When the NHL decided that the Buffalo Sabres would host the first Winter Classic in 2008, the Penguins raised their hands first in offering to be the visiting team.

    Morehouse on his famous bosses

    David Morehouse, on the trio of top political figures he’s worked for:

    Bill Clinton: “He’s the smartest person I’ve ever been around. I would be briefing him on something important, and he would be doing The New York Times crossword puzzle and two other things while listening to me. He was also very good with people. We’d be walking to a speech in a hotel ballroom, and the president would stop and speak with every worker in the kitchen for 20 minutes. He genuinely cared about people. He made everyone feel as important as a head of state.”

    Al Gore: “He has an unwavering belief in our system of government. During the recount, he always believed that the Supreme Court and the system would do the right thing. He was also very detail-oriented.”

    John Kerry: “He has great patience and encouraged multiple viewpoints before making decisions. I learned a lot from that.”

    — Christopher Botta
    “David’s very smart that way,” said NHL Chief Operating Officer John Collins. “He knew how much having Sidney Crosby and the Penguins in the game would be good for the league but also good for the Penguins. He also offered complete access and cooperation for the first HBO ‘24/7’ show when Heinz Field hosted the Winter Classic [in 2011]. With his background in Washington, he brings a perspective that’s bigger than hockey, bigger than sports.”

    Morehouse came to the Penguins without having spent one day in the front office of a sports team or league. He jokes about his inexperience now, saying, “I didn’t have to pretend to be an outside-the-box thinker when it came to sports because I was never inside the box.”

    Soon after Morehouse became Penguins president in 2007 (he was given the added title of CEO in 2010), he hired Minnesota-based Stellus Consulting to perform brand research.

    “We learned that our brand assets were energy, drive and innovation,” Morehouse said. “We vertically integrated that into everything we do: the music we play, the fonts we used, the advertising we do, the way we talk about the team. What I’ve learned from Ron and Mario is that fans are not customers; they’re shareholders. Fans are investing their money, but also their emotion and their time. That’s why we invest heavily in community outreach: to win the next generations of fans.”

    Joe Schmidt, president and chief operating officer of Dick’s Sporting Goods, which signed a sponsorship as a founding partner of the arena, said Morehouse “really understands the meaning of partnership. He listens to feedback and helps us activate many of our initiatives. The Penguins have become the best partner we’ve ever worked with.”

    Dick’s sponsors the Sidney Crosby Little Penguins program, which provides free hockey equipment to novice players, and also the Penguins Elite youth hockey program.

    “One of the fruits of the youth hockey strategy is the TV ratings,” Morehouse said.

    The Penguins as of last week were well on their way to posting the top local TV rating among all NHL clubs for a fifth consecutive season. Their average last season (12.56) was the highest RSN rating for any U.S.-based NHL team on record.

    “David’s made a huge difference in the way we connect with our fans and sponsors,” Lemieux said. “He’s created so many positive relationships for the Penguins in the business community. And he’s been a big believer from the start in the importance of youth marketing and youth hockey.”

    Morehouse’s background is in communications, whereas many team presidents and CEOs come from a legal or financial sector. As a result, his process in management is to be hands-off in the areas of the Penguins’ business that don’t play to his strengths. (“I know what I do not know,” he said.) However, he does run a weekly meeting of all Penguins vice presidents on Monday mornings and is a frequent visitor to the offices of certain colleagues, namely Travis Williams, chief operating officer; James Santilli, vice president, marketing; Tom McMillan, vice president, communications (and a former Penguins reporter for the Pittsburgh Post-Gazette); and Rich Hixon, executive director, strategic planning.

    In both politics and hockey, Morehouse says, it’s vital to think clearly and move quickly..
    Photo by: COURTESY OF THE PITTSBURGH PENGUINS
    “Those guys, when they hear my keys jangling as I walk down the hall, I have a feeling they’re thinking, ‘Oh no. Here he comes again,’” Morehouse said with a laugh. “But the truth is, I love working with them and everyone on the staff, and we wouldn’t have this success without every one of them.”

    He sees a similarity between the worlds of sports and politics.

    “Presidential campaigns are highly stressful, highly competitive environments, and so is the long hockey season and brief offseason,” Morehouse said. “In both worlds, you have to move fast, and you have to think clearly while you are moving fast. With the Penguins, the challenge is to sustain the business and on-ice success that we’ve had. Few teams are able to sustain a winning tradition. We’re fortunate to look across the river and see the Steelers and how they’ve done it.”

    Morehouse understands that the Penguins would not flourish without stars on the roster and a winning team (the Penguins won the Stanley Cup in 2009 and are a contender again this spring), but he adds that a great hockey team has not always meant full houses in Pittsburgh.

    “People say, ‘Oh, you have Sidney Crosby and Evgeni Malkin’ — I get that,” Morehouse said. “But some don’t remember that our franchise had Mario, Jaromir Jagr and Cup teams 20 years ago and never sold out an entire season. So the combination of Sidney and our great team and the new arena, plus the efforts of this incredible staff I get to work with every day have made a difference.”

    There is more work to be done, starting with the development of the 28 acres where The Igloo stood, land the Penguins own and where they plan to build 1,100 housing units, 250,000 square feet of retail space and 500,000 feet of office space. But the Stanley Cup playoffs start for the Penguins this week, and Morehouse will be in his Election Day-mode of waiting to see what happens next.

    “We’ve put in the work,” Morehouse said of the Penguins’ staff. “Now we’re just waiting for the results to come in.”


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  • Player in the recount drama: How Morehouse stopped Gore’s concession speech

    On Election Day in 2000, David Morehouse was part of a historic moment that would be immortalized in the HBO movie “Recount.”

    SBJ Podcast:
    NHL writer Christopher Botta and executive editor Abraham Madkour discuss David Morehouse's unique political background and his work with the Penguins.

    As the motorcade of candidate Al Gore headed for the War Memorial Auditorium in Nashville so the vice president could make his public concession speech, Morehouse got a call from Michael Feldman, then Gore’s traveling chief of staff.

    “I called David to say, ‘You have to stop the vice president from conceding,’” Feldman recalled. “I was about eight cars back in the motorcade when I heard … the voting in Florida was within 1,000 votes. That means an automatic recount is mandated. David was in the car right behind the vice president.”

    Said Morehouse, “Usually the vice president would wait for me to meet him outside his car and take him to where he had to go. But I guess he was on a mission, so he was making his way to the stage. I fought through crowds and Secret Service agents and caught up to him and said, ‘We have to get you to Hold.’ That’s shorthand for the holding room where he usually waits before it’s time to speak. He said, ‘I already told Gov. Bush that I was conceding.’ I just stood in front of him, and he gave me that ‘This-better-be-good’ look.”

    Morehouse sighed. “It would have been truly historic if we won the recount,” he said.

    But Feldman said it was another step in the development of a rising star in politics.

    “It showed how exceptionally even-keeled he is,” Feldman said. “That was a huge moment, but David wasn’t flustered. His instincts were perfect.”

    — Christopher Botta


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  • Magic’s arena gets iBeacon technology

    The Orlando Magic is the latest franchise to roll out iBeacon technology in an effort to improve fans’ in-arena experiences.

    The Magic is integrating 20 iBeacons inside Amway Center with its team app, enabling fans to get smartphone message prompts for possible seat upgrades, food and beverage offers, and other retail deals inside the building.

    The Magic launched the Apple-based technology last week after several weeks of testing.

    “We are going to utilize it for the remaining home games and will grow the program with more services and more enhancements next season,” said Magic CEO Alex Martins.

    Fans who opt to receive the iBeacon messaging receive a welcoming message as they enter Amway Center. Some season-ticket holders will be offered free seat upgrades, while others will be offered upgrades at a discounted amount.

    Among other NBA clubs, the Golden State Warriors last month installed the iBeacon technology at Oracle Arena. Verizon Center, home of the Washington Wizards, tested the technology during Georgetown University basketball games earlier this year.

    A host of Major League Baseball teams have installed the iBeacon system, and the NFL used it at this year’s Super Bowl at MetLife Stadium.

    “It is all part of our approach to improving the fan experience through technology,” Martins said.


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