The Arizona Republic named JERRY COLANGELO the most influential sports figure in Arizona in the 20th century. His sports management career began in his native Chicago as head scout and sales/promotion manager for the Bulls. Two years later, at age 26, he became the youngest GM (of the expansion Suns) in pro sports. In '87, he and a group of investors bought the Suns; ten years later, he was instrumental in the startup of the WNBA with the Phoenix Mercury. Colangelo brought MLB (D'Backs) and the NHL (Coyotes) to the state and led efforts to build America West Arena and Bank One Ballpark. Colangelo spoke recently with SportsBusiness Journal N.Y. Bureau Chief Jerry Kavanagh.
Question: First off, congratulations on being inducted into the Basketball HOF as part of the class of '04.
Colangelo: It's the pinnacle for me.
Q: You started out as a basketball player.
Colangelo: Basketball and baseball. I thought my future was as a pitcher. My goal was to be in the majors, and I had offers to sign contracts, the best coming from the Dodgers back in '57. But I threw my arm out, and college basketball had great appeal to me because I had quite a few offers to select from. I chose to go to Kansas to play with WILT CHAMBERLAIN, which never materialized because he quit school.
Q: PAT WILLIAMS of the Orlando Magic called you the shrewdest businessman in sports today. He said, "I'm not sure there's anybody in the history of sports who's done what he's done."
Colangelo: I look at myself and don't really understand why so much has happened in such a positive way in my life. I think I've been very blessed. I've been given opportunities, and I've just done the best I could with those opportunities. I have failed along the way and had successes. It's been a career of living in the trenches and not being afraid to fail. I think a lot of people suffer from that issue itself. They're not risk takers. I like to categorize it as calculated risks, not blind risks. But you need to be able to walk out on a plank. If you take the safe route over and over again, I just don't think you get anywhere.
Q: It's been said that playing not to lose, as opposed to playing to win, is a sure-fire way to lose.
Colangelo: Absolutely. I was blessed with some physical ability that gave me opportunities for an education and exposure. That exposure led to being part of the Bulls' start-up back in l966. I was responsible for all scouting and marketing. It was an unusual combination. Back then, we had just a handful of people. [The NBA] was a mom-and-pop league. But that opportunity, at 26, leading to the GM job in Phoenix two years later, was an incredible opportunity. I was able to learn on the job and grow with an industry that was just in its infancy. And then to be a part of that growth for the last three-and-a-half decades has been quite a journey.
Q: Nineteen years after landing in Phoenix as the Suns' GM, you and a group of investors bought the club for $44.5M. The current ownership group has approved the $401M sale of the team. SAL GALATIOTO of Lehman Bros. said, "One of the reasons the purchase price was so high is the fantastic job [Jerry has done] of managing this franchise."
Colangelo: All I have tried to do is to build a strong franchise or franchises and create a product that would be well-received, supported and totally immersed in the community. And so my value system is something I very much tried to impart on the businesses. To create a family situation in terms of organization, develop this strong tie with the community that works both ways: putting back into the community and being a major part of it. You do it philanthropically; you do it through supporting initiatives and efforts in the community that make it a better place in which to live. And in doing so, I think you build value in a franchise.
Q: Regarding the recent sale of the Suns, JOHN MOAG said, "What it tells the owners is that the market has improved in the past two years." How far has the NBA come since you arrived?
Colangelo: It's come an incredible way. Man reached the moon back in the '60s, and the NBA went from here to Mars in the last three-and-a-half decades, in my opinion. I can't help but think back to our first year in Chicago, when our payroll was $180,000, ticket prices were two, three and four dollars and national TV revenue per team was $100,000. But I had little idea that this thing was going to explode in terms of expansion and exposure and in popularity. Basketball has been a major part of our culture, and I'm thankful for that because it was my involvement in the NBA and my success within that sport that led to Major League Baseball and the Diamondbacks and building Bank One Ballpark and a World Series. So I will forever be indebted to the game of basketball. I tell the story that the first time I picked up a basketball, as a kid, and just smelled it, I fell in love.
Q: So much time is devoted to research and planning in any successful business venture, yet the flip of a coin, for the No. 1 pick in the NBA draft (KAREEM ABDUL-JABBAR), played a prominent role in the history of the Phoenix Suns. Do you ever think about that?
Colangelo: Oh, yes (laughing). I've had plenty of time to think about it. Let me give you a little history. Back in 1968, our first season, I wanted people to engage with us, regarding the process. So, we had a contest through the local newspapers to let the fans vote, and 51.2 percent said "heads." We asked the commissioner, WALTER KENNEDY, if we could make the call. Milwaukee obliged. We tell the story that the coin went up in the air and it came up heads. And then the commissioner flipped it over and called tails. Just that little flick of the wrist had some amazing impact on two communities. It was crushing to lose the flip. I remember getting in a car and just driving for about four hours, not headed anywhere, just driving. I came to the conclusion that I better get back to the office; there's a lot of work to do. [Editor's note: The Suns took NEAL WALK with the No. 2 pick.]
Q: Well, that was out of your hands. Any second-guesses or regrets in your sports businesses?
Colangelo: No, not really. Obviously if one is totally honest with himself, he would say, "Gee, if I had to do it over again, I wouldn't have made this trade or that deal." But I remember reading a book where BUZZY BAVASI was quoted as saying, "In the area of player personnel and deals, if you're right 51 percent of the time, you're way ahead of the game." We've been right a heck of a lot more than we've been wrong in player transactions. I'm a firm believer that you don't look back; you learn from those decisions and you look forward.
Q: At the World Congress of Sports in March, you said, "The days of just opening the doors and selling tickets are over" as far as attracting the fans. What's the best new fan initiative?
Colangelo: I think technology has played a significant role and will play an even more significant role. We live in a very competitive world for the sports dollar and the eyeballs of our fans. That's because of technology: the computer, the Internet, cable television. We had four channels 25 years ago in most parts of the country. We have hundreds of channels to compete with today. That's not just sports programming; it's all types of programming. We live in a much faster-paced world. There's competition for time, for eyeballs, for viewing, for discretionary dollars and it becomes increasingly more difficult to communicate with your fans and your prospective fans. Technology gives us the opportunity not only to communicate, but also to do business. The NBA has totally integrated technology into all of its initiatives. This will have an impact in terms of value to the league and to franchises as the world marketplace becomes a significant player. That technology, the availability of an instrument that will do everything, include giving you maybe full games anywhere in the world at any time and place.
Q: Where would sports be without advertising?
Colangelo: Once sponsors identified a market to buy their product, they had to reach that audience. Therefore, a whole new business evolved in sponsorships and advertising partners, and it continued to grow into naming rights and major all-encompassing types of packages. Back in 1992-93, when we opened America West Arena, we were the 19th marketplace in the country, in terms of size and audience. We undertook some initiatives related to packaging our inventories. Where previously teams would sell off a rate card whatever they were selling, we packaged it all together and leveraged the value. As a result, although it was short-lived (it was a one-year stay at the top), we led the NBA in revenues. And I think that year we had the ninth-highest average ticket price in the league. It was an example of taking this marketing and sponsorship and packaging to a new level. When we opened the ballpark, we made a number of 10- and 15-year deals with sponsors. Today, all of us are faced with shorter deals, and you really have to hustle to get more smaller deals to make up for it. Rather than 10 or 15 years, advertisers are looking at five years. We've been on the cutting edge here in Phoenix in some of the things we've done. And we've been very aggressive. I think that's been one of our strengths.
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| Colangelo Preaches Packaging Inventories
At Both America West And The BOB |
Q: The composer John Cage said, "I can't understand why people are frightened of new ideas. I'm frightened of the old ones." What's been the best new idea in sports business?
Colangelo: Sports reached a level of acceptance of being chic, or the cool thing to be involved in, to go to, to be seen at. The evolvement of our society, you know, the different cultural swings and changes, have been challenging for sports. And I think sports have become very sophisticated in how they market their product, how they see their product and how they present it. We've gone from a mom and pop kind of operation in pro sports to a very sophisticated multimillion dollar industry.
Q: Can the different leagues learn from each other?
Colangelo: Absolutely. For too long, the leagues isolated themselves in doing their own thing. If somebody were to say, "What do you see, what do you project is going to happen over the next decade or two?" I think there would be much more strength in terms of leverage if teams were to combine efforts. And I think that is a distinct possibility. If left to me, that's exactly where this thing would go.
Q: What's a typical day off like?
Colangelo: I don't really worry about days off. I pick and choose opportunities. I'm kind of wired a particular way. I don't need a lot of sleep. I'm up at the crack of dawn. I try to start every day with a workout, which I think is important. It's a full day every day, and there's variety, which I love. It's not a boring life, to say the least.
Q: What are you reading?
Colangelo: I read a lot of the best sellers. I read a lot of Christian books because I am a man of faith and find a lot of strength in reading that kind of literature. I like novels. And most anything about sports is attractive to me. I just read the new book on SANDY KOUFAX. I read a lot about the president and his issues and what's happening politically in this country of ours. I try to stay up on current events and what's happening in my industry. For variety I'll read [ROBERT] LUDLUM. I've read all of his books.
Q: Favorite piece of music?
Colangelo: I like anything that has sax, piano that kind of jazz music and I love anything Sinatra.
Q: Have a favorite quote?
Colangelo: The climb up the ladder is a lot more enjoyable than the perceived arrival.
