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Volume 20 No. 46
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Dave Checketts, president and CEO, Legends Hospitality Management

I remember [Dick] Ebersol standing up at a sports business awards ceremony. He got up and said, “If you don’t know this, folks, your success in this business will be determined by your relationships.” It wasn’t that I didn’t know that, but I’d never heard it said quite that eloquently.

I want to be in businesses that actually are profitable, that make money. Otherwise, you’re always scrambling to deal with lenders. It’s not a lot of fun.

I want to see us grow organically first. Acquisitions in so many areas depend on how long your contract is for in food or beverage.

The Yankees and Cowboys contracts are for 30 years. That’s what gives the company value. This company owns the food and beverage rights for the two most iconic and powerful stadiums in the world for 30 years.

I have a terrific assistant who starts out the month and schedules all of my executive committee meetings at Legends, my board meetings at Legends, my management meetings at Legends.

We’ll do a lot in the U.S., Europe as a secondary option, and we’ll see about the Far East after that.

I personally think F1 has tremendous growth ahead of us. I hate to say this, but I’m not as bullish about NASCAR.

The fact that you’re going to go into a facility, take your seat and order something with your device is too good of an idea. Major League Baseball is trying to do it. Steve Ross’ FanVision is trying to do it. Somebody is going to get there, but connectivity in a stadium is a big problem.

No one wants to move all over their whole career, but if [Legends staff are] paid well, they’re good projects and they’re challenged with exciting work, then I’m doing my job.

The whole environment changed for me in 2008 when my biggest investor and partner, a small firm in New York called Lehman Bros., went out of business. I don’t think anybody could have counted on what was going to happen there. I had been at their office the week before, talking about where we were going with SCP. It’s hard to explain how that feels.

Today it’s almost like you have to throw pro formas out the door because of the economy. All of those numbers that seemed so easy to hit when I first took over the Jazz in 1983, when I came to the Garden in 1991, the acquisition of IMG, the acquisition of CSTV, all of these things that I’ve done — you set up a pro forma with reasonable objectives, on the backs of that you finance a business and go at it. Those days are gone, or at least it feels like it.

You have to start with a very conservative approach today. You have to have an operating margin. The worst place to be is overleveraged, so if you can’t afford to buy it or leverage it, you shouldn’t get into it.

Team ownership today is for billionaires. It’s not an LBO game anymore.
I don’t think I can buy teams, and that’s OK. That part of my life is probably in the rearview mirror now.

I started with the Jazz in 1983. We bought with $8 million of debt. It had $2.7 million of losses. Then the Jazz became worth $18 million and then $36 million and the revenue streams and the TV deals kept increasing and every pro forma looked like a hockey stick and we always hit those numbers. You can’t do that anymore.

Families lost significant net worth these last few years, so owners are tougher to find.

If [Barack Obama] gets re-elected, and we continue to have his policies, I think things will continue to be tough from a business perspective, because we know we’re going to be paying significantly more taxes. We know we have big-time deficits [and] interest rates can’t stay this low forever. There are still a lot of dark clouds on the horizon.

The ’90s are long gone. You could make a lot of mistakes in the ’90s and you could recover because you had other areas that would compensate. You make mistakes now — it’s tough.