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Volume 23 No. 23

Franchises

Tepper has made bold fan-facing moves, earning praise for exchanging the NFL logo at Bank of America Stadium’s 50-yard line for the Panthers logo, and criticism for signing safety Eric Reid after his protests during the national anthem. He shakes hands with fans before games, too.
Photo: getty images
Tepper has made bold fan-facing moves, earning praise for exchanging the NFL logo at Bank of America Stadium’s 50-yard line for the Panthers logo, and criticism for signing safety Eric Reid after his protests during the national anthem. He shakes hands with fans before games, too.
Photo: getty images
Tepper has made bold fan-facing moves, earning praise for exchanging the NFL logo at Bank of America Stadium’s 50-yard line for the Panthers logo, and criticism for signing safety Eric Reid after his protests during the national anthem. He shakes hands with fans before games, too.
Photo: getty images

Ten years ago, David Tepper made $4 billion on a bet that American banks would avoid rock bottom during the 2009 financial crisis. Nationalization seemed plausible and banking stocks were trading for a few bucks a share at the time, so when the troubles passed, Tepper emerged with both immense wealth and a reputation for extraordinary confidence and resolve.

In the year since he paid an NFL-record $2.275 billion to buy the Carolina Panthers, Tepper has brought the same swashbuckling mindset to the NFL, moving quickly and spending heavily to overhaul the franchise with the goals of winning a Lombardi Trophy, becoming a top-tier NFL franchise by every possible definition and becoming a dominant voice in Charlotte-area development. He knows what he wants, has the resources to get most of it, and there’s little second guessing.

In fact, Tepper thinks his biggest mistake so far has been insufficient confidence in his own instincts.

As the Panthers struggled through a seven-game losing streak in 2018, he says he felt football was a bit of a mystery — something he didn’t understand well enough to act on. But he ultimately decided his management instincts were telling him something about the team’s results. In early December, the team demoted defensive coordinator Eric Washington, fired two assistants and put head coach Ron Rivera in charge of defensive play calling.

Who is David Tepper?

 

■ Owner, Carolina Panthers

■ Founder & President, Appaloosa Management hedge fund

■ Founder, The David A. Tepper Charitable Foundation, Better Education Institute

■ Age: 61

■ Hometown: Pittsburgh

■ Education: B.A., economics, University of Pittsburgh (1978); MBA, Carnegie Mellon University (1982)

■ Family: Three children

■ Estimated net worth: $11.4 billion, per Bloomberg Billionaires Index

“The football side was interesting; I was a little bit apprehensive last year,” Tepper said. “But I kind of think I realized that the football side is business, too. It’s just good management processes. So the same sort of standard you’d set for a business you would set for a football team.” 

On the business side, there’s been no apprehension. Worth $11.4 billion, according to Bloomberg — the largest fortune among NFL owners and many times what previous Panthers owner Jerry Richardson had — and with 100 percent control of the club, there’s little to constrain Tepper.

Within weeks of taking over, he began replacing the executive team, bought out Richardson’s limited partners, created departments for marketing and business analytics, and hired a mental health provider and a nutritionist for the team.

He also made bold fan-facing moves, earning praise for exchanging the NFL logo at Bank of America Stadium’s 50-yard line for the Panthers logo, and criticism for signing safety Eric Reid after his protests during the national anthem. He shakes hands with fans before games and had the Panthers jump head-first into Amazon’s “All or Nothing” series — which told locals more clearly than anything that this was no longer the rarely seen Richardson’s team.

This summer, Tepper and his handpicked top executive, former City Football Group chief commercial officer Tom Glick, have gone to work on a bigger vision: to make Charlotte a dominant destination for sports and entertainment, while turning the Panthers into a major player in real estate, development and philanthropy.

■ ■ ■ ■

 

Tepper jokes with South Carolina Governor Henry McMaster at the celebration announcing the Panthers’ new headquarters and development in Rock Hill, just across the state line from Charlotte.
Photo: Courtesy of the Carolina Panthers
Tepper jokes with South Carolina Governor Henry McMaster at the celebration announcing the Panthers’ new headquarters and development in Rock Hill, just across the state line from Charlotte.
Photo: Courtesy of the Carolina Panthers
Tepper jokes with South Carolina Governor Henry McMaster at the celebration announcing the Panthers’ new headquarters and development in Rock Hill, just across the state line from Charlotte.
Photo: Courtesy of the Carolina Panthers

The centerpiece of that goal is their fast-moving bid for a Major League Soccer franchise, which they’ll present to MLS owners at the All-Star Game this week. But it also includes a 230-acre development in nearby Rock Hill, S.C., extensive renovations to Bank of America Stadium if the MLS bid is approved, possible construction of a soccer practice facility, turning the football practice facility into conference space and further uptown Charlotte development. Within a decade, he says, he hopes to build a new retractable-dome stadium, with taxpayer help, that would turn the city into a contender for every major concert tour and sporting event.

Tepper and Glick speak in detail about the corporate and fan interest already documented for an MLS expansion club, and push their argument that Charlotte can do what Atlanta United did: reset the standard for MLS attendance by playing in an NFL-first facility in a place with high fan interest. 

Having just come off $150 million in renovations completed in 2017, Bank of America Stadium is a fundamentally strong place for soccer, Glick said. It’s hosted several international friendlies that have averaged more than 50,000 in attendance. But the MLS bid would require upgrades to include league priorities such as a center tunnel, on-field suites, supporter zones behind the goals and soccer-specific TV camera bays. Those changes would come along with another round of improvements aimed at the general fan experience across all events, Glick said. The team won’t disclose a projected cost, but MLS expansion fees plus those short-term renovations presumably would run between $300 million and $400 million.

Tepper and Panthers team president Tom Glick, who has a deep background in soccer, have set their sights on bringing an MLS team to Charlotte to help fill the city’s year-round entertainment calendar.
Photo: Courtesy of the Carolina Panthers
Tepper and Panthers team president Tom Glick, who has a deep background in soccer, have set their sights on bringing an MLS team to Charlotte to help fill the city’s year-round entertainment calendar.
Photo: Courtesy of the Carolina Panthers
Tepper and Panthers team president Tom Glick, who has a deep background in soccer, have set their sights on bringing an MLS team to Charlotte to help fill the city’s year-round entertainment calendar.
Photo: Courtesy of the Carolina Panthers

But Tepper has his eyes on the big prize: a new retractable-dome stadium in uptown Charlotte at some point in the next decade that would host the Panthers, an MLS team, a robust rotation of concerts, Final Fours and Super Bowls. 

He won’t do it without taxpayer help, which he said ought to be an easy sell considering the economic impact of an expanded, year-round schedule of events.

“At some point I would make a big investment if I could get the state and others on board in a new stadium that would be great for soccer and great for football,” Tepper said.

The project does need public buy-in, he added, and it’s achievable.

“The economy’s big enough for a revenue tax, a hotel revenue increase that would go a long way to help pay for a new stadium,” Tepper said.

He already expertly wrung tax incentives out of South Carolina for the Rock Hill development tied to the team’s headquarters being relocated there and is starting to make a political pitch infused with Charlotte boosterism for a stadium.

“This state, this region, has to realize how great it can be,” Tepper said. 

■ ■ ■ ■

 

The club also is considering selling personal seat licenses for soccer as part of the creation of an MLS team that would give fans a sense of ownership. “There’s a concept of soccer PSLs that we’ve researched, that we think we can do,” Tepper said, though a spokesman emphasized the idea is still being studied. “In this market there’s a lot of pride with personal seat licenses. And what we think we can do on the PSL side, it’s not necessarily from a funding source, it’s more from a pride source.”

With his purchase of the Panthers last July, David Tepper became the NFL’s wealthiest owner with a net worth of more than $11 billion.
Photo: Courtesy of the Carolina Panthers
With his purchase of the Panthers last July, David Tepper became the NFL’s wealthiest owner with a net worth of more than $11 billion.
Photo: Courtesy of the Carolina Panthers
With his purchase of the Panthers last July, David Tepper became the NFL’s wealthiest owner with a net worth of more than $11 billion.
Photo: Courtesy of the Carolina Panthers

Taking a step back, Tepper hammers home a broader argument: There’s extraordinary unmet demand for sports and other live entertainment in Charlotte — in particular the lack of a major league summer sports team — and he can both meet that demand and profit from it. Expect to see more
one-off soccer events at the stadium, and he teases a major concert booking soon.
 

“People here in Charlotte have to realize: This is a really major, growing, important city, and it needs that sort of presence,” Tepper said. “Charlotte, in my mind, for these two states, should be the sports and entertainment capital. That’s what it’s meant to be.” 

To that end, he’s launching Tepper Sports & Entertainment, a holding company that will sit atop all of his Charlotte sports entertainment and development endeavors that will be run by himself and Glick.

As he runs through his plans, Tepper posits what kind of secondary implications development could bring, such as expanded use of the Rock Hill airport once the Panthers’ planned development takes root in South Carolina. It’s a corporate and personal craft airport outside of the congested Charlotte Douglas International Airport’s airspace, which could be a boon to corporate travelers seeking deals in the region. Or, how the Panthers could vastly improve the region’s recreational options simply by building bike trails around all of their real estate.

■ ■ ■ ■

 

Very different from the Panthers’ previous owner, Jerry Richardson, Tepper has made himself accessible to fans and media.
Photo: Charlotte Business Journal
Very different from the Panthers’ previous owner, Jerry Richardson, Tepper has made himself accessible to fans and media.
Photo: Charlotte Business Journal
Very different from the Panthers’ previous owner, Jerry Richardson, Tepper has made himself accessible to fans and media.
Photo: Charlotte Business Journal

Confidence is not unusual among NFL owners. But Tepper’s self-assurance plays out differently when combined with his middle-class Pittsburgh roots and somewhat abrupt success in finance, said Tom Sorensen, a retired Charlotte Observer columnist.

It’s made him the “billionaire next door,” a man who sees no need for the usual trappings of ownership like titles (he’s simply “Dave” around the office), formal business attire and close managing of his media availabilities.

“I think a lot of times these owners are trying to effect an image,” Sorensen said. “You’re looking for a way to show who you are, and maybe this is a part of that … you know, you’ve attained a certain level and there are just rules.”

On the morning of the NBA All-Star Game, Sorensen recalled, Tepper entered a VIP brunch dressed in jeans and a T-shirt, hat low over his eyes, while the rest of the room was in church clothes. He met with reporters and conducted meetings in a white Panthers Nike shirt and gray sweats.

“Tepper is obviously confident enough to ignore those rules,” Sorensen said.

This is a really major, growing, important city, and it needs that sort of presence. Charlotte, in my mind, for these two states, should be the sports and entertainment capital. That’s what it’s meant to be.
David Tepper
Panthers owner

Tepper’s casual, approachable nature has already changed the culture around the Panthers’ offices. For a franchise known for its stability under Richardson, Tepper has engineered a near total overhaul of the team’s top ranks with a focus on diversity and a free flow of ideas. He’s hired women in several key management roles, such as Chief Financial Officer Kristi Coleman and the team’s first chief marketing officer, Meredith Starkey, and instituted weekly meetings with his senior staff after years of infrequent get-togethers.

He expects any organizational deficiency that might be a competitive disadvantage to be addressed immediately, and pushes his team and possible partners to evaluate many long-term plans at once. “I don’t want to leave any room for excuses: What we should have done, what we didn’t do, what we could have done,” he says.

His investment team at Appaloosa Management, the hedge fund he founded in 1993, works in an open floor plan, where entry-level employees to the top are free to interact whenever is necessary to respond to an opportunity. “We’re trying to break down silos,” he said.

Tepper is shrinking his hedge fund by gradually returning investors’ money — he says unpredictable political leadership in both China and the U.S. is making the business harder — and he appears prepared to give the Panthers even more of his attention. He spends two days weekly in Charlotte (three during game weeks), but he’s not giving up the reins on finance.

On a recent Tuesday, Tepper interrupts an afternoon interview to check in with his traders at Appaloosa. It’s simple enough. Two large monitors sit atop his orderly desk: One is a Bloomberg terminal, the other is a video conferencing screen that shows live images of his top staff working in Miami Beach.

He turns off the screen’s mute button and says, “What are you guys doing over there?” They all immediately respond. He promises he’ll check with them later, then returns to the interview.

Tepper then points at his two TVs: One on CNBC, the other on the NFL Network. Moments later, his cell phone rings — it’s Panthers coach Ron Rivera, talking not football but golf. “It’s actually kind of an interesting thing because we’re looking at something else down there,” Tepper explained of the Rock Hill development. “We’re looking at some kind of golf course, and he knows, he’s familiar with Jack Nicklaus, so that’s what that was.”

Tepper, with head coach Ron Rivera, admits that his biggest mistake in his first year was not recognizing that football isn’t that different from business in terms of managing and motivating people.
Photo: Getty images
Tepper, with head coach Ron Rivera, admits that his biggest mistake in his first year was not recognizing that football isn’t that different from business in terms of managing and motivating people.
Photo: Getty images
Tepper, with head coach Ron Rivera, admits that his biggest mistake in his first year was not recognizing that football isn’t that different from business in terms of managing and motivating people.
Photo: Getty images

■ ■ ■ ■

 

Some of what Tepper’s done is a matter of competitive advantage — or at least stopping competitive disadvantage. For instance, building a roof over the practice facility and expanding the players’ cafeteria in the stadium to accommodate the entire team at once. They’re basic problems that can be solved by a relatively small outlay, and if done creatively, can generate income.

Take the Fifty3, for instance. That’s a new super-premium hospitality product already sold to 53 Panthers fans for $30,000 each, giving them seasonlong pregame hospitality in the same place players enter the stadium on game days, and a suite of other privileges and programs. 

Here’s the key: It’s also the expanded players’ cafeteria. For $1.75 million in renovations, the Panthers gave their team a place to eat as a group and facilitated $1.6 million in revenue in a week of sales. There’s a similar plan in place for the “bubble,” the now-indoor practice facility that will also have convention space available for rent, which Tepper thinks will be a high-demand alternative to the current uptown convention center.

Tepper talks about the Panthers as a “great platform” for his philanthropy, quoting Spider-Man’s edict “With great power comes great responsibility.” He means both giving away money and leveraging the Panthers for economic growth.

Tepper's first year in Charlotte

 

■ Created new divisions in marketing and business analytics, and dedicated teams for fan services, special events, and real estate/infrastructure

■ Launched bid for an MLS expansion team

■ Rock Hill, S.C., campus deal: Secured $160 million in taxpayer-funded incentives to develop a 230-acre site projected to include practice facilities, team headquarters, a major health care operation, a hotel, meeting space, shops, restaurants and offices

■ Hired the NFL’s first mental health clinician for players

Developed the Fifty3, a new premium club space that’s also used as an expanded players’ cafeteria

■ 5-year deal to host International Champions Cup soccer at Bank of American Stadium

■ Construction of “bubble” roof over practice field

■ Panthers appearance on Amazon’s “All or Nothing” series

New England Patriots owner Robert Kraft, who advocated for Tepper while he was trying to buy the club, said he’s pleased to see Tepper act with such gusto to challenge the Panthers’ status quo. “He understands the importance of being involved in the community, and you know, he wants to win,” Kraft said.

Ned Curran, CEO emeritus of Charlotte-based development firm Northwood Office, said Tepper simply sees his job much more broadly than Richardson did. Richardson was respected as the man who brought and kept the NFL in Charlotte, but more or less viewed his role as a football administrator.

“The difference I see is a much broader palette,” Curran said. “He’s thinking about soccer, he’s thinking about real estate, he’s thinking about pro football. He’s going to have his fingers in more places, and why wouldn’t he want the region he’s chosen to operate in to grow, prosper and be attractive?”

Kraft said those local projects are key to the NFL’s staying power even if they’re not league matters per se. “For us to continue to be as strong as we are, it only will happen if ownership in their individual communities are committed to making the quality of life there as well as it can be,” he said.

In a city where NFL expansion and the loss of an NBA franchise are still relatively recent memories, Curran sees Tepper’s ambitions as a way of securing the Panthers for the long term. The team’s real estate developments, a second major league franchise and public-private partnerships are all ways to keep Tepper there even if, in some unforeseen future, the NFL business grows frustrating.

“The more invested a professional team owner is in the community, the more secure their presence is in the community,” Curran said.

But the public’s mind is far from those unpleasant considerations now. Tepper’s goals and confidence are infectious; his appearance on Amazon’s “All or Nothing” has only helped give the impression that he’s prepared to spend what it takes to win a Super Bowl. At that show’s premiere, a group of season-ticket holders erupted in cheers when he entered.

It’s already clear, Curran said, that Tepper didn’t buy the team just to be an owner and cash NFL media checks. He’s in it to win, and in Charlotte’s banking and finance heavy economy, Tepper’s track record picking stocks precedes him.

A Pittsburgh native and former investor in the Steelers, Tepper understands the value of a Super Bowl title for a franchise.
Photo: Getty images
A Pittsburgh native and former investor in the Steelers, Tepper understands the value of a Super Bowl title for a franchise.
Photo: Getty images
A Pittsburgh native and former investor in the Steelers, Tepper understands the value of a Super Bowl title for a franchise.
Photo: Getty images

“I think people are excited about that,” Curran said. “You look at his business success and I think people come away with a reasonable bit of confidence that this is going to work.”

But he faces the same expectation as any owner: a Super Bowl title. The team hasn’t won a playoff game since making the Super Bowl in the 2015 season, and fans sense their window of opportunity is limited.

As a Pittsburgh native and former investor in the six-time champion Steelers, Tepper knows as well as anyone what the Lombardi Trophy can do to a fan base and the front office’s reputation. After he moved in, he ordered the club’s two NFC championship George Halas Trophies to be de-emphasized, and placed an empty trophy case in the center of the display to underscore the unmet goal.

But he insists he won’t let the challenge weigh on him. There’s so much opportunity for change and profit, and he’s ready to leverage his money and platform as aggressively as he can to make the team a perennial contender and leading NFL franchise in every way, even if he can’t buy a title.

“I’m never afraid to go back and work in the steel mills,” Tepper said. “I’m not afraid to make mistakes, that’s the bottom line. I want this organization, that was probably a little too rigid, to become an organization that’s not afraid to make mistakes.”

First Look podcast, with David Tepper discussion at the 11:00 mark:

Pricing will soon be set for seating inside the Panorama Club at Fiserv Forum.
Photo: milwaukee bucks
Pricing will soon be set for seating inside the Panorama Club at Fiserv Forum.
Photo: milwaukee bucks
Pricing will soon be set for seating inside the Panorama Club at Fiserv Forum.
Photo: milwaukee bucks

The Milwaukee Bucks already are adding new seating areas and offering multiyear, season-ticket deals as they look to avoid a sophomore slump entering year two at Fiserv Forum.

The team has taken an aggressive selling strategy following one of the franchise’s most successful seasons both on and off the court. The Bucks posted the NBA’s best record during the inaugural season in their new arena and lost to the NBA champion Toronto Raptors in a six-game Eastern Conference Finals.

To ward off a drop in business that can occur the year after a team opens a new arena, the Bucks this offseason are selling new space in Fiserv Forum. Among them will be eight all-inclusive loge tables priced between $20,000 and $38,000 for the season and seating inside the Panorama Club with ticket pricing to be set within a few weeks. The team is also adding 26 more floor seats priced between $200 and $350 per game.

In addition the team began offering season-ticket holders two- and three-year extensions prior to hitting the market for the traditional season-ticket renewal offers. So far, about 1,300 season-ticket holders are in multiyear deals, which provide a 5% discount compared to one-year, single-season ticket buyers.

“We’ve heard about the sophomore slump,” said Jamie Morningstar, senior vice president of ticket sales for the Bucks. Despite the team’s success last season, she said, “We still had to be prepared.”

The Bucks to date have sold about 2,000 new full-season tickets for a 10,500 season-ticket base for the upcoming 2019-20 season. The team plans to sell a total of 11,300 season tickets, with the remaining inventory to be sold to groups and as single games inside the 17,500-seat Fiserv Forum. Year-over-year price increases for season tickets ranged between 5% and 20% depending on the seat location.

“Once we understood the success of the team and building, we made a conscious decision to go back to the market to reconsider two- and three-year deals for existing customers,” said Bucks President Peter Feigin. “We are in July and are pacing ahead of where we were a year ago going into a brand-new building. The team’s success is the accelerant. You don’t plan on it, but you are prepared for it.”

The Bucks also are looking to leverage the team’s success last season as they shop for a naming-rights sponsor for the entertainment plaza in front of the arena. The Bucks are shopping the deal themselves.

“We have three or four prospects and hope to have something done by the beginning of the season,” Feigin said.

James Harden is adding “team owner” to his long list of professional accomplishments, and MLS is getting a jolt of star power from the red-hot NBA in a deal that offers insight into rising franchise valuations in the 24-year-old soccer league.

On July 18, the Houston Dynamo and Dash announced that the Rockets star guard had bought a minority stake in the MLS and NWSL teams as well as BBVA Compass Stadium, the home of both clubs. Harden’s stake is reportedly 5% of the team’s value. A source close to the transaction said that the 2018 NBA MVP invested “in the neighborhood of $15 million” at a valuation between $400 million and $425 million, suggesting he got a discount.

James Harden spent around $15 million for a 5% stake in Houston’s MLS and NWSL teams, as well as BBVA Compass Stadium.
Photo: getty images
James Harden spent around $15 million for a 5% stake in Houston’s MLS and NWSL teams, as well as BBVA Compass Stadium.
Photo: getty images
James Harden spent around $15 million for a 5% stake in Houston’s MLS and NWSL teams, as well as BBVA Compass Stadium.
Photo: getty images

Initial reports said Harden had invested at a $475 million valuation, but a source familiar with the terms of recent MLS team sales said that seemed unlikely. Mexican billionaire Gabriel Brener, who was a minority owner of the Dynamo, bought the remaining 50% of both teams and the stadium back in 2015 at a $200 million valuation. A Dynamo source said that the club’s valuation has since grown at basically the same pace as the league’s expansion values, which have doubled in that period.

In a statement, Harden called himself a soccer fan and said, “I saw this as a way to invest in my city and expand my business interests at the same time.” Harden’s business manager, Lorenzo McCloud, and True Capital Management helped facilitate the deal.

The Dynamo has already felt the impact of Harden’s deal. “We’ve definitely started to see a lot of positives,” said a club spokesperson. “Certainly we saw a big bump in terms of media coverage and social media exposure around the announcement, but we’ve also heard from several corporate partners who have reached out since the announcement. Our ticket sales and service teams have also seen a big uptick in terms of excitement and enthusiasm from existing members as well as prospects.”

That $475 million valuation had struck sources as unlikely in part because last year D.C. United, historically a better MLS market than Houston, underwent an ownership change that valued that franchise at about $430 million, according to a source. There would be little reason for the Dynamo, a team ranked 19th out of 24 clubs in attendance this year, to command a minority investment at a higher number.

MLS does not make its revenue figures public, but team valuations have reportedly been rising and expansion fees have skyrocketed. Montreal paid $40 million in 2010, and Commissioner Don Garber announced in April that the yet-to-be-named next two MLS expansion teams will have to pay fees of $200 million each.

Portland Timbers CEO Merritt Paulson said that the growth potential of MLS has captivated investor interest.

“A significant increase in media revenues is expected when our current deal expires in 2022,” Paulson said. “There is also growth to be achieved in major markets that lack long-term stadium solutions; New England and Chicago both have the potential to do what D.C. United has done and capture a much larger audience in their local markets.”

Corey Leff is a writer in New York.