Forbes reporter Mike Ozanian recently sat down with Celtics owners Wyc Grousbeck and Steve Pagliuca for separate, wide-ranging interviews. The interviews were mainly centered around the business aspect of running the Boston Celtics but there were a handful of gems from Wyc and Steve during each video. Both discussed the process of how they purchased the Celtics, how they bring revenue to the team, their business models of building a successful team on the court as well as financially and the great importance of being very involved with the community and local charities.
They both also tell the story of how they chose Danny Ainge to be the GM (and the big part that Red Auerbach played in the hiring) and share some stories about dealing with the local media and the amazing ride to winning banner 17. All three videos are long, but well worth your time. I’ve added some notes to summarize each video if you want to get an idea of what they said as well.
If you are concerned as a fan asto what direction the team is headed in during the post KG/Pierce Era, these interviews should give you plenty of reason to be confident and ecstatic that they are the owners of the team. Being a winning team and ultimately a contender truly starts at the top with great ownership. That ownership needs to recognize that it needs great management to run the team and hire the right coaches and draft the best players to mold a team. At the very top of this team is that assurance. I’ve been a fan of this team for a long time and these owners are by far the best I’ve witnessed. Sure, the post-Bird era had a lot of bad luck, but the real reason why they were irrelevant and bad for so long is because it started at the top. Bad/absent ownership, inept front offices with no real vision were huge reasons why they continually failed in the draft, free agency and team development.
You can argue that Danny Ainge was simply lucky that Kevin McHale gave him Kevin Garnett, but Ainge had slowly acquired the right combination of assets and basically “reset” the thinking and model for the organization. It was a painful few years but what did that matter since the previous 16 were just as bad? Having this ownership along with Doc and Danny at the very least provides me with great confidence that they have every intention of building a contending team. As a fan, what else can you ask for? Check out the videos and you’ll understand what I mean.
Creating Value in the Celtics Part 1 (Wyc Grousbeck Interview)
[youtube https://www.youtube.com/watch?v=KKRsol79Nik]
Notes:
- C’s weren’t for sale, wanted them, went down to NYC to find Gaston, beat down his door and asked “What’s the price?”
- chance of a lifetime to buy C’s and raise banner #17
- Very lucky to have the partners we have
- They wanted to give Danny and Doc a long time to build a champion
- The championship year was one of the weaker financial years (maybe it was buying the rings!)
- If you run it the right way, run it “hot” then when it goes well, it will get paid back in one way or another
- We learned the business of running the team on the fly
- You need superstars to win in the NBA, looked back at the last 25 years
- His dad bid on baseball teams but Wyc always focused on the Celtics
- How hard was the transition from venture capital to owner: Wyc said he was asked about the company name “Banner 17” by a prominent Boston writer and said: “I’m going to win banner 17 or die trying”
- Doing this for Red and Russell, who are much bigger than us
- Perkins school for the blind – his son Campbell was born blind so they moved back to Boston (from CA) for him… traveling to India later to visit schools for the blind
- Wyc left Highland Capital to own the team
- “I’m going to enroll him (Campbell) in the ref training program, he can do just as well as some of those other guys!”
- On meeting with sponsors, potential sponsors on the way to winning title: “we take it very personally to have your company associated with C’s” most sponsors now say that also want to do things in the community
- relationship with Jacobs family is very good
- He was sitting court side and scouts from other teams were behind him, as well as out of town reporters… said he respected them but listen, those are $1500 seats… moved the scouts up in the stands a little since they’re trying to beat our brains in, we started that now other teams do it
- Also we started a trend of renewing season tickets in February when every team has a chance… some years we say ‘if you renew now you’ll get a free playoff ticket or a free trip for a playoff game… why renew in August when everyone is watching another sport or is at their vacation place… now every team in the league renews in February
- One of the first teams to use Statbridge to monitor what seats and season tickets are resold – if a season ticket holder doesn’t get their tickets scanned for two games in a row, they’ll get a call or an email asking if everything is ok, want to talk, anything we can do better? It works, our renewal rate is over 94%
- Thrilled about new TV deal, market value resets along the way to make sure the deal is right for both sides
- Advantage of having an equity stake with CSNNE? – equity guy in nature, all of the goals are aligned
Creating Value in the Celtics Part 2 (Wyc Grousbeck Interview)
[youtube https://www.youtube.com/watch?v=cnygz0i6-VI]
Notes:
- Did the Boston media/faithful have doubts because of venture capital?… ‘we wanted to get it right, assess the coaching staff, resources, etc”
- What surprised you the most? “that in 10 years it doesn’t ever let up… we won a game last night (@NYK) and I’m still buzzed about it… when we lose games I barely sleep, I toss and turn and that’s 10 years in”
- There is no separation – “If you’re not a fan you shouldn’t be an owner”
- Going to hit $5 billion in revenue in the league this year
- New CBA is a partnership with the players, enough profit to go around to support every team, expects every team to be in the black in the next few years, be profitable… thinks they’ll be a smaller version of the NFL
- Revenue sharing increased to $120 million… big part of new agreement, C’s $13-17 check from Boston to other teams… once those teams get to break even then the “revenue sharing sort of goes away”
- NBA internationally – very profitable internationally for every team, expect it to double, triple in the future, mostly from TV rights
- Upside in revenue growth for the Celtics in the next few years? – new TV partnership is where we’ll grow… the media rights for the team… ticket prices are what they are, don’t want to ask the fans for too much more”
- Most pleasant surprise as owner? – “the things we do with the charities… coming back and winning the finals, beating the Lakers by 39”
- We can’t be afraid of competition… more level playing field in new CBA, that’s fine…
- Wyc’s dad was instrumental in new TV deal (founder of a cable company originally)
- Get own building? “we’ve agreed to stay here for many years…” “we did look at ‘options’ but we made the choice to stay here”
- C’s right now? “nearing the end of a historic run… we have a chance this year, we could in fact win the whole thing” “eventually we’ll transform with Rondo and maybe a few others”
- “We have a waiting list of investors who are willing to buy into the ownership group right now, and we get inquiries occasionally but the team is not for sale”
- Differences in opinion with multiple owners? “only differences with opinions on basketball… luckily we have Danny and Doc to take care of that”
- Who really wanted to bring Ainge in? “Steve Pagliuca knew him on a charitable board… we asked Red who made a short list and Danny was on it, really recommended Danny… this guy is so confident, so knowledgable, so energetic, willing to work with us, he’s a partner”
- What brought you back to Boston? “we had our second child Campbell who was born blind, we looked around and Perkins School for the blind was the leading school for the blind… we wanted him here, we rebuilt our lives here for Campbell”
How the Celtics Score at Home (Steve Pagliuca Interview)
[youtube https://www.youtube.com/watch?v=yyLKdx3L4CA]
Notes:
- Talks about buying team and three main objectives once they did
- 1 – Objective was to win a championship by hiring the right people, beefing up technology…
- 2 – Get out more in the community
- 3 – Beef up Garden amenities be more fan friendly, send emails, new jumbotron, get cheerleaders, etc…
- Meeting with Red in DC, he had the same office since the 50’s, hadn’t changed anything since the 50’s had a rotary phone, told them to get instigators, not retaliators
- How Ainge was hired – Steve was on the “Forever young” foundation with Ainge and Steve Young… planned a meeting with Ainge to ask about potential new GMs, Ainge picked him up at the airport, said he thought about it and he said HE (Ainge) was the man for the job
- Talks about their business model for building a team
- How the sale of the team quietly went down: Paul Gaston wanted it quiet, put a price on the table and said if we met that price we could have the team
- Economics of a building are much better when multiple teams are there (Celtics, Bruins)
- Invested in “pain of building with young players”… get great management, take a long-term view, drafting well and either grow them or trade them for superstar veterans
- Biggest thing that surprised him as an owner – talks about he and Wyc wearing Celtics jackets to a playoff game and hearing on the radio later that they are buffoons… didn’t know the media scrutiny was so enormous… since they proved they can win, people know they’re not fake fans
- Ignored the “fire Doc, fire Danny” noise and stuck with Danny, Doc, stick with the long-term view
- The long-term view from Bain (venture capital) is how they approached the Celtics
- Getting close to the customer… give them a product they like, greet them at the games, have players talk to fans
- They sat down with Paul (Pierce) and his agent, going to invest in Paul and build around Paul
- When all the Boston teams are good it helps all the teams
- Most memorable thing of ownership: Importance of impact in the community, winning the title and being happy for Doc
- They called the Kraft’s immediately after buying the team for advice
- Pags “they’re going to have to carry me out in a box” when asked if he would sell the team for $1 billion
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