Philadelphia's NBA Franchise Has Been Losing Games and Fans For
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some SAVE Philadelphia’s NBA franchise has been losing games and fans for most of the last decade. This fall a group of alumni investors led by Joshua Harris W’86 bought the team and have big plans for turning around this troubled asset. Is that crazy? BY DAVE ZEITLIN 48 MARCH | APRIL 2012 THE PENNSYLVANIA GAZETTE ILLUSTRATION BY JAY BEVENOUR From left: 76ers owners David Blitzer W’91, Joshua Harris W’86, Marc Leder W’83, and Art Wrubel W’87. THE PENNSYLVANIA GAZETTE MARCH | APRIL 2012 49 ave for one older gentleman Adam Aron (he didn’t go to Penn but By the way Harris says the word pas- checking out, it’s a quiet Saturday his son does), whose hyperactivity on sionate, you can tell he’s referring to Smorning inside the lobby of the Twitter engages fans on a whole new the love-hate relationship Philadelphia Four Seasons Hotel. Cool jazz accompanies level. They started a website called sports fans are notorious for having with the rhythmic drip-drop of a soothing water- NewSixersOwner.com, where Sixers their local teams’ players, coaches—and fall. There are few other noticeable sounds, supporters can offer their feedback on owners. They’ll love you when you win, not even from outside on the Benjamin ways to improve the organization. And but they hold you very much accountable Franklin Parkway, where cars have yet to they slashed ticket prices, added new if you lose. How he would handle that emerge from their Friday night slumber. promotions and improved concessions, criticism was certainly a concern. Upstairs in his suite, Joshua Harris W’86 all in the hopes of creating a superior “I wouldn’t say I was surprised, because sits at a long table. A half-eaten bowl of game-day atmosphere. Those moves, I know he likes to take on big challenges oatmeal and a nearly finished cup of coffee combined with the confidence the new and he has incredible stamina,” says Dan indicate he’s been awake for a bit. Perhaps owners placed in veteran head coach Schlager C’86, one of Harris’ old frater- it was hard for him to sleep. Twelve hours Doug Collins and his cast of young play- nity buddies. “I was more just concerned earlier, the Philadelphia 76ers played their ers, created a noticeable basketball buzz about whatever negative comments come first home game of the 2011-12 season, in the city, which built to a crescendo for with being in the public eye.” and the rousing fanfare from that night the team’s home opener on January 6. There were other concerns, too. For one, contrasted considerably with the tranquil “We introduced a lot of fan-friendly the Sixers have not had a winning season scene at the hotel the following morning. things at the arena—everything from dol- since 2004-05, and their average atten- “It was,” Harris says with a smile, “a lar dogs to giveaways to videos,” says dance dipped from around 20,000 per very, very memorable night.” Harris, a New York-based leveraged buy- game in 2000-01 (when they went to the The game itself was a blowout as the out specialist who says owning the Sixers NBA championship) to under 15,000 last Sixers clobbered the visiting Detroit will basically be his night job. “We’ve year, one of the lowest in the league. And Pistons by 23 points to continue their tried to engage the city. It was really the outlook for the NBA itself wasn’t too strong start to the NBA season. More amazing to see the building nearly full. promising, either, with the league’s owners importantly, the Wells Fargo Center— “It was almost like going to a party.” bickering with players over the division of the team’s home arena—was filled near- During the game, Harris tried his best revenue and other issues, which led to a ly to capacity with fans on hand to see to greet many of the partygoers, leaving work stoppage that lasted until December the return of some of the franchise’s his owners’ suite to walk around the and delayed the start of the season. legends who were honored before the concourse. A lot of people high-fived him But as the co-founder of Apollo Global game, enjoy some of the arena’s new and everybody told him he was doing a Management, a publicly traded firm that fan-friendly features such as “dollar great job. Well, almost everybody. invests in distressed properties, Harris dog night,” and watch a likable team “One thing that stood out is someone has a history of turning around troubled filled with no superstars but a bevy of told me we ran out of hot dogs, and he assets. And he’s always been smart about promising youngsters. was mad at me,” Harris says. “He said, it, helping transform Apollo from what For a franchise that has seen its popu- ‘If you’re gonna sell dollar dogs, you’ve was once “10 people in a room” into a larity and relevance dim in recent years, got to make sure you don’t run out.’ I giant in the investment industry, while the game almost seemed like a new said I’d talk to some people about it, achieving the kind of personal wealth he dawn. Many fans, for the first time in a and I thanked him for his input.” never dreamed possible. In Forbes’ 2011 long time, were hopeful. And Harris was The new managing owner of the billionaire rankings, Harris was reported a big reason for that. Philadelphia 76ers laughs, remember- to have a net worth of $1.5 billion. Less than three months earlier, in ing what the semi-disgruntled fan told “People that really know Josh know he’s the midst of a lockout that threatened him next. a thoughtful investor,” says Ignaczak, to cancel the NBA season, Harris and a “But then he said, ‘Other than that, the president of the private equity firm group of other investors that included you’re doing good.’” Quad-C and one of Harris’ best friends fellow Penn alumni David Blitzer W’91, Welcome back to Philly, Mr. Harris. since college. “He only gets involved with Art Wrubel W’87, and Marc Leder W’83 things he thinks he can have an impact on officially purchased Philadelphia’s NBA Even before he hears the entire question— and be successful at. So I don’t think there franchise from Comcast-Spectacor. (At So, what did your friends and family say was much skepticism among his friends the time of publication, another Penn about buying the 76ers?—Blitzer spits out and the people that know him well.” graduate, Tony Ignaczak W’86, was also his answer: “Are you guys crazy?” Like Harris, Blitzer, who serves as co- possibly becoming a partial owner, Harris heard the exact same thing managing owner, established a success- pending league approval.) from others. ful career in private equity, getting a job Since then, Harris—the team’s manag- “I talked to a lot of people about it at the investment-and-advisory firm ing owner—and his partners have wast- and they said, ‘Are you crazy? You don’t Blackstone right after graduating magna ed little time trying to restore interest need to do this’” Harris recalls. “And cum laude from Wharton in 1991. He’s in the once-proud franchise. They hired it’s true. Philly fans are well-known as remained there ever since. “I was ready a new CEO in former travel executive being very passionate.” to go to Penn if they would take me, and I 50 MARCH | APRIL 2012 THE PENNSYLVANIA GAZETTE was ready to go Blackstone if they would take me,” he said. “And they both did.” “I have a suit on, I’m standing It was while working in London a cou- ple of years ago—where he established center court at the Palestra and saw Blackstone’s corporate private-equity investment efforts in Europe—that Blitzer all sorts of Penn people and all sorts remembers sitting with Harris in an English pub and first talking about buy- ing the Sixers. At the time, it was more of Sixers things,” Wrubel recalls. of a hypothetical based on his own love for basketball and some rumblings that “And I thought, ‘Oh my God, we he’d heard that the team could be on the market. But about a year later, when they own the Philadelphia 76ers.’” found out Comcast-Spectacor was hiring a banker and indeed putting the Sixers up for sale, hypothetical turned into reality. “We didn’t ever have to solicit any investment bank Drexel Burnham “It went from a funny conversation in investors,” Harris says. “They literally Lambert and continued at Apollo after a bar to, ‘They’re really selling this team, came to us.” Drexel folded (with a stint at Harvard and we can really do this,’” Blitzer says. Each investor, of course, had his own Business School in between). “I think Blitzer admits Comcast-Spectacor— reason for wanting to buy a stake of the biggest thing I learned from him which also owns the NHL’s Philadelphia the team. But, it seems, there was one is how hard he works and how he’ll do Flyers and the Wells Fargo Center—was motive that linked them all: the confi- whatever it takes to learn something originally skeptical that a group of pri- dence they had in Harris, a man who’s and be successful at it,” Schlager says.