Business

Mauled by Grizzlies

Ken MacQueen February 19 2001
Business

Mauled by Grizzlies

Ken MacQueen February 19 2001

Mauled by Grizzlies

Business

Ken MacQueen

An hour to game time, and Michael Heisley, the billionaire owner of the Vancouver Grizzlies, sits in a back room at General Motors Place munching grapes and considering some unappetizing options. His $240-million purchase last May of the hapless Grizzlies—a fixer-upper NBA franchise if ever there was one—has not gone to plan. His usual strategy is: 1) Buy a failing or underperforming company. 2) Make it a winner. In such a manner, his Chicago-based Heico Cos. has assembled 40 businesses annually producing more than $3 billion worth of wire, plastic knobs, front-end loaders, galvanized nails and Toms Great American Roasted Peanuts. Heisley, 63, is a turnaround artist, a Michael Jordan of the balance sheet, but the Grizzlies aren’t playing by his rules.

Wins and attendance are down. Financial losses are up. Heisley is thinking desperate thoughts to fire fan interest. Trades, for sure. Maybe an egg-the-owner night, he says, only

half in jest. Hire basketball bad guy Dennis Rodman? Just nine months an owner, Heisley is already considering defeat. It may soon be obvious he’ll have to move the Grizzlies or sell them, he says. The team is bleeding his finances, sapping his emotions and creating an uncharacteristic crisis of confidence: “I admit, evidently, I’m not anywhere near effective as a sports club owner as I am necessarily in business.”

The game begins predictably. Mental lapses cost the Grizzlies an early lead. Yet they’re a point ahead of the Cleveland Cavaliers at the quarter. At the half they lead 56-47. All the highpriced help is contributing, even Bryant (Big Country) Reeves, who ofien plays as though he’s carrying the full weight ofhis sixyear, $ 97-million contract. The crowd, just 12,540, awakens.

Heisley was planning to use the gathering of the clan for last weekend’s all-star game in Washington to discuss his team’s shaky future with NBA commissioner David Stern. Stern sympathizes with Heisleys plight, though he seems reluctant to write off the NBAs toehold in Western Canada. Heisley says he’s talked with potential buyers in Louisville, Ky., and Nashville. Commentators are writing pro-basketball’s Vancouver obituary, though Daniel Chiang, a Taiwanese Internet multimillionaire, is said to be shopping for an NBA team in a city with a large Asian market. Vancouver fans, rated basketball’s “stupidest” in a recent survey by Sports Illustrated magazine, have heard dire warnings before. But how stupid is it to be skeptical? Heisley is the third American billionaire the Grizzlies have gnawed at in the six-year history of the franchise. The first and only Canadian owner, Vancouver businessman Arthur Griffiths, lost to deeper pockets and a falling Canadian dollar a year after securing the franchise.

Transplanting basketball to Canada works for the Toronto Raptors, blessed with superstar Vince Carter, a huge market and crucial corporate support. Vancouver has none of the above to ease the pain of paying American megabuck salaries from anemic Canadian revenues, the lowest in the league. The Raptors also win with some consistency, a strategy that eludes the Grizzlies, who’ve managed just 91 wins, against a franchise history of 333 losses. Heisley had budgeted a $38-million loss his first year. The real loss, he says, is way “uglier.” The owner frets about a fan backlash. “I hope to God the message gets

across that I take responsibility for a lot of this. I do. I haven’t provided a winning team. On the other hand, I cannot have as the basis of a sports franchise, that if you don’t make the playoffs, you’re going to lose double-digit millions of dollars a year.” Heisley grew up in a working-class family in Alexandria, Va. His father, a railwayman, never earned more than $12,000 in a year. What he’d say about his son bleeding more than $25 million (U.S.) in red ink, Heisley shudders to think. “He’s probably up there saying, ‘Son, there’s gotta be a lot more you can do for the community for 25 or more million than putting a basketball team out there.’ ” Heisley himself was a modesdy

Even for a turnaround artist, it’s hard to turn around Vancouver’s basketball team

successful executive until 1979 when, in his early 40s, he bought the distressed company he’d been hired to salvage. Married, with five school-age children, he gambled the $ 150,000 equity in his house. The turnaround worked. He acquired other failing companies, tightening cost controls and using assets or inventory to leverage the deals.

More than two years ago, his fortune made, Heisley cast about for a new challenge—joining the billionaire boys club of 29 NBA team owners. Ask why, and the usually blunt and blustery Heisley speaks vaguely of the love of the game. A pithier explanation comes from Andy Dolich, the veteran sports administrator Heisley hired as the Grizzlies’ president of business operations: “There’s not a lot of glamour in steel wire.” Why Vancouver? It was available. Heisley had hired veteran coach Dick Versace to find him a team. They pounced on Vancouver just days after league governors rejected a bid by prospective owner Bill Laurie, who had wanted to move them to his St. Louis home town. Heisley accepted the NBAs wish to give Vancouver another try—endearing him to the community. “Buying an NBA team is a major undertaking,” says Versace, now Grizzlies president of basketball operations. “It’s like buying a Picasso: there are only so many of them.” It’s the third quarter and things are now looking artful indeed. The Grizzlies control the game. A slam dunk by rookie Stromile Swift has the crowd on its feet. No floor seats for Heisley. He’s in the stands, trading high fives, reassuring all who ask that the team is staying. Absolutely. For now.

What else can he do, Heisley asks. He opened this season by personally singing O Canada—how many American owners do that? He’s spent $4 million building a splendid team practice facility. Dolich squeezes every source of revenue. There are game broadcasts in Mandarin and Cantonese, a Chinese Web site and expanded efforts to attract youth. Before the all-star break, the Grizzlies traded grumpy power forward Othella Harrington to the New York Knicks for grinder Erick Strickland and some draft picks.

Heisley insists he never expected to turn around a highly strung basketball team the way he might a Rust Belt steel company. If he can cut his losses to, say, $7 million, “I’d be here forever, probably.” What hurts is doing worse than the previous owner, the reclusive Seattle businessman John McCaw, who still owns the Vancouver Canucks. Or Laurie, who was reviled for trying to move the team. “I don’t want to stomach being the guy that took the team out of town,” he says. “But if that’s what it comes to, I’ve got to do something.” Perhaps, in the perfect world of an owner’s imagination, all games end like this. At the buzzer, it’s 119-107 Vancouver. The Grizzlies saunter off the floor, as if they do this winning thing all the time. Heisley, beaming and hollered hoarse, accepts the congratulations of his seatmates. Here, he is not some suit who makes wire in Pueblo, Colo., surge protectors in Skokie, III., rubber extrusion equipment in Kitchener, Ont. Here, this night, he is living his dream. He’s the man who saved the Grizzlies. For now, if not forever.