Episode Transcript of: David Checketts – The Sports Business Legend
Alan Olsen: Hi, this is Alan Olsen and welcome to American Dreams. My guest today is David Checketts. David, welcome to today’s show.
David Checketts: Thank you, Alan, it’s really a pleasure to see you and to be on your program. Thank you,
Alan Olsen: Well David as we spend time together. For the listeners today before we get into the topic of what you’ve been doing in recent years, and also what you’re up to now. Give me a background of how did you get to where you are today, areas of specialty. Let’s start at college, you have a very unique path.
David Checketts: It was unique in college, I was intrigued with two subjects law and business. And I really struggled as to whether I was going to go to law school or business school actually did better on the LSAT than I did the GMAT. But more and more as I looked at my own father and someone who had tremendous impact on me, my who would would become my father in law. I was intrigued with business. I went to business school, and coming out of business school at BYU, I got the dream job. I was hired by Bain and Company in Boston, management consulting firm. And with my family, my small family, we moved to Boston in 1981. And it was there that everything changed for me I was suddenly working with and consulting big corporations in New York City and Boston and and it was all about competitive strategy. How do you build a company that can really compete? And how do you build a culture and how do you reposition products and pricing and every aspect of business and I got a tremendous sense that I could actually take apart companies and reposition them for growth over those years at Bain and Company working with the best minds from business schools all over the country. It was while I was there that one of our clients at Bain decided they wanted to make an interesting acquisition. They wanted to buy the Boston Celtics. And because the Bain partners knew that I had played basketball at BYU and was really into sport and professional sports. I had this relationship with Danny Ainge, who was drafted by the Celtics, and that just, they just couldn’t believe that I knew him. But I played basketball, BYU with his older brother. So they asked me to supervise and do the work. And it was it was just a dream. I put together this case team of four or five really outstanding young consultants, and suddenly we were off to, to pull apart the NBA and to look at the economics of how it worked and why some teams were constantly in the hunt for a championship. And there were other teams that never were what what made the difference? And that’s the question that the partners of our firm wanted answered, what, what is the difference between a championship culture franchise that was just constantly in on what the Chicago Bulls of the 1980s, the 1990s, the Los Angeles Lakers of the 1980s so you know, that continually won titles, and then there were teams like, back then the San Antonio Spurs or the Cleveland Cavaliers that just were never in the playoffs? The San Diego clippers just to just constantly failing to be competitive and to draw fans, what was the difference? So in six months, we pulled apart the NBA, and I came to know a man that would change my life. His name was David Stern. And, sadly, he has left us now. He passed away in the last few years. But David Stern, New York, lawyer, Deputy Commissioner of the NBA when I met him, he became my mentor and my dearest friend and really he took every step in the next 20 years that I took was with his blessing and guidance. And he became a terrific friend and mentor. So when I was finishing that work, we made a bid for the Celtics, our bid was fell short compared to another bid that was really not expected and, and we thought overpriced, but it didn’t work in and David Stern said to me one night at dinner in New York City, he said, “Now, you don’t talk like you’re from Boston. Where are you from?” And I said, “Well, you, you won’t believe this. I grew up in Salt Lake City, Utah, just outside Salt Lake City.” And he said, “Well, in all of this work that you’ve done on the NBA, what did you conclude about the Utah Jazz?” And I said, “I think it’s the worst franchise in any sport.” And Alan, three weeks later, I was named president and general manager of the jazz I was 27 years old. I’d never run a lemonade stand, frankly. And that was David’s doing. He called the owner of the jazz fellow named Sam Datastone. Sam flew to New York, the next week invited me and my wife to come down to New York and have dinner with him. And at the end of our dinner, he offered me the job. And that’s why I say, that all changed my life. And we moved back to Utah. I took on this orphan franchise, you know, isn’t it funny that there’s a team in New Orleans called the Saints and a team in Utah called the Jazz? Have you ever thought about that? But that’s the reality.
Alan Olsen: That that’s a good point that you made there. And, you know, it’s interesting, I guess it was really, you made a tremendous turnaround, during those years with the Utah Jazz, fun to watch stocked in the Malone, and we had, Mark Eaton, a lot of fun going on there. So you stayed with the Jazz for some period of time? And then then what?
David Checketts: So after eight seasons, with the Jazz and really doing all the things that I wanted to do with a franchise, we started Jazz, youth basketball to get kids involved early on, and becoming admirers of professional basketball, because they love to BYU and Utah, but they didn’t, they didn’t love the professional ranks. We created a summer league to have people actually see how college players would play against NBA players. So they would see actually, the big increase in the quality of play among the pro players. Now just a number of things that we did to create a different message to the people of Utah. But the biggest thing we did was in 1984. With the 16th pick in the draft, we drafted a young man named John Stockton, and then in 1985, with the 13th pick in the draft, we drafted Karl Malone, and those two years, along with Thurl Bailey in 1983. And Darrell Griffith who was before that, and Mark Eaton, we really developed a great team. And it was with that team that I then went out to try to find capital to keep the team in Utah because the team had lost an enormous amount of money, it was deeply in dept. And I just lost sleep trying because I wanted it to stay there in Utah. And I had grown up as a child with the Utah stars when they won the title in 1970. I think it was and I was I was watching when the when the stars won the ABA title, and I knew that Utah loved basketball the way that Indiana did, and that the Jazz belong there. So I went back there for that reason. That’s why I went back there. And so I went to everyone who had any money there and finally ended up with a local car dealer who owned two franchises Larry H. Miller, and then went The First Security Bank and presented him and said, Well, you loaned him $8 million to buy half of the team. And Larry Miller had a net worth in those days of $2.6 million First Security Bank took the franchise as the security loan this $8 million. We paid paid off our bank loans. And Larry took on that debt, and allowed us to operate as a franchise should. And we built revenues. Revenues back then were less than $5 million. And a few years later, we were pushing 50 And, and then when we moved to the new arena, it became $150 million business. And today, it’s about about $350 million business for someone who paid $1.6 billion for that same, that same asset.
Alan Olsen: Well that’s not, that’s not a bad return.
David Checketts: Those were really great days in the 80s. There in Utah, just there were some really lean times where I could not cash my paycheck, because I knew we didn’t have enough money in the account. And if I cashed my paycheck, then Adrian Dantley his paycheck, our highest paid player might bounce. I remember those days thinking I had to tell my wife we there’s not enough money in the bank. So don’t don’t deposit this. I hope you’ll be able to deposit it next next month, Perhaps
Alan Olsen: But so you eventually ended up moving on from the Jazz and out in New York City. And you were still associated with basketball though.
David Checketts: Well, David Stern, this mentor of mine hired me to come to the NBA, and build NBA International and the goal of that Alan was to his vision was to still sell eight franchises in Europe, actually to expand the NBA to a set of European teams in towns like London and Milano and Madrid and Munich. We had the eight, the eight towns including in Rome. We had them all set out and the goal was to sell eight franchises, so I was constantly traveling over there. And it was it was hard because Europe didn’t know that they needed the NBA and finding investors and meeting with investors and talking about putting up that much money to actually build an NBA team in their local town was interesting. But I could see that that was that was gonna be a 20 year project. And I missed competing I missed building a team to compete I missed those scores every other night where you either win or lose and become addicted to it with the jazz and the 1988 the jazz played the Lakers in the second round and should have won that series I mean that’s how good we had become the game the went seven games we lost in game seven. And so the Lakers moved on and won the title but we here we were a really young team with loan and Stockton and Eden all the guys you name Thurl Bailey. And we had put Jerry Sloan and in in charge of the team Frank Layden stepped down in December of 1988. We we put Jerry Sloan in and I knew he was going to be really good, really good coach. So I just missed that competition. And I couldn’t understand why the New York Knicks the team that I admired as a boy, they just couldn’t get it together. And so when Dick Evans who ran Madison Square Garden in those days, showed up on my doorstep here in Connecticut and said, It’s time for you to come, come and take over the next. And that was like another dream. Although I sat on the front row of my first Knicks game, next to the to the owner of the Chicago Bulls, Jerry Reinsdorf, and Jerry’s a great owner, and he turned to me and he said, “Hey, David. I don’t know if I need to say this to you. But New York is very different than Salt Lake City.” And I said, “Is that really true?” I acted like I didn’t understand but I did understand and it was, I’ve often described walking around in New York running the Knicks Alan as walking around in a giant blender, but you’re the person in the blender and somebody’s going to turn it on and you’re gonna turn to liquid, you’re gonna get cast out. And that’s how it is. In New York, you just don’t know how long you can make it because the press the fans, the demands on you are just so significant, but but I was president and general manager the next for three and a half years, who meant to the NBA Finals in 1994. And lost to the Houston Rockets in seven games. But I was I really ran that team for a full decade. And we were in the playoffs every year. And it was a great, great time for my kids to see a completely different place. And they loved the Knicks and then I was over the Knicks and the rangers and Radio City when I became CEO of Madison Square Garden in late 1994. And then I was in charge of everything there. So it was it was a great decade. So many memories, the NBA All Star game and 98 the NBA Finals in 94 again in the finals in 99 I just wish we could have won one title. And I actually blame only one person for the fact that we didn’t. And that was Michael Jordan. He just had a way of taking it away from people and he did that to me. I would have four championship rings if not for that.
Alan Olsen: Well those are certainly the days you know the legendary Michael Jordan. Moving from there to current I guess right now we’re in the middle of the NBA playoffs but it is amazing to watch these guys the sports seems to be played under different rules today. You know, watching some of the games go on between Boston and and in Miami today and then the Warriors and the mavericks and you know, it’s it really is half entertainment and then they but it is an art it is an art to way that those games get so close. Yeah, coming in.
David Checketts: It is and it’s been surrounded by the music and by the the player introductions, the lights go out, the spotlights are on we we’ve turned them into stars and very popular. You know, pop culture stars, they they just are admired and for good reason. They’re incredible athletes. And you never know until you’re sitting down there how big they really are. Last night I had dinner with one of my players for many years, a player named Alan Euston. And Alan was a tremendous, to guard a great shooter from Tennessee, who played for the Detroit Pistons and then we signed him as a free agent and brought him to New York. This is this guy’s a guard and I’m six foot five and here I’m looking up at him, you know, and I just, you forget how big they are Patrick Ewing, seven two Charles Oakley 6’11” Karl Malone, six, nine and 280 pounds and is muscle. That guy like I played all of those years and very rarely missed a game. He was. He said, The doctors told me when we brought him in for the first time and he was 19 years old. They said he’s never going to get hurt. They they showed me the X rays. And they said look at the bone structure on this guy. It’s not fair. I mean, this. He is he’s quite a physical specimen. And he showed it all those years.
Alan Olsen: Jason Kidd part of your organization or I know isn’t that timeframe, but I didn’t know if he ever made it over there.
David Checketts: No, he never made it. To not not while I was there, he played in New York, played in New Jersey. Um He took the New Jersey Nets to the NBA.
Alan Olsen: I remember the New Jersey but I didn’t know if he happened in Landover in New York, but it seemed…
David Checketts: No, but I hadn’t, I know him really well. And now he’s done a great job taking a young Dallas team and getting him into the Western finals, although it looks like like Golden State, can it kind of sweep them into oblivion for a while?
Alan Olsen: Well, so I want to bring this a couple years ago, Rick Welts of the Golden State Warriors called you up at the NBAs are pretty close, tightly knit group and the warriors were working on a project and they invited a year to come back and it and visit them at the chase center. But you were doing something over in London, England, how did you get over there? And what were you doing and, what held you up from getting over to the chase center?
David Checketts: Well, Rick is a longtime friend, I mean, I’ve known him since he was president of NBA properties. And then he went to the Phoenix Suns, and eventually onto Golden State, and just as done such a great job there. But I couldn’t, I couldn’t come to the chase center, because the Latter Day Saint church, The Church of Jesus Christ of Latter Day Saints, saints, church that I have been devoted to most all of my life, asked me to go to England, and to supervise the efforts of what then was supposed to be 800 missionaries from around the world. Actually, they were from 54 different countries, these young men and women, age 18, to 25, who would come to England in an effort to do good, I mean to to teach people about Jesus Christ, the Bible, the Book of Mormon, a restoration of the church. But in addition to that, they had this special desire to do community service. To help people to help help refugees, we opened friendship centers, we have a visitor center where complete strangers, would come in and many times in need of help, and we would do all that we could to help them. The friendship centers would help refugees find places to live, write, resumes, to try to get jobs, we did everything we could do to help these people. And then, when we weren’t doing that, we were teaching people from all over the world, we and as a result, we found people there that truly wanted to devote their life to becoming a disciple of Jesus Christ and following him. And we would, we would bring them into the church, and we would teach them and we would, they would participate in a baptism, which was, was really a beautiful way to devote your life to Christ. And these people would turn their life around, Alan and and so I always called the mission president, I work 24/7 with my wife, which is the first time we’ve worked 24/7 together. But over three years, we saw so many miracles, and receive so many blessings in our own personal life, by seeing people devote themselves to Jesus Christ, and very different than anything I had done professionally before. But I’ve never worked harder for absolutely no compensation. I’ve never worked harder or had more fun than I did in England.
Alan Olsen: You know, it’s interesting as we go through life and work course, we’re in these times where there’s such rapid change in the world, polarization of viewpoints. There’s all humanitarian crisis is happening in many, many places. But you know, it had to be a sacrifice for you to step out of what you were doing on a day to day basis and, and go into a voluntary position like that. How did you how did you manage to, to stay focused on what was in front of you, versus being distracted with all the other things that were happening in this world today?
David Checketts: Well, it’s, it’s easier than you would think, Alan And the answer to that is fear. I mean, all of these people who were there under our direction, from various places in the world, and I, I knew that in the case of all of every one of them, there was a, there was perhaps a mother, father, grandparents, siblings, who were praying for their safety and well being every day and praying for their happiness, praying for their success, and just that responsibility to make sure that they’re going to be with us anywhere from two years, 18 months to two years and their safety, their protection in a city that in many ways, is kind of always on the edge, London. You know, it’s been the target of terrorism and, and all kinds of difficulties through the years but, but that’s what weighed on me. And that’s why it was easy to work. Because I needed to keep track of them. I wrote to them every week, they wrote to me every week, I would interview each one of them over a six week period, and then it would that six week period would start again and I would interview yet again. So to be responsible for their, their physical and mental and emotional and spiritual health was truly the hardest job I’ve ever had in my life. And I was most of the time sleep deprived and exhausted. But I just felt so blessed at the same time. I can’t quite explain what it’s like. It’s one of my, one of my dear friends, Matt Holland, who himself was a mission president put it this way. And I’ll quote him, he said, “I would this is something I would never wish on my worst enemy. But I would like my best friend to have the experience.”
Alan Olsen: Those are words to live by now you came home about a year ago. What are you working on now?
David Checketts: So I have a came home July 1 of 2021. And I was glad to get out of the COVID environment COVID You know, changed everything we were doing in a big way. But it was it was nice to get home and to get with my family again, because I had not seen them. In 20 months, we thought they’d all come to England but obviously during COVID they were unable to. So I missed my family, my children, my grandchildren, I have gotten back in with all of them and love that relationship. Six children who are all married and almost 19 grand kids now. So wonderful to be with them. In addition to that I’m working on two really important projects for me in London. So one is a company called gravity media, which is a sports television production company that does the US Open Tennis Tournament, the Australian Open a lot of European football. It’s a it’s an actually a production company that moves in and produces all of these live events. And I am an owner, shareholder and member of the board. I’m also on the board of directors of a English Premier League Soccer Club. I love the game of soccer or football as they would call it. And I love the English Premier League it is it’s it’s the best football soccer football in the world. And it’s it’s a brutal game people don’t. Most Americans don’t understand that. It’s a it but it is the world’s game. It’s a beautiful game. So I am a director of an English Premier League club. And then I’m working on helping my son who has started really an outstanding company. And I want to put him in a position to do his best work. So raising a capital round to put primary equity into his business and then to take out his private equity fund. partners. And to step into that role through a special purpose vehicle. The company is called Rhone. This is this is a example of Rhone right here that I’m wearing. And Rhone is a men’s active wear business. But it’s it has a much higher purpose than that, which is to address men’s wellness, you know, men are 30% more likely than women to, to commit suicide, men have extremely difficult mental health problems, there’s a lot of depression and anxiety, and they don’t talk about it. So. So while Rhone is a performance apparel company, and that’s how was created, we aspire to be a men’s wellness brand. And to both create, and to curate the best products for men and to encourage dialogue and for them to get help when things get dark in their lives. And to really address those things and to get the help that they need. So Nate, our son and his brother, Ben are the key officers of the company. But Nate is the CEO. Ben is the Chief Marketing Officer and really the brand voice, my son in law Karis who went to Stanford Business School, outstanding young man, he’s a member of the board, and it’s really been additive to the company. So we will, with the $80 million, that will end up raising, you know, we’ll capitalize the company properly. And, and encourage its growth, which is at about 40% a year right now. And, and we want to, we want to get that company ready for some sort of liquidity event in the next couple of years. So doing all of that and, and having a great time.
Alan Olsen: Well, it sounds like you have a full plate. But you’re very capable, and also being surrounded with family, what a what a blessing that is.
David Checketts: It is a blessing, I couldn’t be happier. Or feel more blessed about that our family and the love that we share for each other. I don’t know that there’s anything that could ever exceed that in terms of priority, but also just just blessing since I really am intrigued by the next generation of the family and what they’re thinking and what they’re doing.
Alan Olsen: Well David, I appreciate you being with us today.
David Checketts: Well, Alan, I hope this is what you needed. It is. I love the name of the show. I love the fact that dreams really do come true. And I I am grateful for the opportunities I’ve had and will still have to to accomplish great things. Like I say I’m I feel like now at this point in my life. My job is to create an environment where others can do their best work. And in some cases, that’s my children with Nate Ben. In some cases, it’s with our missionaries that in London, and in other cases, athletes, you know, how do you create a culture where they can do their best work? I’m really intrigued by that. That’s, that’s what gets me up every day.
Alan Olsen: All right, I’ve been visiting here today with David Checketts here on American Dream. Thanks for being with us and join us next week. Right here on the station.
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This transcript was generated by software and may not accurately reflect exactly what was said.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
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