Michael Heisley Tells It Like It Is - Part Four

This the continuation of the interview 3 Shades Of Blue had with Grizzlies owner Michael Heisley on Friday, April 4th before the Chalk Talk. Due to the length of the interview it is being presented in sections to make it easier to read. Part 1 , Part 2 and Part 3 were posted earlier.

3 Shades of Blue appreciates Mr. Heisley taking the time to do this interview.

3SOB: The Grizzlies moved from Vancouver to Memphis. You are now hearing the same story coming out of Seattle moving to Oklahoma City. Do you see any benefits for Memphis in a move like this? Do you see any parallels to what you went though?
MH: My take is simply this. What people don't understand is the way professional sports has evolved in America. There is an idea that on certain levels teams are making pretty good money, but in general in places like Seattle, it becomes essential that you have an arena that has the amenities like skyboxes, restaurants and all these things. The other teams that started this, like Jerry Jones in Dallas, have created ways to create revenue streams. Those revenue streams bring more money into the team which gives them the financial wherewithal to put money back into the team.

I think that Seattle's Key Arena was an old arena. Old by the standards of today. It's like the Pyramid is an old arena. Why was the Pyramid an old arena? Well virtually no skyboxes, one level of amenities, there were things about it that didn't meet the NBA standards. You couldn't generate the revenue that you can out of the FedEx Forum. Now depending on where your market is and what your revenues are you can afford to build one yourself or if you don't have much revenue you have to look for help from the local communities.

I think the situation in Seattle was Shultz, the man who was the controlling owner of the Seattle Sonics, basically sold out because he was losing money and he didn't want to continue to lose money. I think the new ownership that came in, well everyone said they are going to move the team to Oklahoma City. Seattle had the ability to build a new stadium but the city and state decided not to do it. Now there is nothing wrong with that. If I was there maybe I would have said don't do it but then there is nothing wrong...what I don't understand is why then if there is a feeling the state isn't going to do what's got to be done, why is it bad for the person to get up and go to a market that will do what this state won't do? If somebody wants to stand up and help cover my losses then you may move.

Now we came here, we made a commitment to the city and our relationship is nothing like that. We have a contractual commitment to be here for a number of years. No matter what. That's the commitment. And we are going to be here. And nobody has even intimated that we are going to do anything any differently. Do I believe we can be successful in Memphis? Yes. Do I think it's going to be hard? Yeah. When I say successful I mean financially successful. In a small market that means you have to be luckier and better than what somebody does in Chicago. They got 8.5 million people and we got 800,000 people.

So it is a different situation from what the people did up there. So what happened there is the guy from Oklahoma City had demonstrated that they had a lot of interest from Oklahoma City for a professional team. He had gone up there and bought the team. If Seattle and Washington state had agreed to at least build a stadium then they wouldn't have gotten the rights to move out. David Stern went up there and the owners weren't given carte blanche to move. He went up there and said we respect this is your team, this is your city but you have to provide what other cities have done. They chose not to do it so the NBA told the owners they could move. He is now in the process of moving. I don't think that Seattle did anything wrong but now you have people running around Seattle saying can’t you move your team? Any team that goes up there is going to have to get an arena built.

It's just like Cleveland. if you know years ago the Browns were in Cleveland. Cleveland refused to build a stadium for them. So the Browns moved to Baltimore. Immediately Cleveland was incensed and the NFL gave them another team back. Here's what they did. They went out and built a new baseball stadium, a new football stadium and a new basketball arena and they revamped the whole downtown area of Cleveland and it is fantastic. It doesn't even look like anything it was before.

I'm not recommending people do it. I'm simply saying that is the way finances work in professional sports; we could never have come to Memphis without this arena. We would not be here. We would not have moved here if they hadn't committed. Not because I am trying to steal people's money. I put more money into this move to Memphis than the state and city have put in together. Moving the team here has a cost, the cash flow necessary to get the team established, etc., etc.

People say well they built you an arena. Well they didn't have to build me an arena. There were three other cities willing to build me an arena. I'm not trying to be arrogant. I'm just trying to be factual. If you want a professional sports team you have to have either the population, like Rich Daley, Mayor of Chicago. You know what he told the Chicago Bears. I love him. The Chicago Bears said they wanted a new stadium. Rich Daley says you can't have it. You're going to play in Soldiers Field. They said we're going to move to Addison, IL. Richard Daley said move to Addison. There will be another team that wants to move into Chicago with 8.5 million people and he was right. Guess where they went. They went to Soldiers Field. They didn't have to build him a stadium. They didn't have to because they had a population base that made it so the McCaskey's could make money and still help build the arena.

If I had somebody that could come in here and say to me the State and the City will come in here and guarantee you 18,000 people every night, I would have built this arena and I would be way ahead. But nobody wants to hear this stuff. Now I don't expect you to get all of this stuff out and I'm not doing this because of that. I told you I would talk to you and I've given you a broad outline. I'm going to be interested as hell to see what becomes of this.

To be continued...