Want to Buy a Sports Team?
In their business Â— the high-stakes business of brokering sales of professional sports franchises Â— Randy Vataha and Bob Caporale hear a lot of what they call “cocktail talk.” Current and prospective owners alike love discussing the deals they're negotiating. That's why they opt for athletic teams over more staid investments, such as soybean futures or municipal bonds. Vataha and Caporale, the principals behind Game Plan, an investment-banking boutique based in the Financial District, pride themselves on refraining from such braggadocio. But discretion does not always come easily.
Within weeks of closing the biggest transaction of their careers, Vataha and Caporale joined a former client, Hollywood producer Howard Baldwin (Mystery, Alaska; Sudden Death), for dinner in a private room at the Palm in the Westin Copley Place. The waiter was repeatedly dispatched to fetch more wine Â— eight bottles in all, roughly one for each guest. “We went over what everyone was doing, deep into the night,” Baldwin remembers. “The bullshit was flying.” Vataha and Caporale knew they had a story to eclipse them all, a top-secret scheme they were calling “Project Verde.” But they weren't talking.
Then, on September 28, Baldwin picked up the morning paper and saw the headline. Game Plan had just helped three clients buy the Boston Celtics for an NBA record $360 million. He phoned Vataha and Caporale. “You guys are good,” he said. Or, as Vataha puts it, in an aphorism learned from his partner, “There's not a confidentiality agreement ever written that can survive the third glass of Chardonnay. Yet we managed to do that.”
Despite the new Celtics owners' best efforts to maintain a low profile, they emerged as public figures the moment they signed the contract. Boston learned right away that the point man, Weston venture capitalist Wycliffe Grousbeck, plays the drums; that his father, Continental Cablevision cofounder H. Irving Grousbeck, teaches at Stanford's business school; that Stephen Pagliuca, a managing director at Bain Capital, made Duke University's freshman basketball team.
The men who orchestrated the under-the-radar deal, however, remain largely anonymous Â— to the general public, at least. When Vataha, 54, and Caporale, 61, advised Grousbeck to consider pursuing the team last spring, they'd never made a play for a club as storied as the Celtics. Now they hold the record for orchestrating the richest franchise deal in NBA history and may be on the verge of two other blockbuster transactions, solidifying Game Plan's reputation as a dynamo that can outmaneuver the Wall Street behemoths. Their wild scamper to the top is a story replete with big-name Boston power brokers, a couple of Super Bowl MVPs, and enough quirky sports ventures to fill a box set of blooper videos.
Randy Vataha, the younger member of the Game Plan team, started his career in a more visible role: as a wide receiver for the Patriots. This despite the fact that as a young man, he seemed better suited for mascot. After failing to earn football scholarship offers as a 5-foot-9, 160-pound high school quarterback out of Garden Grove, California, Vataha enrolled at a nearby junior college and turned himself into a wide receiver. During a recruiting visit, Stanford coach John Ralston challenged him to a racquetball match; the coach won, and Vataha, keeping his end of the bet, chose Stanford over rival suitor Oklahoma.
“I go down to the airport to pick him up,” says former Stanford quarterback Jim Plunkett. “I'm waiting, waiting Â— I don't see anyone who looks like a Division I receiver. All of a sudden, someone pats me on the shoulder. I look down, and, I swear, the guy looks 12 years old.” (The HR department at Disneyland shared that assessment, hiring Vataha one summer to portray one of Snow White's seven dwarfs.)
Vataha overcame his lack of stature, capping his senior year by catching a touchdown in Stanford's 1971 Rose Bowl victory. His size did, however, scare off the pros. He landed a spot with the Pats only after Plunkett, the team's top draft pick, talked management into granting him a tryout. Vataha totaled 51 receptions as a rookie, but his defining NFL moment came later when, serving as the 26-year-old player representative, he led a six-day, five-team ministrike that forced the league to negotiate a new contract.
In 1977, Vataha was cut by the Patriots and picked up by the Green Bay Packers, a move that caused him to miss the grand opening of the first of 11 racquetball clubs he'd build in New York and New England in partnership with well-connected Peabody investor George Matthews and fellow Patriot Bill Lenkaitis. Vataha quit football the next year to concentrate on his new vocation. When he and Matthews learned about the nascent U.S. Football League (USFL), they sold their racquetball clubs and started raising money for a Boston franchise, which they christened the Breakers. In order to launch the team, the investors needed legal counsel. “I'd heard that the brightest sports lawyer in the country was here in Boston,” says Matthews. So he scheduled an appointment with that lawyer Â— a Jamaica Plain native and one-time Tufts football player named Bob Caporale.
At Boston's Fine & Ambrogne, Caporale had a history of taking on challenging assignments. He'd handled the legal wrangling behind the construction of Foxboro Stadium and represented Boston's mid-1970s entry in World Team Tennis Â— the Boston Lobsters. He'd also handled the Hartford Whalers of the World Hockey Association. After the WHA collapsed, he represented four clubs in their merger with the NHL. The negotiations took place in the Bahamas, and Howard Baldwin, then owner of the Whalers, flew Caporale down on his chartered jet. “On our way back, one of the engines went out over the Bermuda Triangle,” says Baldwin. “That was the only time I've ever seen him sweat.”
Vataha and George Matthews wound up talking Caporale into serving as president of the USFL's Breakers, but his steely leadership couldn't compensate for the team's lack of an adequate stadium. After one season at Boston University's Nickerson Field, the Breakers bolted for New Orleans and its 70,000-seat Superdome.
Caporale stayed behind and focused on his evolving sports law practice. “I was spending more time giving business advice than legal advice,” he says. “So I started thinking, there's an idea for a company here, and there's going to be enough business that I shouldn't try to do it on my own.” While searching for a partner, he had lunch with Vataha, who was working as CEO of the Boston agency Bob Woolf Associates, negotiating contracts for the likes of Larry Bird, Doug Flutie, and Joe Montana. Vataha and Caporale decided to join forces.
In 1994, Game Plan opened for business.
By the time Vataha and Caporale first sat down with Wyc Grousbeck late in 2001, Game Plan had graduated from quixotic ventures such as national inline hockey and boxing leagues. Satisfied customers included the owners of the NHL's Ottawa Senators, Pittsburgh Penguins, and Dallas Stars. The firm's newest client didn't need to shop for bargains: Wyc Grousbeck had rolled some of his father's fortune into tech startups as a venture capitalist at Highland Capital Partners.
“We initially told him that there might be some opportunities in the NHL,” Vataha says. “But as we got to know Wyc, it became clear that the team we really should be going after was the Celtics. It was clear to him as well. It was like the light bulb went on for everybody.”
Things had changed since the last time the Celtics were sold. The procedure then-owner Harry Mangurian followed in 1983 was simple: He called a press conference, announced that the team was for sale, and waited for his phone to start ringing. Three months later, Don Gaston, Al Cohen, and Paul Dupee scooped up the franchise for a reported $19 million. “That approach doesn't work anymore,” says Caporale. This time around, anyone looking to buy the team from Paul Gaston, who took over for his father a decade ago, had to quietly present an offer to Gaston's lawyer.
Though the exact amount of Grousbeck's opening bid remains undisclosed, this much is certain: It was enough to get Gaston's attention. Now the trick for Vataha and Caporale was to ensure that no one else heard about the ensuing negotiations. On July 8, Game Plan and its clients signed a confidentiality pact. All the parties went to great lengths to shield their talks from the reporters on the Celtics beat. “The way the logistics worked, if we were going to meet with [Celtics chief operating officer] Rich Pond, he would come to our office. If we were meeting with Paul Gaston, we would meet at his office in New York,” says Caporale. Vataha even came up with a code name for the deal: Project Green. Fearing this was “too transparent,” he borrowed from his sons' Spanish lessons and changed it to Project Verde.
Game Plan's next job was to calculate the team's overall value Â— and, with that, how much their clients should be willing to spend. They pored over binders of documents, scanning the fine print on everything from Paul Pierce's contract to the Celtics' sponsorship deal with Pepsi. Some pundits argue that the price Grousbeck and company ended up paying was too high. Vataha and Caporale counter that the cost squares with their analysis Â— a claim supported by some former clients. “They got a heck of a price on the Celtics, and to be able to parlay that in this economy was incredible,” says Howard Baldwin.
And their cut? On a typical transaction, Vataha and Caporale collect a retainer for working out the details, plus 1 to 3.5 percent of the purchase price for major transactions. They won't divulge the particulars of their arrangement with the Celtics' new owners, but if it falls within these parameters, they may be able to afford a ball club of their own when the check comes in.
Game Plan has other big projects on the burner. Caporale and Vataha are shopping for an NBA franchise for Robert Sturges, a Florida businessman who holds a stake in the Miami Heat. They're also entering their third year of working on behalf of the Portland Baseball Group's campaign to bring major league ball to Oregon. Vataha has already pitched local business leaders, won over the editorial board of the Oregonian newspaper, and testified before the Oregon state legislature. He expects the effort to pick up momentum this year.
With only a pair of assistants and some interns, Caporale and Vataha juggle these complex tasks from a base of operations at the headquarters of one of the firm's partners, FleetBoston. A motley collection of memorabilia hangs from their conference room walls: ticket stubs from the Boston Breakers' inaugural season, autographed glam shots of one-time Vataha clients New Kids on the Block.
To purchase a controlling share of one of the 131 franchises that make up the five major sports leagues, a prospective owner needs a minimum net worth of approximately $250 million dollars. “It's a small world, and between Bob and me, we're almost going to know everybody who's in the sports business,” Vataha says. “Chances are that we'll end up on their call list, even if it's just to run something by us. Because that's the backyard we play in.”
Source URL: http://www.bostonmagazine.com/2006/05/want-to-buy-a-sports-team/