Dynasty, Inc.
Late last summer, during a visit to New York, Celtics managing partner Wyc Grousbeck took his kids to the American Museum of Natural History. There, among the exhibits of exotic frogs and a 94-foot blue whale replica, Grousbeck spied a favorite sight: a young man wearing a Paul Pierce No. 34 Celtics jersey. That's all it took to change Grousbeck from tourist/dad to owner/pitchman. He approached the boy and his father, handed them a business card, started talking up the team, and offered them lunch back in Boston and tickets to a game. Alas, the Pierce fan was from Iowa — lunch and tickets weren't going to work out. When Grousbeck learned that the Iowans had relatives in Boston, he extended the offer to them instead.
This seems to be the method Grousbeck, along with partners Steve Pagliuca and Robert Epstein, is determined to use to restore the stature of his team: He will woo fans one by one if necessary, with handshakes, business cards, and, for the lucky ones, tickets and a free lunch. “I can't help it,” Grousbeck says. “I was a fan before I was an owner, and I still am a fan.”
But it's more than shared devotion and enthusiasm that have Grousbeck and his partners working so hard. They bought the Celtics for an NBA-record $360 million at the end of 2002 — an especially steep price considering that the team had no stake in its home arena, the FleetCenter. (Most NBA teams get at least a share of arena profits.) Since then, the group has turned personnel decisions over to a new executive, former Celtic Danny Ainge, and watched the team go backward, winning eight fewer games last season than in the previous year. Well-liked players Antoine Walker and Eric Williams were traded, and popular coach Jim O'Brien resigned because he disagreed with the direction Ainge had in mind. Attendance fell from 13th in the NBA to 20th. Despite this, Ainge says he has a plan, and he seems stubbornly protective of it. In the wake of O'Brien's resignation, he said, “My plan hasn't wavered from the first day to today. I know that's easy to say. But if every move is judged as its own entity, then that is very shortsighted.”
The owners insist that they believe him. “I have nothing but faith in Danny,” Grousbeck says. “He knows where he wants this team to be, and we think he can get there.” They'd better be right. These owners have staked a sizable investment on Ainge's unproven team-building acumen.
For Ainge, history complicates matters. The Celtics are among the most dominant franchises in sports, run for decades under the iron hand of the legendary Red Auerbach. He helped the team to 16 championships, the most in the league and the third-most (behind baseball's Yankees and hockey's Montreal Canadiens) in major professional sports. Recent history, though, has been less kind. In the 1990s, the Celtics suffered their only decade without a winning record, causing fan interest to plummet. Things appeared to be improving by the time Grousbeck, Pagliuca, and Epstein bought the team, when the Celtics were coming off their most successful playoff run in 14 years. Five months later, Ainge entered and everything changed.
The team's recent success had been based on brutish defense and three-point shots — hardly a thrill for fans as Celtics games came to resemble Greco-Roman wrestling tournaments. It was a welcome step up from the '90s doldrums, but Ainge was a player better known for offense than defense during his 14-year NBA career. When he became head coach of the Phoenix Suns (with virtually no coaching experience) in 1996, he preached a fast-paced style that required players to be skilled shooters and passers, and the Suns were among the top offensive teams during his three-plus seasons. Having been given the reins of Boston's defense-first bunch (again, with no experience as an executive), it was little wonder Ainge did not like what he saw. The Celtics shot too quickly and unreliably. They did not pass much. They did not have the speed to beat opponents to the offensive end, a common way to get easy baskets. This was not Ainge's style, and he was impatient to change it.
Now, entering the second full season of Ainge's reign, the Celtics barely resemble the team he took over last year. Only two players (Pierce and reserve forward Walter McCarty) have been in Boston throughout. Respected coach Doc Rivers has been hired. Ainge has taken chances on youth, speed, and athleticism, hoping the young guys develop into the kind of smart, offensive-minded players he seeks. The Celtics have nine players on the roster who are 25 or younger, to go with veterans like Pierce, center Mark Blount, and forwards Raef LaFrentz and Tom Gugliotta.
The jury is still out on whether Ainge's plan is any good. NBA teams always emphasize defense, but in recent years defense has really dominated. Last season's champion Detroit Pistons were tied for fewest points allowed in the league. The previous season, the San Antonio Spurs ranked third and also won the title. Teams that typically finish among the best in offense-Dallas and Sacramento, for example — have been failures in the playoffs. Strange, then, that Ainge would break up a good defensive team and hope to win an NBA title by boosting the offense. There is not much recent precedent supporting that method.
This has not shaken the faith of Grousbeck, Pagliuca, and Epstein. They praise Ainge's plan to every fan willing to listen, and their public involvement represents a transformation in the front office that mirrors the transformation on the court. These owners are changing the way the Celtics do business — adding a personal touch and, by doing so, hoping to give Ainge as much support as possible. When O'Brien resigned, for example, Ainge and the owners held a conference call with 400 season-ticket holders. Grousbeck calls 20 different season-ticket holders each day to discuss the team and explain Ainge's transactions. And, of course, he randomly harangues fans wearing Celtics gear. “It's not a struggle for us to buy someone lunch and talk basketball with them,” Grousbeck says. “It's not a struggle to call season-ticket holders and ask what they think about the team. Why wouldn't we?”
When the current ownership group bought the team from Paul Gaston, who had been in charge since 1992, the franchise was running on a traditional sports business model: It put players on the floor and hoped they won and attracted fans. Gaston was an absentee owner — he lived in Connecticut and worked in New York, rarely appearing at Celtics games. His interest was profits. Just before the sale of the Celtics, in fact, he cut costs by mandating that the team use the league minimum of 12 players, though most NBA teams carry 15.
Grousbeck, Pagliuca, and Epstein changed that. All three grew up in the Boston area, making them the first local Celtics ownership group in 40 years. They are lifelong fans and wanted to make fans a priority — a trend in pro sports throughout the last decade. In a competitive market where ticket prices average between $50 and $75, teams have been focusing on creating demand in their markets, rather than letting demand come to them.
To that end, the Celtics hired vice president of sales and development Rich Gotham, who had previously filled the same role for the Internet company Lycos. “What we needed most,” Gotham says, “was to change our infrastructure.” That meant creating a customer management database to sort out the types of fans the Celtics had. It meant creating e-mail lists of fans and potential fans. It meant inviting season-ticket holders and corporate sponsors for “chalk talks” with coaches. It meant offbeat sponsorship deals. For example, a local bank has partnered with the Celtics and, as part of the deal, hosts breakfasts featuring Ainge, Rivers, or other Celtics representatives. The bank invites potential clients, who are drawn by the chance to hobnob with the Celtics brass.
Even with the team winning fewer games in each of the last two seasons and attendance declining, the Celtics brought in record revenue last season, thanks in part to a rise in ticket prices and added sponsorships. Ownership has changed what happens to those profits, too: Under Gaston, the Celtics were publicly traded, and the team funneled profits to shareholders. But these owners use the money to support Ainge and his vision. The team spent $80 million on basketball operations last year, up from $60 million the previous season, and Grousbeck expects to spend even more this season. The extra dollars were tangible for players: The owners have renovated the locker rooms and upgraded the team's private planes. They now use two luxury planes, complete with leather seats, wood cabinets and train-style cabins, allowing the team to travel in comfort and making the Celtics more attractive to free-agent players.
That's just the beginning. Additional profits have helped pay for Ainge's $5 million-a-year salary and the $5 million annually Rivers will get. (They're among the highest-paid management-coach combos in the league.) The team has bulked up its scouting network. The Celtics will increase the payroll to a team record for the third straight year (it was around $60 million last season and should be around $64 million this year) and gave a generous, six-year, $42 million contract to Blount, who was a free agent last summer.
“I did not think there was much of a chance [Blount] would stay in Boston,” says his agent, Mark Bartelstein. “But Danny, Doc, and the ownership did a great job of showing Mark how important he was, how he fit into their plans. They're committed to winning, and they convinced Mark of that. That's something that, with the Celtics, hasn't always been the case.”
But be warned: There is more to winning than simply spending. The two teams with the highest payrolls over the last four years, Portland and New York, have not won a playoff series in that span. Two of the teams favored to win the NBA title this year are the defending champion Pistons, who rank 17th in payroll, and the previous champions, the Spurs, who rank 22nd. In the NBA, it's how you spend that counts, not how much you spend.
“When the Celtics talk about reinvesting in the team, I am not sure what to make of that,” says Smith College professor Andrew Zimbalist, a specialist in sports economics. “I see no evidence that it brings results. There are a lot of things that can happen that can't be solved by spending money: injuries, or players don't get along with the coach, or players don't get along with each other. You can't throw money at problems like that.”
In other words, we're back to Ainge and the matter of whether he will be lucky or good — or neither. What Grousbeck, Pagliuca, and Epstein have done to rebuild the business side of the franchise and reach out to its fans is admirable. But unless Ainge makes the right decisions on players, the efforts expended on selling this team to the public will have little effect. In fact, Joe Dumars, president of basketball operations for the Pistons, warns against trying to market an incomplete team — such as the Celtics — to fans. “I think there is a rush to market yourself in the NBA,” Dumars says. “You have to be patient with that. If you are trying to sell yourself before you have defined yourself, it's just a gimmick and it won't work.”
Ainge is making the Celtics into an offensive-minded team in a defense-dominated league. He is pushing Boston to play a speedy style during a slow-down era, and the team's owners are proudly proselytizing to the fan base, one by one, with Ainge's message. But considering what is happening around the NBA, considering that the Celtics still are a work in progress and Ainge still is a novice when it comes to building a team, they still must prove to Boston sports fans that they're selling something more than a gimmick.