Yet the team’s worth has increased $131 million in the two years since the purchase.
In a column which makes a case for why you should be patient with Harris, John Gonzalez of CSN Philly defends Harris’ purchasing of the New Jersey Devils…
Forget about buying the Devils. That was easy. That was obvious. That was a business decision made by a savvy businessman. There was some silly PR fallout because a handful of provincial hockey fans got overheated for ridiculous reasons, but that wasn’t (and isn’t and won’t be) a big deal. Harris had to anticipate that kind of narrow-minded knee-jerk reaction, but when measured against the opportunity to purchase a team and a building for a cut-rate price, the choice clearly wasn’t tough.
… and helps Harris explain why Harris is so smart, and rich:
Harris gets credit for adopting the Sixers’ current strategy, but don’t worry about how it might affect his bank account or the team’s bottom line. It might be harder to sell tickets and merchandise this season, and people might not be as interested in the on-court product. And yet Harris and his ownership cabal will still figure out a way increase the franchise’s value.
Consider what they’ve already done with the Sixers. Harris and his crew purchased the organization for $287 million. They bought a not-so-good team that didn’t own the building it played in and had trouble getting fans to attend games. Two years later, that investment is worth $418 million. That’s a 45.6 percent increase to the value of a team that hasn’t won much and doesn’t have a star player. That’s financial magic. They’re monetary wizards who should have long Gandalf beards made of cash.
“The value of sports franchises is going up,” Harris told Lynam. “People want to see sports live. It’s truly one of the only things that, if you watch it, three hours later you know the score, and it’s just not as exciting. The value of live sports content is a big tailwind.”
Gonzalez says that these are reasons why you should A) not worry about Harris owning the Sixers (and Devils) and B) feel good about the whole thing.
I’d argue whatever the opposite of that is.
The problem is that, yes, buying the Devils was a no-brainer, easy money-grab for Harris, whose company, Apollo Global Management, eats $400 million business deals for breakfast. He knows that sports team values are increasing with little correlation to on-court (or ice or field or pitch or sand) success. Sports are the last thing holding traditional TV and advertising together. I’ve written about this before, so I won’t beat it to death, but between DVR, onDemand, iTunes, Netflix, Hulu, Apple TV, Roku, Chromecast and other cord-snippy devices, services and platforms, you can pretty much watch any kind of programming in some way other than live or during its predetermined broadcast time.
Sports are a dish best served live or, at worst, grill-kissed via a near real-time DVR delay. And though you may soon be able to watch all your favorite teams on, say, an Apple TV (right now you can watch ESPN, live, on the device), the necessity to watch sports live isn’t going away. Which means commercial breaks. Which means money. More money than sports has ever gotten before because networks don’t have any other alternatives. Supply and demand. Economics. Frightening high school teacher who spit on those seated in the first row. Bullies. Sexual frustration.
Where was I?
Ah yes, Richie Rich and his team of misfit billionaires.
Harris knows he’s going to make money on the cheaply-bought Sixers and Devils merely by holding those assets (this is, precisely, what he does during his day job). So while Gonzalez makes a good argument for why Harris being so smart and such a great businessman who really knows how to turn a profit and good for him for being open to tanking this year because the team’s value will only increase by 21%! should make you feel all warm and cuddly as you hug your Sir Charles wrestling buddy pillow*, I’d caution you to be weary of exactly those traits. It is, in fact, bothersome that he bought the Devils, as irrational as it may be. Sports fandom itself is irrational. “PR fallout” when the owner of one of your favorite teams buys one of your most hated teams is anything but “silly.” It A) could actually hurt the bottom line and B) is a completely understandable reaction from fans. It also gives you the sense that Harris, who is a billionaire, runs his teams like his many business holdings and not like, you know, sports teams.
Owners, obviously, want to make money. Lots of it. But the most successful franchises in sports (Yankees, Lakers, Patriots, Red Wings and, yes, Cowboys) are owned by people or groups that seem equally as interested in winning as they are in turning a profit. That may sound naive, and it may be, but never underestimate the desire for rich people to be really fucking successful and have something that their peers don’t. In many cases at that level of wealth, owning a successful sports team is more of a status symbol than an extra $50 million. My team just won the Super Bowl! But hey that’s cool about you gobbling up that oil pipeline, Dick Cheney. But you don’t get that sense with Harris. You get the sense that he wants to increase the Sixers’ value as much as he can as quickly as he can, because he’s a monetary wizard, not because he wants to build a great sports team.
“That’s a 45.6 percent increase to the value of a team that hasn’t won much and doesn’t have a star player. That’s financial magic. They’re monetary wizards who should have long Gandalf beards made of cash.”
Yeah, that’s the problem. The Sixers seem to be doing all the right things now – Sam Hinkie is off to a good start, the coach is from the Spurs, so, hey, he can’t be bad! – and while tanking to get better is, maybe, commendable, it doesn’t mean that Harris and new CEO Scott O’Neil, who will split his time running the Devils(!), are ever going to put the Sixers in a position to compete for a championship. And they won’t have to. Sure, they might splurge on a sexy free agent here and there, or be willing to take one on the chin this season, but ultimately, the Sixers are going to make money just by existing. Any notion that Harris is some Mark Cuban-esque billionaire who wants a fancy toy with which to win trophies went out the window the minute he bought the Devils. And it’s acceptable not to like him for that.
The point is: Maybe this will work out and I’ll look like an idiot someday. But until the Sixers actually become all the things Harris and Aron told us they wanted the team to become – Passionate. Intense. Proud., to name a few – nothing we’ve seen so far shows us that the Sixers, and Devils, are anything other than assets to Harris. There’s nothing wrong with that, but I’d hold off on applauding him for making $131 million on a team that just drowned itself in its own bathtub in an effort to, maybe, one day reach an even higher valuation.
*I doubt that actually exists. But it should.