When I grow up
Why play for a pro team when you can own one?
- Gregg SegalYou're roughly 6.6 times more likely to qualify to own an NBA team than to suit up for one.
This story appears in ESPN The Magazine's Sept. 17 Franchise Issue. Subscribe today!
AS A YOUNG child, Joe Lacob would sit on the floor in his home in southeastern Massachusetts playing Strat-O-Matic. He was a poor kid from the city of New Bedford but quick with numbers; the board game filled a need. For those who don't know it, Strat-O-Matic, like its doppelgänger APBA, lets you play virtual, statistically accurate games between, say, the 1965 Red Sox and the 1965 Yankees. Every player has a data-filled card based on his stats that year; you roll the dice, consult the numbers and get a result for every at-bat. Lacob would take the previous season's entire major league schedule and play every game, managing lineups and pitching rotations as he went. "I wrote everything down, kept all the records," Lacob says today. "I was quite a maniac." Playing that card game didn't just leave him with notebooks full of fantasy stats. It left him with the desire to run an actual team.
He dreamed about it his entire life until he had amassed a fortune as a partner at Kleiner Perkins, Silicon Valley's most famous venture capital firm. About a decade ago, Lacob took a minority share in the Celtics; he wanted to learn even more about managing a franchise. Then, in the summer of 2010, he and Hollywood mogul Peter Guber beat out Oracle's Larry Ellison to buy the Warriors for an NBA-franchise-record $450 million. Lacob was 54.
By that time, of course, a whole new generation of kids like him had come of age dreaming of managing a pro team rather than playing for one. The math argues it's not a crazy idea. In the past decade, 33.7 percent of the teams in the NBA, NFL and Major League Baseball, many of them family owned, were sold. A sports team is no longer something that is either inherited or a late-in-life reward. When you've got the money, it's attainable -- much more so than playing on a team. For instance, in order to become an NBA owner like Lacob in today's marketplace, let's say you need a net worth of at least $250 million. Currently, 13,960 Americans have that, according to Wealth-X, a company that provides intelligence on ultrahigh-net-worth individuals. That's roughly 1 in every 15,186 people over the age of 25. Meanwhile, NBA teams drafted 113 American males the past five years, which is roughly 1 in 100,844 of men ages 19 to 23 living in the U.S. So by that accounting, you're roughly 6.6 times more likely to qualify to own an NBA team than to suit up for one.
The same seems to be true now for the GM's office, if you happen to be analytical and driven but care far more about sports than you do, say, corporate restructuring or arbitrage. In the past decade, scores of younger versions of Joe Lacob have taken over jobs once reserved for guys who played the game. They probably could be making a lot of money working for McKinsey or Google. Instead, they are running the Rockets or Thunder or Rays.
STRAT-O-MATIC MAY HAVE led Joe Lacob to aspire to ownership, but fantasy sports has been the real driver of the aspiration to run a team. Ten years ago, fewer than 15 million Americans played fantasy sports. The Fantasy Sports Trade Association now says that number has topped 35 million, which amounts to about 1 in every 6 people over 18 playing fantasy and doesn't count all the teen and tween boys drafting up a storm.[+] EnlargeAP Photo/Sue OgrockiWhen Presti became the Thunder GM in 2007, Kevin Durant, then 19, said "He looks younger than me."
"The truth is, owning a fantasy team isn't that much different from being a general manager," says Rockets GM Daryl Morey, the first Moneyball disciple to take over an NBA club. "I spend a lot of time talking to these guys. Many of them will keep you on your toes." After playing fantasy sports as a kid, Morey moonlighted at Stats Inc., the analytics industry pioneer, while pursuing a computer science degree at Northwestern. After college, he worked at Stats as a statistical consultant, then headed to MIT to get a
business degree. He wound up in 2000 at the Parthenon Group, a Boston-based consultancy, where he advised businessmen Joe O'Donnell and Steve Karp on what became an unsuccessful bid to buy the Red Sox. He met 41-year-old Wyc Grousbeck and 47-year-old Steve Pagliuca when they were looking to evaluate the possible purchase of the Celtics. When the two bought the team in September 2002 for $360 million, Morey had impressed them enough to be offered a job -- and then impressed them again with his mastery of new metrics useful for evaluating players in new ways (à la fantasy sports). His systems gained such renown that the Rockets named him the de facto GM in 2007. Fantasy had become reality.
By then, of course, Morey wasn't doing anything revolutionary. The rise of fantasy players coincided with the rise of sabermetrics. Bill James' books on baseball analytics were studied by kids who would aspire to be young GMs, the Red Sox's Theo Epstein, the Rangers' Jon Daniels and Morey among them. When Billy Beane -- not incidentally a former player and scout -- first applied James' teachings to a lineup and succeeded with the A's, other teams finally let these know-it-all analysts inside the tent. Suddenly, the old-boy network, which suggested you either had to drink beers with the owner or have played pro ball yourself to get a job picking players, fell apart. The young nerds knocked down even more walls with the MIT Sloan Sports Analytics Conference, which Morey started five years ago. Today it serves as an incubator for self-proclaimed dorks who happen to be sports fans. Last year, 2,200 people heard the top minds in sports speak, while others worked the crowd with the newest surefire stat. Many of those in the audience came from the nearly 350 schools that offer either a bachelor's or a master's in sports management, a number that Mavericks owner Mark Cuban laughs at. "I give the credit to all the universities in the country for creating a new version of rocks for jocks and making people believe that they have a future in sports management and ownership," says Cuban.
Cuban might be the owner most responsible for inspiring the trend of younger sports managers. He was a smart outsider with $285 million to burn when he bought the Mavericks in January 2000 at age 42. Since then, 20 other businessmen under 50 have plunked down big money for a Big Four franchise, many of the men with backgrounds in math or business analytics like Cuban. And many of these owners have hired even smarter, younger guys well-versed in fantasy strategy and sabermetrics. In the decade after the commodity-trading John Henry brought in the 28-year-old Epstein to run his newly acquired Red Sox, leading to two World Series titles, 20 other GMs under 40 have come in and now run a Big Four team. "It was only a couple years ago that the nation's best and brightest wouldn't think about working in sports," says Josh Harris, 47, who bought the 76ers last year for $280 million. "They'd go to banking or private consulting. But now the best guys can come out of school and get paid to be a GM or an assistant GM and enjoy what they do a whole lot more."
DESPITE THE RAPID generational shift since the millennium, it's not exactly true that anyone with enough brains and ambition can eventually run a team. There are only 122 franchises, after all, and an ever-increasing pool of applicants. "I can't even count the number of emails I delete every week," Cuban says. Morey, for his part, is well aware that his MIT analytics conference has inspired an army of people who can't all become GMs. "I tell people that if you want to run a team in sports and that's your dream, keep chasing it," Morey says. "But it's like being a movie star. The odds are long, and there are so many people out there who want to do it." Still, they apply.[+] EnlargeKim Klement/US PresswireThe former Goldman Sachs partner grew up playing baseball in the streets of Brooklyn.
"If we have a job listing," Morey says, "I'll get six to seven résumés a day. If there's nothing specific, I'll get two to three. It's like trying to get a job in a great symphony -- 450 quality musicians show up for one job. I can see a thousand résumés, and there's not one that's easy to toss. It's almost like you try to create random ways to exclude people, like looking for that single spelling error."
Increasingly, though, the exclusion isn't so random: The pedigree Moneyball set seeks out its own. Rays owner Stu Sternberg, a former Goldman Sachs partner, hired Matt Silverman, who worked in the firm's merchant banking division, to be his president. His general manager, Andrew Friedman, came from Bear Stearns. Sternberg is an example of a new owner who wants his GM to think the way he does. For new-era owners, if that doesn't mean coming from the same industry -- in Sternberg's case, finance -- it can mean attending the same schools.
For instance, Grousbeck and Pagliuca, the Celtics' owners, have degrees from Princeton, Stanford, Duke and Harvard. They brought in Morey, an MIT grad. When he left for the Rockets, the Celtics' new player-development star became Mike Zarren, who was, sure, a lifetime Celtics season-ticket holder. But he had also served as a U.S. Court of Appeals law clerk, a management consultant, and did we mention his degrees from the University of Chicago
and Harvard Law? This summer, Zarren interviewed to be the GM of the 76ers. Not a surprise since Josh Harris went to Harvard.
This new-boy network grows thicker and harder to bushwhack every year. "If you are into building software, the number of companies that you can work at has multiplied," Grousbeck says. "But if you're interested in running a sports team as an owner or a general manager, nothing has changed as far as the opportunities go. There are only so many teams and so many jobs."
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