April 24, 2003
Sports, Risk and Philanthropy: Extended
Interview with Red McCombs
|
Before speaking to students on April 21, 2003, Red McCombs chatted with business foundations student Brea Olson. The following is a transcript of their discussion, which ranged over key themes in McCombs’ life – his passion for sports, his penchant for risk, his commitment to philanthropy with impact, and his appreciation for seeing results.
Brea Olson: The world of professional sports is one very few people get to experience, something you call a “special place.” What is it like and what do you think would surprise people about this arena of business?
Red McCombs: It’s a rarified arena. I am a part of the very best in football. I then can try to use my talents to be the best of the best. To be the one out of 32 that is the last one standing – there is just a very, very big competitive skill there that is satisfied. That drives me and, of course, everyone else in the business who all have the same goals.
You have to have some kind of unique feeling to get into an industry where the goal getting in is that everybody loses except one. That would be kind of hard to explain I guess, but the way we explain it is that we feel that we are going to be the one who is going to win.
What might surprise people is how difficult it is to tell a player he’s not going to make the team. All of these players, including those who don’t make the team, have been all-stars since they 10 or 12 years old. They are the cream of the football players in the world. To tell one he is not going to make the team is never, ever easy. And it’s not that I’m the one to tell everyone, but I am the one to tell a few, and I am the one generally that has the final sign off on who it is going to be. I think that that would be something that people wouldn’t be aware is happening because what you are really focused on is who makes the teams. In late July at every NFL camp in the country there will be approximately 100 guys playing for 50 jobs, so only about half are going to make it. There are great football players, great athletes, who are still not going to make it.
BO: You’ve owned the Nuggets, and the Spurs twice, as well as currently owning the Minnesota Vikings. How hard is it for you to build up the team and nurture them and then hand it off to somebody else?
RM: You don’t ever really hand it off. I’ve been through it a number of times. I’m still emotionally attached as long as any of my guys are still involved. The players you hand over, the coaches, the administrative staff--you stay very much attached, the umbilical cord is not just cut. Then, as time goes on, and you don’t have players or coaches involved, it’s kind of a weaning process that takes care of itself. At least that is how it has worked for me. When I first sell a club I still feel attached to it. It is as much my club in my mind as it ever was. Then you go through that break that involves the attrition of players and management, and that changes. There is a unique feeling when I go into a Spurs game now, as I will tonight, and there is only one of my players left. That is David Robinson. He is playing his last games. I still feel connected because I hired the head coach, (Gregg) Popovich, but you realize your team is no longer there. You now only have one of the 12 players that is “your guy.”
BO: Could you talk about selling Denver? Do you still have ties there?
Let me say about Denver, that of the teams I have been involved with, I sincerely regret ever selling the Nuggets. That was done in a very hasty moment over a telephone call that was unexpected. I regretted it almost from the time I hung up the phone, and I really haven’t changed. I liked Denver. The people of Denver had embraced me. We turned the team around real quickly, we had a winning program going, and I’ve always regretted selling the Nuggets. It is one of the great cities in America and the whole atmosphere, everything about it, was right. But, still I recognize that it’s over.
J.B. Bird: How does the business of managing a major sports franchise intersect with your busy life as an investor and entrepreneur? One would think they would get in the way in some ways, but do they feed each other in other ways?
The sports business is very unique. Even with private ownership it is very much a public business. Generally, I think it is a plus to your other businesses. When dealing with sports in the major league arena, you are dealing with the very best people in the talent pool. The sports identity is generally good for your other businesses. Even if your team is not winning, the bottom line is, it’s better. It is an identification that you really don’t get any other way. So, to me, it has been a definite plus.
JB: Next is a question from your book. I didn’t know anything about the setup of Lloyd’s (of London, the world’s leading insurer, which McCombs briefly joined as a member, a responsibility that entails enormous risk). You said you had pleasure in knowing you were putting everything on the line, as well as being happy that you got out before you could lose everything. What personal qualities do you have that would lead you to do something like that?
RM: A lot of sophisticated business people who have used Lloyd’s throughout their business don’t know the history, so it’s not unusual that you didn’t know.
The personal quality is one that really comes from wanting to be involved in a very unique experience. That was not a good business decision, although it turned out OK. I don’t think anyone would recommend that to someone as a business experience. When I learned about the history of Lloyd’s, I was so fascinated, that I began to make the move to see if I could embrace that membership. I would say that I would not do that today.
JB: Is it part of your profile, being a risk taker?
RM: My risk taking generally is not of the sort that I would bet everything on one play. The Lloyd’s situation essentially forced you to bet everything on one play. I wouldn’t recommend that to anyone. My friends thought that I lost my mind, yet most didn’t understand how it works. I can tell you right now that I don’t know of another person who has done it. It wasn’t like I was climbing Mount Kilimanjaro, but it was something very unusual.
JB: Could you talk about your involvement with Mary Hull Elementary. (Since the mid-1990s, Red and Charline McCombs have been major benefactors of this elementary school working with at-risk kids in San Antonio. It has become a Texas Blue Ribbon School.)
RM: The bigger part of the story there is that I am impressed by others who are driven to do a really good job doing what they do. I had been introduced to that school by a lady that had been a junior partner with one of the big six auditing firms, and had left that to go back to school to get her teacher certification. She was driven to make a difference with the elementary kids. When I got the letter from her, I was just touched by what she had done, so that got me to participate in her fifth grade graduation class, and that would have been the end to it.
Less than a week later, I see a small story in the local newspaper about the classrooms of the school being burned. I had already had that experience out there, and I was really touched by this woman and what she was doing in her life, trying to help these at-risk kids, so I went to the school to see what happened. When I got there, I found that with a little leadership, I could make a big difference in getting the kids back in the classroom and making a move to cut out the bureaucracy in putting the classrooms back together.
It’s hard to explain why or how something like that would happen, but from a management standpoint it was a situation that was pretty easy to do. You could see results almost immediately. It is kind of a dream for someone who likes to see results, because almost overnight you could see things changing. You were kind of fed by, “Hey, this is working, it is really making an impact.” I think that is just a part of the nature of someone who sees a problem, gets exposed to it, and wants to fix it.
JB: Do you keep in contact with (Spurs forward) David Robinson and have you talked to him about his school (Carver Academy, a private school Robinson founded to serve elementary students from a culturally diverse community)?
Yes, I talk to him all the time. David visited with me with one of his advisors when he was thinking about doing a school, and I advised him as strongly as I could, and I don’t mean just a little bit, I mean I really pushed David, not to do that school. I knew David did not have a clue as to the difficulty of establishing and maintaining a school. He came to me, not for money, but to ask advice because I had been involved in working for different school programs. I suggested he go the scholarship route, there are a lot of ways to help, but to not to try to start a school. It is so difficult to accomplish.
However, there was no question in David’s mind as to if he should do it. He just wanted me to suggest a good way to help him with his program. Of course, David did the school, and it is an overwhelming success in the four years it has been operating. There is no doubt in my mind that it will continue to be a success. I think he’s done something there that very few people would do. It wasn’t that he was not forewarned about how formidable his objective was.
I’m glad people ask me my observations. Generally I encourage people to do things, and not to be devastated if things don’t work out. You really need to take a shot at it and go for it.
BO: What is the proudest accomplishment you have made in your professional life?
RM: I think the proudest moment was the Board of Regents’ decision to name the school. It is something I never thought would happen. It was because of the success in other businesses that played a role in it. So, that was a very defining moment for me.
BO: Do you have any advice for students, especially graduating students, as they go out into the real world?
Work hard, never cease the learning experience, and believe in yourself.
BO: Finally, you have long-established ties with Longhorn athletics. How do you think the football and basketball teams will fair next year?
RM: I think there will be national championships in both, as well as in women’s basketball.
JB: We heard it here first.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
