Post by TheShadow on Sept 21, 2006 18:44:24 GMT -5
www.forbes.com/
By Monte Burke
Al Davis created the most successful brand in football by plying
maverick methods and embracing an outlaw credo. Today he is better
known for suing his fellow NFL owners.
Al Davis, owner of the Oakland Raiders, approached the lectern at the
Pro Football Hall of Fame in Canton, Ohio last month in his trademark
black suit and silver tie, his slicked-back black hair fully silver at
the temples. He was there to induct John Madden, the former head coach
and famed NFL analyst as the seventeenth "Raidah," as Davis put it in
his Brooklyn accent, to grab football's highest honor, including the
owner himself.
In his speech, Davis proudly recalled his club's storied history, like
an aged and frail general basking in battles won long ago and unaware
of the sad state of his army. For the NFL the moment was both fitting
and awkward. Davis is 77 years old now, and he has spent more than half
his life--43 years--running the Raiders, building the team into one of
the richest franchises in football and creating one of the first
antihero, unabashedly outlaw brands. He outfitted his team in black and
silver. He signed players with renegade attitudes and nicknames
straight out of pro wrestling: Ken (the Snake) Stabler, Jack (the
Assassin) Tatum, Ted (the Mad Stork) Hendricks. Raider Nation, a motley
band of fans, attended games in black face paint, black cloaks and
shoulder spikes. The Raiders consistently led the league in merchandise
sales. Oakland street gangs wore Raider jerseys.
And Davis personified his kick-ass team, sporting black sunglasses and
the slick black hair and coining phrases like "Commitment to
Excellence" and "Just win, baby." From 1963 to 1992 the Raiders posted
a 285--146--11 record, the best in all major professional sports. Along
the way his teams won three Super Bowls, the last one a generation ago,
in 1984. "Davis was the first to realize the importance of branding,
that the players are what drove fan attachment," says Marc Ganis,
president of Sportscorp, which tracks team valuations.
But in recent years the traits--his maverick style and combative
fearlessness--that made Davis one of the great visionaries in the
National Football League have withered into a crotchety contrariness,
hurting the value and profits of his beloved team and giving fits to
his fellow owners in the NFL. Like an entrepreneur who refuses to hand
over his creation to professional managers, Davis has clung to total
control and failed to groom a true successor; instead he spends much of
his time in litigation with the league
"Darth Vader is a punk compared to Al Davis," the late writer Hunter S.
Thompson once said. Sportscorp's Ganis adds: "His off-the-field
disputes have required so much of his attention that the Raiders have
missed out on the recent great rise in NFL franchise value." FORBES
pegs the Raiders' worth at $736 million this year, 22% below the league
average of almost $900 million. In the nine years that FORBES has
calculated team valuations, the Raiders' cumulative operating income
($116 million) is 42% below the NFL average of $200 million.
One of Davis' bitterest fights, now under way before the highest court
in California, may also be one of his last. He rankled the NFL years
ago by arbitrarily moving the Raiders from Oakland to Los Angeles in
1982, winning court rulings that said the NFL couldn't stop him--then
abandoning Los Angeles and moving back to Oakland in 1995. Thus Los
Angeles, the second-largest market in the U.S., has been without an NFL
team for a decade. If the new commissioner of the NFL, Roger Goodell,
can create a team in Tinseltown, his bosses--the owners--could share in
a windfall of $800 million or more.
Yet Al Davis insists that he, not the NFL, holds the rights to the city
he abandoned so long ago. He has filed suit asserting so, losing at
trial. His first appeal was thrown out, and now Davis is pressing his
case before the California Supreme Court. "Al is one of the most
important people in terms of growth and building the league," says
Lamar Hunt, owner of the Kansas City Chiefs. "But no one likes to be
sued all the time by their partners. You like to think we're working
together to make the league better. What he does is counterproductive.
But that just seems to be his personality." Davis declined to be
interviewed for this story.
The Brooklyn-bred Davis was an English major at Syracuse University. He
had never played a down of pro football, yet he was enthralled by the
game. In 1960 he got his first job in the pros as the offensive coach
for the Chargers of the old American Football League (then in Los
Angeles and since 1961 in San Diego). Three years later Oakland Raiders
co-owners Edward McGah and Wayne Valley hired Davis as head coach; he
was only 33 years old. The moribund franchise had a record of 9 wins
and 33 losses in three years of existence in the AFL. The owners handed
full control to Davis, who repaid them with a 10--4 season in his first
year.
In 1966 he left the Raiders to run the AFL, then deep in its antitrust
battle against the older, more established NFL. Davis aggressively
raided the NFL talent pool, signing top players to exorbitant
contracts. His gambit helped force an agreement that year to merge the
two leagues, creating the modern NFL. Davis returned to the Raiders,
intent on becoming an owner. He signed on as general manager and
received a 10% stake for the bargain price of $18,000. Then, in 1972,
he made his big move. While Valley, the more powerful of the two
owners, was away at the Munich Olympics, Davis persuaded McGah to sign
a contract that gave Davis complete control, though not ownership, of
the team, according to Michael Valley, the late Wayne's son. Enraged,
Valley sued Davis and lost. In 1976 Valley sold his 15% chunk to Davis,
who later upped his share to a current 54%.
In the early 1980s Davis decided to move his team from Oakland to the
far bigger TV market of Los Angeles. The NFL initially stopped him with
a court injunction, but in 1982 Davis won a landmark case against the
NFL and the Raiders went Hollywood. Thus team franchises essentially
became free agents. Since then teams like the Cleveland Browns, the Los
Angeles Rams and the Houston Oilers have moved to new cities. A
stadium-building boom ensued, helping to raise NFL revenues from $970
million in 1989 to $6.2 billion today.
But as the economics of the NFL changed, Davis didn't adapt--and he
failed to cash in on the construction boom he created: The Raiders are
one of only six teams that haven't built a new stadium since 1982 (the
Giants and the Jets have a new one under way). Most owners, notably
those at the New England Patriots and Denver Broncos, focused on
marketing and building new stadiums and gave their coaches and general
managers control over the football side of the business. Davis kept his
ironfisted rule, resulting in a high turnover in coaches (nine in 20
years, the most in the NFL) and a mediocre record--168 wins and 167
losses in 20 seasons.
In 1995, realizing the Los Angeles Coliseum lacked pricey luxury boxes,
Davis moved his team back to Oakland. Then the lawsuits began in
earnest. Davis' suits against the NFL have been all over the place: for
breach of contract on a Los Angeles stadium proposal; for allegedly
misappropriating funds; to stop expansion teams from using the color
black in their uniforms; to get out of revenue-sharing; and for failing
to promote the Raiders brand. "In the process he has made himself an
island in the ownership ranks," says Ganis of Sportscorp. In 2001 some
owners skipped an NFL meeting, fearing Davis would serve them with
subpoenas. Others carefully watch what they say around Davis to avoid
getting tangled up in another lawsuit.
Meanwhile, Davis made bad moves in Oakland, where the Raiders have one
of the worst stadium deals in the NFL. In 1995 he signed a contract
with Oakland-Alameda Coliseum that lasts until 2011, giving up the
right to sell his own tickets and market the team until this year. The
stadium, now known as McAfee Coliseum, "is not the epitome of what an
NFL stadium should be," says David Carter, executive director of the
Sports Business Institute at the University of Southern California. The
team gets less than $11 million a year in premium seating revenue, less
than one-third of what teams like the Eagles, Redskins, Patriots and
Broncos get. Since 1995 the Raiders' record is 81--95, and 58 of its 88
home games haven't sold out, the second-most in the league, after the
Cardinals.
And the outlaw brand that Davis worked so hard to create is now working
against him. "Their reputation has compromised their ability to
generate cash flow by leasing suites and selling personal seat
licenses," says Carter. "The NFL product has changed. It's more
corporate and polished. Davis is still operating in the old way."
According to Neil Schwartz of SportScaninfo, Raiders apparel sales
dropped 25% last year. Meanwhile, owners like Jerry Jones of the Dallas
Cowboys and Daniel Snyder of the Washington Redskins, the spiritual
heirs of Davis' maverick maneuverings, have surpassed him, generating
revenues from stadium deals and advertising to create two of the most
valuable franchises in sports.
The lawsuit over who controls Los Angeles may be Davis' last big spat.
Davis claims the Raiders earned the rights to Los Angeles by waiving
$46 million in settlement payments from a 1982 antitrust trial against
the NFL. In 2001 Davis lost the $1.2 billion claim to Los Angeles, but
the case was appealed when one of the jurors reportedly said, "I hate
the Raiders." That appeal was dismissed, but the California Supreme
Court has decided to review the dismissal. The verdict is important to
the NFL's future plans. "Anyone who wants to buy or move a franchise to
Los Angeles has to include the likely cost of litigation in the overall
budget," says Carter, who has consulted for California municipalities
on the subject. "It's a huge financial wild card." Some owners see the
suit as sour grapes. "He chose to move back to Oakland, so I don't know
how he could continue to own the rights [to Los Angeles]," says Lamar
Hunt of the Chiefs.
A win for Davis might allow him to retake Los Angeles or raise cash by
selling the market rights, and cash is something he needs desperately.
Unlike Jones and Snyder, Davis has no outside wealth. Keeping control
in his family will be difficult, though according to a 1999 partnership
agreement, his wife, Carol, will become the chief executive of the
franchise upon his death. It is rumored that Davis has put up a piece
of his team for sale but that every time he gets close to a deal, he
balks. "He'd have to bring in an equal partner, someone who knows the
new NFL, who could market and generate revenues," says Ganis. "But the
chances of him doing so are slim. Like many entrepreneurs, he'd have a
tough time with this."
The Redskins have not had much success on the gridiron since Daniel
Snyder bought the team and its stadium in 1999 for $750 million. But
his savvy marketing has made his franchise the most valuable in sports.
Empty Seats
Only 68 NFL games (out of 756) have not sold out during the past three
years. The Raiders and Cardinals accounted for 60% of them. Even the
addition of superstar receiver Randy Moss last year didn't help the
Raiders sell out.