Bulls' Schanwald says goodbye after 28 years
Steve Schanwald, Executive Vice-President of Business Operations, will retire at the end of June after 28 years with the Bulls. During that time, Schanwald has become one of the elite figures in the field of sports marketing.
By Sam Smith | 6.22.2015 | 2:00 p.m.
First, believe in yourself. There's little doubt Steve Schanwald did. Like Michael Jordan said, you must expect great things in yourself before you can do them. Steve expected great things, though not quite the way Michael did. But Steve's impact with the Bulls and on the NBA can be measured as extraordinary as well.
"Steve was a trailblazer in every sense of the word in respect to marketing, game presentation, sponsor sales and branding of the team," said former NBA commissioner David Stern. "People could say and probably did that it's easy to fill up Chicago Stadium when Michael Jordan is in his prime. But because of Steve's ability to adapt to new ideas, new techniques and technology, after Michael retired and the Bulls weren't doing quite as well on the court, their attendance and revenue levels, nevertheless, remained at an extraordinary high level, which was a tribute to Steve's expertise."
It won't draw the attention associated with players or coaches departing, but the Bulls are about to say goodbye after 28 years to one of the enduring, innovative and vital figures in the history of the franchise and in NBA marketing and business, Bulls Executive Vice-President of Business Operations Steve Schanwald.
Schanwald, 59, will leave his position at the end of June after 28 years with the Bulls. During that time not only have the Bulls matched their on court eminence with business accomplishment, but Schanwald has become one of the elite figures in the field of sports marketing, with innovations and successes that have made he and the Bulls the envy of the American sports business.
"Steve's always been kind of like the elder statesmen among the team presidents group, not because of age but more because of his tenure and experience," said Brooklyn Nets and Barclays Center CEO Brett Yormark. "When I reentered the league 10 years ago, I really leaned on him for his advice and his guidance, especially as we were trying to transition out of New Jersey and go to Brooklyn. Plus, he was a Long Island guy and he had a lot of insight into the project we were undertaking (locating the NHL Islanders to Brooklyn). He's always been someone I've looked up to and had respect for, not only for how good a marketer he is, but what a great leader and manager. The whole league has so much respect for what he's done."
Steve Schanwald joined the Bulls in 1987 as Vice President of Marketing & Broadcasting
It's been an amazing trip for a middle class kid from suburban Long Island outside New York City who rode the subways to watch his favorite home teams and eventually helped drive the express that became the much imitated Bulls organization. Here was a kid who started trying to organize flip card sections in the stands at his high school football games, who eventually was handing his business card to half a dozen United States presidents, talking boxing with Muhammad Ali, movies with Jack Nicholson and comedy with Jay Leno, playing golf at Augusta, going on African safari with Michael Jordan's mother, attending multiple Olympics and Super Bowls and who was part of almost 3,000 Bulls games and six championships, all while coming in on the ground floor and helping the NBA construct its skyscraper of appeal around the world.
"I used to chide him on a couple of the game activities," laughed Stern. "He would try anything and thinking of Steve brings very pleasant memories. He was always a favorite of his contemporaries and I always enjoyed my interactions with him. To give you an idea, when the Bulls went to Paris and did the introductions (and game presentation), as soon as the pounding started, 16,000 fans in Bercy Arena knew exactly what to do. That was in some measure the fact that Schanwald's techniques were going global."
And now Steve is going to hang out winters in Florida, summers in Chicago, see the world, and begin painting on his own blank canvas of life after one of the most celebrated of sports business careers.
"We all have dreams when we are kids," said Schanwald. "You're truly blessed if the wildest dreams you had as a kid are exceeded by your real life experiences, which mine have been."
There are lessons in the life of everyone who is successful. Or not quite as successful. Schanwald, whose job and passion became a study of human habits and behavior as well, liked to say everyone has a story. That's if you take the time to listen. Steve has his own unique story that, like with everyone successful, requires good luck and good timing. But it also needs a passion and a mission, and Schanwald had that belief in himself. You don't sell a product successfully, whether it's a sporting good or a sporting team, without that.
Steve among seven of his great accomplishments over the years.
"A lot of people in life are in the right place at right time," said longtime sports business executive and Schanwald mentor, Russ Potts. "But they don't have the initiative or vision to take advantage of the opportunity. Steve did."
Like Churchill said, "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
"Steve was and is a leader in looking around the corner," said Andy Dolich, a longtime sports business executive whose positions have included business chief for the Golden State Warriors and Memphis Grizzlies. "I call it marketing through the windshield and not the rear view mirror; he has been a leader in that. ‘What's next? How do we do this?' Never losing sight of the fact with all the analytics and metrics, it's the fan. It's the person coming through the turnstile that ultimately determines the quality of your organization, and Steve understood."
Schanwald grew up in Bethpage, Long Island, another kid who loved sports, took the Long Island Railroad into New York to catch a subway up to Yankee Stadium, a fan whose own athletic fantasies were long dismissed with a modest frame. But his dreams and visions were always at bat.
"When I was in high school, I determined the music at the high school basketball games and tried to organize on the fringes," Steve recalls. "I tried a flip card section. We were playing a high school lacrosse championship at Hofstra. Our team was the Bethpage Golden Eagles. I think it came out Olden Beagles. But I got an A for effort."
The report card eventually would become straight As.
Steve's dad was a furniture salesman and lost his job when Steve was a senior. He got another job in Maryland, moving the family in what would be a serendipitous move for Steve, though difficult as a high school senior. After finishing high school, Steve enrolled at the University of Maryland, which happened to have one of the first sports marketing offices in intercollegiate athletics. It was the infancy of the genre, which now is widespread on college campuses and throughout the sports world.
But there really was no such thing then.
Steve with Vice President Joe Biden before a Bulls home game
Bill Veeck sort of invented the concept in sports with his oddball antics, which come under the category of game presentation now. Famously the maverick then, Veeck's gimmicks were mostly demeaned by the conservatives of sports. But times were changing in sports. Free agency was coming to players. Everyone needed more money.
"I was a liberal arts major," recalled Schanwald. "I always loved sports and was a mediocre athlete. The guy running Maryland sports marketing was a legendary guy, Russ Potts. I walked in one day to his office and asked for a job. I couldn't play, but I wanted to be involved in sports. I didn't want to be a manager picking up towels and all that stuff. I didn't know anything about marketing."
But Steve sensed this was for him.
Potts also sensed this was a special kid.
"Walked in cold right off the street," recalls Potts, who later became White Sox marketing vice president and a Virginia state senator. "He wanted a job. I said, ‘I can't pay you.' He said he'd work for free. Distributing pocket schedules, bumper stickers on cars, that kind of thing. What first impressed me about him was the determination. You couldn't scare him off. He knew he wouldn't get paid, but he already had a big picture in mind."
So much so that on spring breaks instead of going off with classmates to the beaches of the south he took trips to meet college executives, like Roger Valdiserri at Notre Dame and Don Canham at Michigan.
"I told them I was a student at the University of Maryland and could they give me time to pick their brains, learn for them," said Schanwald. "They were gracious enough to say they would. I felt having connections like that could lead to something and I could learn and be better. I got about an hour with each."
Working for Potts worked out as after graduation, Potts recommended Schanwald to the Air Force Academy, which was looking to begin sports marketing. They had little known coaches like Bill Parcells in football and Gregg Popovich, an assistant in basketball. Steve put together brochures, did group sales, built a radio network and arranged for courtesy cars. "Parcells said he needed one," recalled Steve.
"I'm at the Academy," related Schanwald. "A friend of Valdiserri is running business operations for the Pittsburgh Pirates. They're having attendance issues and want to hire a director of promotions. They've never had one. He remembers me. They fly me out and I'm hired and now I'm in major league baseball at 23. Selling sponsorships, generating revenue, signs, publications, advertising, promotional giveaway days.
"It becomes the ‘We Are Family' champion Pirates," says Schanwald. "Willie Stargell liked that song. They played it in the locker room after games, loose bunch. They're in last place the end of May and end up winning the World Series. We did t-shirts, some commercials (with the song). The same way ‘Winning Ugly' caught on with the White Sox in '83. Doug Radar makes this comment and we took it and ran with it.
"Some teams try to force those things, come up with sayings. Things like that happen organically," said Schanwald. "You can't force things like that. You have to recognize opportunities when they occur and then hope to make one plus one equals three. The ‘We Are Family" experience showed there was an opportunity."
Steve is among great company as the Bulls retired Scottie Pippen's jersey in 2009
Potts had gone off to SMU and when Jerry Reinsdorf and Eddie Einhorn were the leads in the group purchasing the White Sox, Einhorn persuaded his old friend Potts to join the White Sox for sales and marketing. Potts called Steve knowing he'd been in baseball with the Pirates. Potts soon left to run for state senate and was replaced by Mike McClure as Schanwald remained in the No. 2 spot. Then when the Reindorf group purchased the Bulls in 1984, Reinsdorf knew the Bulls business operations needed an upgrade and he believed he had the right guy around in Schanwald.
"I decided we needed someone young and vibrant who had a vision in marketing and selling tickets and took Steve from the White Sox," said Reinsdorf. "We didn't interview anyone else. He was exactly the guy I wanted.
He had a great relationship with sponsors, worked hard and he had a lot of good ideas about how to sell tickets, sell sponsorships, advertising.
"He was very professional despite being so young," said Reinsdorf. "The Bulls almost like the White Sox, had so little marketing. I remember asking (Bulls CEO) Jonathan Kovler what they were doing. One of the first questions I asked was how many season ticket salesmen they had. He said they didn't have any. He said if people want to buy season tickets they are going to buy them; if they don't want to you are not going to talk anyone into buying them. That was their level of marketing. They'd have a concert occasionally after a game, a few giveaways. I didn't know what we had in Michael Jordan. Even the first year with Michael we weren't selling out; we were drawing more but not selling out. Plus, in the modern era it's more than ticket sales. You've got to have sponsorships, good television, good beer soft drink deals; it's a whole different business.
"I felt Steve was the guy to carry it out and he did a remarkable job," said Reinsdorf. "A lot of the stuff we do has been copied around the league. We went from a basketball game to an entertainment extravaganza. There's always something going on. Whether we win or lose, people end up having a good time. He took it beyond anything I was thinking about. My strength is not having great ideas. My strength is hiring people who have great ideas. I never would have dreamt of the game presentation and all the stuff that comes in the timeouts and halftime."
Or the $100 courtside seat.
"Jerry almost had a heart attack when I told him in 1987-88 I wanted to take the courtside seats to $100," laughs Schanwald.
The Bulls had been selling them for $40. They're now as much as $2,500 per game.
The NBA was hardly the international monolith back then. They were still a few seasons removed from Finals games on tape delay. The Bulls had no radio network, little advertising, few sales people, and hardly any reach to the community. Schanwald helped change that to the Bulls becoming perhaps the model for NBA business as business became the engine that drove the NBA's fast break to the public conscious. After all, there always was basketball and great talent. But the NBA wasn't the cool sport.
"You're truly blessed if the wildest dreams you had as a kid are exceeded by your real life experiences, which mine have been." said Schanwald
"Basketball was almost a cult sport back in those days," says Tom Wilson, a decades long Detroit Pistons president who now serves a similar role with the Detroit Red Wings. "There was a feeling we are always going to be the No. 4 sport or No. 5 sport or No. 6 sport until you had that (Magic/Bird/Jordan) era. We all shared ideas and that's where Steve was great: ‘Here's what I'm doing with this; here's what I'm doing with that.' And never above you. There are a lot of people who would have looked down on you when you had the Jordan years because for a decade we were all chasing that team and then chasing their success, the sellout crowds, the craziness, the best opening tune, game presentation. We're all renting his acts like the Blues Brothers: ‘Ok, we've got to get that. It's not Detroit, but it's still pretty cool.'
"I remember ‘90 or ‘91 going to a league meeting and in those days they did them both, the business and the basketball together," recalled Wilson. "I went into the general managers' meeting and David (Stern) stopped me on the way out and he said, 'What are you doing?'
I said, ‘I'm in the general managers' meetings.'
He said, ‘You got a general manager?'
I said, ‘Yes.'
He said, ‘Well then, get out of there. The future of this league is over there.' He pointed toward the business meetings. He said. ‘That's where we need the heroes. GMs come and go. You guys are going to drive this business.'
"It was a quick meeting, but it's one I'll never forget, as I don't think I ever went back to a general managers meeting again," Wilson said with a laugh. "There's a passion and love a lot of guys in our generation had. People like Steve who spent 30 years; it wasn't a job. When you talk about sustaining success, how to overcome the challenges of being awful as we've all been there, it starts with this passion and love for the franchise that it's not a job. It is a huge part of us. You take it extraordinarily personal. It's one of the key things with Steve. He had such an emotional tie to that franchise that he wasn't going to let it fail and in so doing he set an example for some of the guys who had even bounced from job to job that if you cared enough you can make this go on. You are going to have blips. So you don't draw 23,000 anymore. But there's no reason to draw 10,000. What can you do promotionally? How do you change your platform from all season tickets to 10-game plans to group sales? It's constantly reviving your business, changing your business on the fly to make sure success is close.
"That means when you can finally draft a Derrick Rose you never fell so far that it's going to take you five years to get back. That ability to sustain has been one of the keys for the Bulls franchise."
Revenues began to increase dramatically from a variety of sources in those early Bulls years after the ownership change. But one of the principal innovations that has been copied in so many places has been the game presentation that has become almost a Bulls trademark, less a diminution of the game, which always will be the biggest selling point, but a desire to provide fans with a thrilling experience to match the events on the court.
"His commitment to understanding the fan base in a non digital world was unparalleled," said Brooks Boyer, White Sox chief marketing officer who previously worked for the Bulls. "As we went to NBA league meetings people would come to him and say, ‘What are you doing to continue to sell tickets?' There was a vision and commitment to our season ticket holders, committing to understanding who are fans were."
There were elements of the iconic opening in previous years with the famous introduction music, which public address announcer and radio personality Tommy Edwards found one day in the Biograph Theater playing after the end of a movie. But there needed to be more than a song. Because this show cost more than a song.
"My philosophy has been fans spend a lot of money; tickets are not inexpensive to come to a Bulls game," noted Schanwald. "You are there for two and a half hours, but the game is only played for 48 minutes. That's another 100 minutes with nothing going on. How could we fill that time? How do you give people as much entertainment value as you can? Not only did we want to make sure fans who were there were having a good time, but you can't guarantee what kind of game it is. Is it a close game? Blowout game? Entertaining? Dull? You understand the fans that come to games on a one to 10 scale, there are some tens in terms of their passion for and interest in basketball. And a lot of ones and twos coming with the 10s. How do you make sure they have a great time, too? So game entertainment became really important for us."
It became can't miss entertainment on the court and around the stands and concourses.
"He'd always preach to us that we've got to make this more than a game, make this an entertainment experience for everyone who comes in," said Boyer. "Ticket prices have never been cheap, so the goal was to keep people entertained during the down times and when you look at NBA games now so many of the games are designed and developed after what those Bulls games were like in the 90s. I think people took notice of what the fans in Chicago liked and decided to have their game experience and value creation. We talk about as ticket people buying a chance to see the game. But if you can create incremental value for the ticket, that's always a positive thing. You look at what you are trying to do for the consumer."
Boyer even remembers on some Halloweens with a game being played the office staff dressed in costumes and circulated around the arena.
"We all became part of the show," said Boyer. "More fun for everyone."
But all good things come to an end. Or do they?
Steve representing the Bulls at the 2008 NBA Draft lottery. Little did he know what to expect from that night.
That was the narrative for the Bulls. And even the NBA with the retirement of Michael Jordan in 1998: The end of championships, the end of fun. Perhaps the franchise wasn't packing up and leaving like the Packers/Zephyrs of the 1960s, but who's coming to watch the Bulls without Michael Jordan? And worse, teams winning 15, 17 games.
Pretty much everyone, it seemed.
Even as the Bulls in a six-year stretch sustained one of the poorest records in NBA history, the Bulls continued to be among the league leaders in attendance with a sellout streak that lasted some 13 years and the amazement and wonder around the league of how had it been done. But a sports franchise is not built in a day. It was the marketing and sales and entertainment, going into the community with the league's first community relations department, the Bulls charities donating some $20 million, the team financing basketball courts and local tournaments, a Boys and Girls Club, a library, schools, Bulls tickets becoming perhaps the most prized and valuable sports ticket.
"There was a lot sentiment that once Michael retired the bottom would fall out again and we'd go back to drawing 4,000, 5000 fans. That never happened," noted Schanwald. "And if you'd say what professional accomplishment are you most proud of, I'd say the fact we compiled from 1998 to 2004 a .262 winning percentage, which is the worst winning percentage for a non expansion team in NBA history over a six year stretch, and we led the league in cumulative attendance over that period.
"What I'm proud of in that regard," said Schanwald, "is the theory in sports is you win you draw, if you don't win you won't draw and nothing will ever change that.
"We proved that you could draw if you didn't win if you worked really hard, were really creative and during the time you were winning you serviced your customers really well and provided great entertainment value. When I talk about value, going to Disneyland is expensive. But you feel like it's a good value. I feel we had the same mindset with the Bulls. It was expensive, but I feel like we were giving you good value for your money and we were able to convince people of our plan to get good again, remind them of how valuable and precious a Bulls season ticket was and convince them to stay with us awhile and give us a chance to rebuild the product. It was due to a lot of hard work on the part of lot of people."
Schanwald says Reinsdorf's passion and commitment as much as anyone's has been responsible for his and the team's business success. But Schanwald also took a role in the careers of many of his employees as Potts did for him, like Boyer with the White Sox. Others who were hired by Schanwald include the voice of the Pirates and executives with Nascar, the Chicago Fire, Gatorade, the Dallas Cowboys and Chicago Cubs.
"The true testament is how you place the people who have worked for you and where they go, and he's had great employees who have gone on to bigger and better things," said Yormark of the Nets. "He's leaving behind a great legacy and a great story for a lot of people.
"Let's face it," added Yormark. "They were ahead of many to build a world class building, practice facility and many have leaned on Steve with his experience at the United Center with whether it's premium seating or sponsorship development or sponsorship activation. They seem to always have been ahead of everyone else and Steve has always opened up his doors to say, ‘Learn from us.' That's the sign of a collaborative leader and one I have enjoyed working with. You go back to the Jordan years and those game openings and presentations and how dramatic they made it and engaging it was for the fans and when we look at our game presentation it's all about how do you evoke emotion, how do you get the fans engaged. Steve hit it right the way it was about emotion and engaging the fans and connecting with the fans in a way we haven't seen before and many of us looked to him to make us better."
It's been an amazing full court fast break life. Steve wasn't an athlete, but a team player. And the Bulls prospered.
"I'm proud knowing that professional basketball in Chicago, despite having failed two times previously, is now well established," said Schanwald. "The foundation is in place and is here to stay and thrive."
Steve Schanwald can proudly say he helped erect some of the pillars with his passion and belief.
Before a home game, Steve was presented a personalized jersey by General Manager Gar Forman for his hard work and dedication to the Bulls for 28 years.