Banking on Suns’ Success
East Valley Tribune
Nov. 3, 2004
As a 21-year-old college student, Robert Sarver started forming a bank.
Not a piggy bank, with the savings used for keg parties, but a real bank that would be backed by $4.5 million in capital that would make loans and charge interest.
Within a decade, the bank was a successful statewide operation that Sarver sold to a large banking firm.
In his mid-30s, Sarver started investing in downtown San Diego, when California had yet to emerge from its realestate depression.
Sarver made a fortune. He and his partners recently sold the assets.
Now, he’s buying the Suns. Eventually, he will replace Jerry Colangelo, the state’s most enduring sports figure who recently was elected to basketball’s Hall of Fame for his work as a Suns executive. What can fans expect? "What Robert’s always had is the courage to go with his gut and to think on a large scale," said Mark Schlossberg, a business partner and a friend since the two were 15-year-olds at Sabino High School in Tucson.
Sarver grew up in a banking family and worked with mortgages at age 16.
He started the National Bank of Tucson (later the National Bank of Arizona) with the help of $50,000 from his mother (his dad died when he was in college) and the expertise of a professor at the University of Arizona who had been a former government official.
He moved to Phoenix in 1991, sold the bank in ’94 and moved to San Diego in ’95.
In developing the bank, "He really believed there was a need for a locally owned bank in Tucson," Schlossberg said.
"A lot of people thought this might be a good idea, but how many people would go out and make it happen?"
In terms of his next major move, "He had the guts to make a bet on downtown San Diego," Schlossberg said.
"It’s the same pattern you’ll see throughout his life. He’s not a talker. He goes out and gets things done."
Sarver, who just turned 43, began poking around late last year at the notion of buying an NBA franchise. By April — with help from a host of partners — he had agreed to pay an NBA-record $401 million for the Suns (along with the Arena Football League Rattlers and a portion of the WNBA Mercury).
The price raised eyebrows, but Sarver said the tax benefits of purchasing the club are such that he’ll save about onethird the purchase price (about $133 million) in taxes over the next four years.
For the next three seasons, he’ll make decisions jointly with Colangelo, who remains the Suns chairman.
"I don’t see either of us doing anything without the other agreeing," Sarver said.
Then, in the summer of 2007, after he pays the final 35 percent of the $401 million sale price, he’ll be solely in charge.
But even now, the Suns are starting to be run much differently.
Said one longtime Suns staffer, "Things will be done more from a business standpoint, first. That’s not necessarily bad, but it’s different.
"He doesn’t have a sports background. He’ll make decisions based on, ‘Do I see revenue opportunities based on this decision?’ "
These words were spoken last week, on the very day it was becoming clear that Sarver had turned down the idea of putting money into contracts for Joe Johnson and Casey Jacobsen that would have guaranteed more years in Suns uniforms for the pair.
Johnson will become a restricted free agent next summer; the Suns can match any offer for him. Jacobsen will be unrestricted, free to sign with any team.
"Everybody is very high on both Joe and Casey in terms of how they play and how they conduct themselves," Sarver said.
At the same time, he added, "Don’t forget that we just came off two big commitments (of nearly $100 million) for Steve Nash and Quentin Richardson.
"That’s a situation where everybody wants to see how the team plays before making more commitments."
Though these were the types of deals Colangelo has seldom punted on, Sarver said Colangelo agreed with him.
For more coverage of Phoenix sports,
be sure to visit eastvalleytribune.com
Under Colangelo, for example, the Suns had run up the NBA’s limit of $100 million in secured debt; Sarver took over the debt as part of the purchase.
"There has been a change," agreed Colangelo, though he said the Johnson deal would have been consummated if negotiations with the player’s agent had been successful.
"There was a number where we would have done the deal."
And yet, in general, "How we ran the operation before the transaction is one thing. How we operate for the next three years is another."
The club is run by a sixmember committee, including Colangelo and two of his people and Sarver and two of his subordinates. Colangelo can break any ties but has made it clear he will try to avoid such situations.
Colangelo said he viewed Sarver as somebody who had accomplished a lot in a short time. Now that he’s seen him operate, he senses Sarver is becoming passionate about the Suns.
"He’s excited about his involvement. . . He’s been hands-on, which I think is the way you need to be."
Fans who worry that Sarver won’t match the ultracompetitive Colangelo in his desire to win probably will be comforted by the words of a Sarver sports pal, Mike Whitmarsh, who has played golf, volleyball and cards with the incoming Suns owner.
"Some people accept losing, and some people hate it," said Whitmarsh, who recently retired as a world-class beach volleyball player. "He’s more on the hating side. . . . He wants to win. And he wants to win at all costs."
That happened at an informal beach volleyball game, when Whitmarsh singlehandedly beat Sarver and three others.
"Robert wasn’t happy," he said.
Sarver hooked up with Whitmarsh when Sarver saw Whitmarsh’s wife, Cindy, on a TV ad for fitness training. Sarver hired Cindy Whitmarsh to train himself and his wife, Penny.
Sarver and Cindy Whitmarsh got into some battles over his training habits, Mike said. "He wasn’t used to having someone tell him what do to."
Sarver finally got in shape, Cindy said. But at first, "He was not the best student as far as personal training. . .
"His wife was a trooper, but he always complained. We had like a brother-sister relationship, I’d get so mad at him."
Once, she was on the verge of quitting, "Then he’d call and say, ‘I’m sorry,’ and he gave me a cash bonus."
On the other hand, Sarver had a sense of humor about it all.
He once asked Cindy, "Do you have tickets to the show?"
"The gun show!" Sarver replied, while flexing his biceps.
Mike Whitmarsh calls Sarver a brilliant businessman who "sees things before they happen" but who can be impatient if others don’t see things his way.
Sarver once urged Whitmarsh to buy into a new upscale housing development; Whitmarsh declined because it was too far from the beach for his tastes.
"He got a little chippy with me," Whitmarsh said.
Sarver admits he can be impatient.
"I think that’s both a strength and a weakness."
On the plus side, "You tend to get things done quicker." On the downside, "Sometimes you don’t give enough time for things to develop."
On the whole, "It’s probably been more of a plus than a minus."
Sarver always has been interested in sports. He was a kicker for his high school football team as well as an outstanding tennis player.
That interest has been transferred to family members, who are getting the hang of rooting for the Suns.
For example, Max, his 6-year-old son, recently joined a youth basketball team near the family’s home in San Diego. But when his teammates named the team the "Lakers," Max became so upset "he refused to play," his dad said.
Sarver is trying to get his son to reconsider.
Steve Kerr, the 15-year NBA player who now serves as Sarver’s lead basketball adviser, describes Sarver as a "real go-getter, very smart, aggressive" businessman who doesn’t kill himself agonizing over minor details.
"He assesses a business deal, decides if it’s good or bad and doesn’t mess around from there," Kerr said. "He feels a lot of deals are lost by dilly-dallying around."
As for changes he’d like to see, Sarver said, "I’d like to sell more tickets." (The club’s season-ticket base has shrunk to barely 10,000, the lowest it’s been in the current building).
Also, the business of basketball "could be more customer friendly" with more community involvement from players, he said.
So what will he do when he’s in charge three years from now? Will he make major changes in personnel and philosophy?
Sarver begs off, noting he’s yet to witness his first game as an owner.
But he points out that, "In my other businesses, people who perform well stay with me for a long time."
Schlossberg, his old buddy, agrees:
"One of the reasons he bought the team was he felt there were already good people in place. It gave him comfort in getting involved in a new business."
In less than three years, that business will be his, and his alone.
COPYRIGHT 2004, EAST VALLEY TRIBUNE. Used with permission.