Glen Taylor’s Three-Point Play
Just a little more than three years ago, the fortunes of the Minnesota Timberwolves basketball franchise hit rock bottom—which, if you know anything about the team’s checkered 23-year history, is very low indeed. By any currency of success—victories, profits, hope for the future—the Wolves were flat broke.
A Glen Taylor Timeline
Taylor signs purchase agreement to buy Timberwolves franchise for $88.5 million.
The NBA Board of Governors approves sale to Taylor.
Taylor’s purchase becomes official after a delay required for the City of Minneapolis to close on its purchase of Target Center.
Taylor shocks fellow owners by signing Kevin Garnett to six-year, $126 million contract, seen as the catalyst for the 1999 collective bargaining agreement that caps salaries at a level that makes future contracts like Garnett’s impossible.
Taylor is caught trying to circumvent NBA salary cap rules. NBA Commissioner David Stern restricts Taylor’s activities for a year, fines the team $3.5 million, and takes away five first-round draft picks (two are later reinstated).
Taylor approves General Manager Kevin McHale’s decision to fire Coach Flip Saunders less than a year after the team advanced beyond the first round of the playoffs for the first and only time in its existence.
Taylor is elected chairman of the NBA Board of Governors.
Taylor hires David Kahn to become the new president of basketball operations. A month later, Kahn fires McHale as coach, ending McHale’s 15-year relationship with the franchise.
Taylor is unanimously re-elected chair of the NBA Board of Governors in the midst of a lockout of NBA players.
Taylor plays a key role in establishing new revenue- sharing, luxury tax, and salary cap rules in a new collective bargaining pact.
The Minnesota Legislature authorizes a public-private pool of money that can be used to upgrade Target Center.
Taylor tells Twin Cities Business that he expects to announce a new minority partner who will become majority owner and keep the franchise in Minnesota.
After the 2008-09 season, erstwhile hometown hero Kevin McHale, the longtime general manager who also served two brief stints as coach, was mercifully let go amid a torrent of derision after years of questionable draft picks and player acquisitions, and failing for five straight seasons to get the Wolves into the playoffs. The new regime—player personnel boss David Kahn and Head Coach Kurt Rambis—then proceeded to tie an 18-year-old record for the fewest wins in franchise history, finishing 15-67 in the 2009-10 season. Construction of a gleaming new Twins ballpark was proceeding apace across the street from the Wolves’ aging and increasingly outmoded home at Target Center, and even the Wild still had the luxe Xcel Energy Center as cover for their own dysfunction.
This was also when the economy tanked, a “Great Recession” that compelled the Wolves to dramatically discount the price of season tickets. The previous year, season-ticket-holders could secure a seat in the team’s upper bowl for the price of a large candy bar—$3 per game. But now prices were being cut across the board, with seats that had cost $100 being offered for as little as $40. In March 2009, Wolves owner Glen Taylor also announced a guaranteed refund of any unused season tickets if the buyer lost his or her job during that calendar year.
Reminded of the Wolves’ gambit in a phone call this summer, NBA Commissioner David Stern called it a “shock treatment that was necessary to show that the team cared about the community.” But the biggest shock was likely the amount of red ink on the bottom line. A credible team source says the Wolves lost approximately $25 million in 2009, easily the worst financial year in franchise history.
This sordid trip down memory lane makes the flow of positive news and activity emanating from the Wolves organization throughout this past summer all the more remarkable. In late April, Taylor began soliciting offers from parties interested in succeeding him as majority owner of the franchise. As of early August, Taylor said he had received “seven serious inquiries.” While a majority of them were ultimately rejected because they wouldn’t guarantee that the Timberwolves would stay in Minnesota, Taylor told Twin Cities Business he was confident that he could publicly announce a succession plan involving a new partner sometime before the opening game of the 2012-13 season on November 2.
The new partner would commit to keeping the Timberwolves in the state and have sufficient financial means to be approved by the NBA as the team’s controlling owner. He would be someone Taylor enjoyed working with, committed to keeping the Wolves in Minnesota (despite leaked reports that he lives in California), and content to allow Taylor to retain majority control for a number of years while slowly but surely amassing a majority stake in the franchise. Much of this investor’s initial 25 percent share would come from buying out some of the dozen limited partners in the ownership group who have wished to end their involvement with the team after years of cash calls and losses. “After he acquired 50 percent, I’d be the [minority] partner for a while until he eventually bought me out. The whole transaction would take perhaps six years,” Taylor said in August. At that point, Taylor would be 77 years old.
Of course, back in 2009, Taylor was already 68 and well aware that he needed an exit strategy. “Unlike my other businesses, I knew when I bought the Timberwolves that it wasn’t going to stay in the family,” he says. Consequently, even as the franchise was hemorrhaging money, Taylor began to formulate how he could make the Wolves presentable for sale while cementing his legacy as the man who saved, then resuscitated the franchise.
“I remember thinking three things had to happen. First, we needed to be a competitive team that the fans would be excited about coming to see. No. 2, we had to get Target Center improved so that we are competitive with other arenas across the country. And No. 3, we had to have a new contract between the players and the owners that allows
Those three elements crystallized and coalesced more rapidly than Taylor or anyone else could have reasonably expected. What follows is a detailed look at how Taylor, once portrayed by the media and other insiders as increasingly ineffectual, brought much of it together.
Step 1: New Leadership
The first tangible sign that the Wolves could blossom into an exciting and competitive basketball team occurred in November 2010, when Kevin Love removed all doubt about his future stardom by becoming the first NBA player in 28 years to grab 30 rebounds in a single game. Love’s spectacular performance had the added benefit of sealing the fate of Coach Kurt Rambis, who had disrespected Love, clearly the team’s best player, by playing him off the bench and reducing his minutes. Rambis was fired after compiling a tragicomic 32-132 record in his two seasons at the helm while engaging in a dysfunctional relationship with the man who hired him, President of Basketball Operations David Kahn.
But we’re getting ahead of ourselves. “People wonder, ‘How did you end up with David Kahn?’ ’’ Taylor says. “Well, I knew I had to let Kevin [McHale] go. We had to watch the money. Kevin was not a money-watcher, not that kind of a detail guy. To replace Kevin, we talked to a lot of people, and some were basketball guys and some were money guys, like David, who understood budgets and the salary situation [of players]. It seemed like whichever way we went there was going to be some risk.
“The person who convinced me about Kahn was [former New York Knicks President and General Manager and current Indiana Pacers President of Basketball Operations] Donnie Walsh, who was David’s mentor in Indiana and a guy I really like and respect. Donnie told me, ‘I’d take a risk on him. He’s very smart. He doesn’t know all the basketball stuff, but he’ll know how to run your team.’
“So I hired David, and David went out and selected Kurt. I can’t really fault him. We wrote down what we wanted and he looked like that kind of guy: Somebody younger, who could build a team, who came from a winning program. But it ended up that Kurt and David didn’t get along very well, and Kurt didn’t do what he said he would do, which was to be flexible. He wanted to run his [triangle offensive] system even though coaches were telling me he didn’t have the right players to run it.”
Rambis was officially fired in July 2011. By then, Kahn had finally persuaded wunderkind point guard Ricky Rubio to join the Wolves after Rubio, the team’s top pick in the 2009 draft, had spent the previous two seasons playing in his native Spain. As the NBA owners initiated a lockout to signal hard-line negotiations with the players’ union over a new collective bargaining agreement, Kahn and Taylor convinced veteran NBA coach Rick Adelman to replace Rambis. All of these developments—Rubio’s arrival, the lockout, hiring Adelman—played an enormously important role in establishing a foundation for a return to winning, a key component of the financial improvement necessary for Taylor to implement his exit strategy.
Step 2: Reform League Economics
As chair of the NBA Board of Governors, Taylor had a pivotal role in negotiating the new collective bargaining agreement on behalf of the owners. “Glen should take a lot of pride in what he did,” Kahn says. “He must have attended 70 meetings in New York, staying up until midnight in negotiations. Aside from [San Antonio Spurs owner] Peter Holt, the head of the labor committee, Glen spent more time on it than any other owner.” Commissioner Stern agrees, calling Taylor “a pillar of strength who cranked it up and came in whenever he was needed.”
As has become the norm in major team sports, there was probably as much negotiation between the large-market and small-market owners as between the owners and the players union. Three substantial revenue streams had to be resolved.
The first was the percentage of total revenues that would go to players, and here the owners benefited, as the players conceded to a drop from 57 to 50 percent. But the other two streams presented fissures between the large- and small-market teams. One was how punitive the “luxury tax” should be for wealthier franchises that exploited loopholes in the salary cap system to inflate their payrolls in order to stockpile talent; the other was revamping the revenue-sharing formula so that franchises in markets that were less populous or affluent, or otherwise disadvantaged would reap enough revenue to mitigate losses and remain competitive. Both Kahn and Stern specifically cite Taylor’s diligence and influence in the issue of revenue sharing, which Stern describes as “incredibly complex and [one that] will continue to require accountants, actuaries, and lawyers to sort out.”
“The new deal really helps us,” Taylor flatly states. “As bad as we’ve played and as bad as the economy has been, we were still in the middle of about 22 or 23 teams that were losing money. If we were losing $15 million or $18 million, some others were losing $40 million.” The new revenue-sharing fund “will step up over three years. Next year there is a possibility of $10 million—now, if we do well it will be less. But I would say that between $5 million and $12 million will come to us.”
With the lockout over last December, Wolves fans got their first taste of Rubio and Love in action together, guided by Adelman on the sidelines. Ten weeks later, a franchise that had finished 100 games below .500 the previous two seasons had a winning record and would have qualified for the playoffs—but on the night the team dared to run a marketing campaign with the tag line, “Get your season tickets now or someone else will,” Rubio tore the ligaments in his knee and was lost for the season.
Still, the fans’ appetite had been whetted. Rubio was a precocious, floppy-haired facilitator and dogged defender with big, dewy eyes and a beguiling combination of flash and selflessness in his game. Love was the quintessential banger and grinder—arguably the league’s best power forward in a golden age of power forwards—who could also step out and hit the three-point shot with dead-eye accuracy. And Adelman’s expertly conceived motion offense and immediate upgrade of the team’s defense made it apparent why only three other coaching legends—Phil Jackson, Pat Riley, and Jerry Sloan—have won more games at a higher winning percentage in the history of the NBA.
According to Taylor, it was the prospect of a free flow of communication among him, Adelman, and Kahn that attracted the coach. “People think Rick is my guy, but he’s David’s guy,” Taylor explains. “David was the one who knew him. And David was sitting there the whole time when Rick said, ‘I know David and I can get along. But if I can talk to you too, and have some input when decisions are made, it gives me interest in this team.’ ”
Step 3: Fix the Cinderblock Palace
As the 2011-12 Timberwolves season was winding down last spring, negotiations over funding for a new Vikings stadium were growing more serious and specific at the Minnesota Legislature. It presented an opportunity for Taylor to achieve the third part of his strategy for making the Wolves presentable for sale.
The founding owners of the Timberwolves, Marvin Wolfenson and Harvey Ratner, financed the construction of the Target Center themselves in 1987. But seven years later, “Marv and Harv” sailed into financial straits and needed to sell the team. With prospective buyers variously threatening to move the franchise to New Orleans, San Diego, or Nashville, the Legislature and the Minneapolis City Council agreed to make a public purchase of the arena, provided the new owner kept the team in the building. The City of Minneapolis became the responsible government entity for the maintenance of and improvements to the building, a task that became increasingly expensive even as the city repeatedly lost state aid.
By last spring, the deteriorating state of the Target Center was a source of angst for both the city and Timberwolves. With the Legislature requiring the cooperation and approval of the Minneapolis City Council for a component of the financing for the Vikings stadium, there was leverage. To persuade legislators, the Wolves helped lead about 70 politicians on tours of the facility. They saw an antiquated building where the bleachers are stored outside in the elements because there isn’t any other place to put them. They saw a single loading dock, which means that when staging elaborate events such as Aerosmith (21 trucks) or Cirque du Soleil (30 trucks), drivers are on the clock circling their rigs until it is their turn to unload, adding enormous costs and affecting the arena’s competitiveness. They saw a building with just one working elevator to serve a capacity crowd of 19,000 people.
In the final Senate floor debate, the Target Center portion of the legislation was twice excised from the bill, then reinserted. All agree that the most influential lobbying was from Minneapolis Mayor R.T. Rybak and City Council President Barb Johnson, who firmly stated that the city would not green-light a Vikings stadium proposal unless improvements to both Target Center and the Minneapolis Convention Center were financed. But it surely didn’t hurt that Wolves Senior Vice President and Chief Marketing Officer Ted Johnson, who coordinated the Wolves’ lobbying at the Capitol, is a former DFL operative, and, more significantly, that Taylor is a former state senator, minority leader, and prominent contributor to the Republican Party.
In the end, the bill allows Minneapolis to use $60 million to $70 million of its entertainment tax revenue for economic development, which includes Target Center. The public investment will have a significant private-sector match from the team and AEG, which manages Target Center, according to Johnson; negotiations on the terms and amount of the contribution are due to conclude in mid-fall.
Rybak’s office was quick to point out that the Orlando Magic, which came into the NBA the same year as the Wolves, recently razed their original arena and built a new one for about $400 million. The hope, or perhaps the hype, is that the Target Center will be upgraded so that it looks nearly brand-new at just a third of that cost.
Rybak likens the process to “fixing up a house, in that you do the important things that people don’t see, which in this case are the loading docks and the sound system.” Adding elevators and adaptive reuse of the square footage taken up by unused stairwells will dramatically improve food service and foot traffic, and upgrading the training and locker rooms will boost morale and help player recruitment.
But as the Wolves’ chief marketing officer, Ted Johnson is most excited about how the renovations could improve the game experience for basketball fans. It begins with the face of the building, scrapping its fortress-like faÃ§ade in favor of a glass atrium, which could be further enlivened with a digital mesh coating that would transform it into a huge screen to advertise the team and its sponsors.
Johnson says state-of-the-art arena design has changed greatly in 20 years: “When Target Center was first built, only about 2 percent of the seating in the arena was what we call premium seating. Today, for most sporting facilities, it is 20 percent.” What’s more, demand for premium seating is constantly evolving. The inflexible infrastructure and large-group scale of traditional suites has made them passÃ©, so some will be demolished in favor of arrangements that can accommodate smaller groups and are themselves not so bound to brick-and-mortar that they can’t make way for the next innovation.
The team expects to expand its corporate revenue base with three levels of premium service beyond what Johnson calls “the hyper-exclusive club” for those courtside. Johnson says the renovation will allow the team to provide “a more exclusive club experience” that emulates how Target Field and other modern facilities treat fan royalty: “driveway-to-driveway service with a full dinner package and other special amenities.”
Post-renovation, average fans will find broader concourses with better lighting, easier access to concessions and the team store, and more and better restrooms. And guys in the nosebleed sections can wander over to a bar overlooking the court at a corner of the upper level. New types and styles of seating will proliferate, providing more choices. “We thought very hard about how to improve the experience for every one of our fans,” Johnson says.
It sounds wonderfully ambitious, but until the city, building manager AEG, and the Wolves come to an agreement on how private dollars will be allocated, all plans remain mere theory. One complication is that AEG is more than halfway through its 30-year contract, and is believed to prefer a new 30-year deal in exchange for funding building improvements; lacking that, the potential return on investment for AEG is reduced. If the process delivers less than $135 million or negotiations drag on, the behind-the-scenes upgrades the mayor is focused on will likely happen first, as public dollars are not contingent on the private ones.
Triangle of Authority
The Vikings stadium bill passed about two weeks after the close of the 2011-12 season. But most of the Wolves-related headlines concerned Kahn’s persistent attempts to upgrade the talent on the roster. Behind the scenes, as promised, Adelman was providing input and helping with the decisions.
“Most of the moves David is making are heavily influenced by what Rick has asked of us. But when it comes to finances, David will tell Rick no,” Taylor reveals. “At the end of the year, Rick gives me a report of what he thinks of each player. He tells me it’s the same one he gave David and that David knows he is giving it to me. Then he goes through the list. He says, ‘This is the first one I want gone’—that was [underachieving veteran center] Darko [Milicic]. ‘This is the second one I want gone. This is what I think of this player.’
“We were going to build slowly with a young coach [Rambis] and young players. It was a good plan, but there was a misstep. Now we have a seasoned coach who has said ‘This is my last job.’ He is going to push faster because he wants to win sooner. But his [style of communication] is one I understand and can relate to.”
A lot of positive things have happened to the Timberwolves franchise in the past 18 months, and Taylor has a credible and satisfactory exit strategy to show for it. But the seemingly rosy future of the franchise is not without some genuine risks and downsides. After years of dolor and cynicism, Wolves’ fans may actually be too complacent about the team’s playoff prospects this coming season, especially if Rubio’s knee is slow to recover in the first month or two of action. It’s likely, whatever the improvements within Target Center, that it will still be found wanting compared with Target Field, the X, and the new Vikings stadium. And though the NBA’s new revenue-sharing plan will help mitigate losses, celebrating its largesse will be a sign of continued poor play.
But for now, it’d be parsimonious not to allow Taylor the comforting vision of his walk into the sunset. “It appears that some of the things we have done are finally coming together,” he says. “I don’t need to have it all finished, with us on top, but if I can leave a franchise our fans are excited about, and that an owner can have fun with without losing money, then I’d feel I’d accomplished about everything I could.”
Britt Robson has covered Timberwolves basketball since 1990. He currently covers the NBA for Sportsillustrated.com.