BY Art Thiel 06:00AM 01/31/2019

Thiel: Schultz’s time as Sonics owner tells all

His “stewardship” of Sonics tells all that anyone needs to know about what kind of political leader Howard Schultz would make. So does his lousy apology.

Howard Schultz on the day he sold the Sonics to Clay Bennett. / Getty Images

On the July day in 2006 that principal owner Howard Schultz announced he was selling the Sonics to out-of-town buyers, he did something petty that turned out to have significant symbolism.

The press conference at the Sonics practice facility was decorated with balloons in team colors. Whether he ordered it, or was done by a misguided young staffer, I don’t know. But he didn’t tell anyone to remove them as he introduced buyer Clay Bennett.

Everyone in the room believed, or suspected, Bennett was going to move the team to his Oklahoma City hometown as soon as he could, mostly because Schultz earlier claimed local government showed his ownership group “no respect” in his demand for public funds to upgrade KeyArena. Took Bennett just two years.

The announcement called for a eulogy, not for balloons. Since then, whenever the tone-deaf Schultz makes news as a business/civic leader or now, as a potential independent candidate for the U.S. presidency in 2020, I think of those balloons.

They were full of hot air.

Exactly the same fuel that propels Schultz today.

My observation has nothing to do with his liberal/conservative political agenda, or some festering wound about the Sonics departure. And Starbucks under his watch has advanced  some worthy labor initiatives regarding employee health care, education, and employee stock ownership, so some credit is due in his day job.

Nor is it about the political question of whether he should run as an independent, and the potential consequence of splitting the anti-Trump vote.

Hey, it’s a democracy. So far. He’s entitled to run.

What’s this about? I simply don’t believe anything he says.

His ownership of the Sonics from 2001 to 2006 revealed that he was untrustworthy. Worse, he may not even know it. (Wait — is that worse?).

No further examples need to be dredged from 13 years ago. He offered up one Sunday.

The Seattle Times allowed him to publish an op-ed column, to coincide with his recorded appearance on a fawning 60 Minutes segment, all in support of his new book, From the Ground UP. The Seattle tour stop is Thursday at the sold-out Moore Theatre.

Schultz opened his essay with a transparent suck-up to local readership: “I first fell in love with Seattle . . .” Bleah.

Then for the first time publicly since he abdicated what he often called his “stewardship of a civic trust,” he tried to take responsibility for being a betrayer and a sellout.

He wrote of the Sonics sale, “My biggest mistake still reverberates in the city.”

Let’s stop right there.

No, Howard. It was not a mistake. A mistake is when you add two and two and get five.

You knew exactly what you wanted to do, and obtained what you wanted — a profit for you and your investors and relief from fighting city, county and state electeds who kept trying to tell you that the world had changed from the 1990s.

That’s when the owners of the Sonics, Mariners and Seahawks all received tax subsidies for new venues during a period when the federal government was running annual budget surpluses and municipal budgets grew thanks in part to new tax revenues from the robust tech community led by Microsoft.

But for a variety of reasons, by the early Aughts, there was neither money nor political will for another round of KeyArena upgrades after having spent $100 million in tax money to do so in 1995.

So, in the manner of a spoiled brat, Schultz cut and ran.

In the op-ed, here’s how Schultz rationalized it:

The loss of the beloved Sonics devastated thousands of fans. Many rightfully blame me.

In a new book I try to shed light about what went into my decision to sell when we did and the lessons I came away with. The truth is that I wish I held on to the team until someone local wanted to buy it. But after five years as an owner, I was so focused on getting myself and others out of a money-losing situation that I made a bad choice and failed to follow a principle that helped me grow Starbucks, which is to try to balance profit with humanity.

Selling the Sonics is the biggest regret of my professional life. Few things are more human than the bond felt among family, friends and in communities when cheering on a hometown team. Sitting at Yankees’ games in the right-field bleachers with my dad was among the few happy moments we shared when I was a kid. Selling the Sonics ultimately denied that bond to thousands of people in Seattle. I do not expect my actions to be forgiven or forgotten. I created a wound I cannot heal, and for which I will always be deeply sorry.”

Sorry? Again, Howard, no.

If you want to convey contrition that might be meaningful, here’s my offer of a starter kit:

As a pro sports owner, I was in over my head. I didn’t know or like how the business worked, didn’t like that fans cared more about the players than about me — ugh, Gary Payton, glad I traded him! — and learned that most of my business and people skills were worthless in pro sports. I panicked.

I found a mark who was hand-picked by Commissioner David Stern, and played Clay Bennett off against a phantom bidder in Larry Ellison. When Bennett offered $350 million for a business losing $20 million a year, I didn’t care about all that “stewardship” twaddle. Whatever pain the fans felt was nothing compared to my suffering in owning it.

In hindsight, I was greedy, reckless, selfish and foolish. If you can accept that I now recognize how destructive are hubris, disingenuousness and ignorance, especially for an elected leader, I ask for your forgiveness. If yes, then I seek your time to talk about health care, tax reform and cybersecurity.”

Until he can find words similar that convey genuine candor and authenticity, many of us who saw the real Howard Schultz as a pro sports owner will never see him as as he sees himself — the brilliant coffee baron with an enlightened perspective on 21st century America and the world.

He will be the balloon guy. A phony.

 

 


YourThoughts

  • DonMac

    Well, I think it’s safe to say old Howard isn’t going to carry the state of Washington in 2020. He is still clueless or delusional though thinking it’s ludicrous to raise taxes on the rich when polls have shown that a solid majority of voters are very supportive of doing so. There is no clearer example of his hubris or cluelessness then coming back to Seattle on speaking tour to promote himself after having betrayed Sonics fans the way he did.

    • art thiel

      Actually, I give him credit for standing in open ground to take fire. Then again, it took him 10 years and is happening only to promote himself and a book.

      Maybe he thinks he’ll be hailed.

  • ReebHerb

    He’ll prove to be a much better candidate than Gov. Inslee running on Tom Steyer’s hysterical Chicago on fire issue. Let’s remember the Queen of Thieves did well in the popular vote before The Donald kicked her to the curb in ’16 as Pres. Obama did in ’08. I can easily see Mr. Schultz taking more votes from Washington State than Gov. Inslee if Inslee is the Democrat nominee in 2020.

    • art thiel

      First votes in from the precinct of Mars.

    • Seattle Ray

      The King of thieves ..kicks the queen of thieves to the curb 2016!

    • Husky73

      I would vote for Howard Schultz. I would vote for Dutch Schultz. I would vote for Schultzie from the Bob Cummings Show. I would vote for any person that would end the Presidency of the man who has turned the White House into a madhouse.

      • art thiel

        Bob Cummings show? Pull of the night.

        • Will Ganschow

          Love That Bob. “Hold it, I think you are gonna like this picture.”

  • Bruce McDermott

    Could not agree more. Self-absorbed b.s. artist. Wouldn’t trust him, ever. Wouldn’t vote for him for dogcatcher.

    • art thiel

      You’re plugged in around town. Is there a constituency that supports him, aside from some Starbucks employees?

      • tor5

        I’m mildly unimpressed by Schultz. And so far I haven’t found anyone who doesn’t get mad at me because I’m not showing enough anger toward him.

  • Matt Kite

    Great column, Art! The last sentence says it all.

    I don’t know a single Puget Sounder who says, “Gosh, I sure like that Howard Schultz fellow.” He effed the Sonics and Seattle. End of story.

    Oh, and unless I’m missing some wordplay, it’s “Aughts,” not “Oughts.”

    • art thiel

      Right on both counts, Thanks.

  • Will Ganschow

    I knew I could count on you Art.

    • art thiel

      Keeping my eye out for baristas in ammo belts.

  • Parts

    Thank you Art. It had to be said. You said it better (and significantly less profane) that I ever could have.

    • art thiel

      I had a couple 101 mph heaters in mind, but decided to work the corners.

  • seapilot69

    Great article Art, you hit every high note. Howard Schultz is at the bottom all by himself in the Seattle Hall of Shame in the wing for dishonest and clueless owners. He had some significant competition too with Ken Behring and Howard Lincoln (although Mr. Lincoln was a proxy). I haven’t purchased anything Starbucks to this day.

    • art thiel

      Someday I’ll have to do a sports villains column, but I think I know who retired the trophy.

  • rosetta_stoned

    The fact the left is spitting nails at Howard from every direction tells you all you need to know – he’d practically guarantee a second Trump term. It’s highly entertaining.

    • art thiel

      The nails from the right toward your boy are starting to fly. What’s McConnell doing, standing against Trump on Syria?

  • Sonics79

    Spot on, Art! And today I’ve finally read someone in the national press (Matt Taibbi in Rolling Stone) bring up Howard’s depressing days with the Sonics which none of the other accounts of the Schultz trial balloon that I’ve read have done.

  • Alan Harrison

    I know you shouldn’t do it to a dog, but Howard’s the kind of guy you want that makes you want to roll up a newspaper and bash him across the nose with a firm “NO, Howard. BAD boy.”

    • art thiel

      There’s also a follow-up technique for a particularly bad dog who keeps doing it indoors.

  • tor5

    Ouch! I can see some Art Thiel quotes coming up in anti-Schultz political ads. Not that he’ll ever get that far. Still, I’m a little less inclined to write off his campaign as a destructive endeavor. Surely he must know that he can’t win as an independent. But it’s impossible to know how it will all play out… heck, it’s 50/50 that Trump will even be the nominee. Maybe Schultz ends up somehow bending the election away from a President Pence. I’d gladly forgive his prior sins if that were the case. I’m just saying, you never know.

    • art thiel

      That’s it — you never know. Speculating about outcomes this far away is futile. So far, Schultz is doing the dumb thing and saying what he’s against, and not for.

  • PJ

    Hopefully this column gets the full press it deserves. Well said.

    • art thiel

      Tell your 10,000 friends to spread the word.

    • Matt Kite

      Easy to share on Facebook! :)

  • Ouch! That’s gotta hurt. Truth always does.

    • art thiel

      Not sure Schultz feels any of these truths.

  • Guy K. Browne

    I think maybe the real regret Schultz now lives with is not understanding that in less than a decades time, another local business mogul would be willing to part with $2B to join the NBA frat club. Losing $20M+/year would have amounted to accumulated losses of another $160M-$200M, a drop in the bucket compared with what Ballmer paid for the Clippers. Ok, LA is a different market, but surely the Sonics would have been worth nearly $1B. Schultz potentially feels bad because he left a lot of money on the table, an ego bruise that amounts to a black eye that forever lives in the public record.

    • art thiel

      Before Ballmer made a move in 2013, Shultz’s No. 2 partner, John Stanton, now Mariners majority owner, might have stepped in to buy out Schultz. Never got the chance.

  • woofer

    Amen, Brother Thiel. It’s not about centrist politics but about a world class jerk with a massive self-absorbed ego. If you’re a Starbucks stockholder, get out now. If Howard goes forward with this scheme he will pull the company down with him. Of course, things could go much better if he brings on board a proven winner like Wally Walker to run the campaign. Dare we hope?

    • art thiel

      He’s gone from the company, or nearly so. Which won’t stop his potential candidacy from damaging the brand some. I’d love to attend the next board of directors meeting.

  • Brig Boring

    He wanted the Cadillac of all sports arenas and not have to pay for it. Not getting it, and to spite the State of Washington, he chose to sell the team to a fat bastard from Oklahoma. Hope he runs. He’ll be humiliated. He won’t even win in his home town.

    • art thiel

      My guess is he won’t get very far down the road. Seattle history aside, he’s not offering policy or programs that I identify as worthwhile.

    • Seattle Ray

      Trump didn’t win New York …yet became Prez. There is suckers to vote for anyone they truly don’t know.

  • WestCoastBias79

    Great article. If dude couldn’t handle Frank Chopp, good luck with Nancy Friggin’ Pelosi. The scariest part is that he seems so delusional and full of self righteousness he truly thinks he can save the country. Ironically, he lost hundreds of millions by selling when he did. It’s not a stretch that the Sonics would be worth well north of a billion if they were still in Seattle judging by the recent sale prices.

    • art thiel

      As I wrote, he panicked after he didn’t get his way. Ballmer’s 2014 bid for the Clips floated many yachts.

  • DB

    You’ve nailed it, Art. While Howard was the front man, and has therefore taken the richly-deserved heat, there are a number of other folks in the 58-member ownership group who were also culpable in the Sonics death. Unfortunately, none of them have had to suffer any public humiliation. I believe there was a nine-member board that voted on the sale.? I know John Stanton voted ‘no’, but I’d love to know who was in favor, -besides Wally and Howard. It’s never been clear to me that Howard had a controlling ownership interest to the extent that he could make the decision on his own. -only that he had the largest share. Having said that, he certainly seems to act like he was the sole decision-maker. Please educate us, if you know. Related; http://community.seattletimes.nwsource.com/archive/?date=20060405&slug=sonicsowners05m

    • art thiel

      Howard was the largest shareholder and initiated the action, but did so in part because the smaller investors were screaming about capital calls. Yes, they all have a share in the blame. But it was Howard who mismanaged the political approach.

  • #NailedIt
    Must admit I’m taking some solace from watching him get humiliated on a national stage. He’s a phony, a liar, a sell-out and Starbucks notwithstanding, a lousy investor given NBA franchise valuations now.
    And yeah, as a long time season ticket-holder, I’m still nursing the festering Sonicectomy wound this clown performed on our fair city.
    My guess is he’s going to realize that running for president is about as ego-fulfilling as he found owning a team. The moment that happens he’ll pick up his marbles and go home. What a schmuck

    • art thiel

      He claims he will step aside before dividing the anti-Trump vote. No time like the present.

      • Indeed. He bragged that if he runs he will be on every ballot in every county in the country. The filing deadline for most county elections is April or May. So if he files and runs, but drops out in August 2020, his name will still be on the ballots.

  • DJ

    Thank you, thank you, thank you, for the magnificent tee shot, Art!
    I’ve never seen a smoother swing, or greater use of the sweet spot. I’m not sure Shultz has quite yet landed. Although when he does, I hope he plunks in real deep into the sod.

    For a while after the sale of the Sonics, I avoided Starbucks in protest. It became harder and harder for someone that likes a consistently great cup of coffee and at times it’s the only source around that you can trust, especially when traveling. I relented, but the original burn never goes away. I now have a family member that has benefitted from their tuition reimbursement, which is cool, but does not change the tenor. I saw the 60 Minutes bit – p l e a s e give us a break, Howard.

    You are sooooo right, Art – this guys just plain doesn’t get it. Again, Gracias!

    • Seattle Ray

      There business model and how they treat employees is something other giant corporate food service companies don’t do. Starbucks should get credit for taking care of their employees. One person I knew worked for them could get health insurance for dialysis and kidney transplant while working part time. Also paid for being out of work healing from surgeries.

      • DJ

        That’s impressive! Thanks for sharing.

      • art thiel

        I mentioned some of his labor initiatives deserve credit. But there’s little in that that’s a predictor of his governance. He and Trump don’t understand that the presidency is not a kingship, it’s public service.

        • Seattle Ray

          I don’t know what He believes. I do know despite Howard or not the Sonics were being sold. The majority of owners were fed up 7 of 8. I loved the NBA and hate it now. I don’t want it back. I just watch some of the finals. I just give Starbucks props for how they treat employees and willing to give my business towards that. Howard just like any billionaire CEO has a huge ego. At least he earned his ..not so much Trump. Trump was born on 3rd base. It is hard to find Paul Allen billionaires.

    • art thiel

      Thanks, DJ. Very little of what Schultz did at Starbucks prepares him for governance, but what he did with the Sonics reveals publicly how he deals with adversity.

  • Archangelo Spumoni

    On one of the local sports radio stations, it was retold that Mr. Schultz handed out Starbucks gift cards for some occasion . . . worth $3.50 each. Wow.

    • art thiel

      I’ve since learned that the cards were passed around by a marketing staffer from a leftover promotion, not as a gift from Schultz. But that means he gave them nothing.

  • 1coolguy

    He had Wally Walker as his president, to me a very unimpressive tool. If he had searched for a quality replacement for this Ackerly hold-over, things may well have turned out different. I dropped my season tickets after Payton was traded, as he was the only reason worth going to the games those last few seasons that he was there.

    • art thiel

      Nothing would have changed Schultz’s outrage over the electeds’ dismissal of his bid for public money. His petulance dictated everything.

  • Tim

    What Howard believes is reflected by his past actions and his personality only alienates normal, working class people. Unfortunately he’s a perfect fit for what the Democratic Party has become.

    • art thiel

      Curious that it took Schultz 10 years to muster a public apology, and only because it was a tool in a greater plan.

  • Xman

    Your central observation — that Schultz is a liar — is astute, important, and underreported. But to me it IS about “his liberal/conservative political agenda” and “whether he should run as an independent,” because Schultz endangers the world by giving our most-unfit-ever president a better shot at re-election. It IS about the “festering wound about the Sonics departure,” from which this devoted fan will never recover. These three concerns are in a three-way tie.
    Even so, I’m going to retweet the hell out of this.

    • art thiel

      Your larger points are true; I wanted to point up the flaws in his Sonics tenure that revealed his character and inform today’s voters.

  • Jetswa

    wtf

  • Drew Griffin

    I grew up outside of Portland as a Blazer fan and ardent Sonics hater despite knowing I wanted to one day call Seattle home. Over the years of living in Seattle, I became less of a Blazer fan and allowed myself to enjoy Sonics basketball, but when the Sonics were sold and moved, that was it for me, I have not watched an NBA game since and I won’t going forward. The Sonics should have never been moved and David Stern / NBA could have done more to keep them here in Seattle by requiring the team not be relocated. I am convinced a new arena could have been built or another renovation of Key Arena could have been accomplished, but for Schultz to try and pass this event off as a charming story is below the belt. Sorry Howard, no vote for you.

    • art thiel

      I don’t think he sees it as charming, but is counting on people not knowing the truth and dismissing the meaning of the episode regarding his character. That’s why I wrote it.

  • antirepug3

    “His ownership of the Sonics from 2001 to 2006 revealed that he was
    untrustworthy. Worse, he may not even know it. (Wait — is that worse?).”

    Dunning-Kruger effect?

    • art thiel

      Spot on.

  • coug73

    Art, do you have a Super Bowl article in the works? Hope to see your analyze of the Rams and Pats.

  • Larry StoneB

    You took him out to the woodshed, Art. He earned it. He’s about as welcome as a wet fart.

    • art thiel

      I like analogies, but I hope you don’t mind if I fail to steal that one.

      • ljstonebraker

        A bit rude, true, but fitting

  • Dale Carlson

    Nicely done, Art. Razor sharp and on target.

    • art thiel

      Thanks.

  • jafabian

    He described himself as a “self-made billionaire.” That in itself is a selfish statement. You don’t make billions all by yourself. You get there with the help of others. Sometimes by stepping on others. He completely discounted his employees. His stockholders. His investors. His partners. The governments and politicians that worked with him to let Starbucks expand and grow. He seems to think he’s qualified to take the highest office in the land simply because he cares. Becoming president isn’t like an entry level position. You don’t just walk into it with no experience as we’ve seen firsthand. The fact that he’s protested Elizabeth Warren’s proposal to tax the super wealthy shows how he can’t relate at all to the lower and middle class. So how can he have this great plan on tax reform that will benefit all? He can’t.

    If he couldn’t get the city of Seattle to work with him for the Sonics how can he expect to work with Congress? The Senate? Trudeau? Macron? Putin? They’d all run circles around him and he’d turn around and sell to the highest bidder. Then Nancy Pelosi (Or as I like to call her “Nancy”) would quietly remind him that he can’t do that. Maybe he’d try to bribe them with $3.50 Starbucks gift cards then???

    • art thiel

      As you point out, there’s no there there with him. Except to save fellow billionaires from paying shares they can afford.

  • phil2bin

    This, despite your denials, is still about losing a sports team and not about policy discussion. I didn’t really care about losing the sonics, but I’m totally behind Krugman’s latest pieces deriding the faux “centrist” political canard that Schultz is trying on for size. I admire Schultz for taking Starbuck’s global, making the world safe for espresso. He should declare victory and write an honest memoir. Just. Don’t.