Josh Harris, seen in one of his New York offices, knows a thing or two about reviving failing enterprises. Now the new Devils owner is determined to breathe new life into one of the NHL's most successful on-ice franchises. The need to win, he says, is "my disease."
(John Munson/The Star-Ledger)
In the wilderness of the Vallee Blanche, where Josh Harris has traveled, the human footprint is trivial next to the jagged mountaintops that rise like castles. The wind is innocent enough, except for the way it shifts the snow, concealing the crevasses and creating hidden death traps. A man can be moving on a snow bridge one moment, relieved he has sidestepped danger, and disappear the next.
Skiing in the French Alps requires unbroken focus with each treacherous step. There’s no place for fear of the uncertain, but a reckless man is playing at a deadly game.
Josh Harris — business visionary, financial mastermind, husband, father of five, and the new owner of the National Hockey League Devils — is by all accounts, including his own, never reckless.
With his partners at Apollo Global Management, one of the world’s largest private equity firms, he has turned the resuscitation of failing companies into precision art. At the moment, Apollo owns more than 40 companies with roughly 350,000 employees, and manages $113 billion in assets.
More recently, Harris has channeled his revival skills toward two financially troubled sports franchises, buying the Philadelphia 76ers of the National Basketball Association two years ago and completing the deal for the Devils in August.
When the U.S. economy verged on collapse in 2008 and 2009, leading many investors to recoil, Harris and Apollo acted from a reasoned and timeless notion — that it's best to buy low. The result: In the past year alone the value of the company's stock has increased 82 percent, and Harris' personal fortune has soared to about
$2.5 billion. Friends and associates say he is bold but not a gambler.
For the Devils, he is nothing short of a liberator, having already absorbed the organization’s suffocating debt. His blueprint calls for global thinking about ways to take advantage of overseas markets and attract fans in the digital age.
"The internet, the iPad, the cell phone," he says, and not in a dreamy way. "The distribution of sports content is getting easier, and the distribution of live content is more valuable then ever."
Friends, relatives and business associates talk about Harris as something like the world’s hardest-working man. They describe him as a long-term thinker.
David Blitzer, his partner with both the Devils and Sixers, says Harris’ greatest strength is "his ability to remain calm amid lots of crazy things going on."
"Josh is action-oriented — some skitz out, but others are focused and methodical. That’s Josh."
Against this portrait, it is strange then to envision him in January of last year, in the mountains high above the village of Chamonix, on a narrow snow-swept corridor feeling his way. Accompanied by a guide, he had skied away from his group, off-piste (the skier’s word for leaving the groomed and well-traveled trails for untamed backcountry). As can happen there in a flash, the two men were soon in trouble. The most expert guide can misjudge the volatility of the slopes. Far beneath the snow, a glacier may have slipped on the bedrock, rearranging the snow, and he would not know. The pair was now on a high-pitched slope. Their skis were hitting rock.
A decision was made. The guide would go off alone, to scout for a stable pathway. Harris carried on his back standard avalanche gear — an air bag, probe poles, hooks for hoisting, and a beacon transmitter, but these were not useful just then. For 30 minutes, with the sun dipping, Harris waited at the edges of a cliff. The temperature was already well below zero. The guide had led him to a point of no return, or nearly so, before he finally reappeared.
It took the men 90 minutes to trudge back up the mountain to safety. Driving by much later, Harris could see the cliff where he had been stranded and only then allowed himself a small shudder.
In the retelling — on a recent Saturday afternoon, in a small conference room at one of his Manhattan offices — he acknowledged he probably skirted too close to calamity. (The guide, he says, "took me to a bad place.") Even so, he had the tone of a man who met with misadventure and was somehow fed by it. He wrestled and played soccer in his school days, does triathlons and marathons, and his habitual workouts include cross-training, biking, the treadmill, or running the north-south loop in Central Park. The pull and satisfaction of excelling at sports and athleticism is as powerful in its way, he said, as any business achievement.
His need to win, he said, is "my disease."
THE MODERN OWNER
Once upon another sports generation, there were rich men like the Walter O’Malleys (the Dodgers) and Horace Stonehams (the baseball Giants). These were owners whose devotion to their teams was nearly matched by their financial dependency on them. Later came the Steinbrenners and Wilpons, no less impassioned, who had built their wealth in other businesses.
These men helped build a sports business culture that now values their franchises at around a billion dollars each. Tellingly, none would have had the means to become owners in today’s market. In the falling away of their breed looms a dystopian sports universe where teams are clinically manipulated from a distance by corporate tycoons who have found the ultimate plaything. Who needs a fantasy league when you can toy with the thing itself?
Out of this specter comes Harris, the paradigm of the modern owner — neither as emotionally invested as fans may wish, nor as detached as they may fear. While he may be constrained by an NHL-imposed salary cap, it’s unlikely he’ll ever impose one on himself.
On opening night at the Prudential Center this season, he looked at ease in a night-blue sports coat and a red-billed Devils cap. He found a cranny next to a penalty box, nearly camouflaged in a bank of jerseys with the flared demon’s tail. He shook his fist as his new team scored late to force overtime against the Islanders, though they lost a shootout.
Afterward, he and Blitzer brought a throng of family and friends onto the ice. About two dozen children found a mecca here, slip-sliding and gawking at the six-sided honeycomb scoreboard above them. Not many fathers can give their children an arena to frolic in.
"A great night," said Harris, toeing the ice. He is 48 years old, about 5-foot-8, hardly overbearing in size. (He is proud of his 31-inch waist and 12 percent body fat.) He bears a passing likeness to Robert F. Kennedy. The dogged athlete is plain to see. His power is held compactly in his shoulders and chest, in a strong chin, a super-white set of teeth and piercing green eyes. The shootout result did not sit well with him.
"A great night, but could have been better," he added.
By most measures, the Devils are one of hockey’s elite franchises. Since 1995, they have been to five Stanley Cup Finals and won three championships. Only the Detroit Red Wings have done better. And thanks to the Devils’ previous owners, Jeff Vanderbeek and Ray Chambers, they play in a sparkling arena near the Ironbound district.
Still, another man may have scanned the books and shied away. The Devils owed about $230 million, were struggling to meet payroll and perpetually locked in disputes with the city over parking revenues and plans to revitalize the area more fully. Harris and Blitzer recognized a familiar narrative with the Devils — an organization with assets and room to grow but saddled with debt.
The Sixers were in a similar predicament when Harris and Blitzer took over there. With the Devils purchase, Sixer chat rooms and blogs lit up with withering criticism of Harris as something of a carpetbagger, who has boosted attendance in Philadelphia (from 14,000 to 17,000 a game last year) only with marketing gimmicks and discounted tickets. But industry estimates value the Sixers at $418 million, up $131 million in just two years, a 46 percent increase.
In Vanderbeek, Harris and Blitzer see a sympathetic figure who was dragged down during the recession,
"Jeff’s timing was really difficult," said Blitzer, who has also become rich turning around faltering companies. "The world blew up right after he built that arena."
On a smaller scale, the Devils’ finances resembled LyondellBasell Industries, the world’s largest manufacturer of polypropylene, which filed for bankruptcy early in 2009. Apollo banked heavily on it with a $2 billion investment that ended up producing a gargantuan paper profit of more than $10 billion, the greatest gain ever on a private-equity investment, according to data compiled by Bloomberg.
"Sometimes it’s better to be the second owner than the first," said Harris. "There are plenty of skyscrapers, if you look around New York, where the first owner didn’t do well but he built a fantastic building."
UPBEAT IN NEWARK
Now comes the challenging part — bringing in more corporate sponsors. While the Devils’ attendance ranks near the top of the league, the season began with more than half of the arena’s 72 suites unsold. The Devils’ new management enters an ultra-competitive market for performers and events that now includes the Barclays Center and a refurbished Madison Square Garden.
Overall, Harris said, Newark fits his template as a place overripe for development. Before sealing the purchase of the Devils, Harris said he walked around the arena, on Mulberry Street and Edison Place.
He speaks customarily in understated tones. Told that part of the Ironbound has attracted young professionals, that Portuguese and barbecue restaurants lure customers from outside the city, Harris’ eyes narrowed, and he asked a visitor for guidance. He had a new project in mind.
"Let’s drive around an hour or two before a game," he said. "Let’s plan that."
CONNECTED TO THE CITY
The Newark that Harris knows is at least partly of the imagination, filled with tales of his grandfather, Morris, an electrician by trade who owned a toy store in the city. Harris’ father, Jacob, graduated as valedictorian from Caldwell High School.
An orthodontist, Jacob Harris, his family says, was on the forefront of orthodontics for adults. He had a talent, too, for comic opera, captured in his portrayal of the wobbly valet Ambrogio in a 1995 production of "The Barber of Seville" starring Placido Domingo. The Washington Post review said he lent the show "worthy support." Jacob Harris died in 2007.
Josh Harris’ mother, Sylvia, said her son drew the attention of nurses when he was a day old. "The nurses said he was on his belly looking around," she said. "From day one, he didn’t sleep."
Harris describes himself as a near-addict for exercise. "I’d rather sleep an hour less to get up and run an hour every morning," he said.
Perhaps to compensate for a mild form of dyslexia that had him seeing letters upside-down, Josh Harris developed rare work habits. A soccer teammate at the Field School in Washington, D.C., John Williams, said he remembers egging the team on to tease Harris for having his head in a chemistry book. Harris’ eyes, he said, never wavered from the book.
The entrepreneur scratched constantly at the surface. He dealt his comic books to collectors. On summer break from college at the Wharton School of Business, Harris was not above managing a lemonade cart near the Farragut North Metro stop.
He met his wife, Marjorie, while he was getting his MBA from Harvard. She knew on their first date, she says, that he was harvesting unusual talents. "He’s solid," she said. "Like a tree."
Williams, a corporate consultant, now does business with Harris, an association that did not develop easily despite their long friendship.
"I would do my audition at various times," Williams said. "He would say, ‘John, you’re not ready.’ He knew the material better than I did."
Williams is also a skiing partner. They have traveled the map as part of a small cadre of friends. They were together on the excursion to the Vallee Blanche nearly two years ago. They started off from the Aiguille du Midi (Needle of Noon), 13,000 feet high. With steep passageways, some as narrow as 20 yards, there is no such thing as a leisurely trip down the mountain. The feat demands jump turns and the nerve to accept skidding along bare rocks if necessary.
"He’ll never admit it, but I’m a better skier," Williams said. "But he has the tenacity."
Explaining how a prudent man could have allowed himself to ski into a hazardous place, Williams said, "He’s cautious, but he’s not been unwilling to step out of his comfort zone."
A LIFE IN THREE PARTS
Becoming a sports owner, Harris said, provides another chance to compete.
"There’s one team that wins every year and goes home champion," he said. "That’s a big draw.
He sees his life unfolding in three parts, he says. The first was devoted to education and the second to building his wealth. The last third, he said, will be devoted to "giving back."
He describes himself as a "moderate" and "pragmatic" Republican and says he thought seriously about running for office before deciding he could "accomplish" more from the outside. His mother said the decision was one of the most difficult he has ever faced.
She recalls his reading Yeats’ "The Second Coming" during a junior high school program. The poem expressed, she said, his concern for disorder and a wisdom beyond his years.
"Things fall apart; the center cannot hold," she remembers him reading.
Source : https://www.nj.com/devils/2013/11/new_devils_owner_josh_harris_an_expert_in_risk_management.html