Pro Basketball's Family Act
It began as a roar. But before long, the filled-to-capacity Arco Arena began to rock and shake. Down by 11 points in the fourth quarter, the hometown Sacramento Kings were midbounce through a rally. And no one was cheering louder than 44-year-old team owner Gavin Maloof. His suit jacket off and his fingers to his mouth, Maloof let out a sharp whistle. In a recent Chteau Latour tasting, guests sampled the 1982, 1985, 1990, 1991, and 1993 vintages. Another recent evening featured great Alsatian Rieslings from the top grower Hugel. The entry fee was $115 per person.
STOCK LISTING? Vinopolis is unabashedly commercial. "Anyone who wants his wine displayed must pay us," Vaughan-Arbuckle admits. The more one pays--up to $8,250 per year--the better their exposure. So you won't see many trophy wines--they don't need the promotion. And wines such as Beaujolaiare worth an estimated $1 billion.
Now, the Kings are really putting the Maloofs on the map. In early 1999, the family paid about $260 million to Los Angeles real estate developer James F. Thomas for a controlling interest in the team as well as the Arco Arena, a women's professional basketball team, and an indoor soccer team. Better still, the once-sorry Kings are red-hot. They have won 25 of their first 38 games this year, putting them third behind the Los Angeles Lakers and the Portland Trailblazers in the ultra-competitive Pacific Division. And while the family says it has plenty to do overseeing what it already owns, it's a safe bet the Maloofs will soon be looking to add to their budding sports holdings. "There is something unique about owning a sports team," says 45-year-old Joseph G. Maloof, Colleen's oldest and the president of the family holding company, Maloof Cos.
Purchasing the Kings has also served as a kind of homage to George Maloof, Colleen's late husband and the father of their five children. He died of a heart attack in 1980, a year after buying the National Basketball Assn.'s Houston Rockets. Colleen's crash course in managing began somewhat reluctantly the moment her husband died. And, with her children still learning the ropes of the family business, one of her first moves was selling off the Rockets to concentrate on the family's other holdings. Now, Colleen believes it was a mistake. "I regretted it almost immediately," she says. "I didn't watch another basketball game for 10 years, it hurt so much."
Still, it became clear that Colleen had a knack for running things. She has been the driving force behind the family business ever since. Today, it is Colleen who makes the big decisions, flying into Las Vegas or Sacramento for meetings with her sons.
TOUGH TEAM. Three years ago, the Maloofs tried to get back into professional sports, but at first weren't willing to pay the asking price. The Kings were the fourth NBA team the Maloofs looked into buying. "They kept calling me, asking what was available," recalls NBA Commissioner David J. Stern, a longtime family friend. "They kicked a lot of tires."
Sports and the Maloofs have always gone together. The four boys all played football in high school, with both Joe and Gavin winning college scholarships. Daughter Adrienne was among the state's top-ranked tennis players. When they weren't playing sports, the children pitched in at the family business. The boys helped deliver cases of beer, while Adrienne worked the front desk at a family-owned hotel in Albuquerque.
Toughing it out and self-reliance were always stressed within the family, recalls Joe. He remembers getting beat up at the age of 10 by a local bully. Instead of solace, his mother gave him a stern lecture. "She told me to go out and find him and beat him up," says Joe. "Yeah," adds Gavin, "and I went with him, and he beat us both up."
These days, the family is just as close. After a legal skirmish for control of the beer distributorship with a pair of aunts that lasted 10 years, Colleen acts as the family's "chairwoman." Her greatest strength has been holding together the empire her husband built and hiring smart people to handle the details of running it. Joe oversees the management of the beer company. The Sacramento Kings are run equally by Joe and Gavin, both of whom bought homes in the same gated Sacramento community. A third brother, George, is in charge of the Fiesta, a downscale Las Vegas casino that caters to locals.
Group decisions are made over meals--or at least via conference calls. "It's a family that eats a lot," says Phillip J. Maloof, 32, the youngest brother and a New Mexico state senator. Few decisions are made without everyone's input, says George, who is planning a $250 million Las Vegas casino that is expected to break ground in June. "I make a presentation and then take notes as every member of the family makes their comments."
That's the way it has always been with the Maloof clan. The family got its start in 1892, when grandfather Joe immigrated from Lebanon. A train trip from New York landed him in the boom town of Las Vegas, N.M., where he opened a general store. In 1946, his eldest son George and two other sons won the rights to the Coors beer distributorship that eventually fueled the family fortune. By the time George died, the Maloofs' businesses included a trucking company, an Albuquerque Ramada Inn, the Houston Rockets basketball franchise, and a majority stake in First National Bank, the state's largest bank. After a 1993 merger, the family now owns a 16% stake in Utah-based First Security Corp., valued at $320 million.
Now, the next generation is trying to make its mark in the high-stakes world of big-league sports. The problem is that the Sacramento Kings are still very much a work in progress. Like most professional franchises, the team loses money, even with television revenues. The family maintains, however, that the overall sports operation is profitable thanks to the 200-odd annual events that Arco Arena books, including circuses, trade shows, and other nonsports events. And with 22 games this year on national television, the Kings' young stars are a hot commodity that the NBA has been eager to promote.
OPEN WALLETS. Still, the Maloofs have plenty to learn about life in the big leagues. The family was fined $25,000 last year by the NBA after it footed the bill for an all-expenses-paid junket to Las Vegas for Kings team members. The league ruled that the expense constituted payments beyond the mandated salary cap.
Indeed, the Maloofs seem intent on keeping the Kings players happy. They are shelling out $8 million to build a plush training facility, a real step up for a team that currently practices at a local YMCA. And it will no doubt dole out millions more in the next few years, when superstars Chris Weber and Jason Williams will be seeking new multimillion-dollar contracts. "They're putting money out for us, and we'd like to win for them," says Williams.
The Maloofs are counting on it. As is often the case with home games, most of the clan was in Sacramento in mid-January when the team took on the San Antonio Spurs, last year's NBA champs. Colleen flew in from New Mexico to sit courtside with Gavin and Joe. So did Adrienne, who designed the Kings cheerleaders' shimmering costumes. And there was plenty to cheer about when the hometown team beat the champs in a squeaker. Now all the Maloof family has to do is turn their fascination with sports and the Sacramento Kings into a money-making proposition.