Can Woody Johnson Make It In New York?
Robert Wood Johnson IV, philanthropist and owner of the New York Jets, knows how to work a room. It's a warm June evening and Johnson is hosting a luau-themed benefit in New York to raise money to find a cure for the autoimmune disease lupus. Clad in a Hawaiian shirt, Johnson moves around the room, high-fiving one supporter and playfully grabbing the lei of another. Then he takes the stage with the night's honoree, James L. Dolan, chief executive of Cablevision Systems Corp. (CVC ) As they banter casually, it's barely apparent that the two men are actually engaged in a bitter war over Johnson's push to build a football stadium for the Jets in Manhattan.
Johnson will need all the diplomacy and persuasiveness he can muster. Four years after paying $635 million for the Jets, Johnson has teamed with New York state and city officials in a controversial proposal to build a $1.4 billion stadium on the west side of Manhattan. It would be the most expensive sports facility ever built in the U.S.
True, the 57-year-old billionaire heir to the Johnson & Johnson (JNJ ) fortune is known for his relentless energy and unbridled enthusiasm, whether he's talking up biomedical research or handicapping the Jets' prospects this fall. But his stadium plan faces some powerful enemies, ranging from community groups to city and state politicians. What's more, New York's Madison Square Garden -- a facility that's controlled by the Dolan family's Cablevision -- has attacked the plan in television ads.
All this hubbub has thrust the normally press-shy Johnson into an unaccustomed spotlight. But Johnson -- who goes by "Woody" because he deems his full name "too serious" -- seems to be enjoying the exposure. After turning away from the family business as a young man, Johnson spent much of his early adulthood searching for a passion that would excite him as much as running J&J had driven his father and grandfather. The Jets, coupled with his philanthropic ventures, have filled that void in his life. "I think I'm finally there," he says.
The Jets, while far from a charity case, definitely need help. Johnson, a lifelong football devotee, bought the team in 2000 following the death of longtime owner Leon Hess. Professional sports finances are rarely made public, but Marc Ganis, president of Chicago-based consulting firm Sportscorp Ltd., estimates that once the cost of capital is factored in, the Jets have actually been losing money ever since Johnson bought the team.
Part of the problem is that the team has a lousy deal with the Meadowlands complex in New Jersey, where it shares a stadium with the New York Giants. The Jets only get a fraction of revenues from sources such as signs and luxury suites, with the rest going to the Giants and the New Jersey entity that runs the facility. And the rent the team pays is 15% of game receipts, vs. a National Football League average of less than 10%. "They have one of the worst stadium deals in the NFL," Ganis says. Not only would the new stadium sport more amenities like high-priced suites and club seats but the Jets would keep all the revenues from them.
Johnson's political ties haven't hurt his efforts to grab some prime New York real estate. He's a big GOP fund-raiser. In 2001 and 2002, Johnson gave $27,500 to New York Governor George E. Pataki's campaign. With New York City looking to add convention center space and build a stadium as it bids for the 2012 Olympics, Johnson was able to craft a plan with the governor and New York City Mayor Michael R. Bloomberg to share the cost of the facility.
It will take more than Johnson's political glad-handing to close the deal, however. Legislators in Albany threatened to try to block the $300 million in state funding Pataki has pledged to the project. And some politicians are up in arms over possible plans to allow the Jets to use tax-exempt bonds to cover part of its stadium tab -- a move they argue increases the already generous subsidies going to the Jets. Dolan's Madison Square Garden ads ask New Yorkers whether the millions being spent by the city should go to schools and other services instead.
The tactic irks Johnson. "They are mounting a massive disinformation campaign," he says. Johnson believes the Dolans are only worried about a possible threat to Madison Square Garden. The Dolans referred questions to a spokesman for the New York Association for Better Choices, who says the cost to taxpayers is "irrefutable" and that the ads are accurate. Still, Johnson has kicked off his own ad campaign arguing the stadium will generate enough revenues to cover the investment. Of course, with Los Angeles looking to land an NFL team, Johnson could always up the ante in negotiations. He says he has no plans to move the team out of New York. But Jets President L. Jay Cross says with the Meadowlands lease up in 2008, if the team can't get a suitable stadium in the New York area, "We would have to explore all our options."
Johnson's feistiness doesn't surprise those who know him. An avid sailor, he competed twice during the 1970s in a race from Rhode Island to Bermuda -- traveling through hurricanes so brutal "you thought the keel was going to come off." And he has driven across the country on his motorcycle with buddies such as Rolling Stone founder Jann Wenner and AOL Time Warner's former chief operating officer, Robert W. Pittman. Once, he and Wenner drove for one hour at the highest speeds the bikes could handle. "It was sunset, and we were hauling buns," he laughs.
A life of privilege, to be sure. But Johnson's formative years also were marked by tragedy. Johnson lost two younger brothers within months of each other when he was in his 20s -- one to a drug overdose and the other in a motorcycle accident. His father, a onetime senior executive within Johnson & Johnson, had died a few years earlier at the age of 50. That death followed a nasty feud between Woody's father and grandfather, family patriarch Robert Wood Johnson II, who ran J&J from 1932 through 1963. Woody has one surviving brother and a sister, who along with his mother have stakes in the Jets. "The situation he grew up in was very difficult," says retired J&J Chairman James E. Burke, who took the helm at the company in 1976 and led J&J through the Tylenol tampering ordeal.
Determined to chart his own course, Johnson never pursued a career at J&J. He worked just one summer there as a teen. Johnson instead made a series of investments in the cable-television business and real estate in Florida, where he grew up, before moving to New York in 1984. There he began managing investments for several family members. In the 1990s, after one of his three daughters was diagnosed with diabetes, he began raising money for the Juvenile Diabetes Research Foundation. And he founded the Alliance for Lupus Research in 1999 when another family member was struck with the disease.
In many ways Johnson is more passionate about biomedical research than he is about football. He once hopped on a plane to visit a wealthy woman in Qatar who had a family member with diabetes. He returned with a $10 million donation for the Juvenile Diabetes Research Foundation.
Regardless of whether the subject is philanthropic or Jets-related, Johnson can get even his competitors to let their guard down. Robert Kraft, owner of the New England Patriots, who opened a stadium for his team in 2002, has allowed Jets executives to take a close look at his operations to help them plan for their own facility. "I wouldn't do that for everyone," Kraft says. "I trust Woody." The question is whether Johnson can convince skeptical New Yorkers to place their faith in him as well.
By Amy Barrett in New York