Stan Kroenke: The Sports Mogul You Never Heard Of
Billionaire Stan Kroenke has never much enjoyed the limelight. In ninth grade, during a basketball tournament in central Missouri, Kroenke's coach tapped him to shoot a free throw for a technical foul. Normally a deadeye shot, Kroenke was unnerved to be playing in front of so many fans. "My knees were knocking," he recalls. "I missed the free throw and was useless the whole tournament."
Thirty-two years later, in 1993, all eyes were on Kroenke again when he emerged as a lead investor and the public face of St. Louis' ultimately failed bid to win an National Football League expansion franchise. Kroenke was by then a hugely successful shopping-center developer, his career catapulted by his marriage into the Walton family of Wal-Mart Stores (WMT) fame. He thought he could handle the media scrum. He couldn't. Sportswriters panned his somnambulant performance. "I was somewhat naive—not in a business sense, but as far as the whole public side of it," Kroenke recalls.
Kroenke's response? Forget the public side of it. Build an empire privately. Amass an impressive array of assets—retail centers, pro sports teams, sports arenas, a cable TV channel—and weave them together. And speak to the media rarely, if at all, thus earning the sobriquet "Silent Stanley."
Today, sports fans outside Denver may have no clue who he is. But Enos Stanley Kroenke (pronounced KRON-key), 61, is widely admired by fellow moguls as well as by a BusinessWeek panel of experts, who voted him among the most influential people in the business of sports in the magazine's soon-to-be-published Power 100 special report.
While some of Kroenke's teams have reached the pinnacle—football's St. Louis Rams in 2000 and the Colorado Avalanche of the National Hockey League in 2001—a championship in the sport he loves most, basketball, has so far eluded his Denver Nuggets, perennial underachievers who have lost in the first round of the National Basketball Assn. playoffs five years running. This eats at Kroenke, whose competitive fire belies his shyness. "I always had a dream to someday own an NBA team," he says. "Uncle Sam always said to find something you like to do and try to be really good at it."
Uncle Sam would be Sam Walton, who founded Wal-Mart in 1962 with younger brother Bud, whose daughter Ann met Stan on a Colorado ski trip in 1971. Sam and Bud took a special liking to their future son-in-law and invited Kroenke along on bird-hunting trips during which the Walton brothers would visit potential Wal-Mart sites. Kroenke watched the master merchants at work and soon went into the business of building shopping centers. Today, Kroenke's THF Realty is one of the top 20 retail developers in the nation.
Although his first stab in sports didn't work out in St. Louis, he succeeded the second time by quietly snatching a stake in the Rams in 1995. But his signature deal was the $400 million purchase of Denver's Pepsi Center, plus the Nuggets and Avalanche in 2000. (The acquisition also created some family tension, as an earlier bid from Kroenke's brother-in-law, Bill Laurie, fizzled.)
Since then, Kroenke has purchased the famed Napa Valley winery Screaming Eagle, gobbled up cattle ranches (including one previously owned by CEO-turned-convict Bernie Ebbers), acquired a 12% stake in British soccer club Arsenal, and launched his own regional sports network, Altitude. Altitude was a logical step, but a risky one. Colorado already had a regional sports network, but Kroenke saw advantages to gaining the trifecta of teams, arenas, and the primary conduit to at-home fans. It's the classic case of eliminating the middleman.
WINNER TAKE ALL
But successful sports networks need year-round programming, and without baseball, Altitude has a huge hole in its lineup for much of the summer. Kroenke's stake in Arsenal, meanwhile, has less risk and more upside. There, Kroenke is following a path blazed by American sports moguls such as Malcolm Glazer (Manchester United) and Randy Lerner (Aston Villa). The economic rationale behind English Premier League soccer is that it's much more of a winner-take-all model than, say, the NFL, which splits the revenue pot equally.
What's next for Kroenke? He reportedly mulled a stake in a new professional cricket league emerging in India. That didn't pan out, but given the amount of time he's spending in Asia and Europe, it's likely that his next big investment will take place far from the Mile High City. "Economics is about creating win-win situations," Kroenke says. "But in sports, someone loses." Win or lose, Kroenke's escalating clout is making it tougher and tougher for him to dodge the public eye.