House of Rock
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The cabbie knows the heartache all too well. The last time a Cleveland team sat atop the professional sports world was 1964, when the Browns beat the Baltimore Colts, 27-0, for the NFL championship. “This town really needs a champion,” he says. “You tell Mr. Gilbert I said this is his year. The Cavaliers are going all the way.”
If Dan Gilbert feels the considerable weight of a long-suffering sports town on his shoulders, he’s not letting on. As majority owner of the Cleveland Cavaliers, who made his fortune selling mortgages over the Internet from the confines of the Motor City, he’s a Detroit booster through and through. Sure, it would be nice to own his hometown Pistons, but with Cleveland banging on the door of an NBA championship, he’s not too conflicted.
He’s also a realist. “Getting an NBA championship is a quest,” Gilbert says. “Last year, we went 8-0 in the first two rounds of the playoffs, and then we played Orlando. There were a few plays here or there that could’ve gone either way, but we lost in six games. Injuries are another factor, and something that’s unpredictable. Luck plays a part, too.”
Not one to wear his emotions on his sleeve, Gilbert likes to blend in and observe the world around him. But when the billionaire owner sees opportunity, he grabs hold and doesn’t let go. Case in point: The Cavaliers’ brass reacted quickly to the team’s major deficiency last year — that it was too soft in the middle — and acquired all-star center Shaquille O’Neal during the offseason.
Will it be enough to reach the summit? Time will tell. But don’t look for Gilbert to dwell too long on the outcome. He’s too busy enhancing a professional sports franchise. Since he acquired the team in 2005, he’s invested $35 million in the Cavaliers’ arena, including more comfortable seats, added sound, and new scoreboards. The venue also hosted 220 events last year, up from 160 events five years ago, according to team president Len Komoroski.
So what’s Gilbert’s secret? “One of the things I always look for are synergies among the various businesses we operate,” he says. “I like to call it the threads of connectivity. If we can promote our other companies as part of something we’re doing, it’s a lot easier than creating something from scratch, or having all of these silos that don’t connect to one another.”
Mindful that professional sports teams are competing for entertainment dollars across multiple spectrums, Gilbert launched a unique in-house ticketing service two years ago that allows Cavs fans to buy, sell, and transfer seats online. Goodbye, StubHub. Hello, Flash Seats. The beauty of the system is that there are no tickets to drop off or pick up. All a fan has to do is flash a credit card or driver’s license to enter the game.
“Even if a game is sold out, a typical NBA franchise only knows 40 percent of the people in an arena because there’s so many tickets changing hands,” says Jeff Kline, president of Cleveland-based Veritix, which oversees Flash Seats. “By operating our own ticketing service, we can get to know 50 to 60 percent of the people, plus there’s a better chance we can fill all the seats even if we’re technically sold out.”
Kline says that up to 7 percent more fans will come to a game because of the team’s in-house ticketing service. So that means added revenue from parking, concessions, and souvenirs. And it’s not just Cleveland fans who are benefiting. Veritix also has partnerships with the Denver Nuggets, Utah Jazz, Houston Rockets, and Colorado Avalanche. “I’d love to get Detroit teams involved,” Kline says.
The Early Years
Born on Detroit’s west side, Gilbert, 48, doesn’t remember a great deal of city life. His family moved to Southfield in the mid-1960s, and he attended Southfield schools. He was active in sports, playing both baseball and pickup basketball. But he often traveled back and forth to Detroit on the weekends — his late father, Sam, was a World Word II Army veteran who bought and operated a handful of bars after leaving the service.
Gilbert recalls playing with the adding machine at a bar and restaurant his father owned near Seven Mile and Woodward. “I’d deliver things from the basement, hang out, have fun,” he recalls. “My grandfather owned a few car washes. I guess you could say we were an entrepreneurial family, but no one used that word back then. Eventually, my dad sold the bars and both he and my mom (Shirley) became Century 21 agents.”
Those early years proved fruitful for Gilbert. He developed a knack for building things and creating value. He would deliver newspapers, sell candy or yo-yos, go door-to-door offering pots and pans — he even got into the pizza business, albeit temporarily.
“We made the pizzas in my mom’s kitchen using Chef Boyardee sauce, and we delivered them on our bicycles,” he says. “But the health department shut us down pretty quickly. We obviously had no business license and really [shouldn’t have been] operating … I think some local pizza outlets complained.
“But I did deliver pizzas for a while, and I believe I hold the world record for the most pizza deliveries in a night — 78 pies on Aug. 12, 1982 (the 4:30 p.m. to 1 a.m. shift). It was a perfect night, great weather, and all the orders were clustered. The biggest problem for a pizza deliverer is getting the money quickly from the customer. I happened to have had a great night.”