CCLB MAIN 10-02-06 Cavs 1 CCLB
9/28/06
11:34 AM
Page 1
MARC GOLUB
Danny Ferry, in his second year as the Cavaliers’ general manager, is excited about the next steps for the team, including building upon last year’s
performance in the postseason, when the Cavs beat the Washington Wizards and took the Detroit Pistons to the brink of elimination.
Finding his footing
After a whirlwind first year on the job, Cavs general manager
Danny Ferry is focused on plotting the future of the team.
Eventually, he says, that future holds an NBA championship.
THE DANNY FERRY FILE
FRONT-OFFICE EXPERIENCE:
2005-present: General
manager, Cleveland Cavaliers
2003-2005: Director of basketball operations, San Antonio Spurs
(2004-2005 NBA champions)
PLAYING EXPERIENCE:
2000-2003: San Antonio
Spurs (2002-03 NBA champions)
1990-2000: Cleveland Cavaliers (all-time leader, games played)
COLLEGE EXPERIENCE:
1985-1989: Duke University
(1989 Naismith Award winner, top
player in the nation; first-team AllAmerican, 1987-1988, 19881989)
PERSONAL:
He and wife, Tiffany, have four
daughters: Hannah, Grace, Sophia
and Lucy
Story by JOHN BOOTH
A
fter one year in the Cavs front
office, former player Danny Ferry
seems more relaxed — and more
excited.
Can you blame him? The Cleveland
Cavaliers’ general manager and 13-year NBA
veteran is coming off a return to the playoffs,
and an offseason that included the highestprofile contract talks in the league.
Ferry is clearly looking forward to his
second year on the job, with good reason.
After an eight-year playoff drought, the
Cavaliers not only reached last year’s postseason, but clocked the Washington Wizards
in the opening round and pushed the Detroit
Pistons to seven games in the Eastern
Conference semifinals.
Ferry called attaining the playoff berth
“kind of a burden shed,” but said it also
jbooth@crain.com
raised the bar on both internal and external
expectations for this year.
“We should have more confidence in general
as a team,” he said. “I think we should be
hungrier, because we’ve had a taste of it (the
postseason). And teams are going to focus on
us more. We’re not going to be able to fly under
the radar.”
That much was clear this summer, when
the Cavaliers’ contract talks had fans biting
their nails until LeBron James and Drew
Gooden inked new deals.
“We walked into the summer saying we had
a good year,” he said. “We started to build
momentum, and said, ‘Let’s continue to build
from the inside out.’ Obviously, LeBron is a key
ingredient for Northeast Ohio and our team.
We also believe Drew, for our team, played an
See FERRY Page C-7
CCLB MAIN 10-02-06 Cavs 2 CCLB
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Page 1
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t’s tough not to be excited
about how the Cavaliers spent
their summer vacation: The
team re-signed LeBron James
and Drew Gooden and in many
NBA analysts’ eyes, nabbed two
great draft picks in Shannon Brown
and Daniel Gibson.
Team owner Dan Gilbert shares
that excitement. He’s equally enthusiastic, though, about changes to a
facet of the team that most people
won’t ever see: the $4.2 million renovation of the Cavaliers’ front office
space at Quicken Loans Arena.
It’s just one more step toward his
efforts at building a “championship
culture” that extends beyond the
basketball court.
“This is a fun entertainment business, and as far as I’m concerned,
when people walk into the front
offices, it shouldn’t be a law firm,” he
said in a telephone interview. “We’ve
got a great product and exciting stuff
happening, and that’s how the people’s environment should be that
they work in every day, so they can
project that to our fans.”
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When the roughly 230 Cavs office
employees move back into their
spaces on the fifth and sixth floors of
The Q (they spent their summer
working out of Quicken Loans’ Cleveland branch offices), they’ll find what
Gilbert calls a “non-office office.”
Work spaces are separated by low
walls, so there’s little division in the
expansive space. Cavaliers’ colors
and photos and logos are everywhere, and regulation basketball
hoops are mounted throughout.
Parts of the office have hardwood
court-style floors, including the
conference room, which is shaped
like the key of a basketball court.
Through the ceiling, a giant basketball seems to descend.
The makeover, designed by Vocon
Design Inc., a Cleveland architectural
firm, is supposed to be more than
fun, though. Changes in the layout
are meant to put work groups closer
Several front-office conference rooms were part of the renovation.
to each other, for instance, and for
the first time, Cavaliers general
manager Danny Ferry and head
coach Mike Brown won’t have offices
on different floors at opposite ends of
the complex.
“All of these little things matter,
and what appear to be little things
to people are huge things,” Gilbert
said. “It would be like Spock and
Kirk trying to run the Enterprise …
from different parts of the Enterprise. It just doesn’t work that way.”
As far as Ferry and Brown being
next door to one another, Gilbert
said, “Being able to see each other
and communicate and build their
relationship, with their staffs talking to each other, can only result in
better things.”
Part of the bigger picture
Gilbert says his idea of a championship culture is built on the same
philosophies with which he runs
Quicken Loans.
He refers often to a Quicken
employee handbook called “Isms in
Action,” which espouses thoughts on
effectively running a business. Of
paramount importance, he says, are
the ideas of reducing bureaucracy
and increasing employee creativity.
One of those oft-quoted “isms”
— “Money follows, it does not lead”
— comes into play when Gilbert
talks about the more than $20
million he has put into renovating
The Q over the last two years.
“We don’t sit here and make an
ROI (return on investment) decision
on every investment we make or
every dollar we spend,” Gilbert said.
“We think that’s very short-sighted.”
As an example, he points to last
year’s replacement of the seats in
the arena, and the switch from
bright blue to Cavalier wine.
“Is that really going to make one
single person, because that seat’s a
different color, come and buy a ticket
to a game where they otherwise
wouldn’t have? The answer’s ‘no’ if
you isolate it.” But, he goes on to say,
that change and the money behind it
played a role in the team’s television
talks with Fox Sports Net Ohio.
Fox officials, he recalled, felt
secure in signing a long-term deal
with the team because they’d seen
how much cash Gilbert and his
partners had poured into the arena.
Gilbert says there’s no reason
why the approach he uses with
Quicken Loans shouldn’t carry over
into the Cavaliers operations.
“It’s what I call ‘carrying the
thread’ through the organization,”
he said. “I just personally believe
that that kind of culture, a championship culture, is nearly the same
thing, whether it’s an NBA team or
a great business or a nonprofit or
whatever.”
Q
CCLB MAIN 10-02-06 Cavs 3 CCLB
9/28/06
11:33 AM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
Brown: Experience in playoffs,
continuity will sustain success
Second-year coach optimistic Cavs can continue on road to title
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LeBron James walks off the court at the Palace of Auburn Hills May 21 after the
Cavaliers were eliminated by the Pistons in Game 7 of the Eastern Conference
semifinals. James’ supporting cast remained intact with the retention of Drew
Gooden, and the Cavaliers are expected to challenge for the Eastern Conference title in 2006-07.
WHO’S ON TAP?
A look at the intriguing
matchups on the Cavaliers’
2006-07 schedule:
Q Nov. 1, Washington: Home
opener and rematch of exciting
opening round of the 2006 playoffs
Q Nov. 9, Chicago: Bulls in the
offseason made major upgrades,
including Ben Wallace; they’re a
trendy pick to win the East
Q Dec. 21, Detroit: Cavs took the
Pistons to the brink in Eastern
semis; an early opportunity to
remind Detroit of its inability to
intimidate the Cavs last spring
Q Jan. 28, Phoenix: Suns are one
of the most exciting teams in the
league; Cavs rallied from a 17-point
deficit to beat them last year at
The Q
Q Feb. 1, at Miami: First meeting
of the season between Dwyane
Wade and LeBron James
Q Feb. 9, Miami: Cavs fans get to
see Wade in person
Q Feb. 11, L.A. Lakers: Kobe
Bryant’s only appearance in town;
many remember the now-No. 24’s
38-point outburst last year
Q March 17, Utah: If healthy,
Carlos Boozer’s first game in
Cleveland since spurning Jim
Paxson two years ago
— Joel Hammond
is versatile, with the ability to penetrate against bigger guards and
shoot over smaller ones.
“I think it was a steal,” the coach
said. “I don’t know the draft
extremely well, but the scouting
staff did a heck of a job recognizing
the talents that Shannon has, and
the stuff he could bring to this
team.”
Depth, too, marks the front
court, with the addition of Scot
Pollard to go with James, Gooden,
Ilgauskas, Donyell Marshall and
Anderson Varejao. Pollard, entering
his 10th year, has been a part of
successful Kings and Pacers teams,
and is known as a player who isn’t
afraid to dive on the floor and do
the so-called “dirty work.” He’s
averaged 4.7 points and five
rebounds per game for his career.
“I like the different things the big
guys bring,” he said. “Donyell is our
stretch big, and in this day and age
you need one; Andy brings a lot of
energy; Drew has an ability to be
very good at a lot of things; and Z
is unique in what he can do
offensively. We went out and got
Scot because we feel like he has
basketball left in him and can help
us.”
The Cavs must also contend with
a rapidly improving Eastern
Conference and a Central Division
from which all five teams went to
the playoffs a year ago.
In the Central, the Bulls took a
major step forward, signing Ben
Wallace from the Pistons, trading
for veteran forward P.J. Brown of
the Hornets and drafting versatile
Tyrus Thomas from LSU.
In response, the Pistons signed
Flip Murray away from the Cavs
and center Nazr Mohammed from
the Spurs.
The Bucks somehow convinced
the Raptors to trade them power
forward Charlie Villanueva and
signed Ruben Patterson away from
the Nuggets.
The Pacers added forward Al
Harrington from Atlanta and swingman Marquis Daniels from the
Mavericks.
Oh, and the world champion
Heat? They’ve got a couple decent
players in Finals MVP Dwyane
Wade and center Shaquille O’Neal.
“That (conference movement)
should make us want to work that
much harder, just so we can
compete with all the other teams in
the East,” Brown said. “It’s a tough
league, and we’re playing in the
toughest division in the league.
We’re not going to have any nights
off.”
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s long as LeBron James
dresses in the home locker
room at Quicken Loans
Arena — which will be at
least until the summer of 2010 —
the Cavaliers will be a contender for
the NBA championship.
The retention of power forward
Drew Gooden and three additions
to James’ supporting cast have
coach Mike Brown thinking big for
the 2006-2007 season, which begins
with a home preseason game next
Tuesday night, Oct. 10, against
Boston.
Brown, entering his second year
as the Cavs’ coach, says the team’s
continuity and its postseason
success from a year ago — when
the Cavs beat Washington in a
thrilling six-game series and took
Detroit to the brink of elimination
— will help the team get to that
elusive “next level.”
“Any time you can have carryover, it’s a good thing, especially
when you had success,” Brown
said. “Now we have added pressure
on us that we haven’t had a chance
to experience yet. Last year, we
were able to sneak up on some
people. … This year it’s going to be
a little different. People are going to
mark our game as a big game, and
they’re going to come after us
because they know we’re capable of
winning ball games.”
James signed a shorter-thananticipated three-year contract
extension in the off-season, which,
coupled with the team option for
the 2006-07 season from his rookie
contract, keeps him here through
the 2009-2010 season.
James is a known commodity, as
are Gooden, who signed a threeyear, $23 million contract extension; shooting guard Larry Hughes,
who returned late in the season
from multiple surgeries on a broken
finger to contribute in the playoffs;
and veteran center Zydrunas
Ilgauskas.
There are questions, however,
with the remainder of the roster.
The draft-day additions of guards
Shannon Brown (Michigan State)
and Daniel Gibson (Texas), along
with the free-agent signing of
veteran combo guard David
Wesley, give the Cavs a glut of
guards on the roster.
That trio joins veterans Eric
Snow, Damon Jones, Sasha
Pavlovic, Luke Jackson, Ira Newble
and Eddie Basden, who was
acquired from the Bulls in a trade
for Martynas Andriuskevicius, in
competing for minutes.
Brown said the depth in the
backcourt will only help the team.
“They all bring something
different to the table, and they’re
looking forward to the challenge,”
he said. “Nothing’s guaranteed —
except for LeBron — so it’s going to
be a dogfight to find out who’s
going to play.”
The coach is especially excited
about the addition of Shannon
Brown, picked 25th overall in June’s
draft. Listed at 6-foot-4, the player
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CCLB MAIN 10-02-06 Cavs 4 CCLB
C-4
9/28/06
3:36 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
Clinic seizes opportunity with naming
rights of Cavs’ new practice facility
Partnership with Cavs
means more exposure
for Cleveland Clinic
By SHANNON MORTLAND
smortland@crain.com
O
ne word holds even more
weight in professional
basketball than LeBron
James: Exposure.
It’s the name of the game for
advertisers who pay big bucks to
put their names in the arenas, on
special promotions and even on the
venues themselves. For the Cleveland Clinic, the planned construction of a $20 million practice site for
the Cleveland Cavaliers represented
a golden opportunity for maximum
global exposure.
To be named Cleveland Clinic
Courts, the 50,000-square-foot site in
Independence will have two basketball courts, therapy and massage
rooms for players and even a media
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PHOTO PROVIDED
Cleveland Clinic Courts, seen in this sketch, will be the Cavaliers’ new practice
facility in Independence.
studio where journalists can interview Cavaliers players and officials.
Terms of the naming rights deal were
not disclosed.
“The naming of this facility gives
us tremendous exposure in all three
of our audiences — local, national
and international,” said James
Blazar, chief marketing and
communications officer for the
Clinic. “As we look at all the ways to
get our message out, this is actually
a very efficient way.”
Indeed, Len Komoroski,
president of the Cavaliers and
Quicken Loans Arena, said all
media interviews other than those
at the basketball games will be held
at Cleveland Clinic Courts, so there
is an unlimited amount of times the
Clinic’s name can be used.
“The team will function at Cleveland Clinic Courts,” Mr. Komoroski
it’s bound to increase the number of
foreign patients who seek health
care at the Clinic, Mr. Blazar said. He
also expects the name to better
resonate in the region, where the
Cavaliers market to 15 million
people in Ohio, western Pennsylvania, northern West Virginia and
western New York.
When people from those areas
come to a Cavaliers game, Mr.
Blazar said, they’ll realize Cleveland
is easy to reach, which the Clinic
hopes they’ll remember when they
need health care.
But there’s more to it than just a
name. The Clinic’s doctors treat the
team’s players, and they will help
architects and designers create the
new building’s therapy and
massage rooms, Mr. Blazar said.
The Clinic’s electronic medical
records system also will be installed
“The naming of this facility gives us tremendous
exposure in all three of our audiences — local, national
and international.”
– James Blazar
chief marketing, communications officer, Cleveland Clinic
said, noting that the practice site is
the equivalent of an office for the
players.
A logo-laden banner also will hang
behind the players and team officials
during TV interviews, again spotlighting the Cavaliers and Clinic
names, Mr. Komoroski said. The
Cavaliers will be on national television 33 times in the coming basketball season, which is the maximum
number allowed by the National
Basketball Association, he said.
With the Cavaliers expected to
make the playoffs again this year,
and some pundits predicting they’ll
fare better than they did last
season, the media attention around
the world and in Cleveland only will
increase, Mr. Komoroski said.
Overseas appeal
The number of media representatives who came to Cleveland to
cover the playoffs last spring more
than doubled from the first to the
second series, said Steve Meyer,
director of corporate sales for the
Cavaliers. To top it off, NBA games
are shown in some form in 230
countries — with over one billion
Chinese people tuning in last year,
Mr. Komoroski said.
With that many people watching,
at Cleveland Clinic Courts so doctors
can pull up players’ records wherever
they’re treating them. In addition, the
Clinic’s new sports medicine facility,
which will provide a full range of
sports medicine services, will be less
than two miles away when it is
completed, he said.
Mr. Komoroski said partnering
with a hospital system such as the
Cleveland Clinic gives the practice
site one more selling point in
recruiting players. With salary
caps the same for every NBA
team, intangible factors such as
practice courts and medical and
rehabilitative care can have a major influence on which team a
player chooses to work for, Mr.
Komoroski said.
The Cavs will go from an aging
practice court at The Q — which
often isn’t available due to the
other 180 events held each year at
the arena — to a state-of-the-art
building constructed only for the
team’s use. In a world where all
NBA teams are trying to best each
other in their offerings to players,
the new site is a must, he said.
“If we don’t have a facility
to match (others), we’re at a
competitive disadvantage,” Mr.
Komoroski said.
Q
CCLB MAIN 10-02-06 Cavs 5 CCLB
9/28/06
11:30 AM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
C-5
Cavs’ momentum extends to local businesses
Bars, restaurants in Gateway neighborhood
feel a push from the team’s 2005-06 success
By CHRISSY KADLECK
clbfreelancer@crain.com
A
t the same time the owner
of The Clevelander Bar &
Grill was considering the
lease option for his twostory Huron Road establishment
this summer, the Cavaliers’ shining
star aligned himself with the team
for the next four years.
“The option actually happens to
coincide with LeBron’s contract
extension, so it made exercising
that option a no-brainer,” said P.J.
McCarthy, who owns the restaurant
that sits only two blocks from
Quicken Loans Arena. “The Cavs
are kind of what gets us through the
winter.”
Similar to McCarthy’s experience
at The Clevelander, other businesses
near The Q say they too have scored
big since the start of LeBron James’
reign on the Cavs’ court.
“This is a mixed-used neighborhood with business and residential,
but when the Cavs and Indians do
well that’s just an added-on
bonus,” said Tom Yablonsky,
executive director of Historic
Gateway Neighborhood Corp., a
nonprofit local development corporation.
“Sports success only bodes well
for the neighborhood. The Cavaliers’
recent success and anticipated
future success is part of that same
phenomenon we lived through
during the Cleveland Indians playoff
era,” he said.
Slam-dunk for business
Ken Kleinhenz, general manager
of Winking Lizard Tavern on Huron
Road, said his business has seen an
impressive increase in customers
since the NBA sensation starting
dunking baskets for the Cavs.
“When the Cavs come into town
we do about two times our normal
business on a weekday, and on the
weekend it’s almost the same thing,
it almost doubles our sales,” said
Kleinhenz about the restaurant that
has two bars and can pack in about
350 people.
“It’s not only built our days when
the Cavs are at home, but people
still like to come in on any Cavs
game, even if it’s just on TV,” he
said.
“A lot of the businessmen and
businesswomen who come into
town for conventions … come
down here to watch the games.
“If say the games start at 7 p.m.,
by 5 p.m. it’s too late to get in here.
You’re going to be on an hour-plus
wait. After the games it is sometimes even crazier — win or lose, it
doesn’t seem to matter that much,”
he said.
Steve Zamborsky, managing
partner and founder of Fat Fish Blue,
said the increase in business has
been “visible” and “measurable.”
“LeBron has had a tremendous
positive impact, no question about
that,” he said.
Zamborsky said one of the
reasons that the Louisiana-Creole
restaurant captures the Cavs crowd
is its location at Prospect and
Ontario avenues.
“What’s really huge for us is that
we are on the ground floor on a
parking garage and by way of our
lease arrangement many years ago
we have $2 parking 24-7 here,”
Zamborsky said.
“After the game, instead of being
stuck in traffic or being stuck on a
ramp waiting, waiting and waiting,
they come over to the Fat Fish Blue,
have a couple brews, celebrate, if
they didn’t have dinner, they have a
late-night dinner with us and they
pull out of parking and there is no
waiting around,” he said.
‘The crowds are coming back’
At Alesci’s Downtown on Huron
Road, it’s sometimes hard for regulars to find a table on game nights.
Alesci’s is primarily a lunch business, with night hours scheduled
around Gateway events, concerts
and Indians and Cavs games.
“Since LeBron and Mr. Gilbert
being involved with The Q, business is up greatly,” said Jeff Burson,
Alesci’s manager. “It’s a sold-out
crowd now, and it has definitely
increased the traffic flow down
here, which is nice. The crowds are
coming back.”
The Clevelander’s McCarthy is
hoping the Cavs’ momentum —
and the business that comes with it
— continues into the 2006-2007
season.
“The playoffs were really where
we saw (the business skyrocket),
particularly the Detroit series when
Cleveland was caught with the
playoff craze,” McCarthy said.
“We’re a playoff starved city —
we’re really so into it. We have kind
of always been waiting for the big
game, where even if you don’t have
a ticket, everyone comes downtown
to watch that game. Game 6 of the
Detroit series was where we saw
that.
“We had a packed bar and had
they won we couldn’t have fit
another person in this bar, it was
that full.”
Going head to head with the
Detroit Pistons legitimized the Cavs
as a real contender for the championship, not just to make the playoffs, he said.
“We’re hoping that the craze
kind of continues right out of the
box,” McCarthy said. “And that
people are going to be just as crazy
as they left off.”
Q
CCLB MAIN 10-02-06 Cavs 6 CCLB
C-6
9/28/06
11:32 AM
Page 1
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OCTOBER 2-8, 2006
Additions to Q’s floor level offer
upscale look into the suite life
By SCOTT SUTTELL
ssuttell@crain.com
a private, meet-theplayers event.
“The allure of this is
eil Kruschke
the exclusivity of it,”
Jr.’s business is
Estis said. “There are
plastics, but
only five companies in
the lifeblood of
Cleveland that will be
his company, Stopol Inc.
able to entertain at this
of Solon, is
level. You get the best of
relationships.
both worlds — high-end
That’s why Stopol,
suites and floor seats,
which arranges the
which are the best seats
acquisition and sale of
in the house.”
manufacturing equipIn part to accommoment, parts, businesses,
date buyers of Platinum
product lines and licenses
Suites, the Cavaliers
in the plastics industry, is
have added 244 new
in on the ground floor —
PHOTO PROVIDED floor seats at The Q for
literally — of the CleveThe Platinum Suites at Quicken Loans Arena offer a swanky this season.
land Cavaliers’ entry into alternative for the Cavs’ experience — at $180,000 per season,
ultrahigh-level corporate the five suites offer perks including one spot in the players’ park- Work in progress
entertaining: the PlatEstis said three of the
ing lot and access to a private, meet-the-players event.
inum Suites at Quicken
five Platinum Suites
Loans Arena.
have been sold, and he expects the
As the name implies, the five
other two to be sold before the start
“We’re bringing in clients
Platinum Suites aren’t cheap. Nor
of the season Nov. 1. Other than
from
the
West
Coast
who
do they look it, with 650 square feet
Stopol, he would not identify the
are going to be ecstatic to
of space, high-end décor, plasma
other two companies that have
see LeBron up close.”
TVs and all the trimmings.
bought the Platinum Suites.
A Platinum Suite costs $180,000
“The biggest challenge has been
– Neil Kruschke Jr.,
per season and requires a five-year
Stopol Inc. that we haven’t had a finished suite
commitment. Suiteholders also
to show,” Estis said during a Sept.
must buy eight to 12 floor seats for
Kruschke, whose company last
20 interview in one of the suites,
each game, at a cost ranging from
year “did very well” in sharing a
which was under construction and
$100,000 to about $300,000,
traditional suite at the arena, said
will be done by Oct. 10, the date of
depending on the location of the
he committed last spring to buying
a Cavaliers exhibition game at
seats, said Chad Estis, executive
one of the swanky Platinum Suites.
The Q.
vice president and chief marketing
“It’s a unique way of entertaining
With the addition of the five
officer for the Cavaliers. Traditional
clients and our vendors,” Kruschke
Platinum Suites, Quicken Loans
suites at The Q go for $150,000 to
said. “The paybacks that we’ll get
Arena has 93 suites, about one$230,000 per year, but that includes
will far exceed the costs. You can’t
third more than most National
12 tickets for all events in the arena.
imagine how many deals we get
Basketball Association arenas, Estis
done before the game, after the
said. He expects all or most of them
game, even during halftime.”
to be sold for the season, even
The combination of high-level
though the Cavaliers have competiamenities and a playoff-ready team
tion from two other professional
makes for customers who are eager
sports franchises and operate in a
to spend time at The Q in the
region that hasn’t fully experienced
company of Stopol executives.
an economic rebound.
“We’re bringing in clients from
“For our market size, it’s a highly
the West Coast who are going to be
competitive market,” Estis said.
ecstatic to see LeBron up close,”
“But we feel we have a product that
Kruschke said. His company
corporate clients like and see as a
THANK YOU FOR A
employs an administrative assistant
way to enhance their business.”
SUCCESSFUL FIRST YEAR.
whose job in large part involves
Elite company
In celebration of our 1-year anniversary,
handling entertainment arrangewe have a special offer for your next
ments for Stopol customers.
Tad Carper, senior vice president
event. Book your event by 12/31/06
of communications for the CavaIn the money
and hold it by 12/31/07 and you will
liers, said only four other NBA
have a chance to win a Marriott Revive
The Cavaliers decided to build
teams offer suites comparable to
Bedding Package and up to 125,000
the Platinum Suites to address the
the Platinum Suites at The Q: the
Marriott Rewards Bonus points.
needs of companies such as Stopol
Atlanta Hawks, Dallas Mavericks,
Going above and beyond.
that entertain frequently and want
Houston Rockets and San Antonio
IT’S THE MARRIOTT WAY.
to do it in a plush setting.
Spurs. (Folks in Texas apparently
“We really didn’t have an option
like to do everything big.)
for people with a lot of money to
Carper said The Q, which opened
spend,” Estis said.
in 1994, is the oldest NBA building
The team has gone to great
that’s home to such high-end suites.
lengths to make sure it is corporate
Estis said to make the Platinum
money well-spent.
Suites more attractive to potential
What’s formally known as The
buyers, the team also offers a
Platinum Lounge & Suites, built at a
$30,000 food and beverage credit
cost of $2.5 million, is on the ground
and a $15,000 credit for concert
floor near the area where Cavaliers
tickets at The Q.
players enter the court. Suiteholders
The Cavaliers will assign veteran
entering the area will walk through
employees at The Q to work in the
an elegant bar to their suites, which
Platinum Suites area, Estis said.
feature high ceilings, private
“The mantra is going to be that
Cleveland Marriott East
restrooms and a special catering
service will be at an exceptionally
I-271 Exit 28B/Harvard Rd.
menu that was still under develophigh level,” he said.
ment in the last week of September.
Stopol’s Kruschke said he already
Warrensville Heights, OH
And there’s no shortage of cool
gets that sense in his dealings with
perks.
the team.
Call one of our Sales Professionals
For instance, suiteholders get
“I can’t say enough about the
for all the details.
one reserved parking space under
Cavs organization,” he said. “They
216-378-9191 or visit
the arena in a lot with the players’
kind of set themselves apart in the
www.clevelandmarriotteast.com
cars. They also are invited to attend
level of service they offer.”
Q
N
SM
CCLB MAIN 10-02-06 Cavs 7 CCLB
9/28/06
2:54 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
C-7
2006-2007 CAVALIERS ROSTER
PLAYER
Eddie Basden
Shannon Brown
Daniel Gibson
Drew Gooden
Stephen Graham
Larry Hughes
Zydrunas Ilgauskas
Luke Jackson
LeBron James
Damon Jones
Donyell Marshall
Ira Newble
Aleksandar Pavlovic
Scot Pollard
Eric Snow
Ejike Ugboaja**
Anderson Varejao
David Wesley
POS
G
G
G
F
G
G
C
F-G
F
G
F
F-G
F
C-F
G
F
F
G
HT
6-5
6-4
6-2
6-10
6-6
6-5
7-3
6-7
6-8
6-3
6-9
6-7
6-7
6-11
6-3
6-9
6-10
6-1
WT
215
205
190
242
215
184
260
215
240
190
230
220
210
265
205
225
240
203
DOB
2/15/1983
11/29/1985
2/27/1986
9/24/1981
6/11/1982
1/23/1979
6/05/1975
11/06/1981
12/30/1984
8/25/1976
5/18/1973
01/20/1975
11/15/1983
2/12/1975
4/24/1973
5/28/1985
9/28/1982
11/14/1970
FROM
YRS
Charlotte
1
Michigan State
R
Texas
R
Kansas
4
Oklahoma State
1
St. Louis
8
Lithuania
8
Oregon
2
St. Vincent-St. Mary HS 3
Houston
8
Connecticut
12
Miami (Ohio)
6
Serbia & Montenegro 3
Kansas
9
Michigan State
11
Nigeria
R
Brazil
2
Baylor
13
SOURCE: CAVS.COM; ROSTER CURRENT AS OF SEPT. 28, 2006; ** DENOTES UNSIGNED DRAFT PICK
Ferry: Offseason gives
GM room for optimism
continued from PAGE C-1
important role, and we look
forward to having the continuity of
having him back.”
A year of firsts
Last year also marked the Cavs’
first year under head coach Mike
Brown, whom Ferry has said is one
of the major reasons he returned to
Cleveland. Brown was an assistant
coach in San Antonio during Ferry’s
playing years there.
Make it Last.
inch of information and seeing the
guys we needed to be seeing, and I
just felt we were very organized and
prepared come draft time.”
The team’s key picks were Michigan State guard Shannon Brown in
the first round and Texas point
guard Daniel Gibson in the second.
“Shannon has the opportunity to
really grow into a very solid NBA
player,” Ferry said. “We’re all very
excited about him. And with Daniel
Gibson, we felt that was an unbe-
“I believe we’re going to (win the NBA championship). I
don’t know if it’s this year or next year ... but I believe
we’re going to.”
– Danny Ferry
Cavaliers general manager
lievable value, getting him in the
second round as we did.
“You have to be kind of unemotional, especially with the draft.
You’ve got to make the right
decision for your team more than
anything else. I felt good because I
knew all the hard work that went
in.”
Uncharted territory
Now that he’s no longer the rookie
GM, Ferry says he’s much more
comfortable not only with what his
role is, but with the entire Cavalier
front office. It’s just one more reason
he’s excited about this season.
“We’ve started to build a real
teamwork mentality that was
impossible to have last year at this
time,” he said.
For all the team learned last
year, though, about itself and its
philosophy and its coach, there’s
one thing the Cavaliers haven’t
learned.
“I still don’t think we know the
answer to how good we can be,”
Ferry said. Later in the conversation, he nonchalantly says, “When
we win a championship, it’s going
to be an incredible story. The
passion this city will have will just
explode.”
Did he just say “When?” Not “If?”
He affirms it with a nod.
“I believe we’re going to,” he
said. “I don’t know if it’s this year or
next year, and I’m not making any
predictions now, but I believe we’re
going to.”
Q
© 2006 Mellon Financial Corporation
“He’s a talented young coach
who has a chance to be one of the
better coaches in the league,” Ferry
said. “Mike’s ability to communicate with the guys, his passion for
being a coach and being a part of
the team, and his passion toward
the defensive end of the court are a
lot of the reasons why (Cavs owner)
Dan Gilbert hired him. That was
only reaffirmed last year.”
Ferry said the biggest hurdle he
faced in his first year was time,
because of “all the things that we
had to answer.” He joined the team
in June, prior to the start of the
2005-2006 season.
“From travel to scouting to the
draft,” he said. “We had so many
question marks as a team, and I had
question marks. As far as our team,
we (Mike Brown and I) were outsiders looking in.
“If he and I did not have a high
level of trust and shared philosophies
about the basketball team, about an
organization, it would really have
been almost an impossible challenge.”
The Cavaliers’ playoff run made
time an issue this offseason, too. No
sooner had the Pistons series ended
than the team had to prep for the
draft.
Still, Ferry said, they were ready.
“From really the previous August
until the draft, we rebuilt our scouting process and group, and I was
able to watch it unfold,” he said. “It
was exciting, because I really felt we
were doing our job of finding every
Across market cycles. Over generations. Beyond expectations.
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Please contact Charles E. Long, Jr., Senior Director, at 216-464-4244. mellonprivatewealth.com
CCLB MAIN 10-02-06 Cavs 8 CCLB
C-8
9/28/06
3:47 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
NBA’s salary cap provides level playing field for Cavs, others
Structure prevents major market teams
from dominating free agency, like MLB
By JOEL HAMMOND
jmhammond@crain.com
I
f he were an outfield compadre
of Grady Sizemore, Cavaliers
superstar LeBron James could
likely make triple or quadruple
what he’ll make this season in his
annual salary.
Luckily for the Cavs, they play at
The Q, not next door at Jacobs Field.
James signed for the maximum
amount he could under the NBA’s
collective bargaining agreement
this offseason, a three-year deal
worth about $60 million.
Without the NBA’s salary cap,
James would have been free next
summer — at the end of his rookie
contract — to accept a deal from
the highest bidder. Major market
teams, such as the New York Knicks
and Los Angeles Lakers, would have
fallen over themselves in wooing
James to their cities.
The limitations placed on player
salaries by the NBA’s cap are
designed to level the league’s
playing field and punish teams who
outspend the cap with a luxury tax.
“With our collective bargaining
agreement, the salary cap is a situation where it’s a win-win for the
players but also for the teams,” said
Cavs general manager Danny Ferry.
“Our players do a great job. They’re
paid very well, but it’s done within
the framework of a system that
allows teams to be in a position to
have sustained success, oftentimes
regardless of the market size.”
The current collective bargaining
agreement, effective through the
2010-2011 season, is an extension
of the 1999 agreement. That deal
followed a league lockout of players
prior to the 1998-1999 season.
By taking a defined percentage of
the league’s projected “basketballrelated income” — a figure that
includes, as the title suggests, anything basketball related, from ticket
receipts to concessions and merchandise sales to advertising — and
dividing that figure by the number of
teams, the league arrives at its cap.
For the remainder of the current
collective bargaining agreement, that
defined figure is 51% of basketballrelated income, and the cap is set at
$53.135 million for this season.
This means that no team should
spend more than that amount on all
player salaries. However, the NBA
uses a “soft” cap, meaning there are
exceptions that can be used to add
salary even if a team is over the cap of
$53.135 million. This is different than
the NFL’s “hard cap,” for which the
luxury tax begins at the first dollar
over the cap number.
The NBA’s exceptions include,
among others, the “Larry Bird
Exception,” which allows teams to
exceed the cap to sign their own
free agents; and a “mid-level”
exception, allowing teams to sign
free agents for the league’s average
salary — $5.215 million in 2006-07.
The latter exception can only be
used every other year.
Meanwhile, the salary cap has
increased from $24.4 million just 10
years ago, fueled in part by increased
earnings from TV deals and global
exposure.
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The $53.135 million cap for this
season is up from $49.5 million a year
ago. This season’s increase is a result
of higher-than-expected basketballrelated income; as part of the collective bargaining agreement, if the
league takes in more money than it
projects, it must in turn allow for the
players to be paid more.
James certainly has added to
Cleveland’s contribution of the
league’s basketball-related income:
He had the third-best-selling jersey in
the 2005-2006 season, and the
Cavaliers’ attendance has increased
markedly from the year prior to his
arrival. According to league attendance figures on the Cavaliers’ web
site, the team was last in 2002-03,
when James was a senior in high
school, averaging just 11,496 fans per
game. The next year, they improved
to 18,287, followed by 19,128 in 200405 and 19,326 this past season.
While the cap is based on 51% of
projected basketball-related income,
the luxury tax threshold — the point
at which teams begin to pay a penalty
— is also based on a defined figure,
61% of the league’s basketball-related
income. Teams over $65.42 million
will pay a dollar-for-dollar penalty,
which in turn is paid back to non-taxpaying teams.
For example: According to a July
ESPN.com report, after the cap was
officially set for the upcoming season, the Knicks are approximately
$44 million over the cap. Any other
team’s penalty will be combined with
the Knicks’ and paid out to the other
27 teams in the league. The teams
receiving tax payments can use their
share for anything they want.
Another of the collective bargaining agreement’s main functions is
setting parameters for maximum and
minimum salaries and rookie contracts, based on years of service in the
league, with rookie contracts based
on where in the draft a player is
selected. The Cavs’ Shannon Brown,
as the 25th pick in the draft, signed a
standard three-year rookie contract
with a team option for the fourth
year, a deal exactly like the one
James will still be operating under
this season. The only difference:
Brown’s deal is worth $4.1 million,
whereas James, as the first pick in
2003, signed a contract worth
approximately $18.8 million.
“I think overall, the players understand that they’re very well paid, and
that what’s good for the game of basketball is also good for them,” Ferry
said. “At the same time, people want
to make a great living. I think the
players see it as a win-win as well.”
In turn, the structure encourages
younger players to earn their second
contract, which is infinitely more
lucrative than a rookie contract.
Veterans see their salaries grow as
they gain more experience, hence
James signing only a three-year
extension this offseason, rather than
the maximum five-year extension to
which he could have agreed.
Salaries of players with fewer than
seven years of experience can’t
account for more than 25% of a
team’s total salary expenditures. By
negotiating a deal that ends after his
seventh year in the league, James will
be eligible for an extension that can
pay him up to 30% of his team’s
salary cap, or in this year’s case, $15.9
million. That’s a salary few teams can
afford in the days of the cap era,
because it prevents them from signing other front-line players or from
developing depth.
Ferry said it’s a tightrope that he
and other GMs must walk in dealing with the cap.
“It depends where you are as a
team, depends on what your roster is,
depends what you’re playing for at
the time, depends on strategically,
where you are as an organization,” he
said. “Ours is ‘win.’ And that’s where
we are right now — to aggressively
win, but balance that with being able
to do it for awhile.”
Q
Crain’s reporter John Booth
contributed to this story.
CCLB MAIN 10-02-06 Cavs 9 CCLB
9/28/06
11:53 AM
Page 1
CRAIN’S CLEVELAND BUSINESS
OCTOBER 2-8, 2006
Market ripe for LeBron to
attain billion-dollar mark
Cavs star takes advantage of Jordan’s example to capitalize on his earning potential
By JAY MILLER
jmiller@crain.com
T
iming is everything, and
LeBron James’ entry into the
sports world comes at a time
when there are unlimited
possibilities for the basketball star’s
marketability and earning potential,
according to industry experts.
In fact, the 21-year-old James
could eventually outearn Michael
Jordan, according to Lynn Merritt,
senior director of basketball sports
marketing at Nike, in speaking with
Advertising Age, the leading advertising trade newspaper and sister publication of Crain’s Cleveland Business.
“The state that LeBron comes in
with now, with the Internet and all
kinds of technological advancements
that weren’t around when Michael
was at his peak, well, LeBron could be
the first billion-dollar athlete in all
aspects,” Merritt said.
While it used to be that athletes
put their names on baseball gloves
and the occasional soft drink,
Michael Jordan was a pioneer in
parlaying his skill and personality
into a multimillion-dollar business.
Tiger Woods followed to become
today’s highest-earning athlete.
Fred Schreyer, a former director of
sports marketing at Nike and current
president of the Professional Bowlers
Association, agrees James can take
his marketing to a level not previously seen with Jordan and Woods.
“Since Michael Jordan, the way
athletes are used and the earning
power they have outside of sports has
multiplied,” said Schreyer, who was
working for James’ agent when the
athlete was talking to several shoe
companies after high school graduation. “MJ’s success changed that.”
LBJ BY THE NUMBERS
100,000,000+: Estimated
dollar value of James’ endorsement
deals, primarily from Nike
60,000,000: Value, in dollars, of
the three-year extension James
signed with the Cavaliers
6,307: Points scored so far in
NBA career (26.5 points per game)
56: Career high in points in a
game (at Toronto on March 20,
2005)
42.5: Average minutes played
per game in the 2005-06 season,
second in the NBA
32: James’ original uniform
number at St. Vincent-St. Mary High
School in Akron. He later switched to
No. 23 as a tribute to Michael
Jordan.
21: Age, in years. He turns 22 on
Dec. 30.
9: Number of consecutive games
last season in which James scored
at least 35 points. Only Jordan and
Kobe Bryant have done that since
1970.
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3: Number of NBA players, including James, to average 20 points, five
rebounds and five assists per game
as rookies. The others are Jordan
and Oscar Robertson.
2: Number of medals won during
international basketball competitions, in the 2004 Olympics and
2006 World Championships. Both
are bronze medals.
1: Number of episodes of “The
Simpsons” in which James was a
guest star. The episode is called
“Homer and Ned’s Hail Mary Pass.”
Risk Management
Commercial Property & Casualty
Employee Benefits
SOURCES: NBA.COM, WIKIPEDIA
401 K
It all adds up
Shortly after he graduated from St.
Vincent-St. Mary’s in Akron, James
signed commercial contracts that will
eventually pay him over $100 million
— that’s in addition to what he earns
from the Cleveland Cavaliers.
The biggest chunk of that cash
will come from Nike, which signed
the Akron native to a seven-year,
$90 million basketball shoe deal.
Coca-Cola also signed on for the
long haul, giving James a six-year,
$12 million deal to promote its
Sprite and Powerade products.
In addition, Upper Deck, a sports
card company; chewing gum brand
Bubblicious; and even Microsoft
have joined Team LeBron.
Jim Kahler, executive director of
the Center for Sports Administration
at Ohio University and a former
senior vice president for sales and
marketing for the Cavaliers, estimates that James is only one of five
National Basketball Association
players getting significant national
endorsement dollars. He said the
others are Kobe Bryant, Tim Duncan,
Allen Iverson and Shaquille O’Neal.
At the moment, replicas of
James’ jersey are not the top seller.
He’s been eclipsed by guard
Dwyane Wade of the championship
Miami Heat, according to Sport
ScanINFO, a sports marketing
service that tracks sales.
deals in all types of categories —
financial institutions, automobiles,
technology, mobile phones, home
entertainment — all kinds of
categories.”
And these opportunities will span
the globe. A key destination is Beijing, where the 2008 Olympics will
be held. Carter expects the LeBron
brand to extend itself to China and
beyond by that time.
“(The opportunities) are all over
the world because basketball has
become such a globally recognized
sport and the stars are such
globally recognizable celebrities
that there are deals all over the
world,” Carter said.
C-9
Still, James’ overall marketing
effort has made him one of the topearning athletes in the world.
Sports Illustrated put him sixth
on its list of the “Fortunate 50” with
an annual income of $28.6 million.
Woods is at the top of the list, earning $97.6 million.
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Just the beginning
Now, James has a team hard at
work to go to the next level. That
team is LRMR Marketing led by CEO
Maverick Carter and two other young
men, Randy Mims and Richard Paul.
Carter, a former Nike marketing
representative, believes his longtime friend has broad appeal.
“He’s positioned as a generous,
dedicated, hard-working, playful,
loves-to-have-fun kid at heart but
an adult off the court who handles
his business,” Carter said.
Since James changed agents and
created LRMR, he hasn’t made any
significant additions to his partnerships, but that’s likely to change.
Over the summer, LRMR held a
“Sports Marketing Summit” with
marketing execs who already partner
with James to hear about where he
and LRMR are headed.
“There’s a ton of opportunities all
over the place for Mr. LeBron James
that he hasn’t done partnerships
with,” Carter said. “We’re looking at
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