The Mess in Atlanta: What Bruce Levenson’s Email and Exit Mean for the Future of the Hawks
We shouldn’t need a reminder that NBA owners, when the cameras are off and the community rallies are over, conceive of fans mostly as walking sacks with dollar signs on them.
That was the trigger for the email from Atlanta Hawks owner Bruce Levenson, sent in 2012 and unearthed again two months ago as part of a Hawks internal investigation, that led to Levenson’s decision over the weekend to sell his share of the franchise: How can we squeeze more money from the few fans loyal enough to actually attend Atlanta Hawks basketball games? Or, more precisely: How can we draw fans who might spend more money at the arena?
Levenson estimated that 70 percent of fans in attendance at Hawks games as recently as a few years ago were black, larger than the African American share of the Atlanta population, according to the 2010 U.S. Census. That was in part, Levenson said in the fatal email, because the Hawks, desperate for live bodies, gave away tickets to young fans from some of Atlanta’s underprivileged communities — common practice among NBA teams struggling with bad attendance.
That led to the crass stereotyping Levenson knew would cause a firestorm once exposed. On Saturday, he chose to sell his controlling stake in the Hawks rather than walk that firestorm, giving the NBA a convenient out to announce the ugly post–Donald Sterling story hours before the first full NFL Sunday. Hell, they could have waited a few more hours and revealed the Levenson story while Twitter was going berserk over the Antonio Brown flying kick. Hardly anyone would have noticed. Nobody ever notices the Hawks, which is the larger point here.
Levenson soaked his remarks in the antiseptic of “business sense” and spread them over a rambling email, so it was easy at first to miss their offensive nature. A few leading black voices, including Kareem Abdul-Jabbar this morning, have argued Levenson is in no way a racist. And he probably isn’t, at least in the most virulent sense. Levenson made it clear he was offended that any white Atlanta-area fans might find Hawks’ games “scary” because of the majority-black audience. He called such thinking “racist garbage.”
But Levenson’s email, boiled down to the core, is essentially this: “We have too many black people at our games. How can we get more white people?” You would not see an NBA owner ask the reverse question with such blunt urgency.
Wondering how to maximize profit is reasonable. Every sports franchise behaves that way. Levenson in the same email argued the team might suck in more halftime money by slicing $2 off the price of hot dogs during intermission instead of forking over the $2,000 or $3,000 appearance fee for a halftime draw like Quick Change or Red Panda.
The email is a hyper-local version of the last lockout, and of the ceaseless quest to wring taxpayer money for new arenas. The Hawks are estimated to have lost $23.9 million on basketball operations last season, the fifth-largest loss in the league, trailing Brooklyn, Charlotte, Minnesota, and Detroit, per a confidential league memo obtained by Grantland. About $11 million combined from luxury tax proceeds and the league’s revenue-sharing fund softened the blow, but this has long been one of the NBA’s sad-sack franchises. Attendance is well below league-average capacity when the Hawks are good, and when they’re bad, as they were for most of the early 2000s, they typically rank among the league’s bottom three.
The profit-maximization discussion is fair. And to be frank, so is wondering whether some white people are, in fact, scared of large groups of black people. Some of the nation’s most diverse cities — including New York, where I have lived for more than 10 years — are diverse only by the numbers, and not in the day-to-day realities of their citizenry.
But Levenson veered into unsavory stereotyping in that discussion. He labeled blacks as cheap without using that word, and speculated that racial composition explained why Hawks fans spent so much less on merchandise at games than fans of the Atlanta Thrashers — the hockey team Levenson’s ownership group sold. (To Levenson’s credit, he did at least hint at the socioeconomic forces that could be behind those sales numbers. A more broad-minded course of action would be trying to address those forces instead of swapping out black fans for white, but that’s hard work at which the U.S. has failed for centuries.)
He repeated the old cliché that black people don’t arrive on time, and floated a bizarre theory that black fans don’t cheer as loudly as white fans. He made an indirect link between the majority-black attendance base and the lack of “fathers and sons” at games. He wanted more white cheerleaders, more white people on the Kiss Cam, and less hip-hop music — as if white people don’t enjoy hip-hop.
Levenson had pushed through some of those changes, and in the email, he made a link between those moves and a gradual decline in the percentage share of African Americans at the arena. He characterized that decline as a good thing, which, again, is the thread running through the email: fewer black people at games, please.
This is in step with the league’s larger history of hand-wringing over whether enough rich white people will enjoy a game played primarily by young black men. Levenson simply took that old trope and transported it from the court into the stands. Bill Russell and other black players accused league owners in the 1950s and early 1960s of having an informal quota on the number of black players per team, an allegation no one effectively refuted until it became clear to every owner that such a quota would make it difficult to win.
As the league reached its nadir in the late 1970s, owners and team executives had all kinds of uncomfortable conversations about race, athleticism, and fandom. David Halberstam’s path-breaking book The Breaks of the Game, about the 1979-80 Blazers, is filled with white higher-ups wondering if the genetic after-effects of slavery made black players better athletes, whether black players were as “cerebral” as their white teammates, and whether a majority-black league could even survive in white America.
David Stern talked openly about those sustainability concerns. There is a rather obvious reason the NBA mandates inactive players wear certain kinds of clothes, and not other kinds of clothes, while sitting next to a hardwood floor watching sweaty men in tank tops and shorts throw a ball into a basket. I’d have to change my entire wardrobe if my bosses suggested I dress for a basketball game as if I were attending arguments at the Supreme Court.
Levenson’s email was distasteful at best, offensive at worst. He might have been able to survive it, but he chose not to, and he happens to be selling his controlling (but not majority) share in the franchise at a good time.
The Hawks rediscovered the email after Danny Ferry, running a free-agency meeting about Luol Deng, read aloud a background report on Deng that included a racially insensitive term, according to both ESPN and the Atlanta Journal-Constitution. Adrian Wojnarowski of Yahoo reported today that Ferry referred to Deng as having “some African in him,” before clarifying, “And I don’t say that in a bad way.” It’s unclear as of now whether Ferry ad-libbed that line himself or read it directly from a report by someone else.
The team initiated an internal investigation after at least one executive, Steve Koonin, the team’s CEO, expressed discomfort over the phrase.
The team will discipline Ferry for reading the word, the reports say, though Ferry will remain as GM. That may seem harsh if Ferry didn’t author the report, but it’s an ugly statement either way, and teams are going to engage more in this type of anticipatory house-cleaning after watching the league and the Clippers look the other way on Sterling’s heinous beliefs — until it bit everyone in the ass. No one in the room has come forward to describe Ferry’s reaction in reading the report, and Ferry hasn’t responded to requests for comment.
It’d be interesting to know if there were any minorities in the room when Ferry read the report. The NBA has a strong record of hiring minorities and women compared with the other major U.S. pro sports, but front offices and coaching staffs are still surprisingly white-majority considering how large a portion of NBA players are black.
The sale of Levenson’s stake will be a good test of the Clippers’ effect on team valuations. Sources with expertise in franchise sales have speculated since the announcement of Steve Ballmer’s purchase that Ballmer overpaid, and that the $2 billion price tag may not lift up franchise values across the league as much as we’d typically expect.
The Clips’ sale was an outlier, they suggested — a fast-paced, semi-blind auction for a mega-market team approaching the renegotiation of both its local TV deal and the league’s national package. The sale of the Bucks for $550 million in the spring might be the more meaningful benchmark going forward. We’ll start to see now.
Even that Milwaukee sale marked a bonanza relative to earnings — the Bucks lost $6.5 million on basketball operations last season, per the league memo, and ended up with a profit only due to a massive revenue-sharing check — and the rest of the Hawks’ ownership group has already received calls from several billionaires interested in Levenson’s share, per the Journal-Constitution.
Sources across the league wondered if we might see a mini-wave of sales in minority ownership stakes after the Bucks-Clippers double whammy; rich guys with small stakes and minimal perks are now certain they can turn a quickie profit without risking the bubble might burst down the line. Levenson’s share is too large to really fit in that discussion, but it will be an interesting test case. He doesn’t own a majority of the Hawks, but he’s the controlling owner, and he didn’t need the permission of any of his ownership partners to initiate the sales process, per a league source.
The bubble may not burst for a long time. Sports Business Journal reported this morning that the NBA is close to an agreement with ESPN and Turner on a new national TV rights deal that could crack $2 billion per year on average — up from approximately $900 million under the current agreement, which runs through 2015-16. That could wreak havoc with the salary cap, since the cap level is tied to overall league revenues. Grantland reported in late July that the league is trying to avoid any mammoth one-year jump in the cap level, since such a leap would make it difficult for both players and teams to build long-term plans. Some team executives are inquiring this morning whether the league might bake some of projected TV revenues, scheduled to kick in for the 2016-17 season, into the 2015-16 cap to smooth the increases.
Regardless: what a coup for Levenson, at least financially. The Atlanta Spirit, the group of Hawks owners headed by Levenson, has been messy since before it even officially began. The sale of the team to the Spirit in 2004 sparked immediate litigation from one spurned buyer, who accused Time Warner and Turner Broadcasting, the team’s prior owners, of reneging on an oral agreement because they wanted to sell the team to family and friends of Ted Turner.
Members of the Spirit then began suing one other after a co-owner, Steve Belkin, opposed the Joe Johnson trade and (eventually) sold his stake in the team. The remaining owners sued a major law firm involved with the Belkin issue and the Thrashers sale, and tried to unload the Hawks during the lockout in a busted deal that would have netted much less than what Levenson should get today. This is not unlike the Cavaliers falling ass-backward into a new super-team.
The sale, plus the Hawks’ sad history, sparked immediate talk in NBA circles on Sunday of whether the team might be a candidate for relocation — possibly to Seattle. It’s possible, given skyrocketing franchise values and the chaotic history of the Spirit group, that buyers will come calling for more than just Levenson’s share. A new majority owner is a game-changer in any city.
But we need to slow down. The Hawks have been in Atlanta since 1969, and the league has made it clear in Milwaukee and Sacramento that it values continuity — provided continuity comes with a glistening new arena, which isn’t an urgent need yet with the Hawks. Philips Arena opened in 1999, and though the lifespan of arenas keeps shrinking, there has been no loud outcry about replacing the Hawks’ home. Atlanta is a top-10 TV market, larger than Seattle, and the headquarters of Turner and NBA TV.
Any buyer wishing to relocate the team would have to assume debt and pay a $75 million early-termination fee on the arena lease. Toss in the mandatory relocation fee payable to the other 29 owners and you’re looking at a giant price tag just to get permission for a theoretical move.
Chris Hansen, the head of the Seattle group that tried to buy the Kings, showed the stomach for that kind of overpay. He was ready to value the Kings at around $600 million, fork over the relocation fee, and line up nearly $300 million in private money for a new arena — an arena that doesn’t yet exist.
Perhaps other owners with relocation dreams might be willing to pay that sort of premium. It takes only one, and Seattle itself is a large market. Moving the Sonics from Seattle to Oklahoma City, the league’s third-smallest TV market, with minimal hotel capacity, made zero practical sense.
Any relocation talk at this point is far-fetched speculation, the kind of “What if?” buzz that always follows a story of this magnitude. And the Bucks probably have to get a new arena — an actual, physical building — before any other team becomes a realistic candidate for relocation.
For now, let’s see how the Levenson sale plays out, and whether other ugly comments come to light. Remember: The Sterling litigation is ongoing. That story isn’t dead yet, and the ripple effects continue.