When Marc Lasry bought the Milwaukee Bucks in 2014, his friend and fellow billionaire Josh Harris tried to pump him for information. Who would Lasry pick first in the NBA draft?
Harris, who cofounded the alternative investment giant Apollo Global Management and owns the Philadelphia 76ers, sometimes worked out with Lasry at the gym inside Manhattan’s Core Club. It was there that Harris took on the role of interrogator.
Lasry, the founder of the $10 billion hedge fund Avenue Capital, had become accustomed to his longtime friend’s constant smack talking. While Lasry stretched out with a trainer, Harris would needle him, “Why don’t you lift more weights? It might be helpful if you actually got some exercise.”
“I want to be limber,” Lasry would say back.
But he didn’t offer much of an answer when the topic switched to the team he’d just purchased. That year, the 76ers received the No. 3 draft pick; Lasry’s team received the second.
Both men knew three players were going to get picked early: Andrew Wiggins, Jabari Parker, and Joel Embiid.
“I think the real reason he wanted to find out is they wanted Embiid really badly,” Lasry said during a phone interview with Business Insider. “He would have given me something in return for us not taking him.”
(The Bucks wound up with Parker and the 76ers took Embiid.)
Lasry’s account of the banter speaks to Harris’ competitive streak, which has led the onetime college wrestler to assemble a sports empire. With a net worth of nearly $5 billion, Harris has earned himself a reputation among dealmakers as a sharp-elbowed negotiator.
Harris, 55, owns or co-owns the 76ers, the NHL’s New Jersey Devils, and the Crystal Palace Football Club, a London soccer team. Now he may add a baseball team to his list of assets. Variety reported earlier this month that his sports-investing company, Harris Blitzer Sports & Entertainment, was one suitor of the New York Mets.
The Mets deal would be a major building block for HBSE’s sports empire, though sources familiar with the matter say the talks are still in early stages. Last year, the group put its soccer team up for sale while eyeing at least two NFL teams, sports consultant Marc Ganis said. Harris has a small personal stake in the Pittsburgh Steelers, according to a source.
“It’s clear that their appetite isn’t sated,” Ganis said.
If such a deal transpired, Mets fans would put their dreams of World Series glory — a victory they haven’t enjoyed since 1986 — into the hands of a businessman who is known for tapping the power of the purse.
Since Harris led the deal to buy the 76ers in 2011, he’s applied his private-equity investing style to his teams by revamping management, upgrading athletic facilities, snapping up star players, and trying to turn around ailing sports franchises.
“I’ve been a lifelong Mets fan going back to ’64, and I’m very excited,” one of Harris’ outside attorneys, Brad Karp, said. “He would be great for my Mets.”
To be sure, his possible bid for the Mets is no done deal.
Though there are no signs Cohen has returned to the table, Harris may have other competition. Variety reported in April that the former MLB star Alex Rodriguez and his fiancée, the actor and musician Jennifer Lopez, were working on a bid for the deal, backed by the biotech investor Wayne Rothbaum. Eric Menell, JPMorgan’s cohead of North American media investment banking, is representing the couple, Variety said.
On Wednesday, the New York Post reported that Galatioto Sports Partners, a New York investment bank, was working with investors who could put in up to $250 million for Rodriguez and Lopez’s bid.
Specifics of negotiations are being kept secret. The president of Galatioto Sports Partners declined to comment. A spokeswoman for JPMorgan declined to comment. The banker who is advising the Mets, Steve Greenberg of Allen & Co., did not respond to a request for comment.
But interviews with more than a dozen people close to him paint a picture of the man who the Mets could quickly find calling the shots from up top. According to these sources, Harris is one of the most hard-driving people they’ve worked with and applies a private-equity playbook to his expanding list of sports assets.
Harris declined to comment for this story.
Harris created his wealth through private-equity investments, including chemical companies, and as sports owner, he’s faced scrutiny over business decisions
Harris, who commutes from New York to 76ers home games via helicopter, has an ambitious work ethic that is frequently cited by friends and colleagues.
“Josh calls me all the time to say, ‘Hey, what do you think about this?'” Michael Rubin, Harris’ business partner and a co-owner of the 76ers and Devils, said. Harris recently texted him as early as 5 a.m. after a midnight call: “Are you up?”
With $350 billion under management, Harris’ alternative investments firm is one of the largest in the industry and known for being among the most aggressive investors.
The wealth he’s accumulated has also made for some thorny optics. Harris recently instituted — then quickly retracted — a 20% pay cut for staffers of the 76ers when the coronavirus suspended the NBA season. When the cut was announced, the 76ers star Embiid offered to donate $500,000 to help affected workers.
A writer at The Philadelphia Inquirer, David Murphy, wrote a rebuke of Harris and his business partner David Blitzer’s decision. Even though they had already backtracked, his column leaned in, criticizing them for “four years of losing,” increasing ticket prices, and a “meaningless home game in the early stages of the pandemic.”
Embiid, who’s known as “The Process,” told Business Insider he reached out to Harris and other owners after the decision was announced and expressed his opposition to it. The conversation quickly became: How do we make this situation better?
“I had no idea that that was going to happen,” Embiid said of the announcement. “There was not a lot of communication.”
It broke with his past experience with Harris. The prior winter, Harris had visited Embiid’s New York apartment. The team was going through a rough patch, and Embiid felt he was in a slump. Harris provided moral support and asked how he could help.
“Since I got to Philly, he’s made me feel like a partner instead of treating me like someone who works for him,” he said. “He values my input — and we got it fixed.”
Harris’ firm Apollo doesn’t invest in sports companies because of perceived conflicts of interest
Such public scrutiny isn’t common in the secretive world of private equity, where Harris has devoted his career. The rationale of day-to-day business decisions don’t often require public explanations.
Apollo had decided years earlier not to invest in sports teams because when it comes to investing other people’s money, it could be problematic if there were any perception that a firm is managing assets in which a leader has a personal interest.
One insider said: “You could fall in love with something and want it, rather than be more calculated on price and exit. And people tend to, when they get really involved in those things, want to own them forever. That doesn’t fit into a model of third-party capital, when you have a fund for a certain number of years.”
Apollo’s other top executives have had their own side projects. CEO Leon Black, for instance, is chairman of the Museum of Modern Art. And private-equity executives at other firms, including David Bonderman of TPG and Tom Gores of Platinum Equity, own teams too.
Adam Aron, the CEO of the 76ers from 2011 to 2013 who now runs AMC Theatres, has known Harris for a good chunk of his career, working as an operating partner at Apollo between 2006 and 2015 and as the CEO of the former Apollo portfolio company Vail Resorts before that.
He described Harris as a highly engaged sports owner.
“He makes sure the people that work for him have good reasons for doing what they do,” Aron said. “I doubt there are many decisions that are made where he is unaware or oblivious to what’s being done. At the end of the day, he lets his people make the decisions because they are the professionals.”
Harris’ desire to build a sports empire stemmed from personal experiences as a college wrestler
Harris turned to sports investing after a lifetime of athletics. During his freshman year at the University of Pennsylvania, Harris wrestled and in college played competitive pickup basketball with his friends and fraternity brothers, including Tony Ignaczak, the president of the private-equity firm Quad-C Partners.
In 2011, Harris put together a group of Penn friends, including Ignaczak and Blackstone’s Blitzer, to buy the 76ers, who were struggling with their record and finances. The team’s last NBA championship win was in 1983, while Harris and Ignaczak were in college. The business evolved into Harris Blitzer Sports & Entertainment, a company that also owns some minor-league and esports teams and spawned a venture-capital arm.
“I really think he looked at Apollo as his business legacy and sports as his business and philanthropic legacy,” Ignaczak said. “From the beginning, Josh and David were the same way.”
Insiders explained how Harris approaches managing his sports teams and uses data to analyze decisions
Harris evaluates and operates his teams the same way he would a portfolio company, Ignaczak said. He thinks long term, seeking to create a sports franchise that competes for championships year after year.
When NHL Commissioner Gary Bettman first met Harris, it was clear he wasn’t treating his ownership of the Devils as some frivolous endeavor, Bettman said.
“He really wanted to understand what made the asset — what the upside potential was — and how he might be able to improve what was in place,” said Bettman, who also highlighted Harris’ philanthropic commitments to his sports teams’ cities. “He wants to make sure there’s nobody who’s doing anything better than what they’re doing.”
Data is a big component to Harris’ approach, those close to him said. He has hired Ph.D. holders to analyze player stats. Digital marketing, sponsorships, ticket sales, and expansions of the teams’ presence internationally have also been among some of his best-known initiatives.
Even though the 76ers have yet to return to the NBA Finals since Harris took over, Lasry and others close to Harris said the team was better-positioned today than it was before he bought it, with key players added, such as Ben Simmons, who joined in the 2016 draft.
When Harris bought the team, the stadium was often half full. Philadelphians had more enthusiasm for the city’s other sports teams, like the Eagles or Phillies, Aron, the former 76ers CEO, said. To breathe in some life, the 76ers cut ticket prices to the upper bowl to $17.76, backed a local ad campaign,and created a new practice facility for the team.
Aron recalled getting a tour of the former bleak practice facility at a Philadelphia college, with then-coach Doug Collins telling him how he needed a refrigerator.
“I said, ‘Doug, you need a refrigerator? I’ll buy you a refrigerator,'” he said. “You know what Josh did? They didn’t just buy a refrigerator for the court. They built a new practice facility that’s state of the art and best in the entire league, and the best in Camden, New Jersey. That’s a long cry from sharing a college gym.”
Sports teams Harris acquired are valued higher today than when he purchased them
Aside from the Sixers’ win-loss record — the team’s second-worst season in history came in 2015-16, with a 10-72 record, though last year, they got back up to 39-26 — it’s difficult to argue that Harris and his team haven’t expanded the business.
Forbes valued the 76ers at $330 million in 2011, the year Harris bought the team for $280 million. The 76ers were worth $2 billion this year, according to Forbes. Before Harris’ deal, the team averaged 14,000 people per home game, 26th in the NBA. In the past two years, the team climbed to first in the league, averaging more than 20,000 fans.
As for his NHL team, Forbes put the Devils at $320 million in 2013, when Harris bought the majority stake in the team, and $550 million last year, though its attendance is down slightly since Harris bought in.
What does that mean for the Mets?
“He has to be willing to spend the right money and time to get the right players,” Lasry said of the prospective investment. “And if he gets that, I think it’s great for the fans of New York.”
Ignaczak, Harris’ close friend, said his competitive streak has surfaced when the pair have run races together, like Philadelphia’s half and full marathons.
He recalled one race in particular, when Ignaczak started pushing the pace, pulling ahead from Harris slightly with a few miles to go. Harris convinced him to slow down so they could cross the finish line together. Ignaczak complied, only to see Harris pull away in the final stretch.
“He crossed about 10 seconds ahead of me,” Ignaczak said.