Phoenix Suns Owner Discusses the Business of Operating a Franchise

Dec 17, 2010

By Jacqueline Sudano, ESQ
“Hope is not a plan.”
These were words of wisdom that Robert Sarver, the owner of the Phoenix Suns, imparted to the audience at the recent Club E meetup in Phoenix, AZ. It’s also on the wall of the Suns’ offices. What Sarver is referring to is the spirit of entrepreneurship, and what it takes to be successful in the small business world. No stranger to entrepreneurship himself, Sarver made his money in the early 1990s buying and then selling government-owned real estate, and eventually became the owner of the Suns. Not surprisingly, Sarver brings his entrepreneurial spirit and business expertise to managing a team in the competitive world of professional basketball.
“There are two things that are really important for small businesses,” he said. “One is having a good understanding of finance… you have to know at all times where your cash flow is… The second is that technology is important; you have to have someone in your organization who understands technology.”
“Another thing that gets lost is that you have to be willing to change.” He detailed how the real estate market had changed since he made his money in the 90s to the proliferation of the internet, changing how business was done in the industry drastically.
“Sometimes being an entrepreneur, you have to not know your own limitations,” he remarked. Sarver says that a certain kind of fearlessness benefits an entrepreneur. Not being afraid of failure, or knowing necessarily that failure is an option, is an asset to a young entrepreneur; with great risks can come great rewards. Later in his speech, an audience member asked Sarver about testing players when they are drafted. What Sarver replied with seems to echo his idea of the attributes of a successful entrepreneur:
“It’s also interesting how players sometimes may not be real smart but have good basketball smarts…Sometimes, even, the guys that are too smart, or too serious, sometimes over think themselves. Sometimes the best shooters at the end of the game when you need a basket, and the best hitters in baseball at clutch time are the guys who don’t really think about it very much. They just go out and do it. Sometimes if you’re really thinking about how much pressure’s on you, you may not do as well… The mental part is a lot to do with basketball IQ and to do with toughness and competitiveness and how you react in certain circumstances…and how you react to the spotlight and how you react professionally in new surroundings…The better players are smart on the court, they are mentally pretty tough, and they also try to keep improving… and recreating themselves.”
When asked about the current player salary spending level of the Suns in relation to the economy, Sarver identified the paradox he, as an owner, is faced with: “The tough thing about sports is yeah, I’d like to lower salaries because the economy is down, the revenue’s down. But you don’t get into this business for the most part unless you’re really competitive. So I’m very competitive… I want to win. Well, if you don’t spend money, you’re not gonna win. So it’s hard. The sports business becomes more emotional than other businesses; you make more emotional decisions. The other thing about sports is there’s no second-guessing where you’re at. You can’t pretend you’re this or pretend you’re that.”
Sarver painted an optimistic picture of the future of economy. He believes that the end of the recession may come more quickly and stronger than most would think. “Right now corporations have record levels of cash, and a lot of it hasn’t been spent in a long time,” he said. He believes that spending is on the horizon, and this will ultimately inject the economy with new life. Until then, Sarver says: “I don’t mind paying taxes. I just want them put to good use.” He admits that he does not have a keen interest in politics, but that he hopes that the Arizona state legislature and other political leaders create and further policies that will help Arizona business, rather than dealing with other issues unrelated to helping the economy. “When Rome is burning,” he said, “we don’t want the police handing out parking tickets.”


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