How Cleveland Cavaliers owner Dan Gilbert made his fortune


Cleveland Cavaliers owner Dan Gilbert. (AP Photo/Tony Dejak)

Be honest: your primary association with Cleveland Cavaliers owner Dan Gilbert is that letter he wrote in comic sans, right? Look, it’s fine. No shame there. It was a really funny letter! (RIP, comic sans letter.)

But there’s probably more you should know about Gilbert, who buried the hatchet with LeBron James to bring him back to Cleveland. Like how he could afford the Cleveland Cavaliers, for instance. Let’s follow the money, shall we?

First, the vitals: Dan Gilbert … 52 years old … attended Michigan State and Wayne State (law school) … net worth: $3.8 billion (according to Forbes) … is on Twitter:

(Sidebar: How does the kid’s jersey still fit after four years? It should be too small now, right? Also, are you seriously telling me that Dan Gilbert’s kid didn’t burn his LeBron jersey? Come on, Dan. Let’s be real.)

Everyone caught up on the basics? Cool, let’s turn to the numbers.

#Sports
Gilbert bought the Cavs in 2005 for $375 million at age 42. (The sale came in James’s second year with Cleveland.) Gilbert had previously tried to buy the Milwaukee Brewers, but the bid fell apart after months of negotiations.

“It’s been a long, long dream,” Gilbert said after the Cavs sale, according to the Associated Press.

“It’s kind of the typical thing,” Gilbert told the Cleveland Scene in 2006. “You realize in high school, ‘Most likely I’m not going to be a professional athlete. So one day, I’ll buy a team.’”

How’d the The Decision (Part I) impact Gilbert financially? Here’s Forbes, explaining in 2012:

The year after losing James the value of the Cavaliers fell 26%, to $355 million. The Cavaliers were terrible on the court and the team’s local television ratings plummeted 55%. The next year Cleveland’s value dropped another 7%, to $329 million. And the Cavaliers have been lowering their ticket prices to deal with declining attendance.

Alas, Gilbert is still worth $1.5 billion. But he’d be worth a lot more if James was still a Cavalier. And [Miami Heat owner Mickey] Arison would be worth much less than $4.7 billion.

Gilbert also owns the Lake Erie Monsters of the American Hockey League and the Cleveland Gladiators, an arena football team, and he operates The Q — which is home to the Cavs, Monsters and Gladiators.

Then there’s Fathead, the company that sells life-size wall decals and is part of Gilbert’s Rock Ventures. Although you might already know about Gilbert’s involvement with Fathead because of this: “LeBron James Fathead Price Cut Is Sparked by Birthyear of Benedict Arnold.”

Quicken Loans
Like so many good stories, Dan Gilbert’s begins with pizza.

“I still claim I hold the worldwide record — 78 pizzas delivered in one night,” Gilbert told ESPN in 2007. “I still ask pizza guys today, I say, ‘What’s your record? 55? 57?’ And then I tell them I once did 78.”

Gilbert reportedly saved about $5,000 from his college pizza delivery career and used it to start a mortgage company in the mid-’80s. That company grew and expanded online; Gilbert’s Rock Financial was then purchased by Intuit, a software company.

Gilbert remained CEO of the renamed Quicken Loans and eventually bought the company back. It’s now the largest online home lender in the country.

“My last semester at college, I only had classes from 8 to 10, then I’d deliver pizzas to office buildings from 11 till 2, and then I’d go take a nap with 150 bucks in my pocket,” Gilbert told ESPN. “But it wasn’t about money for me, I wanted to build. Build businesses, houses, create stuff. For me, and I think this is a secret for a lot of people, if you want to get wealthy you can’t chase money to get wealthy. If you build something, the money will follow you. That’s what happens.”

Quicken Loans is headquartered in Detroit and has about 10,000 employees.

Hey, about Detroit …
Right! Detroit. Gilbert’s connection with the city runs deep, so we’ll direct you to two New York Times features and let them take it from here:

A Missionary’s Quest to Remake Motor City

The Post-Post-Apocalyptic Detroit

Gilbert also spoke to Forbes about his relationship with Detroit in 2012. You can check out that video below:

Rap Genius
According to Business Insider, Gilbert has invested $40 million in Rap Genius, a website that annotates lyrics. (Also, it’s now just called Genius.)

Here’s Business Insider, explaining how that developed:

While visiting his parents in Detroit for Thanksgiving, [co-founder Ilan Zechory] wound up attending a Detroit Lions game with a friend. Zechory’s friend spotted the teenage son of Dan Gilbert, the billionaire owner of Quicken Loans and the Cleveland Cavaliers.

At halftime they went over to say hi. Both of Gilbert’s sons knew what Rap Genius was. Gilbert and Zechory started comparing notes about communicating with employees in a rapidly growing company. Gilbert talked about his “-ISMs,” sayings that he drilled into every new employee at all his companies. One is “a penny saved is a penny.” Another: “You have to take the roast out of the oven.”

Gilbert invited Zechory to come to his office the following Monday to learn about some of the investments he’d been making in downtown Detroit. That Monday, Ilan showed up with his grandfather. Gilbert showed up with a team of executives. It seemed Gilbert had an ulterior motive: to kick the tires on Rap Genius.

The local angle
What, did you think we wouldn’t find one?

So here’s the deal: Gilbert has ties with the gambling industry (his gambling history reportedly goes back to his college days), and one of his companies — Rock Gaming — is part of an investment group set to open the Horseshoe Baltimore next month.

Before bids were due, Maryland regulators “relaxed a rule designed to keep people with past gambling transgressions from winning licenses to operate such facilities.” The rule change, The Post reported at the time, helped Gilbert “who was arrested in 1981, while a student at Michigan State University, in connection with an alleged sports bookmaking operation that reportedly threatened violence against some who had gambling debts. Gilbert was not convicted and his record was expunged, but according to published reports, he was fined, put on probation and given community service.”

Can we end with something fun, please?
Okay, sure. Here’s Warren Buffett and Dan Gilbert with Seth Meyers. They are talking about both money and sports, so it totally works.

Sarah Larimer is a general assignment reporter for the Washington Post.
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