Value Added: Elephant bumping with self-proclaimed Washington ‘consigliere’ George Stamas
By Thomas Heath,
Dealmaker/ lawyer George Stamas would roll his eyes and blow me off with a rude utterance whenever I approached him about the deals he was involved in, especially his negotiations involving the Wizards, Capitals and Orioles. He owns a small piece of each team.
Back then, I didn’t much like Stamas.
I still don’t love him, but you can’t ignore the 61-year-old force of nature and partner at Kirkland & Ellis. He is full of great stories and is one of the best-connected people in the Washington-Baltimore region.
He has a killer view from his office overlooking the Treasury and the White House, and an ego-wall full of photos. There’s Michael Jordan and Arnold Palmer, the Bushes and Clintons, and plenty more from years of elephant bumping.
A shrinking violet he isn’t.
Stamas has been instrumental in some of the biggest recent deals in the region, including Constellation Energy’s sale to Exelon, Ted Leonsis’s purchase of Verizon Center and its teams, and SRA International’s sale to Providence Equity Partners.
He also has been an investor and board member at successful companies such as FTI Consulting, where he still sits on the board, and not-so-successful flame-outs such as NexCen Brands, which was previously known as Aether Systems.
Stamas, who relishes the role of “consigliere,” doesn’t do it all himself. He relies on a pair of loyal veterans, Mark Director and Andrew Herman, for heavy legal lifting. There is a deep bench behind them, as well.
We broke bread a few weeks ago at the Prime Rib, restaurateur Buzz Beler’s K Street retro version of the 1970s Washington power scene.
Stamas grew up in Baltimore, where his father owned the Hilltop Diner, reportedly the model for the movie “Diner.” He arrives at 12:30 promptly, plops down next to me in a remote corner table and starts reminiscing.
“I think there’s no better setting for me than me being in here,” he said, ordering a Spicy Virgin and surveying the room. “The original Prime Rib opened in Baltimore in October 1965. The Beler family was great friends of my family. When I think of my life, and even my career and closing dinners and important family dates, it all sort of ends with the Prime Rib.”
How, I wanted to know, did you end up doing sports deals?
“When [Orioles former owner] Edward Bennett Williams was passing away, I was trying to buy the Orioles for the USF&G Corporation, which was the most important company in Baltimore.”
The attempt failed, and the team went to businessman Eli Jacobs. But Jacobs eventually went bankrupt and was forced to sell. Stamas said Major League Baseball preferred another buyer until Stamas and another Baltimore lawyer, Peter Angelos, stepped forward.
“I call Peter Angelos and said, ‘Look, Peter, you know this has to go to bankruptcy court. Let’s make an effort to try to go for the highest bid.’ ”
He persuaded Angelos because “he didn’t want to see the team go into the hands of somebody else. He is a real homer.”
Angelos eventually won the team for $172 million.
I tell him he negotiated a bad deal for Leonsis to buy the money-losing Capitals in 1999 for more than $80 million. He also bought a 45 percent ownership stake in the Wizards and Verizon Center, then known as MCI Center, but the transactions left the former AOL mogul as a renter in the facility and the late Abe Pollin’s minority partner in the basketball franchise, with no voice in running the team.
He disagrees, of course.
“What kind of value do you put on the ability to buy the rest of the Wizards that we didn’t own,” Stamas said. “What we got at that time, effectively, what Ted did, which is one of the greatest trades in sports in the last 10 years, was negotiate the ability to buy the Wizards and the arena. And how do you put a number on that?
The waiter arrives and we both order the house salad with chicken, and a couple of Perriers with lemon.
Our talk turns to Stamas’s philosophy of what makes local economies work.
“Like any place, you can to some extent boil this town or any town to maybe 500 people who are really the straws who stir the drink.
“Look at the owners of Monumental [Sports & Entertainment], like Ted, Raul Fernandez, Scott Brickman, Jong Kim, Jack Davies, Rich Fairbank. Ted is helping those guys create a business hegemony around Washington which it really, really needs. Because a business hegemony is the fuel for prosperity in a region. Government Inc. only goes so far.”
I ask Stamas where he gets his clients, or “deal flow,” to put it in lawyer parlance.
“It is a function of time and grade, and just being persistent over the years. And getting lucky about one transaction leading to another. I’d love to tell you that I was very strategic about it all.”
“You have to position yourself to take advantage of those sorts of things. It’s going to sound corny, but I honestly think you have to like people. And you have to personalize their issues.”
His biggest deal, the sale of Constellation Energy to Exelon for $49 billion (I can only imagine the fees Kirkland & Ellis reaped), which closed two months ago, came as a result of his close personal friend, Mayo Shattuck, who was Constellation Energy’s chairman and chief executive.
The SRA deal came from Michael Klein, chairman of Washington’s Shakespeare Theater and a former senior partner at Wilmer Cutler, where Stamas worked before he left for Deutsche Bank on Wall Street. Stamas joined Kirkland & Ellis in January 2002.
“When someone comes to me and says, ‘Look, I’ve got this deal that’s not working or I really want you to help me achieve my ambitions or whatever, that’s when it’s kind of like hiring a physician or talking to a priest. I’m an adviser, and I take a host of experiences that I’ve had and I try to apply them to someone’s issues. And I get a lot of psychic income out of that.”
Who is the most impressive person you ever met?
He said there isn’t one, but then launches into a story about touring Cuba with Angelos and his Orioles, and getting a signed baseball from Cuban dictator Fidel Castro.
“We’re at this ceremony at the palace at 3 o’clock in the morning,” he explains. “I meet Castro . . . he has this aura around him. The longest-standing leader in the” and Stamas stops himself from saying “free” and just ends it at “world.”
“So we’re standing in line to say hello to him. And we’re kibbitzing in a room. I walk up to Fidel and I said, ‘El Presidente, I have a present for you.’ I reach into my left pocket in my jacket and I pull out a baseball, signed by Cal Ripken.”
Then Stamas pulled out a second ball signed by Ripken.
“What would you like me to do with the other ball?” Castro asked.
Stamas asked him to sign it and give it back.
“So I have a baseball at home, signed by Fidel Castro and Cal Ripken.”
Always making deals.