When Howard Schultz bought the Seattle SuperSonics in 2001, his friends told the Starbucks chief he was overestimating what he could do to save the struggling basketball franchise.
“Buying the Sonics could only lead to disappointment and disillusion, they told me . . . ‘You’re naive,’ they said,” Schultz wrote in a Seattle Times op-ed at the time. “I know you can’t superimpose the Starbucks culture on a different industry. But the similarity between Starbucks and the Sonics is this: The fan is the customer.”
Five years later, with the Sonics in a financial tailspin, Schultz sold the team to a group of outside investors, who promptly moved it to Oklahoma City, infuriating Seattle basketball fans by allowing a beloved team of four decades to leave town.
Today, Schultz is seriously exploring an independent bid for president, promoting himself as a problem solver who can use his business experience to fix the nation’s politics.
But his tenure with the Sonics was marred by conflict with star players, fraught negotiations with lawmakers and private outbursts at low-level employees, according to interviews with more than two dozen former Sonics employees, co-owners and players, as well as current and former Seattle city council members and Washington state lawmakers.
The powerful businessman, who turned Starbucks into an international coffee behemoth and was a darling of the Seattle business community, flailed under a new kind of public scrutiny from fans and media, many of these people said.
“His approach was very much a feeling of entitlement,” said Nick Licata, a Seattle city council member at the time. “ ‘Arrogance’ is probably the right word.”
In a book released earlier this year, ahead of his potential presidential campaign, Schultz acknowledged he was wrong to think the lessons he took from running Starbucks could be applied to running the Sonics.
“What I did not appreciate at the time was that owning a public sports team is not the same as operating a private or even public company,” Schultz writes in his book. “The obligations are different.”
Schultz spokeswoman Erin McPike said: “While the well-trodden story of Howard’s ownership of the Sonics didn’t end the way he hoped, there are plenty of things he is proud of, like forging lifelong relationships with many players and coaches. It is also a reminder that just because something is hard, or even unsuccessful, it doesn’t mean the cause wasn’t worthy.”
The episode lingers as a stain on a sterling business career — and it hangs over Schultz’s launch into national politics.
When Schultz appeared in Seattle in late January amid speculation of his presidential bid, Sonics fans decked in the team’s classic green and gold showed up to protest.
There is little doubt Schultz loves basketball and cared about the team. He bought season tickets and frequently played basketball himself.
Schultz and a team of investors spent $200 million to acquire the Sonics and the WNBA’s Seattle Storm from the Ackerley Group, a local outfit that had owned the team for decades.
It was a difficult time for NBA franchises in smaller cities, with many teams losing money.
Schultz began his ownership with a public listening tour. He watched games from courtside seats. And the new management introduced a new logo and a mantra: “All heart, all ball.”
“Especially early on, we were really excited. We really bought into what we now see as empty platitudes,” said Jeremy Repanich, a former Sonics employee who worked in guest relations.
Schultz’s main pitch to the public was a promise to repair what he identified as the decaying culture of the NBA, which he said was too intertwined with money and self-promotion. In a Seattle Times op-ed, he criticized the “little shimmy dance” of young players who “think that the NBA is more about ego than about teamwork.”
“We have to do something almost everyone says is impossible: Bring back respect for the game,” he wrote in the op-ed. “I yearn for the Sonics to represent what’s best about team basketball and to display character and integrity on and off the court.”
But Schultz’s efforts led almost immediately to clashes with players and staff.
In August 2001, the new owner met with two employees who had just finished a new promotional video of the SuperSonics players, inspired by the opening scenes from Guy Ritchie’s London gangster thriller, “Snatch .”
Schultz was irate as employees rolled the tape. Yelling, Schultz said it made the players look like “thugs” and demanded the staff remake the video, according to a former Sonics employee in the room who spoke on the condition of anonymity for fear of professional retribution. (This employee recounted the story in 2001 to a second employee, who confirmed in an interview that they had heard it, though not Schultz’s precise words.)
The employee said Schultz said to make the players appear more presentable. The final version of the video, which was viewed by The Post, was set to the same music but showed team highlights and anodyne shots of smiling players dribbling and dunking.
“I have never been yelled at like that in my career,” the employee said. “This episode set the tone for his ownership.”
McPike said neither Schultz nor two other executives remembered the incident.
Schultz’s defenders don’t deny he brought strong opinions to the job. Valerie Danna, who worked in communications under Schultz, said it was possible some employees mistakenly interpreted the former owner’s intensity for anger.
“The piece about him yelling at or berating employees — it can be passion misconstrued,” Danna said.
Lindsay Fultz, who worked in the sales team, said Schultz’s passion for the team uplifted employees. He gave free tickets to employees, for example.
“He was an amazing owner and leader,” she said. “He treated everyone with respect and made everyone feel important, regardless of their position.”
Schultz’s attempts to change the team’s culture also sparked conflicts in the locker room, contributing to the departure of key players who sometimes resented his public criticisms.
“Schultz was naive in thinking he’d have this power over the players. He thought, ‘How could these players not be inspired by the American Dream that was Howard Schultz?’” said Jason Reid, a fan of the Sonics who directed a documentary about the team’s sale. “He really felt the players would fall into line.”
Rick Sund, who was the Sonics’ general manager, disputed that Schultz treated employees or the team’s athletes inappropriately.
“One of the things I really liked about working for Howard is he let people do their jobs,” Sund said. “He did not try to influence the players. He went through the proper channels as an owner.”
Schultz’s most public spat came with the team’s most popular veteran: Gary Payton, a nine-time NBA all-star who powered the team to playoff runs in the 1990s. After Payton failed to show up for the beginning of training camp during a contract dispute, Schultz blasted him in the media and said that Payton is “disrespecting us,” according to a Seattle Times article from the time.
More than 10 years later, Payton chastised Schultz in a Boston Globe interview.
“It went from being a family team to a business,” Payton told the Globe. “The people who took over the team ran their team like a business, like how they made their money, and you can’t do that.”
In his last year in Seattle, Payton said, Schultz “made it seem like, ‘I don’t care about you no more, you’re nothing.’ ”
Schultz also publicly chastised the “work ethic” of Sonics center-forward Vin Baker, who struck back in the media that he was “100 percent offended” by Schultz’s remarks. But unlike Payton, Schultz and Baker later reconciled, with Baker saying in a recent interview that Schultz helped him as a player and helped him land a job at Starbucks after he struggled with alcoholism.
“The Schultz family really supported me and told me they were there for me,” Baker said, adding that they “became a big part of my support group,” also connecting him with help to combat depression.
In a 2013 interview, pressed on his tenure with the Sonics, Schultz pointed to the immaturity of the players and said owning the Sonics “turned out to be a nightmare.”
“I just thought the culture of professional sports and athletes who were making that much money, it just was inconsistent with my ability to kind of alter the mentality, and I just got out,” Schultz said. “I think when you’re 18, 19, 20 years old and you’re making millions of dollars and you don’t have the right support staff around you and you’ve got people who are trying to take advantage in one way or another, it’s very hard to come to grasp with that, and most people are not mature enough to handle it. . . . It just was inconsistent with my value system.”
Schultz also changed the fans’ experience but in ways that some employees criticized. Four employees said Schultz wanted the 1950s ballad “Mack the Knife” played after every game, win or lose, replacing the hip-hop that had been played. (A spokeswoman for Schultz said the team’s marketing department experimented with many songs in the arena during his ownership.)
“It was one of those things that was sent down from the higher-ups: ‘Hey, this is what Howard wants,’ with an eye roll. And we’d say, ‘Okay, we have to play this song now,’ ” one employee in the Sonics’ entertainment division recalled. “He was completely out of touch, and everybody knew it.”
As he tried to save the team, Schultz cut ticket prices, held special events with community business leaders and offered discounts on concessions. But that didn’t make a big difference. And the team did not play well, either. The Sonics made a playoff run in the 2004-05 season but, otherwise, often ended the season out of playoff contention. Attendance sometimes sagged below the levels of before Schultz bought the team.
Schultz put his hopes in a renovation of the Sonics’ stadium, Key Arena, asking the city and state to kick in more than $200 million in taxpayer money.
Just before Schultz acquired the team, the Seattle Seahawks and Seattle Mariners had each received major investments from the public for their own stadiums. Schultz cited these other stadiums in his request that local lawmakers provide additional financing.
“They came in awfully naive,” said Greg Nickels, then mayor of Seattle. “They had a lot to learn in terms of how to work with the legislature.”
Some lawmakers felt Schultz gave up on negotiations too easily when they did not immediately go his way. (Schultz has disputed that characterization.) Licata, the former Seattle city council member, added that some lawmakers also felt that Schultz acted as if he was owed public financing for the arena: “He believed he was entitled to have the city subsidize his business, because his contribution as a business owner was to provide Seattle a well-run professional basketball team.”
In early February 2006, Schultz levied a threat, announcing he would seek “other alternatives” if the Sonics did not receive financial support from the state legislature, speculating the team would have to be moved or sold.
The tactic didn’t bring state lawmakers to the table. It instead repelled officials who did not want to appear cowed by one of the state’s wealthiest business executives, multiple former lawmakers said.
“We don’t negotiate with terrorists,’’ one state lawmaker, Hans Dunshee, told the Monterey County Herald.
“He really tried to jerk the legislature around, and it just leaves a bad taste in my mouth,” Dunshee said in a recent interview. “Here were the elites threatening to take away our team. People were pissed.”
About five months later, Schultz announced he would be selling the team to an ownership group led by Clay Bennett, an Oklahoma businessman.
Defenders of Schultz point out that he was losing millions of dollars on the team annually and could not stay afloat without taxpayer help. Schultz told the ownership group that the team was no longer a viable financial enterprise, according to a person with knowledge of conversations who spoke on the condition of anonymity.
H.S. Wright III, a minority owner of the team, said he has never lost admiration for Schultz and his business record. “This one didn’t work out for him, but he should be recognized for what he has done,” Wright said.
Two years after buying the team, Bennett moved it to Oklahoma City and renamed it the Thunder. Schultz said at the time, and has since maintained, that he believed Bennett would try to keep the team in Seattle. (Schultz later sued Bennett in a futile attempt to rescind the sale, accusing Bennett of misleading Schultz about his intentions to keep the Sonics in Seattle.)
Others have found that explanation lacking. Media accounts at the time were rife with speculation that Bennett would take the team to Oklahoma. Four of the nine members of the ownership group voted against the sale.
Some critics have said Schultz believed that if he could not make the team financially viable in Seattle, nobody could. They argue that Schultz should have held out for a potential buyer who had roots in Seattle.
“There has to be a certain amount of willful ignorance to make that move and disregard the advice of all the people around you,” said Brian Robinson, founder of Save Our Sonics . “And that was a result of his belief that if he couldn’t do it, nobody local could.”
In his 2019 book, Schultz says he still feels regret over the decision when he sees fathers and their sons wearing Sonics hats and T-shirts in Seattle.
“The loss of Seattle’s professional basketball team devastated Sonics fans,” Schultz writes. “Almost everyone blamed me, and after some initial denial, I realized they were right to do so.”