ALEX SPANOS : How the son of an impoverished Greek immigrant borrowed $800 and turned it into a business and sports empire worth $160 million.
Alex Spanos had trouble sleeping one night recently after a stressful day at the office of his football team, the San Diego Chargers.
He had released two veteran members of the team’s scouting department, the first men he had fired in more than 10 years. Normally, a subordinate takes care of such unpleasantries, leaving Spanos free to concentrate on his business empire, whose bedrock is apartment construction.
The next day, as he sat in the comfortably appointed interior of one of his four corporate jets, Spanos still seemed to be wrestling with his conscience.
“I gave each of them a year to find another job, and I didn’t have to do that,” he said, as if trying to convince himself that he had done the proper thing.
Over dinner in a trendy Dallas steakhouse, a pensive Spanos discussed his discomfort with his son-in-law, Barry Ruhl, one of the four members of the inner circle that helps run the family-dominated business.
Ruhl and his companion, the head of the Texas division of the company, seemed only moderately interested in the Chargers, so Spanos focused on carving a steak and nibbling on some onion rings.
After several moments of silence, Spanos’ thoughts shifted and he began talking excitedly about a recent segment of the TV show, “Lifestyles of the Rich and Famous” that featured a business tycoon from the Far East who had invested multi-millions in a yacht.
“Damn,” Spanos said, “I wish I had taped that show. Can you imagine putting so much into a boat?”
A dinner guest was struck by a certain irony in the moment.
“Glad you haven’t lost your capacity for amazement,” the guest said, bringing a quick smile from Spanos, a gruff, plain-spoken man with a silver crewcut and a face dominated by a longish nose and a pair of horn-rimmed glasses.
Like many other wealthy businessmen before him, Spanos is emerging from the relative anonymity of the corporate world through the high-profile position of running a professional sports franchise.
Spanos, the son of an impoverished Greek immigrant, supervises an apartment-construction empire that spans the breadth of the Sunbelt and has brought him a net worth estimated at $160 million. He is known for his philanthropy, particularly in the Stockton area, with donations to education, medicine and culture that reach into the millions.
He added the Chargers to his domain last summer after passing up a chance to buy the San Francisco 49ers several years ago, when Al Davis told him they were for sale.
Spanos said he considers Davis a friend and the shrewdest thinker in the history of pro football, but he doesn’t want to be too closely identified with him because Davis is not universally admired in the owners’ fraternity.
He much prefers to be linked with comedian Bob Hope, a frequent golfing companion who also taught him a softshoe-dance routine that the two have done on stages around the country. Hope and Spanos first met at a golf tournament 20 years ago.
“When Alex was born,” Hope once quipped, “the doctor slapped him and Alex said, ‘Like to rent an apartment?’ ”
He has built nearly 50,000 apartments over the last quarter-century and now ranks at or near the top of the industry, with projected revenues of more than $900 million this year.
“When Alex plays golf, if he loses the ball, he doesn’t even bother to look for it,” Hope joked. “He figures he’ll just buy the property and find the ball while building apartments.”
Life wasn’t always so comfy. During the bleakest years of the Depression, the Spanos family was so poor that the children slept three to a bed.
“We had to take off our shoes after school to save wear on the soles,” Spanos said.
The family could only afford hot water for one bath a week, and the children had to share the bath water.
Now, Spanos owns a fleet of private jets that allow him and his aides to cover up to 6,000 miles each in a three-day week that begins each Tuesday afternoon. They are all back home in Stockton by sunset each Friday.
When Hope saw the A.G. Spanos Jet Center, which dwarfs the Stockton municipal airport, he said, “Alex must be going to the moon. He’s bought all the real estate down here.”
Hope was indirectly involved in Spanos’ closest encounter with death. A few years ago, Spanos picked up Hope and his wife after a show in New York and flew them to Burbank in one of his jets, which can travel nonstop from coast to coast.
After dropping off Hope, it was time to depart for Stockton. But a driving thunderstorm had swept into the area, making conditions far from ideal. As the plane was taking off, its nose was struck by lightning, and a clap of thunder detonated in the ears of the pilot and his passengers, which included Spanos and several family members.
“I thought the plane was going to crash,” Spanos said.
It managed to stay aloft and complete the one-hour flight to Stockton, but $100,000 worth of repairs later had to be made. It was the most frightened he has ever felt, Spanos said.
Ordinarily, he refuses to think about dying, preferring to believe that through hard work he can achieve, if not immortality, then longevity.
Optimism is one of the Spanos hallmarks. In the den of his 6,000-square foot, $1-million home in Stockton are a couple of books, Iacocca and The Power of Positive Thinking.
“I’ve studied the lives of the 20th Century’s great businessmen and concluded self-confidence was instrumental in all their success,” he said.
The Spanos business is a patriarchy, headed by the 61-year-old grandfather of six. It also includes his two sons and two sons-in-law at the top of the pyramid. All live within six blocks of each other in Stockton.
There are few cases of nepotism paying such huge dividends as in the Spanos empire, where revenues have increased 500% in the last five years, when the last of the heirs became fully integrated into the management team.
“I really believe in this,” he said. “If you can’t trust your own family, who can you trust?”
They all gather at company headquarters in Stockton each Monday and sit in on a board meeting each Tuesday before fanning out in their personal jets to various corners of the nation.
Spanos’ first order of business each Tuesday afternoon is to visit Charger offices in San Diego, where he stays one or two days before leaving to check on other divisions of his company. His entire extended family piles into the four jets and flies to home games in the fall.
He never saw a ballgame as a kid. His chief recreation was swimming in an oily slough on the south side of town, not far from his father’s business, Roma Lunch and Bakery.
Reflecting his stern upbringing, Spanos can be a demanding, short-tempered taskmaster.
Recently, he permitted a reporter to accompany him on his sojourn across America. There were stops in Las Vegas, Dallas, Louisville, Nashville, Atlanta, Denver and Colorado Springs. At each site, where apartment construction is under way, Spanos made his presence known.
For example, in Las Vegas he was met at the airport by his oldest son, Dean, 35, and another high-ranking company official. They drove out on the airstrip in a telephone-equipped German sedan and parked at the base of the steps as Spanos descended from his jet.
Quickly, the party left the airport and sped down the Las Vegas Strip. Spanos avoids the casinos because he can’t stand to lose money.
Just as he shuns gambling, he rarely drinks liquor, preferring to sip hot tea on his plane. He used to be a heavy smoker, but quit a decade ago. Discipline is as much a part of him as optimism. He takes brisk two-mile walks daily, has a private sauna in his Stockton office and a lavish weight room just down the hall.
Spanos and his son discussed business as the gray sedan maneuvered through mid-afternoon traffic on the Strip. Arriving at the apartment-construction site, Spanos leaped out of the car and squinted in the bright sunshine.
The object of his scrutiny was the railing on the patio of each unit. Should the railing be painted blue or brown? Spanos couldn’t decide, but he didn’t want to entrust the decision to his man in Las Vegas because of his notoriously poor taste in color.
“Do one building in brown and another in blue, and I’ll come back next week,” Spanos decreed.
Although it seemed a trifling matter, he would prefer to make a return visit rather than have to repaint the entire project at a cost of $100,000.
Attention to detail was evident in nearly all the stops Spanos made during the week. At one site, he upbraided an executive for allowing the average cost of a unit to rise from $35,000 to $36,000, even though his lieutenant explained that he had to spend more to be competitive with a neighboring project.
In another city, Spanos fretted about the lack of a road connecting a development to a nearby mall until he was reassured that the road would soon be ready. Then he urged his project coordinators to closely watch the framing of each building and make sure each nail was cleanly driven into each board.
Spanos has derived a formula for apartment construction since completing his first project in 1960.
He had gone into the business knowing next to nothing about it. After a painful break with his father’s bakery in the early 1950s--a rift that took years to heal--Spanos borrowed $800 from a Stockton banker, bought a panel truck and began peddling sandwiches made by his wife, Faye, to migrant farm workers in the San Joaquin Valley.
The business yielded fat profits, which Spanos invested in land and buildings. As his real-estate holdings grew, so did his tax bill, prompting his accountants to suggest building apartments as a tax shelter.
His first enterprise was a 48-unit development in Stockton. Spanos lived with the subcontractors, watching closely as the land was graded, foundations were poured, framing proceeded and sheetrock was installed. By the time the job was finished, Spanos had a handle on the business.
With growth and experience has come the Spanos method for success. Put together a thorough demographic study of an area. Tie up some prime building sites. Obtain a loan at a favorable rate from a lender impressed with the company’s record of early repayment. Line up a team of contractors and get the work moving quickly. Get the project done faster than any rival, so there is less money wasted in interest and overhead. Strike quickly, do it right and move on to the next project.
It sounds relatively simple, but it works so well primarily because Spanos pushes so hard. “I can’t slow down,” said Spanos, who insists on a 60-hour work week, 52 weeks a year.
He and his wife pass up vacations in Europe, where his plane could take them at any time.
In 37 years of marriage, she has never questioned his work ethic or asked when he would be home, and he says they have never had an argument. “Oh, I might yell and scream, but she just sits there until I get it all out,” he said.
Part of his success comes from the peace of mind he gets from knowing his wife is content to remain at home and be near the children and grandchildren.
Everyone is together on weekends, and the telephones in the company jets and autos are always available for a call to Stockton.
Well, almost always. The phone that rests in a drawer just behind his seat in the jet wasn’t working when Spanos flew East recently. You can’t have it all.
The Spanos work ethic springs from the early years of toiling under his harshly demanding father.
From the time he was 8 years old, he was awakened at 3 a.m. and forced to prepare pastry for four hours each morning before school. If he objected, he was beaten by his father.
Naturally, permission to play games such as football and baseball was automatically denied. Spanos said he wanted to own a football team because so many years ago he was denied the chance to be an athlete.
At 13, Spanos had had enough and decided to run away one night. But before he got to the edge of town, he started to feel cold and scared. Returning home, he received one of the more memorable beatings of his childhood.
“Alex tended ovens for his Dad and he’s had a hot hand ever since,” Hope once quipped. The line contains as much insight as humor. Spanos admits he is what he is because he learned to work hard as a boy.
Despite the whippings and long hours, the young Spanos was a free spirit. He was never afraid to sneak out of the house and find a party somewhere in the neighborhood.
“Nobody who knows me would believe this, but I was always the life of the party,” Spanos said. “Oh, how I loved to sing and dance, and we had good times. Good clean fun, it was, too. Nobody knew what drugs were in those days.”
If Spanos had not become a businessman, he likes to believe he would have succeeded as an entertainer. Most anyone who spends an hour with him is bound to be shown videotape of the Spanos-Hope dance routine. Spanos is the one with the horn-rimmed glasses.
Along with the frustrated hoofer, there is also the spirit of the gladiator in Spanos. He was named for Alexander the Great. Actually, his father planned to name him for a Greek warrior, Leonidas, but at the baptism, his godfather conferred the name Alexander, and it stuck.
“I like to think I am the best there is at what I do, and so I have conquered the world like Alexander. But I don’t believe I am the reincarnation of Alexander the Great,” Spanos said.
No one would suggest that Spanos is anything but a devoted family man--and one with a soft touch, as well. He was never afraid to reprimand his children, but said he administered only one whipping to his son Dean, when he was sassy to his mother.
Spanos met his wife, Faye, while he was a member of the Army Air Corps stationed near Tampa, Fla., during World War II. One Sunday he visited a Greek Orthodox Church in nearby Tarpon Springs and was introduced to a young lady.
Because of strict Greek family customs in those days, the kids were allowed to meet but not go on a formal date. The courtship was quaint and formal by the standards of 1980s California, but it produced a bond that has been successful, by any reckoning.
There are pictures of family members--and also of Ronald Reagan, John Wayne, Edwin Meese, Pete Rozelle and, of course, Hope--in all corners of Spanos’ vast Stockton office, which is furnished in a subdued color scheme of navy-blue furniture and parquet flooring, much like the Spanos home.
Although he dresses more like a golfer than a businessman, and boasts of never having worn a tie to work, Spanos requires his staff to be attired in traditional business garb. And he has a passion for cleanliness and order. Even the floor of the 40,000-square-foot hangar at the Jet Center is painted white, and there are no grease spots.
The interior of his preferred jet, a Lockheed Jetstar, is done in a subdued off-white, with six comfortable seats and a divan that can accommodate four more persons.
There is a galley stocked with all manner of drinks and edibles. Spanos may request pastry from his on-board flight attendant and executive assistant, Kerie Lloyd, but she is cognizant of his waistline, and thus is likely to hand him a banana.
Another feature of the cabin is a television that can show either movies--a selection of 12 each week--or a computer-monitored map of the United States, depicting where the plane is, how fast it is going, its time of arrival, even the outside air temperature (which drops to minus 100 degrees at a cruising altitude of 35,000 feet).
“If I didn’t have the comfort of this aircraft, I couldn’t do what I do,” Spanos said. “Being rested and comfortable is part of my success.”
He bought the first company jet in 1969 and it became a staple of the business. Some of his most creative thinking is done as he sips tea and scans newspapers while his plane wings its way eastward in the early morning hours.
Spanos tends to get tired by mid-afternoon, when he is likely to kick off his loafers and recline his seat for a 15-minute nap. But he insists on later having dinner with members of his management team, and is fine as long as he gets seven hours of sleep each night.
“There is no pretense in my family,” he said. “We are the same people we were 37 years ago. We haven’t forgotten where we came from. We always kept a low profile.
“But, you know, I have achieved the ultimate in my field. I am acknowledged as the best at what I do. But there was still one thing I wanted, and one thing I always dreamed of--to own a football team. And now I have it.”
The Chargers didn’t come cheaply. Even though an NFL franchise is a profitable proposition, Spanos might be better off if he had his $40 million invested elsewhere at 15%. At that rate, he would earn more than $6 million annually on his investment. He isn’t going to get that kind of return from football.
Spanos can afford to laugh at what turned out to be a $50-million mistake when he turned down Davis on the proposed purchase of the 49ers in 1977. Davis, who had been empowered by Vic Morabito to find a buyer for the team, advised Spanos that the 49ers were available for about $18 million.
But Spanos had only 24 hours to decide, and he chose not to buy the 49ers, who wound up becoming the property of Edward DeBartolo. It would have cost him $70 million for full control of the Chargers, as opposed to less than $20 million for the 49ers eight years ago.
He bought the Chargers to have fun and gain recognition. What he didn’t anticipate was the drain on his time.
“I didn’t plan to buy another job,” he said. “I wanted enjoyment.”
He plans to devote more of his time, through the end of the 1985 season, to the study of his football organization. After that he may bring in a family member to direct operations. So far, however, none of his most trusted top managers has shown a clear desire to get heavily involved with football.
But, then, he never pressured either of his two sons, Dean and Michael, to join him in the construction business, either.
During high school summer vacations, they worked for him, doing clean-up and wielding hammers. They also traveled and learned some finance. It wasn’t until his senior year of college, though, that Dean Spanos went to his father and asked to work for him.
The method of assimilation was markedly different from his experience with his own father 35 years ago.
“My Dad made me do everything,” Spanos said. “He did his best with me. If he had given me the freedom, I’d have stuck with him, and we probably would have a big restaurant chain now.
“But I just had too much energy to work with my father. I had to grow and move, I couldn’t let it slide by me. The decision to leave him was the best decision I ever made. I never worked for anyone else after I left my father’s business.”
As a youngster, Spanos thought he had special qualities--the other kids always looked to him for fun and leadership--but it wasn’t because he was reinforced or praised at home. Even now he is repelled at the thought of a parent calling his offspring dumb or stupid.
“You can instill that belief in a child,” Spanos said. “Fortunately, I never believed it.”
Spanos says his real life started with the birth of his first son. There would be three more children, and he would have had 12 if that had been practical, he said.
As much as he enjoys getting home each Friday, Spanos can’t stand the thought of retirement. He said he has never gone more than 30 days in his entire life without working. And he gets restless now if he takes off more than four days in a row.
“I’ll never stop,” he said. “I can go anywhere in the world I want on my plane, but I don’t care to do that. Bob Hope and I have been friends for 20 years, and what keeps him going is his work. He’s happiest when he’s working.
“The mind stagnates when you retire. What are you supposed to think about--dying? When the time comes, if you believe in God, you shouldn’t have that fear.
“I don’t dwell on that. When I have those thoughts, I shut them off real fast. I don’t know if Bob would want me to say this, but he thinks if he can just keep working, maybe they’ll come up with a pill to extend life for another 10 or 20 years.”
Spanos, not a religious man, does believe there is a reason why he has been given so much. But when he tries to explain that sense of purpose, the message is lost in a spiel on the virtues of capitalism.
“I’m a doer,” he said. “Any man with the confidence to take a risk and make decisions and move ahead . . . can become a great success. I’ve always had five-year plans and I have achieved each of them early.
“I’ve achieved enough for 10 lifetimes and now here I am in my early 60s. For 10 years I busted my butt wanting to own a ballclub and now I have it. How many more years will I be here? I want to enjoy it all.”
Spanos had been talking during a flight from Dallas to Louisville. Now the plane was descending, and the patriarch was looking forward to seeing his son Michael. He was also looking forward to some lunch, having passed up the barbecued ribs he normally has brought aboard the plane in Dallas.
Spanos greeted his son warmly, then muttered an oath as he wrestled with the seat on the passenger side of the four-wheel drive truck the company is using in Louisville.
“I’ve told you boys not to buy these things. What if you have a wreck? How are the people in back going to get out?” Spanos said with irritation.
Just as quickly, his mood changed again as the truck swung into the parking lot of a hamburger joint featuring 99-cent double cheeseburgers. Spanos approached the counter and, without being recognized, placed his order for fries, burger and a soft drink.
When the food was slow in coming, Spanos ran his hand through his thinning, brushcut hair. Then he grabbed the tray, found a booth and without saying much, polished off his noontime meal.
“OK, son,” he said, wiping his lips with a napkin. “Let’s go see that job you’re working on here. When can we get it done? What do the numbers look like?”
The numbers looked as golden as the late afternoon sun that slanted into the cabin of the Jetstar when a tired, but satisfied Spanos returned an hour later for the short flight to Nashville. The numbers were good, and the apartment king could get his rest now.