He Means Business

By HELENE ELLIOTT

Dec. 13, 2000 12 AM PT

TIMES STAFF WRITER

“The salaries are out of whack in both baseball and hockey. . . . There are a lot of great [baseball] free agents out there this year. I personally don’t think that the clubs are going to be quite as foolish as you might read in the newspaper or some of the numbers that are thrown around. I just don’t think it’s going to happen. I think that the commissioner is going to try everything he can to make sure it doesn’t happen.”

--Tom Hicks,

owner of Texas Rangers and Dallas Stars, in the Dallas Morning News, September 2000

Meet the man who made it happen, Tom Hicks.

The Rangers’ signing of free-agent shortstop Alex Rodriguez to a 10-year, $252-million deal Monday sparked predictions of financial Armageddon among baseball fans and executives. But Hicks’ record in the five years he has owned the Stars--they have won four consecutive division titles besides winning the Stanley Cup in 1999 and compiling the NHL’s best record twice--suggests he has as good an eye for sports acquisitions as for the corporate acquisitions and mergers that have made him one of the business world’s savviest players.

Hicks, 54, is chairman and chief executive officer of the private investment firm Hicks, Muse, Tate & Furst. According to a reckoning a year ago by Texas, the magazine of the University of Texas’ McCombs School of Business, Hicks had bought and sold more than 250 companies, raised $10 billion of private equity funds and made $32 billion in leveraged acquisitions in 10 years. His varied holdings have included radio stations and Dr. Pepper, Ghirardelli Chocolate and Bumble Bee Seafoods, with an electronics company and several cable TV companies mixed in.

His business acumen has extended to his sports holdings. A year ago, after planning to start his own regional sports network to air the Rangers and Stars, he instead decided he could make more money by selling his programming. To avoid a potentially formidable competitor, Fox Sports Southwest bought the broadcast rights for the two teams from Hicks for a reported $300 million over 15 years.

Which means Rupert Murdoch’s Fox Corp., which owns the Dodgers, may be indirectly subsidizing Rodriguez’s every hit and run he drives in with the Rangers.

Hicks has called his ownership of the Stars, Rangers and Mesquite Championship Rodeo “personal stuff,” but his efforts and expenditures toward making both teams competitive reflect his strong conviction that Texans should have nothing but the best of everything.

“He believes that Dallas deserves to have a fine hockey team, [and] North Texas deserves to have a great baseball team,” Dan Blanks, a partner in Hicks Muse, told Texas magazine. “It’s not facetious. He feels he’s gained a lot just by being born in this state, and he would like to see it getting better and better.”

A Texan through and through, from his Stetson hats to the Texas Longhorn logos emblazoned on his personalized cowboy boots, Hicks has been generous in sharing his wealth. That reflects his business philosophy.

“Tom is terrific at relationships, at getting people to trust him, because he is trustworthy,” Blanks said. “Some dealmakers maybe back people into a corner, but Tom doesn’t do it that way. Alignment of interests may be an overused term, but he knows how to do that. He knows how to give.”

That apparently comes naturally. “We work real hard not to get an attitude of arrogance or haughtiness, which you see in this business all the time,” Hicks told Texas magazine. “If you take the approach that you want to scrape every last nickel off the table, that’ll work one or two times, but after awhile, your reputation will precede you.”

His reputation has become one of a civic booster.

He has given large sums of money to the University of Texas, where he earned his undergraduate degree, and a smaller but equally meaningful gift of $20,000 to Travis Roy, the Boston University hockey player who was paralyzed in a freak accident during his first game and needed a specially equipped van to get around. “I’m one of those people who have been blessed,” Hicks told the Dallas Morning News. “I’ve worked hard and I started off with nothing and I’ve ended up with a lot. So when you do that, you want to give something back.”

Two years ago, Hicks and partner Charles Tate paid $388,000 for the rare diary of a Mexican soldier who was in Gen. Santa Anna’s army to ensure the precious book--which detailed events of the Texas Revolution and provided accounts of the storming of the Alamo and Davy Crockett’s death. They gave it to the University of Texas to make sure it would not be spirited away by out-of-state bidders who might not appreciate its importance in Texas’ history.

He also acted as a representative of the University of Texas regents in helping Athletic Director DeLoss Dodds in his search for a football coach to replace John Mackovic. He initially favored Gary Barnett, then with Northwestern, but was won over by Mack Brown in a last-minute interview. “Mack was the perfect fit for the University of Texas,” Hicks told the Dallas Morning News. “Gary Barnett’s a great coach. Mack was just a better fit for our university.”

Although no sports owner can truly be altruistic, Hicks has shown a sense of responsibility in building the Stars.

He has assembled his organization carefully and well, turning the Stars into one of the NHL’s most stable and successful clubs on and off the ice. Since Hicks purchased the club from Norm Green for $84 million in December 1995, the Stars have had one general manager, Bob Gainey, and two coaches--Gainey, who relinquished the job to focus on his duties as general manager, and Ken Hitchcock.

“Bob has got a great sense of chemistry and what you need to do to keep the right balance,” Hicks told the Dallas Morning News.

Hicks approved a three-year, $17.5-million free agent deal for Brett Hull in 1998, $9.3 million over three years for winger Pat Verbeek in 1996, and $10 million over three years to sign free-agent goaltender Ed Belfour in 1997. All performed well, but Hicks has not let sentiment cloud his business judgment. He refused to meet Verbeek’s price in 1999 and let the feisty winger sign with Detroit for less than a third of what the Stars had paid him.

“He’s just not as good as he once was,” Hicks told the Dallas Morning News. “Same way I’m not as good at certain things as I once was. That’s what happens with age.”

He let Gainey negotiate with free agent Claude Lemieux but went along with Gainey’s decision not to sign Lemieux. “I’m not about to second-guess Bob Gainey’s knowledge of how to put together a hockey team at this point,” Hicks said.

And Hicks said he would like to re-sign the prolific Hull, whose contract includes one more season, but the price must be within reason.

“I think he loves to win. But he’ll be 37, 38 years old, and he’s going through the same process we talked about earlier [regarding Verbeek],” Hicks told the Morning News. “He knows that he’s only a few years away from retirement, and that’s why he signed as lucrative a contract as he could when he did, ‘cause he was at the height of his career. And he won’t get those kinds of dollars when he signs his next contract. But he’ll get paid quite handsomely, and nobody’s going to feel sorry for Brett Hull.”

Certainly, not all of Hicks’ moves have paid off handsomely.

On the business side, Hicks lost $50 million on the purchase of the bankrupt G. Heileman Brewing, which he listed among his most regretted business moves, and his firm’s joint purchase of Regal Cinemas with Kohlberg Kravis Roberts Inc. for $500 million each has soured in the wake of the theater chain’s overexpansion and accumulation of $1.9 billion in debt.

On the sports front, Hicks tried mightily but couldn’t lure former Texas Longhorn pitcher Roger Clemens back home to the Rangers.

Yet his successes far outweigh his failures and stand as an impressive record for a man born not to immense privilege, but to a modest legacy.

Hicks’ father owned and operated a string of radio stations in small Texas towns, and it was in Port Arthur that Hicks got his first job, as a disc jockey who used the name Steve King.

“I was one of four sons, and he wanted us all to go to work in the radio business,” Hicks told the Los Angeles Times in 1998. “I chose to go to Wall Street instead. But all the brothers ended up getting back into the radio business in one form or another.”

After getting a business degree from Texas and a graduate business degree from USC, Hicks worked for Morgan Guaranty Trust Co. in New York. He eventually returned home to Texas, where he joined investor Robert Haas to form Hicks & Haas in 1983, just in time to cash in on the leveraged buyout craze of the 1980s. They did $4.5 billion in deals in five years but parted in 1989, when Hicks joined John R. Muse, Tate and Jack Furst to form a new firm.

Despite his wealth, Hicks appears content to let his employees run his teams. Compared toDallas Cowboy owner Jerry Jones, who is the Cowboy general manager, and flamboyant Mark Cuban of the NBA’s Dallas Mavericks, Hicks is almost a shrinking violet.

Asked by the Dallas Morning News whether he’s as involved as Jones and Cuban but merely disguises his behind-the-scenes activity, Hicks said it’s not a front. “I think I have a day job, and they don’t,” he said. “I really enjoy what I do. And I enjoy sports too, the part that I do get involved with, which is the decisions on players. But I’ll keep my day job.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Bread Winners

Alex Rodriguez’s new contract will pay him an average of $25.2 million a year. Athletes and celebrities who made $25 million or more last year, according to Forbes. Totals in millions of dollars:

George Lucas: 400.0

Oprah Winfrey: 150.0

David Kelley: 118.0

Tom Hanks: 71.5

Tom Clancy: 66.0

Stephen King: 65.0

Backstreet Boys: 60.0

Steven Spielberg: 60.0

Bruce Willis: 54.5

David Copperfield: 50.0

Julia Roberts: 50.0

Rolling Stones: 50.0