The Dan Gilbert and Lebron James debacle

By Chris Blair

Ok, you’re probably wondering, “what the heck does Cleveland Cavaliers owner Dan Gilbert’s crazy comments about Lebron James spurning the Cavs have to do with marketing and advertising?” Well, not that much on the surface, except for the fact the whole affair has brought more attention to the NBA during the second week of July than it’s ever had in an entire summer.

July typically brings us Major League Baseball, Wimbledon, the British Open, the Tour de France and this year the World Cup. But the Lebron James free agency circus changed all that. And oh what a circus it was! Leave it to ESPN, creator of the dubious sports award show “The Espys” to bring us a live TV special with Lebron announcing his decision. Of course we have to remember the “E” in ESPN does stand for “entertainment!” But I digress. The real fun didn’t start until after the show, when Cavaliers owner Dan Gilbert published an “open letter” to Cleveland fans on the Cavaliers official website. If you haven’t read the letter, you can do so here:

(Editor’s note: the original letter was removed from the Cavs official website Tuesday morning July 13th, but you can read a transcript of it at the link below):

http://www.cleveland.com/cavs/index.ssf/2010/07/gilberts_letter_to_fans_james.html

 

And here’s a screen capture of part of the original page…a MUST see I might add: http://videomi.com/blog/gilbertletter.htm

First off, what’s with the font Dan? In the original posting on the website, Gilbert wrote using a superhero looking font I later learned was called (appropriately enough) comic sans. That’s a bad choice for a letter from a billionaire CEO. The internet is awash with nearly as much commentary about Gilbert’s font choice as it is about his jaw-dropping comments.

In his letter, Gilbert talked of James’ “selfishness and betrayal” and called the decision a “heartless and callous action.” Yeah right! I’m sure Mr Gilbert never made a selfish or heartless decision while amassing billions in profits over the last 25 years. I’m also sure he never once fulfilled a multi-year, multi-million dollar contract with a client or vendor (as Lebron did), only to move his business elsewhere. Don’t get me wrong, James’ silly TV special and even sillier, third-person comments during the show were bad enough, but he’s a 25 year-old basketball player! Gilbert is a forty-something executive with an impressive entrepreneurial track record. Gilbert is obviously the one with the experience and business savvy needed to handle the disappointment of losing a contract to a competitor. Yet Gilbert used phrases like “cowardly betrayal,” and “shocking act of disloyalty” in his decidedly grade schoolish letter to Cleveland fans.

What if every company reacted the way Mr. Gilbert did every time they lost a project bid to a competitor? Gilbert complained that James wouldn’t return his texts or phone calls and didn’t inform him of his decision prior to the announcement on television. I say…”so what!” When we bid on a project, clients often don’t answer inquiries and we are almost never informed we weren’t chosen. We don’t write open letters on our blog or website attacking the company or people because they chose someone else!

Gilbert is another example of a businessman who believes by virtue of his success in one industry, it guarantees success in another, which seems a common malady for professional sports owners! What businessman in his right mind buys a sports franchise anyway? Less than half of major professional sports franchises turn a profit each year. Some, like Mark Cuban’s Dallas Mavericks, lose hundreds of millions year after year. According to Forbes.com, with Lebron James under contract, Cleveland made money. Without him they likely won’t. Forbes.com estimated the Cavaliers team value was $476 million with James, and will fall to somewhere around $250 million without him. Attendance and licensing revenue is projected to plummet, and when their $25 million television contract expires, it will likely be renewed for far less.

Here’s an article that sums up the psyche of billionaires who buy major sports franchises:

http://www.businessweek.com/news/2010-07-06/billionaire-bosses-become-beggars-in-sports-scott-soshnick.html

Cleveland fans have generally lauded Gilbert for his comments and have blogged and tweeted and facebooked about how refreshing it was to see an executive not worry about being politically correct. Unfortunately they’re jaded by fan loyalty! From a marketing perspective, Gilbert’s comments are about the worst thing a CEO could do. Here is the top executive of a half billion dollar enterprise crying about and deriding an employee who fulfilled his contract but decided to take his talents to a competitor. And Gilbert does this to an employee who likely made him tens of millions of dollars during his seven-year stay (five with Gilbert as owner). Sure James could’ve handled the whole thing better, but again, out of what obligation? He fulfilled virtually every expectation (and then some) given the hype surrounding his talents. I can’t think of another athlete except for Tiger Woods that has lived up to the expectations placed on him at such a young age. Even Kobe Bryant was allowed to grow into his marquee role. He wasn’t even a starter for the Lakers until his third year!

Why do people expect pro athletes to have more loyalty than the rest of us? James spent seven years playing with a mediocre supporting cast and yet still at the age of 22, got to the NBA finals. He single-handedly made the Cavaliers relevant again. He brought excitement to their city. He played out his contract, never complaining about it and never holding out for a re-negotiation. He even publicly hinted of his intentions to move on more than 2 years ago! If Gilbert is such a great businessman, he should’ve done more to build a team that gave James a legitimate shot at winning an NBA title.

The last 15 years show that to win an NBA championship, you need at least 2, if not 3 Hall of Fame caliber players on your team. The only exception was the 2003-2004 Detroit Pistons. Every other champion since 1995 had at least 2 perennial all-stars and likely Hall of Famers. Think Alajuwon and Drexler, Jordan and Pippen; O’Neal and Bryant; Duncan and Robinson; Duncan, Parker, Ginobili and Robinson (yes they were all on one team); Wade and O’Neal, Pierce, Garnett and Allen; Bryant and Gasol. Who did Lebron have? Mo Williams? Donyell Marshall? Drew Gooden? Larry Hughes? Zydrunas Ilgauskas? All fine players and probably finer human beings, but….puh-lease! The only chance these guys have of getting into the Naismith Hall of Fame is if they buy a ticket.

Dan Gilbert may have won fans in and around Cleveland, Akron and the rest of Ohio, but I doubt many outside the Cavs faithful think he did much to help his team or franchise. What NBA player in his right mind now wants to go play for a guy like that? It certainly says a lot about how he does business. As long as you’re making him buckets of money, you’re his buddy. Decide to take your talent to a competitor, and you’re a “traitor” (his words, not mine).

I feel sorry for the director of marketing for the Cavaliers! How do you “spin” comments like that from your CEO? Where do you go with your marketing after that? Imagine one minute having arguably the most talented and popular athlete on the planet at the center of your marketing campaign, then the next having a collection of 2nd tier NBA players and a coach who’s twice been fired in the mid-season after mini-revolts by his players.

Glad I’m not THAT marketing guy!

Of course, if Cleveland can land a talented player or two, and coach Byron Scott can brew the same winning formula he cooked up in New Jersey and New Orleans (albeit during short stints each time), marketing an underdog team will sure get a whole lot easier. Hey…it’s basketball….and everybody likes a winner! Until he leaves and takes his skills to another city!

Here’s another well-researched (and funny) post about our buddy Dan Gilbert:

http://childmurderingrobot.blogspot.com/2010/07/owner-of-cleveland-cavaliers-is.html