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Wealthsimple is an investing service that uses technology to put your money to work like the world’s smartest investors. In “Money Diaries,” we feature interesting people telling their financial life stories in their own words.
I grew up in Toronto, but I was always a basketball fan. I used to go to Buffalo Braves games when I was a kid, when they played at Maple Leaf Gardens. I played lots of team sports growing up: football, basketball, baseball, hockey, rugby. But I always wanted to be a businessman. When I was a kid, I wanted to own and run a conglomerate of all kinds of different things. I'd map out different companies I would buy when I got old enough. None of those companies would turn out to be things I owned. Like the Toronto Raptors, for example.
My parents put my siblings and me to work when we were young. I was probably 11 or 12 years old when I had my first newspaper route. And my dad owned a bunch of Big Boy Restaurants. You know the logo: the little kid with the checkerboard overalls, holding up the hamburger over his head? We had to work in them during the summer, bussing tables, washing dishes, all kinds of things. When I was in high school, my older brother Nick started putting cigarette vending machines in my dad's restaurants — and then he got other accounts. On weekends he and I would go and restock the cigarettes and collect the money. Sunday afternoons we would count the coins so we could deposit the money on Monday. It was Nick’s money, and I was an employee, but he would give me a cut of the profits because he was a nice boss. When I was a kid, every paycheque I got my mom would take to the bank and I'd watch my bank account grow. Whatever I had in cash, she'd make me buy Canada savings bonds. And so my siblings and I learned the value of interest and saving money, and watching it grow from the time we were very young.
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I’d worked in the federal government for two years in the Deputy Prime Minister's office, and had worked in the family business for four years — restaurants and catering. And then in 1993 I led an ownership group that brought basketball to Toronto. It was in the heyday of Michael Jordan, and the league's TV audience was just skyrocketing globally. David Stern, the NBA commissioner then, was one of the best commissioners in all of sports. And the NBA wanted to expand into Canada. I thought, if there's one league that really has its act together, it's the NBA.
When you start a sports franchise, there are no manuals. It's not like McDonald's where you get a binder that says this is how you do everything. And the rules didn't necessarily apply to us anyway, because we're in the capital of hockey.
Our marketing plan was just to ignore hockey and focus on building a basketball fan base. And we took a national approach — Canada was our market. I used our exhibition schedule to take the team on the road. We’d play in Halifax, Winnipeg, Calgary, Montreal. We funded youth leagues across the country, so that we could help little kids afford to play basketball. Our first season, we had the third or fourth-highest attendance in the league. And we never lost money — remember, as an expansion team, we didn’t have a lot of free agents, we had young players, and they have less expensive contracts.
The Raptors period of my life wasn’t that long. From the day we got the team to when I got out was almost five years. The year I left, 1998, the Raptors drafted Vince Carter. Vince was big for the franchise. It took a couple of years for him to hit and really become a star. But he got popular at the dunk contest at the 2000 All-Star Game. And players liked him. It was like when Shaq was drafted by the Orlando Magic. Guys like that are very important for an expansion team to have. But it has been amazing to watch where the team has gone. You saw in the NBA Finals the avid following we were getting. That was really a result of the customer experience and a fan base we had for 20-some years.
Last year, I think every major American media outlet and pontificator were picking the Raptors to lose almost every series along the playoffs. They refused to believe this team from Canada could do it. But the Raptors built a solid team. And you felt once they traded for Kawhi Leonard, they had someone Michael Jordan-like who could take them to the title. I think the bulk of our fanbase believed they could.
I’m not involved with the team anymore, so I found out Kawhi was leaving to the Los Angeles Clippers when everyone else did. I thought he was going to sign a short-term contract with us. You know, when stars win a title, they don’t often want to leave. It’s hard to leave a team you’ve just shared that experience with. But Kawhi was always very clear — he wanted to play 45 minutes from where he grew up.
After the Raptors, I went out on my own. My first big break was when I acquired Scotts Hospitality, which was the bulk of the KFC franchises in Canada, in 1999. After the Raptors, I was trying to do anything but get into restaurants just because I felt that I had been through it my whole life. But I had too many people telling me that there was a public company sitting here. The stock was languishing and it needed leadership, so I looked seriously at it. I purchased it for $250 million. There were 550 restaurants then. We sold it off in pieces ultimately over time. I've been out of it since 2011. One of my big successes was bringing satellite radio to Canada. I read a magazine article that said, "satellite radio, the next frontier." I just thought, wow, I'm going to try and bring this to Canada. And in 2005 I started satellite radio. We started XM in Canada, we merged with Sirius in 2013, and that company has got over three million subscribers in Canada now, doing extremely well.
But I made a big mistake in my wireless company because we didn't see data becoming as big as it did. We thought we could launch a talk and text service, much like a Metro PCS or a Cricket in the U.S. at the time when handsets were cheap and people were basically texting. But within a year of launching, between the iPhone coming out and where the Blackberries were headed, our network could not handle the amount of data that was going to be required. That's where technology can burn you the other way.
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Did I know I would be running a basketball team when I was 35 years old when I was 25? No. Did I know that I'd be launching a satellite radio or a wireless business at 45 when I was 35? No. But I like working. I don't think I'll ever retire. And if something comes to me to build a chain of baby stores when I'm 90 years old, you know, if it's a good idea, I'll do it.
The Raptors — we’re going to be good this year. We had one of the deepest teams and the deepest benches last year, and that hasn’t changed. We won 58 games last year, and Kawhi missed 22 of those games. Having Kawhi leave, it was bruising. But it’s not difficult for Toronto to attract and keep free agents — not in baseball or hockey. The two biggest phone companies in Canada, Rogers Communications and BCE, own the Raptors now, so they’re not hurting for money. And Drake is a selling point, too. He’s very involved with the team, and players have access to him. He’s a definite selling point.
Look, the Raptors are the first team to win a title in 40-some years that has not had a top-15 pick on its roster. And I think it's going to cause a lot of general managers out there to say: I don't need lottery picks to win, I need to pull in good guys with the right attitude. If you have those foundations — a winning culture, a good coach, teammates you enjoy — I think you can put a team in the Arctic Circle and guys would play there. That's what sports is about. I think that's going to be a new paradigm in the NBA. Because Anthony Davis gets traded to the Lakers and all of a sudden the prognosticators are saying they're favoured to win the NBA title next. And you scratch your head and go, really? It's that simple, huh?
As told to Greg Howard exclusively for Wealthsimple; transcript edited and condensed for clarity. Illustration by Jenny Mörtsell.
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