Interview with Ed Snider
Edward Snider is CEO of Comcast-Spectacor, a company that owns the Philadelphia Flyers hockey team, the Philadelphia 76ers basketball team, the Wachovia Center, a $210 million state-of-the-art sports and entertainment complex, and several other sports-related businesses. He is the recipient of many achievement awards, is a noted philanthropist, and sits on the boards of several organizations, including the National Foundation for Celiac Awareness, The Atlas Society, and the Simon Wiesenthal Center. For this interview we met with Mr. Snider at his home in Montecito, California.
Kaizen: Before you became an entrepreneur, you were a young man in Washington, D.C., with a paying job. What was the job, and why did you quit?
Snider: Well, I went to the University of Maryland and majored in accounting. In the state of Maryland in those days—I don’t know whether it’s still that way or not—you could take the CPA exam and you were immediately a CPA. In most other states you have to work as an accountant before you can become a CPA. So everyone—friends and relatives—said, “Look, you majored in accounting, you should definitely take the CPA exam.” So I took it and, much to my amazement, I passed. So I got a job with an accountant—a one-man office. He needed a young assistant, so I went to work for him. He assigned me to an account in the suburbs of Washington called Kensington Esso. I went out and I was doing Kensington Esso’s books and wiping the grease off of the ledger and finally figuring out that the guy had made about $25,000. I was making $5,000. I went to my boss and said, “How long do you think it will be before I make $25,000?” He said, “If everything goes well, I can make you a junior partner. I’ll bet in five years you’ll be making $25,000.” This is a true story. I said, “Bernie, I’m really sorry, but this is not for me. I quit.” I realized at the time I’d rather own a gas station. I’ve been entrepreneurial all my life. I guess working as a CPA just wasn’t my thing.
Kaizen: When you quit, did you have a definite entrepreneurial idea in mind?
Snider: No, I really didn’t have specific thing in mind, but I did go to work in a supermarket chain that my father had an interest in. My father was a grocer, and he finally built up to a couple of supermarkets, and he banded together with others who had a few and they formed a chain. I went to work there, and I was doing, I think, a very, very good job and creating a lot of things for the company. And I went to my boss, one of the owners—there were nine owners—and said, “I think I need a raise.” I’d gotten married, I already had a child. He said to me, “Well you’re already making more than the other sons in the business.” There were several other sons of other owners. He said, “I think the gap would be too big. We can’t afford to have you get that far ahead.” I said, “So my career is dependent on theirs? I quit!” So I quit that job.
Kaizen: What did you do next?
Snider: During my career with the supermarkets, I had run a promotion of phonograph records that I found—45 RPMs—overruns from Columbia Records. They had never been used; they were still completely in the boxes in the warehouse in Cataret, New Jersey. So a dear friend of mine and I—we had been partners in various ventures through the years—decided to buy them and sell them. I sold them to the supermarket chain, and we had a big promotion, and then they had about a third of them left over. So my buddy and I put them in the trunk of our car and we started putting them in drugstores. Then it became a real record business. We started putting record departments in drugstores and supermarket chains and discount houses. We thought we invented this but found there were a few other guys doing it too. So I then started a record association with four other people around the country, called NARM—National Association of Record Merchandisers. They later changed it to National Association of Record Manufacturers, I think, because the industry has changed so much. NARM celebrated its 50th anniversary this year in San Francisco.
Kaizen: At this point what were you using for finance?
Snider: Well, we were making money, and the little bit of money that we had.
Kaizen: So you put it back into the business, growing it organically?
Snider: Exactly. We got credit after a while from the record distributors and so forth because we were doing a good job. So I was supposed to be honored along with several of the other founders, but we were in the playoffs this year so I couldn’t get to San Francisco.
Kaizen: You had that incredibly busy month and a half or so there.
Snider: Yes. But when I think about it, I was 25 when we started that business and it’s still a major thing in the industry today.
Kaizen: So you moved from NARM …
Snider: Well, NARM was just an association. But the record business was called Edge Limited. My name was Ed and my partner’s was Gerald. We were very successful and expanded rapidly on a national scale. But we weren’t prepared for that. We were very young. We took our top people and sent them to live in different cities around the country, without really the proper training on how to run a division or anything of that nature. So we ran into problems—not major financial problems but just operational problems. As we spread our wings we weren’t as good as we were when we were asked to spread our wings. Like we would go into a chain like Kresge’s in those days, and they’d want us to go to other cities, set up different food chains, national chains, national drug chains. So we sold the business—not for a lot of money, but some money—just to get out because it was overwhelming us. It was a great lesson.
Kaizen: So when going national, having the trained manpower and organizational structure was the main issue—so everyone is not running around 24 hours a day trying to fill orders and making things work?
Kaizen: You sold that in what year?
Snider: In ’63. And then, toward the end of ’63, my brother-in-law, Earl Foreman, was very friendly with a guy named Jerry Wolman, who heard that the Philadelphia Eagles football team might be for sale, and wanted to know if I would go up and see what was going on and work with him, since I was—at the time—deciding what my next venture was going to be. So I went up to Philadelphia and strategically decided what to do to get the team, and we bought the Philadelphia Eagles for $5,555,000. The Eagles are now worth $1 billion.
Kaizen: And this was in the middle ‘60s …
Snider: This was in ’63; the end of ’63. We actually took over the team for the ’64 season.
Kaizen: No doubt you were a sports fan—did you decide to pursue a sports career out of a general love of sports, or did a particular opportunity arise?
Snider: This was an opportunity that arose. I never knew where I was going. I actually think most entrepreneurs are that way. I financed the Sol C. Snider Entrepreneurial Center at the University of Pennsylvania, Wharton School. I named it after my dad. And they do all kinds of studies about entrepreneurship; there are all kinds of things written. But truthfully, my own analysis is that it’s an instinct—it can’t be taught. You either are or you aren’t. And if you’re fortunate enough to be born with it, it’s just part of you. I don’t think you can make an entrepreneur. You can encourage people who may not have realized that they were.
Kaizen: When you say it’s an instinct or you’re born with it, what kind of traits would you say go into that—a kind of gung-ho-ness, keeping your eyes open for opportunity, risk-taking, tolerance for going out on a limb and taking a leap?
Snider: First of all, I think when you’re young you’re a bigger risk-taker than when you’re older. And I think when you’re young it’s not the risk as much as it is you have this idea and you feel like it’s going to work. And then you go for it. When I was a kid I was always doing things—selling magazines, I had a paper route. In college I hired all of my fraternity brothers because I had these lots I could get Christmas trees or Easter flowers from. In those days all of the kids in the fraternities would go to work at the post-office for Christmas. So I’d hire them, I’d pay them more and say, “We’re going to have Christmas tree lots.” Stuff like that—I was always looking to do something.
Kaizen: In part it’s a turn of mind—coming up with fresh ideas—and the instinct part is that a lot of people don’t seem to have that; if something falls into their lap then they’re aware of it, but they’re not actively aware and prospecting, spotting opportunities?
Kaizen: Do you have siblings?
Snider: I have one sister.
Kaizen: So there’s no family study that we could do here?
Snider: Well my grandfather pushed a fruit cart in Kansas City, Missouri. He came from Russia. My father came from Russia, too, as maybe a five year old. And then my father had small grocery stores. When I was born I lived on top of one of the grocery stores. He finally got a supermarket, and then he got two. But he was always a businessman, and he was always looking for stuff too. He unfortunately failed in a few of the things but he was always looking to do other things. So I think it’s part of the culture that you grow up in.
Kaizen: Is part of it then being able to pick yourself up again after you’ve failed, as your father did, if you make a mistake, rather than seeing it as a death blow and not trying anymore?
Snider: Yes. My father used to tell me, “If you don’t do anything, you can’t do anything wrong.”
Kaizen: So from the Eagles …
Snider: While I was with the Eagles, we were working with the baseball team, the Phillies, to build a combination stadium, which was the rage in those days. They don’t exist anymore—now football has its own stadium and baseball has its own stadium. But in those days they shared a stadium. The Eagles were playing in Franklin Field, the University of Pennsylvania’s football stadium, with benches and, you know, nothing. And the Phillies were playing in an antiquated stadium called Shibe Park. So we worked together to build a new stadium and I was working with the city, and we picked an area in South Philadelphia and I was very familiar with exactly what we were doing. The city was buying up ground to build parking lots all around and so forth.
I’m sort of mixing this up, but when I was still with the Eagles, the then-owner of the Philadelphia 76ers came to see me and said, “You guys are working on a stadium—would you build an arena for the basketball team?” And I said, “Well, we’re really not in the business of building arenas, but if I hear of anything I’ll let you know.”
Shortly thereafter, I heard, and it wasn’t big news—it wasn’t even news in Philadelphia—that the National Hockey League was expanding from six teams to twelve. They were going to take six in at the same time, and they had all these cities that were vying for it—Baltimore being one, and so forth. And we weren’t even mentioned. So the banker who financed the purchase of the Eagles was with JP Morgan and was leaving. He was in their sports division and he was leaving to go to work for Jack Kent Cooke, who expected to get a franchise in Los Angeles in the National Hockey League, who already had bought the Lakers, and was going to build an arena and wanted the hockey team also. So this guy was going to go out to work for Jack Kent Cooke, and he told me all about the League and what was going on. And I said, “Who can I contact?” He mentioned Bill Jennings, who was the president of the New York Rangers. So I went to New York, met with him and asked him what would happen if we built an arena—would we have an opportunity to get a franchise? And he said, “We’d love to have Philadelphia. It’s one of the largest cities in the country. We just didn’t know there was anybody interested.”
Kaizen: Was this fellow from the 76ers part of what put the idea of building an arena in your mind?
Snider: Yes. I knew you had one for hockey. At that time the 76ers were playing dumps. So I went to the 76ers and said, “If we build an arena would you like to be a tenant?” “Yes, we’d love to be a tenant.” So then I went to the city people that I was working with and I said, “If we build an arena on the parking lot of the stadium”—the stadium hadn’t been built yet, hadn’t even been started—“We’ll put it on the parking lot and you’ll end up with additional parking revenues and everything else: what do you think?” The president of City Council—a guy by the name of Paul Dortona—said, “I love the idea.” And he marched me in to the Mayor—the mayor at the time was Mayor Tate—and told him what I wanted to do. And Mayor Tate said, “I love it,” and he called in the City Solicitor and the City Finance Chief and said, “Find out how much that land costs and divide it over the length of the lease with a small interest charge, and that’s the rent they’ll pay and maybe a little bit of the parking.” So we made a fantastic deal and ended up building the arena for about $8 million.
Kaizen: And this is the Spectrum?
Snider: Yes. And I started out in partnership with Jerry Wolman from the Eagles football team. During construction and everything else, he wanted no part of it and wanted to sell it. I got the franchise because we guaranteed the arena. He wanted to sell it.
Kaizen: The arena was necessary for the NHL to give Philadelphia a franchise?
Snider: You had to have the arena finished before you got the franchise. From the time I thought of getting the franchise to the time that the arena was finished, it was sixteen months. Anyway, Wolman and I had a falling out. He wanted to sell everything; I didn’t, so we had an unhappy parting. He wanted to make a big deal and say that he had fired me, and it was headlines on the night that we opened up the arena with the hockey team. So I ended up with a lot more of the hockey team than I wanted, or that I felt I could afford. So I was scrambling to pay the $2 million franchise fee and to get everything else done. I finally worked it out—I had a few partners. I owned 60 percent at the time—more than I wanted. I actually wanted around 10 percent.
As it turned out it, was the best thing that ever happened to me. Everybody said hockey was going to fail in Philadelphia; it would never make it. Of the six new teams, we were picked to be the least likely to succeed. We ended up being the most successful out of the six. Some of them disappeared.
But the interesting thing is—fast forward to building what is now called the Wachovia Center, at the time it was called the CoreStates Center. It took me about five years to just get everything put together, three years to construct it on the same parking lot in the same city. The documents with the city and the lender for the original Spectrum were each about an inch and a half or two inches thick; the documents for the new building, with the city and the lender, filled up a conference room—stacks of documents. I walked into the room and I couldn’t believe it. This is the same city, the same function, on the same lot, and that’s what’s happened to our world. This arena—it’s much nicer and bigger—cost over $200 million; the other was $8 million.
Kaizen: What are the biggest differences in the 30 years between the two stadiums? Local politics and regulatory structures and the increasing complexity of financial issues. Are there other elements?
Snider: It’s how complex everything has become, how litigious everything is. You have to cover every base of every known possibility. The workman’s compensation insurance alone for this new building was more than it cost us to build the Spectrum—just the workman’s comp.
Kaizen: So in the mid-1960s you had a couple of years of extraordinarily busy scrambling, getting everything done and making it work for the 76ers, for the NHL, for the city. And when your original partner didn’t want to go down that road with you, you had to scramble much more for financing—and part of that, I understand, involved mortgaging your house. And, at the same time, you have all the nay-sayers thinking you’re at the bottom of the list.
Snider: Fortunately, when we finally opened up … I put the team together in ’66, so I was 33 years old, and still young enough to not worry about things so much.
Kaizen: Was it a matter of your being willing to take a number of calculated risks here? Since you were 33, if it didn’t work out there were lots of other things you could do.
Snider: But I was broke.
Kaizen: Did any of the arguments that the naysayers had at the time have any weight with you?
Snider: Once I closed the deal—I’ll never forget—I was with my brother-in-law at the bar putting two drinks together to congratulate the fact that I did it, and I’ve got to tell you—I was shaking just thinking what I had done! When I split with Wolman, he took the arena part of our deal and I took the hockey part of it—we split interests. And then he really didn’t pay much attention to the arena; it fell into financial difficulties. Well, actually, not only because he didn’t pay attention but because he drained it of its money, because he needed it in other areas. So the Spectrum went into bankruptcy. I took it out of bankruptcy, even though I was the guy who had actually gotten it built and everything else—the whole project. But we had it split before the Flyers ever started, and I had the Flyers, he had the Spectrum. I took it out of bankruptcy about three years later, and paid the creditors a hundred cents on a dollar. It cost me, in that bankruptcy, about eight million dollars. And I think we made eight million dollars in the first year, so it was a pretty good deal. It shouldn’t have been in bankruptcy—it was always successful.
Kaizen: At what point did you know the Flyers franchise was a business success? What benchmarks did you achieve?
Snider: We played two of the original teams—I think it was Chicago and Detroit or Chicago and Toronto—on a weekend, at home. We beat them both. And by that time we were selling out some of the big games. Even though our ticket prices were like five dollars top ticket, the first year in existence we grossed about $950,000 for the season. Now we gross over a million dollars per game. Things have changed. I felt that we were going in the right direction.
And then we had a problem where the headlines said the roof blew off of the Spectrum. Actually some tarpaulin that they had laid down came off, but unfortunately it became a political football and they closed the Spectrum down. I didn’t know any of it at the time—it was our first year. They closed the Spectrum down and we had to play our last eight home games on the road. Obviously because we were playing on the road the games were basically free, we just needed venues. We played in Quebec City, we played in Toronto. I was beside myself because it was a financial disaster, although, fortunately, we were insured. But the insurance company wouldn’t pay right away, obviously, and on top of that they didn’t even want to pay. I got into one of the biggest fights I ever got in, but they paid because we did have insurance.
But the bankers who financed us—the vice president had played hockey at Harvard and the president of the bank had played hockey at Harvard. This was the most conservative bank in Philadelphia. I went to all the banks when I was buying the franchise and trying to get a loan against the franchise. They all turned us down. They didn’t even know what hockey was. Finally I went to the bank they told me don’t even bother going to because it’s the most conservative—Girard Bank at the time. And the two guys loved hockey! That’s how lucky I was. Anyway, this banker, Bill Baer, came in and said, “We’re putting a million dollars in your account as an additional loan, and you can pay us back when you can.” Because I was dead in the water with that roof blowing off.
Kaizen: The cash flow issue, because of the games being on the road …
Snider: We had to refund the money from all the tickets that were purchased. We were reaching a crescendo and we had to refund all that money.
Kaizen: How far into it, in terms of revenues and cash flow, were you then comfortable?
Snider: I’d say in about year three. I was scrambling for the first three years—it was a constant scramble.
Kaizen: The Flyers then won the Stanley Cup in 1974 and 1975. That is a major sporting accomplishment—for a new team to win back-to-back championships in only eight years.
Snider: To win in your seventh year had never been done before or since. Edmonton did it, but they had already been playing in the WHA. So they came in with a full team when the NHL and WHA merged.
Kaizen: The championships were also a major business accomplishment. What key business structures and practices made possible such quick and impressive success?
Snider: By the time we won the two Cups we were selling out every game. And we basically sold out every game since. I mean, we’ve had a few weak years when maybe we had a thousand tickets we didn’t sell. After two or three years of not making the playoffs we had a couple of those periods, but generally the Flyers have sold out ever since. And at the parades for the two Stanley Cups, we had over two million people in each parade. Pretty amazing.
Kaizen: That’s great city support. How about in terms of the coaches and other managers of the team, the way in which the business structure works with them or supports them—what made that successful? In some cases coaches and owners are at odds with each other in the short term or the long term.
Snider: Well, I wouldn’t say that owners and coaches are at odds with each other. First of all, the structure that I like, and have had in most of the years, is I hire a general manager. It’s the general manager’s job to hire the coach, and it’s the general manager’s job to make the trades, to analyze the players, to analyze the coach. I don’t interfere in any of that. If the general manager’s going to make a major trade, he comes to me and he says, “I’m going to trade X with Y.” And I start asking a lot of questions: “Why? Tell me about this other guy. Let me see his statistics. Why do you want to trade this guy? Why do you want to get that guy?” I’ve always run the Flyers and all of my other ventures as a business. And sports has to be run as a business. You can’t get too carried away.
I’ve seen in other sports—not only in hockey with other teams, but other teams in other sports—where a wealthy individual buys a team and then abdicates the business operation to, let’s say, a general manager. Well a general manager is usually very well-versed in sports but not business. So you see things get screwed up financially because this wealthy guy is running his empire and this sports team is his toy. But with me, and I think what’s happened now in the last ten or fifteen years, is, because salaries are so high and the numbers are so big, everybody has to operate it as a business. In those days you could get away with a small loss, let’s say, if you were a multimillionaire. Not anymore—the price can be too high.
Kaizen: As the numbers have gotten bigger in the world of sports, does the general manager have to take on more business skills?
Snider: Well he has to be a hell of a lot more attuned to the business side. Because now, for example, we have a salary capologist, an assistant GM who has to go by all the rules because we have a hard salary cap. There’s a lot of new rules in the game and you can’t just spend. You have to plan two, three, four years down the line, because if you get too heavy at the beginning then you won’t have any flexibility going forward.
Kaizen: Is the business of running a sports team in principle like any business, or are there unique elements in the business world of professional sports?
Snider: Yes, there are, because if you run a business and you’re making widgets, and you make the best widget, and you have great marketing and so forth, your widgets are going to sell year to year to year and hopefully your market is going to get bigger and bigger because you have such a nice product. But in sports every year is a new year, and you’re only as good as that year. And each year you have to try to compete with the twenty-nine other teams and it’s very difficult. So that’s the difference in my mind, and that’s also one of the great things about it—you don’t get bored.
Kaizen: So by the mid-1970s, the Flyers are making money, the Spectrum has turned around, and you’ve won the championships. You then created Spectacor as an oversight company or a holding company.
Snider: Well, it was a name given to all of our companies, whatever we had. In the 70s, I started one of the first pay-cable sports channels. At that time I had sports and movies, and, believe it or not, when HBO started, they started as sports and movies. We wanted to compete with them and we did quite favorably in our market. So we were a pioneer in the pay television business, and that company was called PRISM. It actually stood for Philadelphia Regional In-home Sports and Movies. And “PRISM is the eye of the Spectrum.” We had a very creative guy who came up with all this stuff. So that was a venture we started in the mid-70s.
Shortly after that, we started a company called Spectacor Management Group. This is arena management. People were coming to us and asking us how we did this, how we did that, and finally I said, “Why are we going to give all this away for free? We’ll be consultants, or whatever.” So we ended up becoming managers of arenas and stadiums and convention centers, and it grew into a major company called SMG—Spectacor Management Group—which I sold, and then I had a two year non-compete, after which I started a company called Global Spectrum, which does the same thing.
Kaizen: Over the next couple of decades you went into a number of sports-related businesses. At what point is this a strategy? How much of it was saying that for anything that impinges on sports, Spectacor is going to start a business? And how much of it was serial entrepreneurship—an opportunity comes up or you get an idea and you go in that direction?
Snider: That’s it.
Kaizen: The latter?
Kaizen: But the end result is the same: over the course of a couple of decades you are …
Snider: Yes. But then after we have all this we start getting strategic. We say, “We’d better have a strategic plan!”
Kaizen: And that’s part of that lesson from the record distribution company—“We need to have a strategic plan if we’re going to operate on this scale.”
Kaizen: An interesting thing about you is you’re starting off as a relatively small-scale operation and then you’re moving into sports and things are getting progressively bigger. Within the category of people who have entrepreneurial skills there are some who are really good at getting businesses going but they’re not necessarily good once it gets to mid-size or even big-size. What does it take to be successful at the initial entrepreneurial stage and as the CEO of a big firm or a set of firms?
Snider: You’ve got to hire people who are outstanding. That’s the biggest challenge. And you’ve got to hire people who have skills that you don’t have, or, not necessarily skills you don’t have, but desires you don’t have. I mean, I don’t want to be a manager—I don’t like it. I can be; I know I can manage. I just don’t want to. So I hire people who are outstanding managers. It’s not like I just pull them out of the air—you have people working for you who have skills that you see they can grow. And if you don’t have them for a particular thing that you need, then you go out and try to find them. They might be working for a competitor or something like that. But that’s the key thing.
I have a group now which I’ve had for many, many years—we call it “The Office of the Chair.” It’s my chief financial guy, vice president, my chief in-house attorney, Fred Shabel who handles all my charitable stuff, all governmental stuff, which I don’t like to deal with and so forth, and Peter Luukko, who’s really going to succeed me; he’s the entrepreneur in the group. And so that’s called the Office of the Chair. We meet, when I’m in town, every Tuesday, and when I’m not they meet without me. And basically we make all strategic decisions through that group. So I don’t hire all the key people; each of them hires key people.
Kaizen: When you’re hiring people who are outstanding, partly it’s a skill set, tailored to the particular thing that you’re hiring the person to do. What other character traits are you looking for? Issues of drive, creativity, honesty, integrity?
Snider: All of that. I’m fortunate. Most of my key guys have been with me anywhere from ten to thirty years. We don’t have a lot of turnover.
Kaizen: Would you then say that that’s the hardest part of being CEO—picking the people?
Snider: I wouldn’t say it’s the hardest part, I’d say it’s the most important part. It’s not that hard once you develop a culture, because I don’t even have to pick the people anymore. The people that I’ve picked are picking the people, and our organization just has a culture, it’s a thing that just grows because they know how it works in our company.
Kaizen: And new people coming in absorb that culture …
Snider: Right, and if they don’t, they don’t fit.
Kaizen: How much of it is a matter of explicitly training them in the culture and how much of it is a matter of they come in and absorb it?
Snider: It’s a little bit of both.
Kaizen: What’s the most fun part of being CEO?
Snider: I can be here [California] a lot.
Kaizen: Another major milestone for you was the opening of the Wachovia Center in 1996. What was the purpose of this new $210 million state-of-the-art sports and entertainment complex?
Snider: We weren’t the first. There were other buildings that were built in hockey/basketball combinations, or one or the other, or also football stadiums, baseball stadiums. The whole world had changed. Rather than just a stadium with seats for people to come to watch an event, we now are not only in the entertainment business, but we’re in the hospitality business. I mean, we have to do things that were just sort of second-hand. We always had concessions, but we didn’t have restaurants and we didn’t have suites where we served major buffets before games and so forth. So the advent of suites and club seats and things of this nature—we have so many incomes coming from sources that didn’t even exist before. We had to keep up. If we didn’t, we wouldn’t be competitive with the other teams.
Kaizen: So in the sports world the amount of money and the amount of interest that’s available has gone to the next level …
Snider: Yes. Like [Toronto’s] Air Canada Centre compared to the Maple Leaf Gardens.
Kaizen: A striking point about the Wachovia Center is that it was funded privately—that is, no tax dollars were used for its development. Is that correct?
Snider: It was primarily private. It was a $200 million-plus building, and there might have been maybe $12 million in government funds from different sources, maximum. And sometimes I think I’m stupid because the baseball stadium in Pittsburgh, the baseball stadium in Philadelphia, the football stadium in Pittsburgh, the football stadium in Philadelphia, and now the arena for the hockey team in Pittsburgh that’s being built—all of these were built primarily with government funds. We’re the only major facility in Pennsylvania that was primarily built with private funds. But to get it built with public funds I probably would have waited another three or four years and gone through all kinds of issues with government, which I hate to do. I like to have the government involved in my business as little as possible.
Kaizen: Partly that is a matter of principle, but also you didn’t want to wait and go through the amount of time it would have taken …
Snider: But, you know, when I’m paying the mortgage every month on the private monies that we borrowed, I say to myself, “I’m probably not too bright.”
Kaizen: So for owners of teams, is the biggest financing consideration that it’s a lot easier for them to raise government funds, or that they can get more money themselves out of it through government funds?
Snider: Well, let’s put it this way: If someone built your house and gave it to you, you wouldn’t have a mortgage. All the money you would have paid for you mortgage, you would have to spend. Our debt service on the various mortgages we that have on the building is about $16 million a year. Pittsburgh, which is building a hockey arena for the Penguins hockey team, will have very little in debt.
Kaizen: So from an owner’s perspective, being able to shift that $16 million a year to the public sector and have the taxpayers pick up the tab—that’s an attractive option?
Snider: Yes. First of all it gives you that much more cash flow to do other things with. Not only can you put it in your pocket, but you can use it to grow your business in other ways.
Kaizen: This takes us into the moral controversies about the appropriateness of using taxpayer dollars to fund the enjoyment of hockey fans, and so forth. What do you think about those arguments against the public provision of funds?
Snider: I don’t get involved. I don’t really know the real answer, personally. I know that what happened was that, as leagues were expanding, or teams that were going bad in various leagues, they were given all kinds of incentives by various cities to move there. And I guess other cities didn’t want to lose their teams and it became a competitive thing. But you see all of the money the government puts into other ventures, like art museums and concert halls and so forth. It’s all entertainment; it’s just different people going to various venues. There’s a lot of people who aren’t interested in an art museum. There’s a lot of people who aren’t interested in an orchestra. So I really don’t have a strong feeling one way or the other. From a personal point of view I’m happy that we built that building privately because, quite honestly, I don’t like to be involved with government.
Kaizen: Another line of argument is economic, saying that sports facilities have to be so expensive these days that only governments can raise that kind of money. Is that true or is the Wachovia Center an example of it being possible and still possible twelve years later?
Snider: Yes. I think there have been a lot of stadiums and arenas that have been built privately. I think the Dallas Cowboys’ original stadium was built privately. They were the first ones to sell seat licenses. In other words, let’s say you are going to get a fifty-yard-line seat. You had one in your old stadium and want it again in the new stadium. You’d pay maybe a $20,000 fee for the seat, not counting buying the tickets; that’s called a seat license. What happened was that people who had originally bought were very upset. But what happened was their fifty-yard-line seat license became worth—I’m just picking a number; these aren’t real numbers—instead of $20,000 it became worth $50,000. So there’s a trading in seat licenses. So the seat licenses paid for the financing of the stadium. The Philadelphia Eagles got a lot of public money, but they also sold seat licenses. And everybody bought them.
Kaizen: We also hear the arguments about spin-off economic benefits and increased tax revenues. Are cities finding it to be a good investment?
Snider: Yes, I think they are. You have to remember that, first of all, they get taxes on the real estate. We pay a payment in lieu of taxes; it’s called a pilt. It’s a firm number each year and it goes up every five years and so forth. Plus they have amusement taxes on every ticket. Every ticket that’s sold in these stadiums and arenas, whether it’s for sports, or concerts, or circuses, or anything, has a tax on it—a city amusement tax.
Kaizen: So you think cities can make a strictly economic argument that they’re putting out however many millions of dollars but it is not a net loss.
Snider: Yes. There have been many studies, and most studies show that it is an economic benefit. But some studies show that it isn’t—you get this controversy. But I believe that it absolutely is an economic benefit to any city that has sports teams.
Kaizen: And like any enterprises you would expect some not to make money, but most, if they’re done well, will.
Kaizen: In my home state of Illinois, Chicago is bidding for the 2016 Olympics. The numbers being floated around from both private and public sources are huge.
Snider: Well, you know, Peter Ueberroth [CEO of the 1984 Summer Olympics in Los Angeles] was the first one to show that you could make money. It was always a cost prior to that. They ended up with a tremendous surplus from the Olympics in Los Angeles in that year, and I think almost every Olympics since then has been in the plus. I’m not an expert on this—I say I think. I think they all learn, with the television sales, and this and that, if you do it right you can make money and then use the facilities afterwards.
Kaizen: Part of the pressure right now is that the International Olympic Committee wants the financing locked in ahead of time and often the private financing comes along later. Chicago is trying to do more private than most of the other competing cities, but in the IOC’s eyes it’s putting them further down the list because they don’t have it locked in.
You mentioned the world of sports has changed dramatically since the 1960s. For young people thinking about going into sports entrepreneurship, where do you see the major opportunities now? What are the likely developments to look out for?
Snider: It’s not a big industry, people-wise. For example, the Flyers organization, the 76ers organization, there’s not a lot of people compared to most ventures that large. So it’s hard to break in, but you still can in sports. Look, there’s radio, there’s television, there’s PR, there’s management, there’s finance—there are various departments. Many people who are working for us came in as interns. They were impressive as interns and then they came back and were hired at a low-level job and just worked their way up, like almost in anything else.
Kaizen: How about the farm teams, like the Rockford Ice Hogs, the Chicago Wolves, the Toronto Marlies, and so forth? Is that a growth sector in hockey, or is that pretty stable?
Snider: That’s pretty stable, but you can start there and, again, work your way up to the big club.
Kaizen: Given the huge expansion of professional sports over the past twenty years, where do you see the biggest opportunities for the next generation of sports entrepreneurs?
Snider: I think there are many opportunities. For example, in our facility now we have the arena football league. It had never previously existed. We have the lacrosse league that’s been around for maybe fifteen years, but it’s been pretty stable. We have indoor soccer—I don’t know whether that’s going to really ever make it, it’s always just struggling. Women’s sports: you have the WNBA now, mostly that’s it. But there are college sports programs, they need PR people. There’s a magazine that comes out weekly called Sports Business Weekly—it started as a little thing and it’s thick now. It has all the opportunities there, everything. There are more opportunities than ever—it’s a growing industry.
Kaizen: If you had to pick just one, which of your business accomplishments has given you the most pride and satisfaction?
Snider: People say I have the Flyer logo tattooed on my butt. It’s my baby. To start a team from scratch. Not to buy it. To develop the logo with the artist and seeing the different renderings. To decide on the team colors and to do all the things you have to do (a) to start and to struggle and to get it going and the financial struggle and everything, and then (b) to see it become a household name internationally and know the logo is recognized internationally.
I think one of my biggest thrills was when we played the Russians in 1976 and they had the Russian Red Army team that had beaten all the NHL teams they had played—it was really an all-star team of the Russians. And they were coming to Philly—we were the defending NHL champions. We were known as the Broad Street Bullies and we played fairly rough, and the Russians, in the middle of the game, walked off the ice. And this was their eighth game and they were getting $25,000 a game—big money. So I went down underneath the stands. Allen Eagleson, head of the NHL Players Association at the time, was there and Clarence Campbell, president of the NHL at the time. I was talking to them and I said, “Have they gotten paid yet for the game?” And Clarence Campbell said, “They haven’t gotten paid for the series. We’re settling the whole series tonight—that’s why were here.” And I said, “So that’s what, $200,000? Go tell them we’re not paying them.” So Clarence Campbell said, “You know that’s a pretty good idea.” So he and Eagleson go to their counterparts and say, “You’re not getting paid.” So the Russians put their heads together. And they said, “We play.” So then in Pravda [a Russian newspaper] there was a cartoon that people sent to me, and it showed a big Flyer with a big logo with a big club, with little teeny Russians! (Laughs) And I loved that more than any other cartoon I’ve gotten in my life! In those days you hated the Russians.
Kaizen: Would you also say the Flyers were your most fun project?
Snider: Oh yeah. I just called them my baby—it’s just in my blood. I’ve had opportunities, for example, to buy football teams—I started in football—to buy them at reasonable prices through the years. In America football is king, and the franchise is now—you’re talking about billion dollar franchises. Who would have ever thought that could happen? The Super Bowl is the highest-rated TV show anywhere and it’s just gotten so big. And it was tempting. But in order to buy the Eagles, they had rules in the NFL league that you had to have only a football team, meaning I would have had to sell the Flyers, unless you had another franchise in the same city. I would never give up the Flyers.
Kaizen: Was part of your getting the Flyers franchise in the 1960s that you had to give up your Eagles ownership?
Snider: No, I had already split and I was out of there, and I actually was just a minority owner so it didn’t matter.
Kaizen: At what point did you acquire the 76ers?
Snider: When I merged with Comcast in 1996. Part of the same deal, all at the same time, was that we bought the 76ers.
Kaizen: The same year that the Wachovia Center was opening.
Kaizen: Your business success has also enabled your considerable philanthropic efforts. They exhibit a wide range, from the National Foundation for Celiac Awareness, to the Middle East Forum, to the Simon Wiesenthal Center, to The Atlas Society, to Temple University and the University of Pennsylvania Entrepreneurial Center. What principles have guided your philanthropic activities?
Snider: You’ve mentioned things that I’m on the board of or whatever, but a lot of our contributions from my foundation, my wife’s and my foundation, are to a lot of different things. And I try to spread it around as much as I can. I don’t know that I have a philosophy about giving, I just feel that, when I see something that I think needs help, I’ll jump in and help, if I think it’s a good thing.
For example, this is just a little teeny thing, but I was watching TV one night ten years ago or so and saw a show about these kids who can’t go outside during the day. It’s a very rare disease where they cannot see light. So they have to cover up completely, and they build these indoor things where they can have recreation and so forth. I felt so bad that I found out who they were and I sent a check, and I keep sending checks each year. You know, you see something that touches you.
Kaizen: Most recently, you created the Ed Snider Youth Hockey Foundation in 2005. What is its purpose?
Snider: The mission is to use the sport of hockey to help educate youngsters on how to succeed in the game of life, and I think that we are off to a good start. The focus is to particularly serve inner city youngsters who would otherwise not have the opportunity to learn and play the sport of hockey and who would not have access to structured out-of-school supplemental educational programs.
Knowing what goes on in the inner cities in the United States, in the neighborhoods—they’re ghettos there. When I was a kid I grew up in tough neighborhoods; I had a fight, it was a fistfight. But to see what goes on today with little kids being killed—shot and killed with guns, and having no hope—I always thought, “What can I do?” Because there were all kinds of groups trying to help these kids. What could I do to try and help them? And I felt that I could do it through hockey, and that’s why I started it. It’s been the most satisfying thing that I’ve ever done in philanthropy.
Kaizen: The Youth Hockey Foundation is using hockey as a “hook.” Hockey is great fun, but your primary purpose is to teach kids crucial life skills?
Snider: Yes. We take these kids, we put them on ice, and we provide all the equipment and everything. They’ve never been on ice, and they just love it—it’s a great sport. And in order to be there they have to get good grades in school, and then we teach them life skills in classrooms as part of the whole thing. Their teachers come back and say that in order to be on the ice these kids have changed drastically. One girl, a black girl—we have boys and girls—wrote that she had no hope in life until she was in the Ed Snider Hockey Foundation. She was fifteen. Now—this is two years later—she says, “Now I’m getting all As, I’m going to go to college, I’m achieving things I never thought were possible. My life is now a wonderful life.” You get a letter like that, it makes it all worthwhile.
We’re reaching thousands of kids; our goal is at least ten thousand. We’re building a rink of our own for them. We haven’t started construction yet but we have a site. My people said, “You should start it as a public charity,” because I’ve always just done things myself. So what we do is, for every dollar contributed, I put in two. We have fundraising, and we’re very well financed now, and it’s really been a wonderful thing. Other than the Simon Wiesenthal Center, it’s the thing that I’ve put the most money into.
Kaizen: The program expands beyond the rink with assistance to help the participating children stay in school. What does this involve?
Snider: We provide homework help and assistance on a daily basis. Hockey is the reward for going to school each day and completing all homework assignments. It’s a simple formula: if a child attends school each day and does his school work, he stays squarely on the graduation track. Our staff closely monitors school attendance and report cards and has intervened when necessary by taking away ice time and replacing it with extra classroom time and tutoring until a positive course is restored.
Kaizen: How does the hockey program incorporate the teaching of life skills?
Snider: We emphasize six specific skill areas: communication, teamwork, healthy habits, emotional management, organization/study skills, and service to others.
Our staff is trained to spot windows of opportunities that regularly arise both on the ice and in the daily lives of our youngsters, and they are equipped with a curriculum that positively addresses such issues. For example, the simple communication skill of “how to introduce yourself” is applicable nearly every time a player or team takes the ice against one another. Our kids are taught to make eye contact, give a firm handshake, speak clearly and look their new acquaintance in the eye. This very basic life skill might someday make the difference in whether or not a person gets hired for the job they want. You only get one chance to make a positive first impression.
Kaizen: Is any one of those six skills the most important?
Snider: It would be hard to identify the most important. Collectively, they have a profound impact on a youth’s positive development.
Kaizen: Is this a program that could be duplicated in other cities?
Kaizen: Is that part of your strategic thinking?
Snider: Well, I’m not going to do it. But what has happened is that I’ve gotten calls and we’re showing other cities how to do it.
Kaizen: What kind of benchmarks are in place? You mentioned particular individual success cases—kids who have been saved. Is there a way to measure, say, you have x number of thousand kids coming through: here’s how many graduate, here’s how many will go to college?
Snider: We have a 98% grade-to-grade matriculation rate, and this is in a school district where they barely reach 45%.
Kaizen: So you see a strong connection between sports and real life?
Snider: Absolutely. Participation in sports should not be devalued in the development of the whole child. As you referenced, healthy bodies lead to healthy minds. Our programs engender the belief that success is linked directly to hard work and honest effort, and this is transferable to both sports and life.
Kaizen: Last December, Wayne Gretzky came to speak to the kids. How did that come about?
Snider: He’s a great guy; I know Wayne very well. We were playing Phoenix, and my vice president of public relations—who also volunteers for Ed Snider Youth Hockey—said, “Suppose I try to get Wayne.” So I called him and Wayne did it and the kids were just thrilled. These are kids who wouldn’t have known Wayne Gretzky from a hole in the wall, but because they were in the program.
Kaizen: How did the Great One’s appearance go over with the kids?
Snider: We did have some advanced notice, so our kids were properly prepped. They were asked to do some research on Wayne, so they were fully aware that they were being given the opportunity of a lifetime to meet perhaps, the greatest who ever played the game of hockey. Their response was terrific. They all had questions, and Wayne patiently answered them all. It was a great day for these children and the Foundation.
Kaizen: How many children have gone through the program?
Snider: We started in 2005 with about 400 children. By the start of the 2008-09 school year we expect to enroll about 2,500. More important to us is the number of children that we can retain from session-to-session and year-to-year. And we’re pleased that we’re starting to see the same faces appearing. Our goal is to keep kids involved for the long haul. If they start at age ten, we want them until they graduate from high school at age seventeen or eighteen.
Kaizen: The program is new but very promising. What other methods will the program use to track its long term success?
Snider: I just mentioned retention. The other key measurements are school attendance; improved behavior and attitudes in school, as well as the home; academic progress (including grade-to grade matriculation rate); improved fitness levels of our participants; and the eventual graduation rate of our participants. These metrics are tracked through school transcripts, communication with our children’s school teachers, periodic fitness testing and parental and participant evaluation forms.
And if the end results of our programs are youngsters who go on to excel on club or collegiate hockey teams or excel academically, that would be great! But more important are the thousands of kids who come out of our program who have learned the importance of staying in school, staying out of trouble with the law and who will grow up to become productive citizens that positively impact the community in which we work and live.
Kaizen: You mentioned the girl who’s planning to go on to college because she now has some hope; that would be another good metric in the long run.
Snider: We have stacks of letters from teachers and from kids. I’m giving you the one that just hit me the most, but we get them all the time. And obviously we don’t have 100%, but we certainly have a high percentage, and it’s been remarkable.
I’m heading up a group here [in Santa Barbara]. We’re trying to get a rink built here in the city, and it’s a big project, but we’re trying.
Kaizen: You have achieved wealth, great satisfaction in your accomplishments, and—to complete the “hat trick”—great respect and appreciation from others—from being elected to the Hockey Hall of Fame to honorary doctoral degrees to being voted by readers of the Philadelphia Daily News the city’s greatest mover and shaker of the millennium. It is an impressive list. In what way do those honors add to your sense of accomplishment?
Snider: It’s nice to be recognized, I guess. It wasn’t a goal of mine, but once you are—I appreciate it; it’s nice. Because if are making widgets and you make a mistake, nobody knows except you, or maybe five people in your company. But when you make a mistake in sports, every guy in every bar knows better than you anyway: “Why did you trade this guy? Why didn’t you do this? Why didn’t you draft that guy?” I’ve been fortunate because the people of Philadelphia have been very patient with me and after all those years, and I’ve made a lot of mistakes.
Sports fans are much smarter than a lot of people give them credit for, particularly in good sports cities. And they only want to know one thing really—they want to know that you’re trying your best to win. And they’ll put up with mistakes as long as they think you’re trying your best. If they think you don’t care, or it’s just a hobby, or you’ve got other things that are more important, or you live in California and never come to Philadelphia, they won’t put up with it. And I always have tried my best to win, and I think the fans recognize it, so I’ve been fortunate in that regard.
Kaizen: Those who know you all speak of your dynamism and your ability to get things done. What explains the Ed Snider phenomenon? Where does all of the energy come from?
Snider: You don’t mention The Atlas Society or the fact that I started the Ayn Rand Institute. Of course Leonard Peikoff would never admit that, but anyway. When I read Atlas Shrugged, it solved all the questions you’re asking, because I didn’t read it until the mid-70s, which is another interesting story. A guy named Peter O’Malley—he was president of the Washington Capitols hockey team at the time—he was their attorney and a brilliant guy. He didn’t own the team but he was the president, because Abe Polin, who owned the team, was mostly a basketball guy, so he just let Peter run it. Peter and I became very good friends and still are. And I’m sitting in a meeting of the owners, and it was the days of the wars with the rival WHA league. And I had worked out a deal for a merger—a very good deal—with a couple other people and I was censured for it by the owners. It would have been so good, economically, for everybody. So I turned to Peter and I said, “What is it about people like these guys—Bill Wirtz, Bruce Norris, Harold Ballard (the worst)—that won’t operate in their own self-interest?” And Peter O’Malley writes down—and he’s a devout Catholic—“Read this book.” So I read Atlas Shrugged. You heard the story, when I sent the letter and all that. But I read the book and it really solved the problem for me because I realized that this book meant so much to me because this is the way I thought. I learned stuff in the book but it was just the way I always thought, and I was out of touch with everybody around me. I remember somebody saying to me, “There’s no such thing as black or white, there’s only gray.” And this is before I read the book. And I said, “What are you talking about: it’s either black or it’s white.” And when I read the book I learned it’s just a refusal to take a stand.
People would say to me, “What do you want—to be the richest guy in the graveyard? Why do you work so hard?” And I realized that I didn’t work for money; money was the reward. I never once said, “I’m going to be a millionaire,” “Or I’m going to make this much money.” All I wanted to do is feed my family, and after that I didn’t know where I was going. I didn’t even know anything like this even existed. And I didn’t really care. It wasn’t an ambition of mine. So I realized that I’d worked that way because I loved to work, I love to create, I enjoy it. You know, when my father had the grocery store and I had to mop the floor, I took great pride in mopping that floor. I took great pride that I’d get into every corner and there wouldn’t be a spot on the floor. When people say they hate doing this or hate doing that, I can’t honestly say I’ve ever hated doing anything.
Kaizen: So part of it is a fundamental attitude toward work that you had when you were young. You didn’t have this dichotomy between work and pleasure or that work is something that you had to do.
Snider: No, I loved it.
Kaizen: You were what you were doing.
Snider: When I stacked the shelves at my father’s grocery store, and I finished bringing the boxes up and emptying them and pricing everything, I wanted to see the shelves just sparkle. I called my dad over—I had a great father—he’d pat me on the back, “Fantastic!” I was eight years old when I started. So I’ve always enjoyed that type of thing.
Kaizen: Many people have drive and dreams, but you have also been able to focus the drive and make the dreams real. What does it take to translate that drive consistently into successful outcomes?
Snider: Some of it is luck. Some of it is taking advantage of lucky opportunities. When you have an opportunity you have to recognize it, and you’re lucky you have that opportunity, and then you’ve got to do something with it. But I think for me to give an answer to that would be some kind of egotistic diatribe. Why can Wayne Gretzky see things other players can’t? I don’t think he could tell you. I can’t tell you.
Kaizen: You don’t have that perspective on yourself.
Snider: No. I could never explain it to you. I appreciate all the accolades. I was one of the pioneers in pay television. People asked me to grow it thing bigger and bigger and bigger—I could be talking to you today about a pay television channel that’s bigger and more important than HBO or ESPN, but I didn’t have that kind of energy. I’d watch guys that took something and expanded it on a national, international basis. They’d fly here, they have this meeting, they’d have that meeting, they go here, they go there. Not me. I always just wanted to keep things within the perspective of my lifestyle. I don’t like meetings, I don’t like wheeling and dealing and flying and this and that. That’s why I’m here in California, because I like to keep it in perspective. I want to be with my family, I want to enjoy my life.
Kaizen: So a big part of it then would be for people to know themselves. Spotting opportunities, but also spotting opportunities that fit who they want to be. It could be an opportunity, but it’s not the right opportunity for you.
Snider: Right. I know guys who are much wealthier than I am, and they’re constantly in board meetings, business meetings, wheeling and dealing. Just like I said to you, I never did it for the money; the money was the reward. So I’m not trying to get wealthier or make more money; I want to play tennis, I want to work out, I want to spend time with my wife, so how much do you really need? I see people that their whole thing is meetings and dealing and wheeling. Everybody’s different. Maybe that’s what they need.
Kaizen: In closing, what is the most important piece of advice or encouragement that you would give to young people just starting out in their entrepreneurial careers?
Snider: If someone has managerial instincts, they’re probably not an entrepreneur. I think the most important thing is that they have to know that they have entrepreneurial instincts. Now, I’m not sure I knew that when I was young. But I think there are certain indications, and if you feel that you’re an entrepreneur, then if you have an idea and you think it’s a real good idea, do everything humanly possible to pursue it. Sometimes it’s not easy, but you’ve got to really work hard at it. Read stories all the time of great entrepreneurs who borrowed $2,000 from their uncle or their father, or this, that or the other, and started something that became gigantic.
It’s funny—do you read Investor’s Business Daily? The editorial pages, also in the front—I don’t know if you’ve ever seen it but like on page 2, 3, or 4 they always have a story about entrepreneurs. It just happened today, I was reading the one about the Scotts who started Scott Paper, because it was a Philadelphia company and it just caught my eye. They started in like 1890 or something, and how they got the idea for toilet paper, then how they got the idea for paper towels—it’s all entrepreneurial. Nobody had been doing it. They had a little store where they sold paper, and they invented the toilet paper roll, and they had paper that was too coarse for toilet paper. So people were complaining because everybody used the same towels in restrooms and offices, and it spread disease, so they came up with the idea of using the coarse paper to make paper towels and they put it on a roll again.
So the point I’m making is, other people were in the paper business and they didn’t start toilet paper, they didn’t start paper towels. I don’t know how to explain it. I don’t know how to really give advice. The only other thing I can say to you is I never did a focus group in my life, I never asked other people what they thought of ideas. Well that’s not true; I probably did. I probably asked my wife and a couple good buddies. But I know that now a lot of people get focus groups for every idea they have. I always felt that I was a normal, average guy, and that what I would like, other people would like. Trusting your own instincts and judgment and going by what you know. For example, if you’re going to produce a product, or if you’re going to open up a store, or you’re going to come up with any idea as an entrepreneur, you have to ask yourself: Would you buy it? Would you like to have it? And if so, Are you the average guy? So, for example, to me the average guy is not necessarily someone who loves opera, so if you were going to do something in opera you may not make money, because it’s not something that appeals to the masses. So if you’re the average Joe and you have an idea for something and think it will work, if it’s something unique. Look at Silicon Valley: these guys became billionaires just with one idea. That’s a whole different thing—that’s applying entrepreneurship to another level of brilliance. And inventors are not necessarily entrepreneurs, but if they invent something that everybody wants, then entrepreneurs will come in and make it work. There are all different combinations. It’s so hard to just to pinpoint it.
This interview was conducted for Kaizen by Stephen Hicks. To learn more about Ed Snider and Comcast-Spectacor, please visit www.comcastspectacor.com.
© 2008, 2013 by Stephen R.C. Hicks. All rights reserved.