BusinessTN

Trailblazers. Pioneers. Forerunners. In Memphis, such words evoke images of civil rights crusaders from decades past. But viewed through a 21st Century lens, the labels well describe a different class of African-American barrier-breaker hailing from the Bluff City—namely, two of the first black businessmen in America ever to own a piece of a major professional sports franchise.

A look into the owner’s boxes at a Memphis Grizzlies home basketball game reveals two African American faces—those of Charles Ewing and Fred Jones. Native Memphians alike, the two entrepreneurs are among the team’s six-member minority ownership group controlling a combined 30% of the franchise. (Majority owner Michael Heisley, who moved the team to Memphis from Vancouver, Canada in 2001, owns 70%.) How unusual is it that Ewing and Jones hold a stake in Tennessee’s professional basketball squad? Consider that at the time the two men bought pieces of the team in 2001, only one other African American, Earvin “Magic” Johnson, 5% owner of the Los Angeles Lakers, held an active ownership stake in a professional sports franchise in the nation.

Since that time, the number of African- American owners has increased, modestly. Black Entertainment Television (BET) founder Robert Johnson paid $300 million for the rights to the expansion Charlotte Bobcats NBA team in Dec-ember 2002, becoming the first African-American majority owner of major U.S. sports team. But make no mistake, the documented list of African Americans with skin in the game remains staggeringly short (see sidebar, pg. 42). As members of the elite club of pro sports ownership, a club where access for African Americans historically has been limited, Ewing and Jones have a secure place in American sports business history. African-American kids growing up in Memphis don’t have to look to Charlotte to find a role model wearing a suit instead of a jersey. In Memphis, unlike in most NBA cities, they can look to the luxury suites at Grizzlies games as well as on the hardwood floor. It is an historically significant level of prestige.

In the spirit of “the bigger you get, the wider the target on your back,” the case for Ewing and Jones’ historical relevance has had its detractors. Exactly how the 30% stake of the local partnership is divvied up remains a closely held secret by its six members—which includes AutoZone founder and billionaire Pitt Hyde, his wife Barbara, and brothers Staley Cates, president of Southeastern Asset Management, and Andy Cates, president of Cates Co. Cynics automatically construe that silence to mean the stakes Ewing and Jones hold in the team are token in nature, merely sweetener for the application submitted to the National Basketball Association (NBA) to gain favor for the proposed Grizzlies relocation to Memphis. But sources close to the team balk at the notion that Ewing and Jones’ involvement amounts to tokenism. They say the original investments both men made in the team were substantial, exceeding seven figures. And their investments are appreciating. The Grizzlies franchise, which was valued at $190 million at inception three years ago, is now valued by Forbes magazine at $227 million.

Since that time, the number of African- American owners has increased, modestly. Black Entertainment Television (BET) founder Robert Johnson paid $300 million for the rights to the expansion Charlotte Bobcats NBA team in Dec-ember 2002, becoming the first African-American majority owner of major U.S. sports team. But make no mistake, the documented list of African Americans with skin in the game remains staggeringly short (see sidebar, pg. 42). As members of the elite club of pro sports ownership, a club where access for African Americans historically has been limited, Ewing and Jones have a secure place in American sports business history. African-American kids growing up in Memphis don’t have to look to Charlotte to find a role model wearing a suit instead of a jersey. In Memphis, unlike in most NBA cities, they can look to the luxury suites at Grizzlies games as well as on the hardwood floor. It is an historically significant level of prestige. In the spirit of “the bigger you get, the wider the target on your back,” the case for Ewing and Jones’ historical relevance has had its detractors. Exactly how the 30% stake of the local partnership is divvied up remains a closely held secret by its six members—which includes AutoZone founder and billionaire Pitt Hyde, his wife Barbara, and brothers Staley Cates, president of Southeastern Asset Management, and Andy Cates, president of Cates Co. Cynics automatically construe that silence to mean the stakes Ewing and Jones hold in the team are token in nature, merely sweetener for the application submitted to the National Basketball Association (NBA) to gain favor for the proposed Grizzlies relocation to Memphis. But sources close to the team balk at the notion that Ewing and Jones’ involvement amounts to tokenism. They say the original investments both men made in the team were substantial, exceeding seven figures. And their investments are appreciating. The Grizzlies franchise, which was valued at $190 million at inception three years ago, is now valued by Forbes magazine at $227 million.

In the final analysis, focusing on Ewing and Jones’ percentage ownership of the team misses the point. Bottom line—if the Grizzlies ever win an NBA championship, Charles Ewing and Fred Jones will be wearing the rings to prove it. That incontrovertible fact makes Ewing and Jones rare players on a national stage where pro sports leagues, propelled by African-American athletic dominance, are sparsely populated with owners of color.

RAGS TO RICHES
The legacies of both Ewing and Jones are sewn up by virtue of their Grizzlies ownership stakes. But profiling each exclusively for their sports ownership roles would be selling them short. Apart from basketball, both men are highly successful entrepreneurs deserving of placement on the list of powerful African Americans in Tennessee.

A product of the Memphis projects, Jones was studying at Memphis State University and working for Union Planters Bank in 1968 when the bank transferred him to a branch office that handled the account for the legendary Stax Records. Jones quickly got to know such musical icons as Isaac Hayes, David Porter and Otis Redding. After the success of the movie and soundtrack to Shaft, Hayes tabbed Jones to be his tour manager. For Jones, it was the beginning of a three-decade-plus career in the music and entertainment business.

After four years working for Hayes, Jones struck out on his own, eventually founding Summit Management Corp. (SMC). Today, though still a small promoter compared to giants like Clear Channel, SMC maintains a big reputation in show business and does a couple million dollars a year in gross sales. Jones is best known for putting on the annual Southern Heritage Classic football game, the largest annual single-day tourist event in Memphis. The game pits historically black schools Tennessee State University and Jackson State University against each other attract- ing 60,000 visitors to the city. Jones stabilized Memphis as the game’s battleground back in 1989, then introduced the hoopla of entertainment and music that transformed it into a spectacle with an almost mini-Super Bowl-like atmosphere. The economic impact for the city is estimated at over $10 million.

The 11th of 12 children raised in a single family home in South Memphis, Ewing says he learned entrepreneurship from his mother, an Avon sales lady. Using his pickup truck, Ewing started a moving service on the side while working at the Memphis Commercial Appeal newspaper, first in housekeeping and then for nine years as a photo engraver. He bought his first truck in 1985.

Today Ewing has 27 trucks, 47 employees and international capabilities. Ewing Moving Service has a branch office in Nashville and is planning to expand soon to Knoxville and Chattanooga. With roughly $3 million in annual sales, the company is on the verge of no longer qualifying as a small business. Having just completed a major expansion from a 40,000-square-foot facility into a 274,000-square-foot facility, the company now operates the largest single moving and storage facility in the Midsouth.

Ewing hopes to top $10 million in sales by 2007 and eventually to fulfill his ultimate goal of becoming the official mover of the NBA. Current clients include FedEx, TVA, the University of Memphis, AutoZone, the Commercial Appeal and the Grizzlies, with whom he has an exclusive contract.

MODEL CITIZENS
Their entrepreneurial successes helped Ewing and Jones forge stellar corporate reputations in Memphis and garner the respect of black and white Memphians alike. That credibility served the local Grizzlies partnership well as it pursued an NBA team for the city. For three decades, other consortia of Memphis business people tried but failed to land a pro sports team. With Ewing and Jones on board, the feat was finally accomplished.

By way of the NBA’s mandate, the Grizzlies never could have relocated to Memphis without the promise of a new arena. Getting the general public and elected bodies to sign off on the financing for a new $250 million arena was a bruising battle to say the least. So crucial in fact were Ewing and Jones to the total effort of securing a team that fellow minority partner Andy Cates states flat out, “The Memphis Grizzlies wouldn’t be in Memphis without Fred Jones and Charles Ewing.”

On the verge of a new NBA season, any lingering doubts that building the arena and bringing the Grizzlies to town was a mistake have been mollified. Upon its opening last month, the state-of-the-art FedEx Forum became an instant source of pride for Memphians. Grizzlies games, which NBA commissioner David Stern has boasted are the most diversely attended in the NBA, have become more than just another entertainment option in the city. They are events where black and white Memphis commune with a single purpose. As Ewing says, the Grizzlies minister to the soul of the city.

RARE STAKES
Fewer than a dozen African Americans in the nation currently own a piece of a professional sports franchise, according to a 2003 report by the Institute for Diversity and Ethics in Sport, authored by Richard Lapchick of the DeVos Sports Business Management Program at the University of South Florida.

In addition to Ewing and Jones, they include former basketball star Earvin “Magic” Johnson (Los Angeles Lakers), BET founder Robert Johnson (Charlotte Bobcats), former pro basketball player M.L. Carr (Charlotte Bobcats), Soft Sheen Products founders Ed and Bettiann Gardner (Chicago Bulls), former all-pro football player Deron Cherry (Jacksonville Jaguars), major league baseball home run champion Hank Aaron (Atlanta Braves), former Turner Broadcasting board member and the wife of major league baseball’s first black general manager, Rubye M. Lucas (Atlanta Braves) and Tampa businesswoman P.J. Benton (Tampa Bay Devil Rays).

Since that report was issued, rap artists Nelly, born Cornell Haynes Jr. (Charlotte Bobcats) and Shawn “Jay-Z” Carter (New Jersey Nets) have entered the world of sports ownership. (Note: At the time of publication of this article, David “The Admiral” Robinson was reportedly pursuing the purchase of a 1.8% stake in the San Antonio Spurs from Nashville Predators president Jack Diller. Also, former NBA stars Charles Barkley and Sean Elliott had recently pulled out of a deal to become minority owners of the Phoenix Suns.)

The list of African Americans who have formerly owned a piece of a professional sports team include basketball legend Michael Jordan (Washington Wizards), former NBA all star Isiah Thomas (Toronto Raptors), Atlanta developer H.J. Russell (Atlanta Hawks), hair products entrepreneur Comer Cottrell (Texas Rangers), Transamerica Life Companies president William Simms (Carolina Panthers) and Kauffman Foundation president Louis Smith (Kansas City Royals). A group of four African Americans, including attorney Peter Bynoe and deceased broadcasting executive Bertram Lee (as well as deceased tennis legend Arthur Ashe and former Democratic National Convention Chairman Ron Brown, according to some sources) once owned about a 4% portion of the Denver Nuggets. They are credited as the first African Americans ever to own a piece of a pro sports franchise.