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LITES MAGIC

FOR HIS NEXT TRICK, JIM LITE8 WILL TRY TO MAKE THE RANGERS SHINE AS BRIGHT AS THE STARS
By

NORTH TEXAS AZALEAS ARE STILL IN BLOOM outside the Valley Ranch office on a sparkling April morning, but Jim Lites is dreaming of June. Jim Lites is president of the Dallas Stars ice hockey club, and right now he is on the phone to someone that can’t quite be overheard. His first name starts with “B.”

’”Listen.” says Lites. to the mystery person on the other end of the line. “I need a favor. I was hoping that you’d help us out. Would you chair an organizing committee for a Stanley Cup victory parade? It’s not .is bad as il sounds.” Lites has entered his stream of consciousness sales pitch mode and the key element to that, apparently, is never allow the target to wedge in a word or two of protest. “Simply a figurehead thing. Maybe attend a meeting. One at the max.”

Mr. “B” on the other end of the line responds in the affirmative. Now Lites, 46, (who dresses corporate casual but whose facial characteristics suggest that, in a prior life, this man was a Teamsters Union leg-buster), moves on to the next task at hand. That happens to be our one-hour interview. Lites knows quite a few things his interviewer doesn’t, and one of those is that this particular interview will be an exercise in wasted time. Lites knows that within seven days, his universe will expand into another dimension. He knows that Tom Schieffer, his organizational sibling over at the Texas Rangers, will be leaving. He knows that Tom Hicks, now in the process of completing a Sunbelt sports empire, is thinking about asking him to run both the hockey and the baseball teams. He knows also thai it will include the task of the television network that will feature the Stars and the Rangers positioned at strategic ends of the programming spectrum.

But Lites can’t talk about all that now, because die press conference to confirm is still a week away. So he manipulates the interview to topics regarding his past. That still gives him plenty to discuss.

He talks about how he evacuated some nowheresville town in a maize patch to attend me University of Michigan and law school at Wayne State, and how he married this woman whose father happened to own the Little Caesars pizza chain. He talks about how while he and his bride were on their honeymoon his new father-in-law bought the Detroit Red Wings hockey team.

That led Lites to this-his strategic position at the right hand of the Godfather, Tom Hicks. If Hicks is the Don, then Jim Lites is Sonny. A strong will and a little magic have carried Lites to this point, and he is willing to concede that he regards himself as the luckiest man on the face of the earth.



BUT, LITES’ LUCK IS THE RESULT of hard work, considerable talent incredibly devoid of ego, and a knack for being in the right place at the right time. It’s also the result of a management style that emphasizes high expectations while giving underlings the freedom and authority to accomplish their goals.

Still, Lites’ latest task puts all his talent to the test. On the heels of the Stars’ successful Stanley Cup run, some hard questions loom on the immediate horizon. To conquer the sports and TV empire that Tom Hicks envisions, Lites and his boss must endure a Russian winter of serious competition. Until now, the Hicks sports dynamic has thrived during a boom economy. How long can this last in a town that turns on losers faster than a Brett Hull slap shot? Is Jim Lites spreading himself too thin? Is he setting himself up for a free fall?

If the past is prelude to the future, Lites will succeed with the Rangers. It’s not as if he’s taking over a baseball club in the dumps, fielding a lousy team, and playing before miniscule crowds. The Rangers were successful before Tom Hicks bought the club, and they’re now among the four top-drawing teams in baseball. Transforming the Rangers into a truly elite franchise doesn’t require smoke and mirrors. More likely he all he needs is some marketing magic and a little sleight of hand.

Remember, Lites is the guy who took over his father-in-law Mike Hitch’s Detroit Red Wings at a time when the storied original-six hockey club was the pits. The team had missed the playoffs nine of the previous 10 years, when 21 clubs competed and 16 made the playoffs. Its season ticket base had dwindled to 3,000 and it was hemorrhaging red ink, as much as $4 million a year. With one or two exceptions, it was stocked with players who were old and not very good. They were truly the Dead Wings.

It took nearly 10 years, but by the time Lites left in 1993, he had restored the Red Wings to their former glory-and more importantly to profitability. He did it with bold moves that became the stuff of legend. (By now, the stories are well known of Lites’ trips behind the Iron Curtain, the meetings in black forests with pockets full of cash to spirit away talented young Eastern Europeans and Russians to play in Detroit.)

He also used solid business savvy and all his listening skills. He hired new management

On the business side, he invested in building more luxury suites and improving Joe Louis Arena significantly. He took over food and concessions, and eventually started applying his expertise to other arenas in the Midwest. His creativity and hard work paid off, for by the time he left Detroit in 1993, the team that Mike Hitch bought for just $3.5 million in 1982 was rated by Financial World magazine as the NHL’s most valuable, at $87 million.

But his luck in Detroit started to run out in 1992. just before the Red Wings went on a Stanley Cup tear, two championship trophies in four years, and two President’s Cups. Squabbling with brothers-in-law, sisters-in-law, and others finally had finally taken its toll, and the Hitch empire’s heir apparent was about to lose a power play to become Red Wings team president.

Luckily, Lites had helped Norm Green find a new home for his money-losing Minnesota North Stars. So when Hitch changed his mind at the last minute and decided not to make Lites the Red Wings president, Lites was on the phone to Green minutes later asking if he still wanted Lites to run the Stars. And Green offered Lites something he didn’t have in Detroit-equity.

“I was intrigued,” says Lites, “because A, I liked the city, and B, I really liked the opportunity of starting up again and redoing what we did in Detroit here in Dallas, with a team that wasn’t an expansion team. I really didn’t want to go back to a losing situation.”

His first call after taking the job was to his friend and Red Wings marketing chief, Jeff Cogen -at 1 a.m. “He was animated and excited, and he said, ’Did you know the Minnesota North Stars have a new president and are moving to Dallas?’

“I said, ’You know, Jimmy, I think I read something about that. I’d like to congratulate the new president. Who is he?”’ Cogen recalls. “Me,” came Lites’ reply. “I want you to come with me.” Cogen patted his wife on me shoulder and said, “Hon, you want to go?” She said yes, and Cogen was in the Dallas the next day.

“It speaks pretty well to our relationship that he could call at one o’clock in the morning and ask me a question that affects my future, my wife’s future, my kids’ future, and ask it like, ’Hey, you wanna go see a movie,’” Cogen says.

That relationship was key to introducing a sun-blessed Southern city to a gray-skied winter game from Canada. And it will be key to generating the additional interest the Rangers need to sell more seats and corporate sponsorships. For just as Lites is now president of both the Rangers and Stars, Cogen, whom Lites calls his “closest compatriot,” is heading up the marketing for both teams.

“I’d love to tell you that I understood the market and had a game plan in place and knew exactly what I wanted to do,” Lites says. “The reality was that it was a complete fire drill.” The team’s practice facility, which had to be purchased out of bankruptcy, couldn’t make ice. Reunion Arena was decrepit and the locker rooms were unsuitable. Cooperation from city hall was lacking, because the administration was more concerned about not upsetting the Mavericks’ former owner Don Carter than in helping the new team establish itself. The list of potential season ticket holders was more myth than reality, and there was no mechanism in place to sell tickets. The team had no radio or television contract to carry its games, and probably more importantly, they had no advertising or corporate partners.

“All four of us running the business side didn’t have a place to live and hadn’t moved our families yet,” Lites remembers. “It was kind of like camp. We all lived in the Hyatt Hotel together. You work from seven in the morning till 10 at night, then meet in the bar, discuss your day-have an executive meeting in the bar. We’d set down agendas, go to bed, and get up and do it all over again the next day.”

In just a few short months before ’93-’94 season began, Lites and friends had built the season ticket base to 7,000. The practice facility, now the Dr Pepper StarCenter, was up and running. They had a marginal radio deal with KLIF-AM. (The team’s radio broadcasts are now carried by the stronger WBAP, 820-AM.) But their TV deal with Fox Sports Southwest required paying the network $20,000 a game for cable broadcasts. “We got 30 games on Fox Sports Southwest by paying our way on, if you can imagine,” says Lites.

Even better, the Stars won their first game that year-against the Red Wings. “The great news was the team was much better than we anticipated,” Lites says.

But a labor dispute the next year delayed the season’s start till January, and that, combined with Green’s business losses in Canada, meant putting the team up for sale. Lites had to divert his attention to finding someone to buy the team, which likely meant he was signing his own walking papers.

One of those bidding was John Spano, to whom Lites was introduced through investment bankers. Spano worked out a deal and had 120 days to close. Another bidder was Tom Hicks, who told Lites at the time that he knew Spano only by reputation and said, “He’ll never close. I’ll be here when you settle.”

Again, Lites got lucky. Spano did fail to close-and a few years later pleaded guilty to federal bank and wire fraud charges in connection with his attempt to buy the New York Islanders. True to his word. Hicks was there when the deal with Spano died.

“I think about how things might have been different for us had we been able to do the deal with [Spano] in June of ’95 as opposed to February of ’96 when Hicks bought the team,” Lites says. “We were out of cash and couldn’t make payroll. Tom Hicks came in and got things going again. Tom Hicks just like fell out of the sky for a guy like me. Most owners want to win, OK? But he’s got the nice combination of wanting to win and getting it. Everybody can pay lip service to it, and then act totally stupid in the business part of the sports business. What’s amazing to me is he gets it. He knows how to spend money to put seed in the ground and make it work.”

Those seeds fully blossomed with June’s Stanley Cup championship, and Lites says he will keep the team on top. He knows how fickle fans can be.

“If you roll out and win a Super Bowl or a Stanley Cup, and the next year you suck, you’re not going to fool people. We will be a really competitive team for a long time because of our core players,” Lites promises. “I don’t think we’ll hit the wall unless Hicks decides to cut payroll back significantly, which I don’t think he’ll do. You don’t have to have a $60 million payroll [the Stars’ payroll was about $42 million last season], but we can stay competitive given the talent levels and the long-term deals we worked out.”

OK, so now Lites has the Stars on a roll with a long-term plan to keep the team competitive, the seats filled, and his corporate partners happy. The team still runs in the red, but he knows that too will change when it begins to play in the new arena in 2001.

Now all Lites has to do is apply that same luck and magic to the Texas Rangers.

Sometimes, tricks don’t work. Already Lites has made a few missteps trying to translate the fast-paced show of hockey to the creaky old traditions of the national pastime. Playing Rednex’s techno version of “Cotton-Eyed Joe” during the 7th Inning stretch comes to mind. But Lites’ reputation puts him way ahead of the curve.

’The Stars’ success has helped me very much at a practical level gain the confidence-and my people have gained the confidence- of the Rangers people,” Lites says.

His management style also seems to be going over well. Described as both facilitator and idea man, he likes to bounce ideas off people and listen to what they think.

“You don’t facilitate something that didn’t start with an idea,” says marketing v.p. Cogen. “We go, what if. You know, what if we did this, what if we did that, what if we did it this way, and how are these other people doing it. And we will reach a common solution or he’ll make a decision. Then he counts on people like me to administer it. He stays on top of it for sure, but he’s a team guy. If it works, then it’s his idea, and if it doesn’t, then it was mine,” he laughs.

For Tom Hicks, the decision to appoint Lites to head both teams was obvious: When he buys several related companies, he also combines management teams. Hicks was flying back from New York with Lord Stanley’s cup securely strapped in the seat across from him, when he called from his private plane the day after the big parade through downtown Dallas to talk about the president of his two sports teams.

“Lites’ strong suit is sales, marketing, and promotions. He basically came to a foreign city for him with a foreign sport, hockey, and look what he’s accomplished in a reasonably short number of years. To me that’s the kind of track record that can take the Rangers, which already are at a very high level, and take them to the highest level they can be.”

But the boss’s expectations are high.

“The Rangers were a second-tier franchise before The Ballpark, The Ballpark gave the Rangers the opportunity to really be a top-tier franchise. We’re almost there today. Attendance is a little less than 3 million. Our media package is not nearly where it should be for the size of the Dallas-Fort Worth market, and I think our attendance can be significantly higher. I’d like to see it more like Cleveland’s and Baltimore’s. It certainly ought to be better than the Yankees, because we’ve got a better facility than they do. I think Jim and his team over the next couple of years will take the attendance up to somewhere approaching 3.3, 3.5, 3.6 million people, if we do a good job.

“The other thing we’re doing with Jim that plays an absolutely critical role is we’re selling the Rangers and the Stars as a package to sponsors. That package will include tickets, suites, ballpark and arena signage, advertising on radio and television, advertising on cable and game programs, so it becomes a total package where we can allow the advertiser to do a more effective job of reaching their target audience, which they’ve decided is a sports fan. For us, if we do a better job for our advertisers and our sponsors, we can make more money for ourselves.”

Lites doesn’t seem awed by the task, because he really believes that running baseball and hockey teams requires the same skills sets.

Both games need a grand theme: “Nothing Else Matters,” in the case of the Stars, or the recently minted “Power in the Park” for the Rangers. He has seats to fill at both places. The seasons take up about the same space on the calendar. Corporate relationships must be developed and nurtured. As Lites sees it, the biggest difference is the size of the two sports.

“In baseball you have twice as many games, and the scope of it is so much grander because you have a building that’s almost three times as big. It’s a much bigger operation in the sense that from a baseball perspective you have a whole slew of minor league teams. I mean, the draft involves 50 rounds, where our draft in hockey involves nine, You’ve got so many more players under contract.

“The revenue side of baseball is about double the size of hockey, and the expense side of baseball is about double the expense side of hockey. The departments you have to run, merchandising, marketing promotion, advertising sales, television and radio, publications. community relations and public relations, their functions are exactly the same.”



SO AS HE MERGES THE BUSINESS SIDES OF THE TWO TEAMS IN THE Rangers’ offices at The Ballpark in Arlington, he is simply merging mirror images. The economy of scale means reduced expenses and using both staffs year-round to create stronger revenue packages based on the strength of both teams.

That strength is the foundation for Hicks’ Southwest Sports Group, the umbrella organization for Hicks’ sports holdings, and the regional television network that’s being built around both teams. Both teams’ cable deals with Fox Sports Southwest are due to expire soon, and the Hicks-owned LIN Productions is capable of producing both teams’ telecasts. Having two teams whose seasons till the calendar gives Lites unprecedented power. “The Stars and Rangers together will control our destiny on local television, as opposed to having oui’ destiny controlled by others,” Lites declares. “We are going to do it with Fox, or one of Fox’s competitors, or on our own. We own the product.”

That means neither team needs Fox or anyone else to deliver games either over the air or to cable operators across the Southwest. but Lites is looking for programming partnerships (ESPN, Fox, or CNNSI, for example), to provide additional content, such as sports news and college games, to fill the lime around Rangers and Stars games.

While the TV package is critical to long-term success, in short term Lites is turning his attention to The Ballpark in Arlington and reating a buzz for the Rangers. He’s heard the criticism some of moves have drawn, particularly the loud music, but he insists not trying to turn baseball into a hockey game. However, he “nothing is being overlooked. It’s a work in progress, and e’ve got lots of time. This is a successful place, a great building, and people love it. I ’d be foolish to go in there and try to modify or significantly alter what’s been a successful program.”

But there are all those seats to fill up, a little over 4 million of them through 82 games. If the Lites magic is to work, he got to find new ways to create fans and keep mem coming back for more.

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