Bob Cramer's Blog

Check this out.  Wonderful piece about our remarkable Studio at the Peachtree Pine building.  If more people were exposed to all the great things that happen in our building,  we would have all the support we need.  Take a listen or read the story http://www.cnn.com/2011/LIVING/04/01/artists.found.at.homeless.shelter/index.html?iref=allsearch

Pity the poor sports team owners in Atlanta.  Something is clearly wrong because every major sports team here is for sale in one form or fashion, and labor unrest threatens next year’s football and basketball seasons and a move out of town threatens the Thrashers.  The happiest current Atlanta sports franchise owner in town may be the nameless corporation that owns the Braves solely for tax purposes or the lucky owner-to-be, David McDavid, who never got to be an owner but received a huge settlement instead and laughed all the way to the bank. 

Let’s look individually at each major ATL team and its ownership starting with Mr. Blank’s Falcons. A remarkably successful 2010 regular season ended with a sudden thud, but clearly, Mr. Blank, with his signature fourth quarter sideline appearance and smart free agency acquisitions, is content.  Well, maybe yes and maybe no.  Last year, according to reports, Mr. Blank sold about 10 percent of his ownership to a group of  Atlanta businessmen, most likely at an appreciated price to the $545 million he paid to buy the team from the Smith family back in 2002.  Rumors also circulated just weeks ago that popular rocker, Bon Jovi, was negotiating to buy down Mr. Blank’s stake even further. 

With his quiet diversification strategy in play, is it a surprise that Mr. Blank is trying to find a way to boost the value of his franchise, which, according to Forbes, was ranked 26^th most valuable of the 32 NFL teams?   The fastest way to do that is to build a new stadium as it changes the revenue sharing agreement, providing, as the AJC points out, more lucrative luxury boxes, club and preferred seats, perhaps the opportunity to charge a seat licensing fee on top of the normal ticket cost, and opens up the possibility of landing a Super Bowl. 

When word came out last Tuesday (Feb.22^nd) about “a mutual understanding” between the team and the Georgia World Congress Center Authority, I tweeted that this new open air stadium was a bad idea at this time, unless, of course, Mr. Blank were to fund the entire project.  With a price tag today slated at $700 million (who wants to bet that final costs will not exceed $1 billion?), the thought that the Falcons would fund the lion share of this project seems small.  It cost Mr. Blank far less to buy the entire team. Sunday’s AJC reports the Falcons are asking for the state or the Authority to issue bonds between $350 and $400 million, with the team planning to cover the rest.  Many questions clearly remain, starting with the $50 million spread and who pays for the inevitable cost overruns.  Meanwhile, the AJC reports that local economists nearly universally forecast that this new project brings no economic value to anyone besides the Falcons.  “Just adding zero to zero” is their headline.

We all appreciate Mr. Blank, his many important contributions to Atlanta and to improving the Falcons.  But this idea to use partial public funding to build an unnecessary new stadium, especially when the state is cutting back the HOPE scholarship and numerous other programs, is a mistake.  Yes, none of us are getting any younger and I am sure Mr. Blank wants to put the wheels in motion because of the long lead time.  But I think this move is more about him growing the value of his franchise, especially as he looks to further diversify his own holdings, and is not really in the best interest of the fans or the taxpayers.  I hope that he and the Falcons will consider less costly options or ones that do not require public funding.  

Meanwhile, across the Gulch, the hapless Atlanta Spirit group wishes it had Mr. Blank’s problems.  Let’s face it, this group’s ownership of the Hawks, Thrashers and Phillips Arena has been just a notch below other Time Warner-connected disasters including its purchase of AOL and the $850 million purchase in 2008 of Bebo, a European social networking company,  which was unceremoniously dumped to a new buyer in 2010 for $10 million (I kid you not).

As you hardcore Atlanta sports fans may remember, Time Warner found a legitimate buyer for this triumvirate of properties in 2003.  A Texas auto dealer named David McDavid was all set to purchase the assets for around $400 million when Time Warner suddenly halted the deal.  For some reason, it decided to sell the properties to a group lead by Turner Broadcasting veterans and two of their successful sons, Michael Gearon and Ted Turner’s son in law, Rutherford Seydel, for approximately $120 million less than Mr. McDavid offered (go figure). Furthermore, the Atlanta group (wealthy but not big time rich) resorted to scampering up and down the east coast to find enough money to complete the deal, bringing in leisure travel entrepreneur Steve Belkin from Boston and some DC- based investors. 

Since then, the whole thing has been a soap opera on such an epic scale that I don’t have a blog big enough to recount all of the events. So here is my “ESPN At The Half” recap: The spurred suitor McDavid is unhappy and sues Time Warner; The new ownership quickly becomes unhappy and sues each other; The Atlanta Spirit sues King and Spalding, Atlanta’s venerable law firm, who was also involved with suing various other parties; To make it even worse, the ownership saddles the franchise for the next six years by signing the largest contract in NBA history to a player who was at the heart of the initial internal squabbles;  Atlanta sports fans consider suing the Atlanta Spirit because they lied about their plans for the Thrashers; Time Warner, sued by McDavid, settles the suit agreeing to pay him $281 million, probably more than they received in selling the assets to the Atlanta Spirit in the first place.  The insanity of it all….

The off court craziness has not helped the teams’ performance. The Thrashers have made the playoffs once in their history, to be then quickly dispatched in four straight losses to the Rangers. Over the years, the Hawks have improved during the regular season but they barely register in the playoffs.  Phillips Arena I guess makes a little bit of money thanks to the nice sponsorship deal with Phillips and all the exorbitant fees they charge for a beer and a hot dog.   But, like everything else with this ownership, we Atlanta fans cannot pay another penny for a Budweiser or tolerate any more law suits, and we beg you, the Atlanta Spirit, to sell the teams now.  Maybe Mr. McDavid will buy it using house money. 

Finally, turning to Turner Field, the Braves are coming off a remarkable season, Bobby Cox’s finale, and if not for a few untimely errors and some bad luck, they could very well have won the pennant or perhaps even the whole enchilada.  Now with two 21-year old studs gracing the right side of the field and the front cover of Sports Illustrated, hopes springs eternal forgetting for a minute the Phillies starting pitching rotation or the World Series trophy sitting in San Fran.  At least we are not the Mets, having to borrow money to meet payroll last fall, or the Cards, losing their ace Adam Wainwright before the season even begins. 

The Braves ownership situation, however, is about to get more complicated.  Purchased from Time Warner in 2007 as part of a broader corporate relationship with large shareholder, Liberty Media, the Braves may soon face their own free agency.  Liberty Media today owns the Braves, but they really do not want to.  They promised back in 2007 that they would own the team for at least 4 ½ years, keep the payroll at a minimum of $80 million a year and generally agreed not be involved or interfere with the Braves professional management that came over from Turner and Time Warner.  Liberty Media, no shrinking violet, agreed to these terms for one specific reason: it allowed them not to pay taxes on the broader complicated transaction it entered into with Time Warner. 

Well, the clock is about to strike midnight and our Cinderella team will soon be looking to find its new prince (I think I just mangled a famous fairy tale’s plot).  Liberty Media reportedly ascribed $461 million to the Braves purchase.  That looks like a steal when compared to recent sales involving the Texas Rangers ($593 million) and the Chicago Cubs ($845 million).  With a strong playoff contending team, a relatively new ball park, a reasonable payroll and history of averaging more than 3 million in attendance each year, the Braves look attractive.  Let’s just hope that the Atlanta Spirit doesn’t get involved.

With all the people dressed in suits walking on the Galloway campus on a spring-like morning in February, either the school had a radical makeover of its dress policy or something special was to happen.  The latter turned out to be the case with a former President of the United States set to be the fourth presenter in an incredibly impressive Galloway School Speaker Series, already having featured famed education reformer Michelle Rhee, living baseball legend Hank Aaron and our hometown media mogul Ted Turner.  Adding Jimmy Carter to the list raised the bar to incredible heights, forcing one to wonder where the Series goes from here: a sitting President perhaps, the Pope, or if we should be so lucky, the all present Justin Bieber.

With a cadre of at least 10 secret service agents and local support from the Atlanta police force, a safe and secure Galloway community united in the packed school gym full of students, parents, faculty and neighborhood guests to get a direct update from Mr. Carter on the work of the Carter Center.   Before taking the audience on an eye opening and gut checking tour of some horrific diseases facing people around the world, the audience was treated to a warm, touching and humorous introduction of Mr. Carter by his grandson, James Carter IV, a 1995 Galloway school graduate.  Noting that the school community was celebrating “fearlessness” this year, the young Mr. Carter recounted that he was exhibiting some of these qualities just being up there at the podium as in second grade he had given an oral report from underneath his desk. 

In his remarks, the President shared insights into a world totally unfamiliar to most of the audience.  Not mincing words, and providing at times extremely graphic descriptions of diseases’ impact, Mr. Carter talked of the Carter Center’s role in ridding entire villages and countries of Guinea Worm, Tracoma and Elephantiasis, three absolutely horrible conditions that with creativity, planning and resources can largely be eradicated.   Such steps include latrine building, the use of bed netting and access to known medicines, all on a massive scale: 1.5 million latrines have been built, 20 million bed nets have been provided and Merck and other drug companies have contributed millions of free pills, he said.  Mr. Carter also highlighted the complexity of getting resources to disease-impacted areas and the various ways he has used his influence to help government open access and open minds to curing these curable conditions.

Further, Mr. Carter shared thoughts about the conflict resolution work done through the Carter Center, leading to free elections in 34 countries, and in certain instances, helping to create brand new countries like in South Sudan.  He talked about his proudest accomplishments from serving in the White House, noting the strength and sustainability of the Camp David peace accords, even with the recent government shake up in Egypt.  He recounted his work in the tenuous Korean peninsula and pro-democracy changes he helped achieve in the Latin America.  He shared lessons that he learned from Admiral Rickover when he served in the Navy and told wonderful stories about his mother, Lillian, and growing up outside of Plains, GA, a community of 636 people and 11 churches. 

In closing, Mr. Carter spoke directly to Galloway students and all students everywhere to “make our nation a superpower”.  Not the superpower we normally think of “with a military that spends more than the next 20 countries combined”, but a superpower focused on “peace, justice, freedom, humility, service, forgiveness, compassion and love.”  He reminded us to not underestimate the qualities of people in impoverished lands as they are just like us in intellect and aspiration, and to work to insure that the “poorest people on earth have a rich life.”

With that, Mr. Carter was off to hear a song from early learning students, attend an award ceremony that evening, and a full slate of travel and projects in the weeks, months and years ahead.  His trademark smile in tack and the fortune of good health,  boundless energy and full-time Secret Service protection, Mr. Carter undoubtedly will continue to serve, lead and let his views be known; quite a man, quite a role model, not only for each of us but for the world.

I like Mayor Kasim Reed, though I only met him one time for a fleeting second.  He has a nice way about him on television, and I was rooting for him not to mess up when he was on “Meet The Press” last weekend.  He did not disappoint, and his directness and willingness to engage problems head on are winning characteristics in my book, no doubt.

Interestingly, I thought he made a startling admission about Atlanta in a Feb. 6^th AJC article where he was quoted telling a group that “there’s a pall that over this town that is unacceptable” and “when you’re not trying to be the best you are declining.”  I appreciate his honesty, being a one-year Mayor just shaking off the light feathering he got from a well intended but botched ice storm response and facing difficult pension decisions, police brutality issues and all the rest.

You know, I agree with him about this “pall” thing.  Atlanta has lost its way over the past few years, and I would argue that the “pall” that over this town is self inflicted and requires deep introspection for us to get over it.  I think Atlanta has lost its heart. 

We really are two cities; the divide is not purely racial, it is not just the highway that divides our city, it is also economic.  We have great wealth and great poverty, a lively aquarium and deadly gangs, a wonderful airport and a broken school system.  We have dropping property values, massive foreclosures, and a growing homeless population like we have never seen before.  We have people who live in Buckhead who have no idea what goes on in the inner city.  We have remarkable people dedicating their lives to helping people who live in the inner city.  We have a Ying and Yang here in Atlanta that keeps us in our own little worlds and we are missing that piece that really unites us.

 In a small way, I thought the 13 and 3 Falcons were going to help address this issue, if just temporarily, but their unfortunate rapid implosion against the Packers quickly loosened some strings that were pulling people from all walks of life together.  We could have used a Super Bowl championship to rattle off this pall that hangs over us, but it wasn’t to be. 

But I have an idea that might just do the trick.  I know of a 95,000 square foot building that sits right directly in the heart of our city, at Peachtree and Pine streets (many of those who know me can see where this is going).  I and an incredibly talented and dedicated group of people have worked for more than a decade to turn this mammoth building into something all of Atlanta could be proud of.  We have not done a very good job explaining ourselves, our goals and objectives, mainly because we have been too busy caring for hundreds of vulnerable people every single night since 1998 (that is fast approach 5,000 nights of service, caring for an average of 500 people nightly, meaning that we, like McDonalds, housed, fed, loved and served more than 2.5 MILLION people during this time period. Amazing numbers if you really think about it). 

The other amazing thing has been the response of the City and its previous Mayors (before Mayor Reed mostly), the downtown business community especially Central Atlanta Progress, the all powerful Woodruff Foundation (who somehow saw this project as a problem and not an opportunity) and some in the media (yes, the AJC and even Cynthia Tucker before she fled the city) to think that we have done something incredibly terrible at this building.   All of this has culminated in a serious of massive lawsuits, depositions, crazy allegations, funding stoppages, and hostility that is unprecedented in the world of social service.

 I don’t believe this is Atlanta “trying to be the best” as the Mayor said.  This is Atlanta at its absolute worst.  So my idea is for our highly talented Mayor, who clearly has big, national ambition, to step up and lead us out of this mess.   This issue was not his doing, but he now has a golden opportunity at a time when we need him.  Yes, the City is a party to lawsuits, but you are the Mayor who takes challenges head on.  You are an African American man who should come see how hundreds of other African American Atlantans are trying to make it.  You have the chance to help make this city more than “shameless booster, collector of business headquarters, Olympic City” as the same AJC article said, you can make it a place with a heart, with a soul, and in the process, maybe the pall you cite will be lifted once and for all.

 (Blogger’s note: I served on the Board of the Metro-Atlanta Task Force for the Homeless for 25 years, and in the role as Board Chairman for 15 years.  I resigned in May, 2010, because of all the lawsuits, though I remain a huge supporter and advocate.)

As one of the first companies in the country to recognize and embrace social media, I am asked why ThePort Network has not achieved a fraction of the financial success attributed to the Facebook, Twitter and LinkedIn and other social networking companies.  It is a fair question and the answer is mulitifacted.

Some answers relate to funding, business model and luck.  But an overriding thought comes down to this: all of those other businesses took the approach to build their user base first and worry about monetization second.  To do that, you need to have significant capital to purchase infrastructure to handle growing online traffic.  You need to have patient investors who are willing to look at very little revenue while growing expenses rapidly.  You need money to build some brand awareness to attract investors.   Basically, you need venture investors who are looking for big homeruns and are willing to commit millions to make that happen.

Compare that to self funded or angel funded ventures, which characterize most of the start ups in Atlanta.   Mine included.  If you are using your own money, or money from friends and family who trust you, it is incredibly hard to build a business that is not focused on acheiving revenues.   To drive revenues, you are forced to work with “early adopter” customers who can literally bankrupt your company as you try to be responsive to their ideas, many of which are not well thought out but they are paying so you scurry around and try to respond.  Contrast that to well funded venture back companies who don’t get pulled off course by early customers, who can just keep adding individual users to the service and simply focus on  improving core functionality.  “Grow the base first, monetize second” provides a simplicity and a focus that is not there for Atlanta start ups.  We  here lose time, focus and expend tremendous energy chasing dollars down every little opportunity while California venture backed companies are achieving huge audiences, brand recognition and raise even more money at continuously inflated valuations and many are just now focusing on monetizing. 

Please note that our Atlanta model has, can and will work.   We will continue to build substantial companies that produce great products, create profits and a good return for our investors and accomplish things that we are proud of.  We just are not going to build many companies who have valuations that start with a B.