This is the fourth of an eight-part series on "Driven: An Autobiography" about the life of Larry H. Miller written by Deseret News columnist Doug Robinson in collaboration with Miller. Each begins with Robinson's personal observations and experiences from the project, followed by an excerpt from the book. "Driven" is available at Deseret Book.
Larry invited me to be his guest at a couple of Jazz games, sitting in his courtside seats, but I might as well have been invisible. He didn't talk or visit during games. He was all business. His wife, Gail, who sat through hundreds of games, couldn't visit with him, either. When she tried to visit with friends she had invited to the game, Larry would ask her why she wasn't paying attention to the game. She wanted to skip the games after a while, but Larry thought it would appear there was a marital problem. So she sat there and watched, and she is still doing that in Larry's absence. This is an excerpt from one of three lengthy chapters on Miller's arduous, daring and problematic quest to keep the Jazz in Utah. Curiously, Miller wasn't even a basketball fan at the time, but, as we all know, he certainly became one. One day during the last weeks of Miller's life, as a doctor was explaining options about continuing or discontinuing care that would prolong his life, Larry interrupted to ask, "How did the Jazz do last night?"
My pen was hovering over the document. All I had to do was sign the agreement, and the sale of the Jazz would be complete — the Jazz would go to Minnesota and I would more than double my personal net worth at the time. With my signature, I would receive $14 million for my half of the team, which, after paying off my debt, would leave me a slick $6 million profit after owning the Jazz for just 14 months — not a bad return on my investment. Sam Battistone, who owned the other half of the Jazz, had placed the contract on his desk.
"Sign these papers and I'll give you a check for $5 million in earnest money today," he said, and he stood there waiting for me to sign.
The room was quiet. I bent over the desk to sign, but then I froze. Thoughts were racing through my mind. What would I do with that much money? What does it mean to me? What would Salt Lake City be without the Jazz? What kind of hole would that leave in the community? And how could I face the fans who would be upset by this?
The reality and enormity of the decision hit me. I actually started to get dizzy and used the desk to steady myself. Part of it was the surprise. I had been caught off guard. Suddenly, Sam had showed up at my office without warning, and yet he wanted a decision right now.
Nobody wanted to believe this at the time, but I never bought the Jazz to make money, either on the operations side or as a value. Gail and I always viewed the Jazz as the grand gift we could give the city and state. We were the smallest market in the NBA and it was very clear to me that if the Jazz ever left there would never be another major league team here in our lifetime.
There was only one thing that could cause me to pick up the pen and sign a document that would take the Jazz from Utah: The Texas Option. The Texas Option, which had been written into the original contract with Sam, is a provision that is used frequently in business ventures. The Texas Option means that if either partner wants to buy out his partner or sell his share, for whatever reason, he can make an offer to his partner to that effect. But it also starts something he can't stop. If, say, Partner 1 declares that he wants to buy out Partner 2, now Partner 2 can turn the tables and say he wants to buy out Partner 1 for the same price he offered and Partner 1 must agree to it. That means Partner 1 must have a good idea of where the other stands before declaring his intentions to buy or sell.
When I bought half of the team in April 1985, the franchise was valued at $16 million. Even though I wasn't in this to make money, it was difficult not to notice the remarkable timing I had had in buying half the team. Almost immediately, the value of an NBA franchise increased a million dollars every month! My purchase of the Jazz did nothing to stem the rush of investors who wanted to buy the team and move it elsewhere. One of those was a partnership from Minnesota, Marv Wolfenson and Harvey Rattner. They had tried to buy the Jazz a year earlier when I beat them to it and now they were back again. They had been keeping in touch with Battistone, and they knew about the Texas Option clause.
Sam explained that Wolfenson and Rattner, the two Minnesota investors, were still pursuing the Jazz and were prepared to offer $18 million, and maybe even $19 million, for the franchise.
In the coming weeks, the offer climbed to $20 million. Battistone showed me the agreement, and I told him that from a tax standpoint it was a bad deal, and that if we were going to sell, this was a bad way to do it. I realized later that this was the wrong thing to say because now it sounded as if I would sell if the agreement were changed. I realized my mistake when Battistone set up a meeting with the Minnesota buyers at the Denver airport to discuss the tax ramifications. As it turned out, my slip of the tongue had been a great bargaining tool. They thought I was there to raise the price, and they did — to $22 million. Again, I said I didn't want to sell, but Wolfenson and Rattner persisted. They kept coming back to Battistone with bigger offers.
In May of 1986, one year after I bought half of the team, Battistone came to my office at the Toyota store and said, "You've done a great job of doing two things: Moving these guys' price up and ticking them off. Now they're offering $25 million!"
None of these guys — Battistone, Wolfenson, Rattner — got it. They thought I was saying no because I was holding out for more money. They thought it was a bargaining ploy. Finally, Battistone acknowledged the elephant in the middle of the room: The Texas Option.
"Larry, this is getting embarrassing," he said. "I would sell for $25 million, and that would enable them to buy my half and exercise the Texas Option."
I could see what was going to happen, of course. They would come to me and say they own half the team and they want to buy me out for $12.5 million, and I would either have to sell to them or match their offer. They would know I didn't have the money to do that. I would have to sell to them.
A couple of weeks later, on Friday, June 13, Sam returned to my office with four copies of the contract, each of them 3/8 of an inch thick. Each was turned to a signature page, where I could see that Battistone, Wolfenson and Rattner had already signed a deal to sell the team for $28 million! Sam put the agreement on my desk. With some resignation, I picked up a pen to sign the documents. I was beaten. I couldn't overpower this any more because of the Texas Option.
This was one of the moments of truth in my life, a time to find out what I was about. It was a real test. As Sam made a point of saying, he could actually deliver a check for $5 million in earnest money that very day. As far as he was concerned, it was a no-brainer, a done deal.7 comments on this story
My pen was hovering over the blank space and remained there frozen for 10 to 15 seconds while I wrestled with my thoughts. Finally, I threw the pen down and backed away from the desk.
"Sam, I can't sign this," I said.
Now I took the leap. "What will it take to keep the Jazz here?" I asked.
Next installment: Oil raced through Miller's veins.
Meet the writer
Deseret News columnist Doug Robinson, who collaborated with Larry Miller in writing "Driven," will be at the Deseret Book flagship store, 45 W. South Temple, Friday, 5-8 p.m., to sign copies of the book and answer questions.