Evan Smith: You recently sold the Minnesota Vikings, which means this is the first football season in seven years that you won’t be the owner of an NFL team. How does it feel?
Red McCombs: Well, I miss it a lot. We approached this season as if we’d own the Vikings forever. The lead investor in the investor group I made the deal with turned out to be not quite as liquid as the league wanted, so I didn’t know whether it was going to close or not. As it turned out, another person in the group was acceptable as far as liquidity, but I had to be ready [in case I couldn’t sell]. So I was very active in the free-agent market. There were five free agents we wanted, and we got four of them. And we were pleased with our draft. I look at this year’s team as really being my team.
ES: Let the record show that you’re wearing Viking purple. You still feel that loyal to the team.
RM: Of course, because it is my team. I put it together over the past seven years. I’ve been through this numerous times in the ownership of professional sports teams: When I sell a team, as long as players, coaches, and staff who I hired are there, I stay well connected.
ES: You’ve owned pro basketball teams—the San Antonio Spurs twice and the Denver Nuggets once. Is there something particular about owning a pro football team versus a team in another sport?
RM: In terms of what you have to do with your team, it’s not a lot different. The first team I owned, when I was 25 years old, was a class B baseball team in Corpus Christi. It had essentially the same issues. You have a product that’s an entertainment product. It has to compete with a lot of other products for its place. Then you have the issue of knowing that you’re in a business, that you’re in a league, and that when it’s all over, only one of you is going to be a winner. It’s such a challenge to try to be that one. Having said that, the NFL was the epitome of all sports opportunities. I actually chased the NFL for more than 30 years. It took me a long time to get in, but once I got in, it was even more than what I thought it would be.
ES: How’s that?
RM: It’s a closely held brotherhood, yet all of those guys are so competitive against each other as owners. And the viability of the league is the key; you learn that real early. It’s much more important that the league be strong than it is for your individual team to be strong. That’s a hard thing for an entrepreneur type to accept. It goes against your self-interest from time to time. But in the NFL, there’s a very, very strong feeling about the integrity of the league. It works well because of that.
ES: Did the other owners welcome you right away, or did they haze you for a while, kind of like a fraternity?
RM: They’re selective about taking you in. I thought that I would get in in ’92 with an expansion team from San Antonio, but they passed on me and took Wayne Weaver, from Jacksonville, which was just really hard for me to understand.
ES: Did they give you a reason why?
RM: No. Then in ’98, when the Vikings came along for sale, it was held in the format of an auction by the ownership group. I was not the successful bidder; the author Tom Clancy was. But then he had difficulty satisfying the league as to his liquidity, and he bowed out. They put it up for auction again, and I was successful the second go-round. The league said that my application was approved as fast as any they had ever had, and it was unanimous. I was delighted to be in.
ES: Well, you weren’t just a guy walking in off the street. You’d owned pro sports teams before, your liquidity wasn’t an issue, and you clearly cared enough about it to have tried to get into the league before. That probably helped.
RM: I think it did help, and so did the fact that I had been successful in those other operations. When I bought them, they had a lot of problems. They were not exactly at the top of the heap. And we were able to turn them around.
ES: The first season you owned the Vikings was a huge improvement too. You went from 9-7 to 15-1.
RM: And we sold out every game. The Vikings had never sold out a preseason game in the history of the team. When I bought them, we had twelve days until our first preseason game in ’98. We sold it out and sold out every event from that point on. And we’ve already presold this year for the new owner coming in.
ES: Why’d you get out?
RM: Because I inherited an onerous stadium lease, and I couldn’t create any traction to get a new stadium done. The model that the NFL prefers for new facilities is two thirds public money and one third owner money. The problem was the state’s participation. The leadership of the state felt like they had other needs; they’ve had a bunch of problems there since I bought the team.
ES: Did you have a conversation with the governor or his people in which you said, “Look, I need a stadium. If you don’t give me one, I may sell the team, but I may move it”?
RM: I never considered moving the team, although the media would say otherwise.
ES: In fact, isn’t it true that at one point you thought, “Wouldn’t it be great to have the team in San Antonio”?
RM: Well, of course. That’s a natural one. But that was never an issue, and I never raised it.
ES: So why didn’t you get that traction?
RM: In a way, my own success made it more difficult for me. We were selling out, and they knew by league reports that I had one of the better operations. So I couldn’t cry poor mouth. They said, “You know, the fans are coming, and they’re filling up the stadium. In time we’ll get to it.” And I’m sure they will get to it. But at the end of the fifth year, when I fully expected to be in a new facility and wasn’t, I decided I would sell the club. I made the announcement, and over the next couple of years, we got that completed.
ES: It’s been reported that the sale price was more than double what you paid for the team.
RM: I sold the team for considerably more than what I paid for it. But as in any other business, what I sold was not the same as what I bought.
ES: You built a lot of value.
RM: There’s no question. I created value from the first day I got there. It was a much better buy, for example, at the price I was paid than it was for the price I paid the previous owner. By the way, I’ve felt for the past fifteen years that professional sports franchises are underpriced.
ES: Underpriced? A lot of people think they’re overpriced.
RM: The marketplace is showing that they’re underpriced, because there’s an almost insatiable appetite for NFL product. There’s tremendous demand from national sponsors. I don’t see that changing anytime soon.
ES: What was the best part of owning that team?
RM: The relationship with the other owners and the relationship with the players and the coaches.
ES: What was the most difficult part of owning it?
RM: I really didn’t have any difficult experiences.
ES: Really? Dealing with [famously obstinate wide receiver] Randy Moss doesn’t come to mind?
RM: Randy Moss was a pure delight. Frankly, if I had ten Randy Mosses, I’d love it.
ES: Even though Randy Moss was sometimes a challenge to manage?
RM: Not really.
ES: You don’t think so?
RM: No. Randy Moss unfortunately made a few gaffes that were so publicized that we lost fans who didn’t know the difference and didn’t go to games, who just saw what he said and thought, “This guy is a jerk.” Well, he’s not a jerk. He’s a down-to-earth, solid, caring person. I loved having Randy Moss every season. And I didn’t have any sense that in trading Randy Moss I would be able to get equal value for him, because there is no other player who has the ability that he has. He’s truly one of the few players at any level who can win a game by himself.
ES: Come back to San Antonio for a second. Do you think your hometown will ever get an NFL team?
RM: San Antonio could very well support an NFL team. But the league has pretty much said that it wants to go to L.A. next, for obvious reasons, and it doesn’t really want to expand beyond the 32 teams it has—that probably favors some other team moving into L.A. So I think it’s going to be difficult for San Antonio to get one. I think an ideal spot for an NFL team in San Antonio, by the way, is between New Braunfels and San Marcos, which would tie the Austin and San Antonio markets together.
ES: Football has been only a part of your business interests. What about your car dealerships? You had the number one dealership group in San Antonio in 2004, and you’ve been at this a long time.
RM: Cars and car dealerships are the basis of my business. That was the foundation of everything I do. But it has not been, in the scope of the things that I do now, a significant factor in my business world for the past fifteen years and certainly hasn’t been in the past five or six.
ES: So as the percentage of all the money that comes in the door from the various interests you have, cars would represent how much these days?
RM: Less than 10 percent. But outside of sports, it’s still my favorite business, and I never get far away from it. We have eight franchises in San Antonio. Three years ago, on my seventy-fifth birthday, we turned the responsibility for them over to my daughter Marsha Shields. She’s doing very well, I might say. She likes that business a lot. Of course, she’s been raised in it all her life.
ES: What about the radio business? You still have a significant stake in Clear Channel, which I just heard was down 12 or 13 percent in revenue in the second quarter of this year.
RM: It puts us a little off for the year, but we have a lot of free cash flowing. And yet the stock market has not recognized the value that we feel has been there the last couple of years, so we’re in the process of breaking the company into three companies: Radio would be one; outdoor [billboard advertising] would be one; and entertainment [concert venues and concert promotions and booking] would be one.
ES: You’re aware, of course, of what’s been written over the years about Clear Channel. Somebody coming from another planet who read those stories would think, “Oh, my God, this has to be one of the worst companies in the world!” Why has Clear Channel been such a magnet for criticism?
RM: Because we’re so much better than everybody else in that business. And most of the criticism comes from our competitors, not our customers. Hey, let’s face it. It’s a huge entity. We wake up every day and turn on a microphone that talks to about half the people in the United States.
ES: Okay, on to cattle. Are your holdings a serious part of your business or are they a hobby?
RM: It is not a hobby with me. This is going to make me sound like a money-grubbing kind of guy, but if it didn’t work financially, I might have 5 or 6 [head] instead of 250. But it is a good business. I’ve been in it since 1978, and I enjoy it very much.
ES: What percentage of your interests does cattle represent?
RM: About 7 to 8 percent.
ES: So 7 or 8 percent on cattle, 10 percent on cars—
RM: I’ve got a lot of time left over.
ES: Where is the bulk of it going?
RM: I’ve spent the bulk of my time the last two years looking for new ventures, and I’ve put private equity into four start-up companies, all different types of businesses. There’s also my real estate development business. I’ve always been in that business, but I’ve paid more attention to it in the last few years because we’re in such a red-hot market in Texas. And then I’ve been in the oil business for 35 years. Our energy company is headquartered in Houston. We have fourteen employees, so we’re not a big outfit. But we drill about sixty wells a year. We’re pretty active.
ES: I’m guessing that the past eighteen months have been pretty good for you in the energy biz.
RM: Well, prices doubling in the last two years—that would make any business very good.
ES: Has anyone ever said to you, “You have, from a professional standpoint, ADD”? Because you have so many different interests, and not all of them are necessarily compatible.
RM: It’s a big challenge, but it’s not about any attention deficit. I’ve always known people to be able to totally focus on anything at any given moment, and it doesn’t take that much time, really, to make decisions, to decide what you’re going to do. That doesn’t mean there aren’t problems and issues and all. In a given day, with all these various entities, I probably spend about a third of my time on problems at one place or another. I spend about a third of my time looking for new opportunities, and I spend about a third of my time on community activities.
ES: You’re one of the richest men in the world. You’ve built a long, wonderful life from humble beginnings. You have the blessings of health and family. You don’t have to do any of this. Why not sit on your duff?
RM: About the time I was ten years old, I recognized that I had such great curiosity for the way business worked, and I was so fascinated with all aspects of it that it was like, “I have to try some of that, I have to try some of this, and it doesn’t mean I’ll be successful at everything.” I’ve been pretty fortunate, because enough of it has worked that it gives me a pretty full day. I’ve had my failures and my mistakes. I don’t dwell on them. If I have something that’s not going well, and I feel like I’ve done as good with it as I expected to do and I still didn’t get the desired results, I get out of it. So I don’t have anything dragging me down at any given time. I think that attitude is everything, and I want to feel positive about all the things that I do and about all the people that I see and meet. I don’t like negative vibes.
ES: What kind of hours do you put in?
RM: I’m not a workaholic, and I never have been. I work about 60 hours a week.
ES: To a lot of people, 60 hours a week is workaholic territory.
RM: That’s 10 hours a day. God gives us 24 hours a day, and he created all of us equal. All of us get exactly the same time. To take 10 hours out of that and try to make a contribution in some way or another still gives you a lot of time left.
ES: But why contribute to the University of Texas or Southwestern University or other beneficiaries of your generosity? Why give away your millions?
RM: I was raised by parents who were very loving and caring and sharing. Growing up, I watched my dad make 25 bucks a week. He was an auto mechanic in Spur. He would come home every Saturday night with his pay envelope, and my mother would open it up to find $24.75 cash in there. She would take out $2.50 immediately and put it in an envelope for the First Baptist Church. In addition to that, if anyone in our little town had problems or issues or setbacks or whatever, my mom and my dad always, in whatever way they could, offered to help and did help. So I was raised in that atmosphere. And Charline [his wife] and I have always shared our resources. Of course, in the last ten or fifteen years, when those resources have a lot of zeros behind them, it gets more attention.