Trophy News from Bloomberg, New York, NY
May 5 (Bloomberg) — Dressed in business garb on a steamy summer afternoon in the Hamptons, Philip Schwalb and Sameer Ahuja pitched their concept of a sports museum for the financial district in New York City to swimsuit-clad investors at the Surf Club of Quogue.
“We had absolutely no idea that we would be out at the beach and certainly were not dressed at all appropriately for it,” said Ahuja of that day in 2003 on New York’s Long Island. “It was a surreal experience.”
The $7 million in seed capital the pair raised from their beachfront pitch grew to $100 million in three years and gave birth to the 45,000-square-foot Sports Museum of America opening May 7 in John D. Rockefeller’s former Standard Oil Building, steps from the Charging Bull statue in Bowling Green Park near Wall Street.
In addition to individual investors’ cash, the museum is backed by $52 million in Liberty Bonds, the tax-exempt financing program created to foster economic development after the Sept. 11, 2001, attack that destroyed the World Trade Center.
The museum, which will charge $27 for admission, is designed as a tourist attraction in a neighborhood still on the mend.
“People come down here and can see something tangible that we’ve created for lower Manhattan,” said Ahuja, 33, the for- profit museum’s chief financial officer. He predicted the site will attract 1 million visitors annually. “We stand as one of the significant tourism improvements and that’s really important.”
Brandi’s Bra
The Sports Museum’s 19 galleries display the American flag that was draped around Olympic hockey goaltender Jim Craig after the U.S. won the gold medal in 1980 and the sports bra that California soccer player Brandi Chastain bared after her penalty kick led the U.S. to victory over China in the 1999 Women’s World Cup final.
College football’s Heisman Trophy and its annual award ceremony will now be based at the museum. It is also the home of the Billie Jean King International Women’s Sports Center, the only Hall of Fame dedicated to females.
The Pro Football Hall of Fame in Canton, Ohio, and the Naismith Memorial Basketball Hall of Fame in Springfield, Massachusetts, are two of 62 partners of the museum, which will also feature items from the National Baseball Hall of Fame in Cooperstown, New York.
The idea for the museum was born during a visit to the Basketball Hall of Fame on Sept. 10, 2001, when Schwalb, 45, was managing a holding company for the family of Caroline Kennedy and her husband, Edwin Schlossberg.
The excursion prompted Schwalb to conclude that sports museums are in hard-to-reach places and run as nonprofit institutions that are under-funded and difficult to market.
`Lying Dormant’
“The epiphany for me was that this was just a great business idea waiting to happen,” Schwalb said in an interview. “Sports, in my view, had been really tapped in terms of being a business, and I saw this one piece of it which was lying dormant.”
Following the next day’s terrorist attack, Schwalb sought to locate the museum near the destroyed World Trade Center to help the neighborhood rebuild. Placing it in lower Manhattan was first suggested by former Senator and New York Knicks basketball star Bill Bradley, Schwalb said.
He and Ahuja got the project off the ground with the networking skills of George Motz, mayor of Quogue, New York, and president and chief executive officer of the investment advisory firm Melhado, Flynn & Associates Inc.
Beach Pitch
For the pitch at the beach club, Motz assembled Brendan Ryan, chairman of Interpublic Group’s Foote Cone and Belding unit; Edward Horowitz, a former executive at Time Warner Inc.’s HBO, Viacom Inc. and Citigroup Inc. who is now a part-owner of the Tennis Channel; and Matthew Blank, chairman and chief executive officer of Showtime Networks Inc. All three agreed to invest.
Schwalb and Ahuja later tapped Robert Kapito, president of BlackRock Inc., and Michael Ryan, former chairman of Merrill Lynch & Co.’s Global Equity Capital Markets unit, who pitched the project to their Wall Street friends.
One hundred investors provided at least $250,000 apiece. The backers include Daniel Tully, Merrill’s retired chairman; BlackRock Chairman Laurence Fink; Goldman Sachs Group Inc. President Gary Cohn; and Robert Wolf, chairman of UBS Group Americas, according to the museum.
`The Sizzle’
“Very few of them invested because they were excited about the sizzle of sports,” Ahuja said. “Most of them put us through the wringer very, very extensively in terms of due diligence.”
Investors were united by a desire to support the financial district, said Ryan, the former Merrill executive who co-founded the closely held financial-services software company Ipreo LLC.
“They had worked in lower Manhattan and were upset after Sept. 11, and they all had either children that played sports or were themselves athletes — either real or imagined,” Ryan said.
While New York is building a memorial to those killed at the World Trade Center, the district will need other projects to bolster tourism, said Dan Doctoroff, the former New York deputy mayor who supported the museum’s bond financing. Doctoroff is president of Bloomberg LP, the parent company of Bloomberg News.
Originally written by Mason Levinson, New York
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