Monte Burke 09.04.08, 6:00 PM ET
Forbes Magazine dated September 29, 2008
Indianapolis Colts owner Jim Irsay may come across as a flaky, 1960s hippie burnout. But no NFL owner has done more with less
Jim Irsay, owner of the Indianapolis Colts, is pretty sure that he's the only National Football League owner who has his team's logo tattooed on his right shoulder. The 49-year-old, who speaks in the gravelly voice of a pro wrestler and has the physique to match, is also a published poet ("Frozen Lakes of the Confessor" was a tribute to his deceased buddy, Hunter S. Thompson), a songwriter (he wrote an official Colts fight song) and a collector who owns, among other items: guitars from Jerry Garcia and Elvis Presley, Jack Kerouac's 120-foot-scroll manuscript of On the Road and the glasses worn by Mike Myers in the Austin Powers movies. Irsay sees no difference between owning an NFL franchise and his outside interests. "I believe we're all artists, that business is art," he says.
Irsay is the untucked shirt in the buttoned-up world of NFL owners. (He swears other owners are wackier than most realize. When pressed for examples, he cites the fact that Steelers owner Dan Rooney is a pilot and Jonathan Kraft, son of Patriots owner, Robert, "likes music." Weirdos!) But the NFL's most eccentric owner is also among its savviest--and one of its biggest risk takers.
Since he took over the team in 1997 after the death of his father, Robert, who will be remembered for his dead-of-night abduction of the Colts from Baltimore, Irsay has consistently produced winning teams on and off the field. Playing in the NFL's ninth-smallest market, in a decrepit stadium that produced only a fraction of the revenue that rivals like the New England Patriots and Houston Texans took in, Irsay made the decision to spend millions of his own money to keep All-Pro players like Peyton Manning and Marvin Harrison. The gamble paid off with a 2006 Super Bowl win.
And unlike some other small-market owners, like the Buffalo Bills' Ralph Wilson, Irsay didn't waste time bellyaching about revenue discrepancies between big cities and small ones. Instead he focused on keeping his franchise competitive by doing a better selling job. One of his first moves as an owner was to bring the radio rights in-house in 1998, the first NFL team ever to do so. Within two years radio revenues tripled; last season they were $3.2 million, more than most other small-market teams got.
Irsay is also good at finding sponsors--including 50 local ones--twice the count of the average NFL team. During the past five seasons the Colts' advertising and sponsorship revenue has doubled to $15 million. "He's the best small-market owner in the NFL," says Marc Ganis, president of the Chicago consultancy Sportscorp.
A decrepit stadium can be replaced. In 2005 Marion County and the state agreed to finance all but $100 million of a new $719 million retractable-roof stadium for the Colts. Lucas Oil, a California fuel additives producer (no relation to the Russian Lukoil), chipped in $122 million for naming rights over 20 years. The Colts moved into Lucas Oil Stadium earlier this month. The team is on the hook for only a $66 million loan from the city, which Irsay can pay back over 27 years. The Colts pay a tiny $250,000 in annual rent while reaping all football-related revenues (tickets, parking, concessions, sponsorships), which will add $30 million a year. Remarkably, Irsay faced little resistance from taxpayers asked to pick up so much of the cost. "It's definitely one of the most favorable leases in recent league history," says Robert Vogel, president of the Bonham Group. This year the Colts make a jump in our value rankings, from 21 to 8, as their enterprise value increases 18% to $1.1 billion.
Irsay's philosophy for the team and for his collecting is the same: identify and obtain quality pieces, then hold on to them. In 1998 he hired Bill Polian, who had built the 1990s Buffalo Bills powerhouse, as general manager. In 2002 he got coach Tony Dungy. Says Irsay, "There are certain moments of opportunity, and you have to seize them." Dungy, who has coached at Pittsburgh and Tampa Bay, says: "When I interviewed for the job, he didn't talk about winning a Super Bowl. He talked about getting established in Indiana, about making a connection with fans, the macrolevel stuff. The winning was to be a by-product." Another difference from other organizations for Dungy: "I was used to signing footballs. Now I sign guitars."
Irsay displayed the same touch and consistency with players. In 1998 he drafted quarterback Peyton Manning, who's now in his second contract, a seven-year, $99 million deal signed in 2004. He's held on to stars like wide receiver Marvin Harrison ($67 million over seven years) and defensive end Dwight Freeney ($72 million over six years), selling stocks and real estate to pay $100 million in signing bonuses in the last ten years. It's paid off: The Colts are among the most successful teams of the past decade, compiling a regular season record of 105--55, making the playoffs in seven of those years and winning the 2006 Super Bowl. Last year they became the first team in NFL history to win at least 12 games five straight seasons.
Irsay has also reached out beyond the Indianapolis market. Besides landing sugar daddy Lucas Oil (whose founder, Forrest Lucas, is from Indiana), he got Airtran Airways from Florida and Anheuser-Busch (nyse: BUD - news - people ) from St. Louis as sponsors. Other league owners credit his work as an owner--and his personality--as a significant reason for awarding Indianapolis the 2012 Super Bowl, a rare honor for a cold-weather city. "I voted for Indianapolis because of Jim, because I like him and respect what he's done there," says Patriots owner Robert Kraft.
Stark contrast to the reign of his father, Robert, who didn't have a lot of admirers. Robert Irsay made a fortune by starting a heating and air-conditioning company that competed with his own father's company. In 1972 Robert bought the Los Angeles Rams for $19 million, then, in a prearranged deal, swapped the team for Carroll Rosenbloom's Colts, then in Baltimore. His ownership tenure was troubled from the beginning. "They say humor is the bridge to sanity, and I laugh like hell about some of the things that happened back then," says Jim. "But at the time it wasn't funny."
The heavy-drinking Robert Irsay fired coaches at whim and called plays from the owner's box. John Elway, his first draft pick in 1983, refused to play for the team and was traded to Denver, where he led the Broncos to five Super Bowl appearances, winning two. Robert's own mother called him "a devil on earth" in a 1986 Sports Illustrated article. But he's most known for his infamous midnight move of the team from Baltimore to Indianapolis on Mar. 28, 1984, done without notifying the city of Baltimore or the NFL.
Jim Irsay got a firsthand education in how not to run an NFL franchise, starting as a ball boy in training camp as a teenager. He joined the team full-time in 1982 after graduating from Southern Methodist University, first working in ticketing and public relations, then becoming general manager in 1984. Things didn't get much better for the team after the move. The Colts posted an 85--122 record under the elder Irsay in Indianapolis, never winning more than nine games in a season. "I got fired many, many times," says Irsay.
But all the while Irsay was learning, from his father's mistakes and from the examples set by some of the founding owners of the NFL, like the Bears' George Halas, who attended Irsay's confirmation and wedding. Jim Irsay has blended his respect for the history of the game, learned at the feet of Halas, with the pro-growth attitude of newer owners, like the Cowboys' Jerry Jones. "As Bob Dylan says, you're either busy being born or you're busy dying," says Irsay. He has battled an addiction to painkillers, which he describes as "a fatal disease." He says: "I am filled with gratitude for having been able to get through that. My dad never had that chance, and it eventually killed him."
Even with the bounty of the new stadium, this season the Colts will be spending a significantly higher percentage of their revenue on players than several teams in bigger markets, including the Washington Redskins, the Dallas Cowboys and the Houston Texans. And in 2010 both New York teams, the Giants and the Jets, will share a new stadium that will give each team far more revenue than the Colts get from Lucas Oil Stadium. In his small market (a third of the size of nearby Chicago), Irsay has far less room for mistakes. A few bad contracts--like a player with a huge signing bonus who either doesn't pan out or gets injured--would hurt the Colts more than, say, the Redskins, who have had a string of poor personnel decisions and a 74--86 record over the last decade, yet still remain the league leader in revenues.
A more frightening prospect: an end to the salary cap, which could happen as early as 2010 because the owners opted out of the collective bargaining agreement last spring. If there is a prolonged period where owners can spend as much as they want on players, Indianapolis won't have the cash to compete with richer teams.
But Irsay sees some benefits to being in a small market, too. "This team has a huge influence on the psyche of the community. I believe in that magic," he says. "I know that I sound like Timothy Leary, but I really believe it."