Last October 28, the National Basketball Association’s board of governors held a private meeting of team owners at the Equitable Tower in New York. The lockout was postponing the beginning of the season, and the mood was tense. The players’ union leaders were meeting at the Sheraton hotel across the street.
It was the first board-of-governors meeting for Lewis Katz, who that day took over as the new co-chairman and principal owner of the New Jersey Nets. A tall, skinny 57-year-old, with just enough light-brown hair to cover his head, Katz felt like an overgrown kid with a big new toy, and he quickly became a center of attention. He began raising questions – about the new NBA store, about television contracts, about league finances.
“I am going to recognize you again, Lewis,” NBA commissioner David Stern joked, “even though it is your first meeting and you are supposed to keep quiet.”
Katz is the flamboyant and well-connected front man for a group of seventeen investors, inspired by the publicity-shy financier and philanthropist Raymond Chambers, who bought the Nets for $150 million. They want to make the team into the engine driving a philanthropic plan to redevelop central Newark, fund scholarships and support programs for poor inner-city kids, and recruit the team’s players to do part-time social work.
And they may not stop there. People familiar with the group’s plans say they have held talks about possibly acquiring the New Jersey Devils and the Minnesota Vikings and even the New York Yankees – raising the startling possibility that the Bronx Bombers could be working for a group currently dedicated to social uplift in the state of New Jersey.
Katz and the other owners won’t comment on any talks. But Katz says they are potentially interested in acquiring other sports and media properties. “If anything comes up, we are keeping our ears open,” he says.
The group has acquired the Nets at a time when independent team owners face stiff competition from conglomerates merging teams, arenas, real-estate investments, and media venues. The NBA lockout underscored the unseemly degree to which money dominates pro sports. To many fans, players and owners seem greedier than ever before. But the Nets’ new owners have something very different in mind.
“We want to give back,” says Katz, a Cherry Hill, New Jersey, lawyer who became a small-town banker, a parking-lot-and-billboard mogul, and a Democratic Party power broker. “With the positions we have, we want to improve the quality of people’s lives. We thought a sports team could be very effective, because it’s so visible and because so many of the players come from the inner city. If we generate any profits, what we would like to do is give them back to the community, to see if we can make a difference.”
To do that, Katz and Chambers have together donated their 38 percent stake in the team to a new charitable trust, the Community Youth Organization, dedicated to providing social services primarily in five impoverished New Jersey cities. Katz and Chambers won’t receive any personal gains from the investments. In fact, if the team makes no money, they have promised to donate $200,000 a year to the new trust. “The biggest owner is a nonprofit trust, but it’s more of a business,” Katz says. “The idea is to invest your capital so that its impact multiplies, for more kids. The people involved are all dreamers.”
The fifteen investors who own the remainder of the team, including co-chairman and chief executive Finn Wentworth, can see returns on their investment, but it won’t be easy; the Nets have been losing more than $1 million a year recently. Their plans sounded at first like public-relations bunkum to Michael Rowe, the Nets’ president hired by the previous owners, who is the son of a Newark cab driver. “These are captains of industry. What is in it for them?” he wondered. But now he insists they are for real: “Katz isn’t a tree-hugger, but he is a poor kid who grew up in New Jersey and wants to help while he’s still young and aggressive.”
That may mean branching out. “I don’t think we are just a basketball team forever,” Rowe says. “These owners think on a large scale, and play for high stakes. They plan to expand this company – but they want to do it to help other people. The only thing you can be sure of is that this team is going to change.”
What unites the financial players behind the new Nets is their rise from humble backgrounds in the weedier precincts of the Garden State. Chambers grew up in Newark, and Wentworth’s parents moved from Newark to a nearby town shortly before he was born. Katz is a native of inner-city Camden.
Raised by his mother – his father died when he was a year old – Katz went to Temple University on scholarship and worked over the summer selling dog food. From the beginning, he was drawn to the limelight. At Temple, he and his friend Bill Cosby ran a weekly showcase called the “Hour of Pleasure.” Cosby would recruit rock-and-roll acts like the Mamas and the Papas and Tom Paxton to perform on campus, or try out his own amateur routines. “Lewis always said he loved me,” Cosby said at a recent charity roast in Katz’s honor. “And the feeling is mutual. I love me, too.”
In his senior year, Katz went to work as a newspaper reporter, apprenticed to Washington columnist Drew Pearson. Pearson became a father figure, standing as Katz’s best man at his wedding, and Katz later named his son after him. Katz continued working with him even while he began preparing for a more lucrative career as a lawyer, attending Dickinson Law School and clerking for the chief justice of the Pennsylvania Supreme Court.
In 1966, he hung out a shingle in Cherry Hill, a Camden county suburb, and hired his mother as his secretary. His practice grew to include local celebrities like players for the Philadelphia Flyers and Eagles, as well as the Motown singer Jackie Wilson.
Along the way, he grew interested in Democratic politics. “When I was younger, I thought that people who didn’t ‘have’ belonged in the Democratic Party,” he says. “I guess it just came from being part of the underclass and having no father, no economic security – you really do get an understanding of the difficulties of life.”
In 1972, he was elected as a Democrat to the Camden County council. And when a 14-year-old boy awaiting trial for breaking a window hanged himself in a Camden youth shelter, Katz was moved to action. Comparing the facility to something out of Oliver Twist, Katz formed a committee to investigate and eventually put his own homeroom teacher from Camden High School, Mary Previte, in charge of reforming the shelter. Previte, now a state assemblywoman, is still in charge of the shelter. “Lewis Katz has always been very generous, helping us buy paperback books or a gerbil cage for a classroom,” she says.
Katz gave up elective politics after two terms in office. But he stayed involved as a fund-raiser and contributor, notably for a Camden friend of his, a young politician named Jim Florio.
In the eighties, everything seemed to come together. Katz, along with Camden County banker Jerome Goodman, bought and turned around a pair of foundering small-town New Jersey banks, which they sold at a hefty profit. “The investments just mushroomed,” he says, “but not as big as New York mushrooms, just South Jersey mushrooms.”
As Florio rose out of Camden, Katz rose with him, heading fund-raising for Florio’s successful campaign for governor in 1989, after which he became finance chairman of the state Democratic Party. Florio appointed Goodman as chairman of the New Jersey Sports and Exposition Authority, one of the most coveted titles in the state. And Katz began hatching schemes to bring his favorite team, the 76ers, to a planned arena in his hometown, in an effort to boost Camden’s sagging economy. Plans for a new arena were on the drawing board when Republicans took over state government and scrapped the idea, Katz says.
Katz made his real killing by turning around Kinney Systems, a parking company in which he bought a small stake in the eighties. When it was on the verge of bankruptcy in late 1990, he bought out his partners for about $20 million. He set about renegotiating better leases with its biggest customers, New York real-estate moguls like Douglas Durst, Howard Milstein, and Samuel LeFrak. He sold the company to Central Parking last year for $225 million.
His Camden philanthropy grew with his fortune, from donating to the local Jewish Community Center to founding a Boys and Girls Club and even adopting a Vietnamese family of six. After two of his housekeepers invited him to the First Nazarene Baptist Church, he came back again and again. Last fall, he donated $50,000 to rebuild the church after a fire. Now he sometimes speaks during services, telling parishioners stories of his own rise from Camden’s slums. “He has rubbed shoulders with the elite and the royalty of this country, and he still comes back to take care of the city of his birth,” says the Reverend J. A. Jones.
Friends say Katz is well suited to his role as the public face of the Nets’ new management. He has a distinctive taste in clothes, sometimes wearing yellow or electric-blue sports coats and bright-green boaters “that look like he just won the Masters,” says his son Drew, 27. Among the political and business elite, he is famous for his practical jokes. He once rented a private airplane from his friend the Philadelphia 76ers owner Ed Snider and replaced all the decorations with pictures of himself and his friends, “so it looked to all the world like his plane,” Snider says. (Katz later bought it.) Negotiating to sell a company to Monroe Carell, chairman of Central Parking Corporation, Katz left a message on Carell’s home answering machine, “Monroe, the DNA came back, and it’s your baby.” His wife was good-natured about it, Carell says. Around the same time, Katz invited Carell to a “hockey game,” which turned out instead to be a private dinner at a table with President Clinton.
“Lewis, you must not have had any toys as a child,” Carell told him after the Nets deal was announced. “Because now that you have money, you are buying all these airplanes and basketball teams.”
Katz knows something about basketball, although the last team he played on was the Camden High School junior varsity. “He’s still got a good eye,” says Arthur Goldberg, the Atlantic City casino mogul who two years ago unsuccessfully bid $95 million for the Nets himself. The two once bet $10,000 on a game of one-on-one. “He beat me ten-nothing, and he would kill to have my upper body,” says Goldberg. (They donated the money to charity.) Katz even once beat President Clinton in a game of Pig at the Nerf hoop in the office of Philadelphia mayor Ed Rendell.
“Lewis is a little wild,” says voluble power forward Jayson Williams, whom the Nets just signed to a $100 million contract. “He’s like me – he doesn’t take anything too seriously.”
Raymond Chambers, the other driving force behind the new Nets, couldn’t be more different. “If you want snappy quotes or long speeches, you got to talk to Lewis,” says Jayson Williams. “Ray Chambers is the main man, the big cheese, but he’s the kind of guy who pays people a lot of money to keep his name out of the press. He’ll probably come to one game all year.”
Chambers has fought tenaciously to protect his privacy. He declined to be interviewed for this story, and his friends try to avoid even using his name with reporters. In 1992, he agreed to speak on background for a Wall Street Journal profile only after, at his suggestion, the reporter volunteered for five months at a weekend tutoring program for underprivileged kids. Friends say Chambers believes that recognition for his charitable acts would diminish their merit.
A tall, strikingly handsome man with gray streaks in his dark hair and a strong resemblance to Ted Turner, Chambers was born in Newark 56 years ago, the son of a steel-warehouse office manager. He worked his way through Rutgers University by playing keyboards in a rock-and-roll band called the Ray-tones, then worked for a few years as an accountant. After investing on his own for a time, he formed a partnership called Wesray Capital Corporation with Richard Nixon’s former Treasury secretary William Simon. Wesray became one of the most successful leveraged-buyout firms of the eighties. At the end of the decade, he retired from active management of the firm and dedicated himself full-time to becoming a kind of philanthropic godfather to the devastated city of Newark. The plan for the Nets – buying the team, building the arena, redeveloping the district – was originally his. “I had never seen people as down-and-out as the people of Newark,” he said in a statement issued to the Journal. “It had gotten so bad I didn’t think I had any alternative.”
Forbes magazine estimated his wealth at more than $200 million in 1988. Since then, he has given away far more than $50 million, according to estimates in the New York Times. He has given even more generously of his time, often leveraging his contributions to elicit support from others and maximize their impact. His Amelior Foundation has been a mainstay of the Boys and Girls Clubs of Newark. He helped bring the city a movie theater when it had none, and helped found mentoring and scholarship programs there that served thousands of kids. With characteristic ingenuity, he once established a nonprofit commodities-trading fund, managed by top-notch trading firms that agreed to waive their fees. He was the driving force behind the development of Newark’s $190 million New Jersey Performing Arts Center, not far from the Nets’ proposed arena. “He was the first Newark boy who really put his money on the line and made it happen,” says Barton Myers, the center’s architect. “No one would have thought you could raise $190 million in Newark and build an arts center.”
Last summer, Chambers even made a rare public appearance to perform with the middle-aged members of his old band in a beachfront benefit concert to save a giant wooden elephant that is a landmark of the Jersey shore. With a guitar-shaped keyboard slung across his shoulder, he sang a tribute to the concert’s organizer, Lewis Katz: “He’s mighty thin and he’s also tall, he thinks he should play basketball, Lewie, Lewie …” (Katz, dancing without much rhythm, pantomimed a hook shot.)
The partnership behind the Nets began to take shape as the 1997- 1998 basketball season ended, when Chambers called Finn Wentworth. “Have you ever thought about putting together a partnership like you do in real estate in order to do some good for other people?” Chambers asked, according to Wentworth. “I think there is a real opportunity here for us to buy the Nets.”
Wentworth was one of a Newark newspaper printer’s ten children. He attended Lehigh University on a track scholarship. After beginning a career as a commercial real-estate broker, he and his partner, Stanley Gale, made a small fortune in the early nineties by buying up properties at depressed prices. Backed by the deep pockets of Wall Street investment banks at a time when many landlords were bankrupt, Gale & Wentworth built its commercial-real-estate portfolio from 1.4 million square feet to just over 24 million around the country, and reaped windfall profits as property values bounced back to new heights.
Wentworth had been a Nets fan from childhood. He customarily showed up for games with his kids around 6:15 to avoid traffic and watch the team work out. The end of the 1997- 1998 season had been very discouraging. “The Nets were knocked out of the playoffs, the strike was coming, and they were leaving the state – it was in all the papers.”
The previous owners realized that they could no longer keep up with changes in the basketball business. A group of businessmen led by New Jersey computer exexecutive Henry Taub, the owners saw that the Nets faced teams owned by entertainment giants like Fox, Time Warner, Disney, and Cablevision. Their competitors often owned several teams, arenas, television channels, and other media outlets, enabling them to bargain more effectively for sponsorship deals and hold onto more broadcasting profits. Worst of all, the media conglomerates were bidding players’ salaries into the stratosphere.
The Nets, on the other hand, were forced to share their potential profits with networks, radio stations, and the Meadowlands. If the Meadowlands had already sold serving and advertising rights to Coke, why would Coke or any other cola company pay to sponsor Nets broadcasts? Until recently, the team couldn’t attract top players, and had languished for years near the bottom of the league. Meanwhile, at the end of the 1997- 1998 season, the league was bracing for labor strife. Tired of their losses, Taub and the six other owners prepared to sell the team.
Two well-funded Long Island bidders emerged. One of them, the banker, real-estate developer, and Islanders owner Howard Milstein, reportedly sought to install them in a new arena where the Nassau Coliseum now stands. Around it, he planned to develop new retail space, offices, and a hotel.
Chambers told Wentworth he envisioned a similar project in downtown Newark, toward more charitable ends. Wentworth and Gale agreed to join the investment group and apply their real-estate expertise. Wentworth would handle the business while Katz managed the basketball matters and acted as front man for the ownership group.
Katz had never even been to the Meadowlands before he bought into the team. Instead, he was a courtside fixture at Philadelphia 76ers games. “He was a rabid fan, always standing up and screaming and yelling,” says Snider, the team’s owner. Katz taunted the 76ers’ Allen Iverson so relentlessly (“pass the ball!”) that the team asked him to move his seat.
Katz brought in his old friend Cosby as a partner. The Katz group’s bid appealed to the old owners, most of whom agreed to retain a stake in the team, in part because they wanted the Nets to remain in the state. The league approved the sale in the fall, and the new owners drafted company by-laws calling for “an irrational commitment to the city of Newark.” There Katz and company plan to make the Nets the cornerstone of a redevelopment plan that resembles a nonprofit version of the real-estate scheme in the movie Chinatown. Wentworth’s partner, Stanley Gale, is spearheading an effort to relocate the team to central Newark, where they hope to build the proposed arena. They are already arranging for the city to condemn a 40-block area surrounding the site. Proximity to the arena will send the price of the land soaring, then another newly created nonprofit will handle the redevelopment, spending the proceeds on funding social services. None of the investors own nearby land themselves, so proceeds from the redevelopment will belong to the nonprofit.
Gale is in charge of the proposed development around the arena. He has already built models for a soccer stadium, a hotel, a shopping complex, and office towers. The architecture firm HLK, which designed the MCI Center in Washington, D.C., is designing the arena. Skidmore, Owings & Merrill is laying out the surrounding area.
The project has inevitably met with some dissent. “The city is declaring the area in need of redevelopment without an adequate opportunity for the community to participate in the decision,” says Susan Kraham, an attorney with Rutgers’s Eastern Environmental Law Center. The proposal includes a residential area that is already improving on its own, she says, and will remove more than 100 families from their homes. If the houses are condemned, owners will be paid according to values that predate the arena.
But the mayor and city council are behind the proposal. Even Cory Booker, the only Newark city councilman to oppose designating the redevelopment area, says he objected only to the process and supports the plan behind it. “The Nets are a perfect team for Newark – struggling to get itself back together and get the respect it deserves,” he says.
Katz and Wentworth have novel community-service plans for the players as well. Each player is expected to “adopt” a town in the area, act as a mentor to local kids, and put in appearances at area Boys and Girls Clubs. Players will introduce scholarship recipients at halftime during home games. “If we can get our players to talk about staying in school and giving back to the community, it can make a big difference,” says Katz.
That means new demands on the players. “Under the new owners, practicing and playing aren’t the players’ only obligations by any means,” says Rowe, the team president. New obligations aren’t likely to please every player in the NBA, some of whom have a hard enough time showing up for practice. “It will take a lot of time from the athletes, and they like to take naps between practice and dinner,” admits Rowe.
The owners promise the Nets will sign only players with the “character” to set good examples to the kids – which rules out Dennis Rodman, Latrell Sprewell, and many of the best players in the NBA. “A lot of great players aren’t great characters. But winning at all costs is not the most important thing to these owners,” Rowe says.
In part through Rowe’s work under the previous owners, the Nets have already put together a team loaded with highly talented solid citizens, led by likely all-stars Jayson Williams and Keith Van Horn, a team that has as good a shot as any of moving past the first round of the playoffs.
And at least one of the Nets’ players shares Katz’s civic mission. “I think the mentoring program is great,” says Williams. “I’m behind it, and I am going to be letting everybody on the team know that it is mandatory. We have to be a different team.”
Williams himself grew up on New York’s Lower East Side, and later adopted his two sisters’ kids when both of them died of aids. Playing for the Philadelphia 76ers, he began to live dangerously – spending too much time with booze, guns, and Charles Barkley, his trouble-prone teammate. Since joining the Nets, he has cleaned up, pulled his life together, and dramatically improved his rebounding.
“Jayson’s contract is what it is because he is a great basketball player, but more because he is a great person,” Katz says. “He’s a wonderful role model and spokesperson for the team.”
after the owners agreed to sign jayson Williams’s contract, Chambers took Williams to dinner at an Italian restaurant. The meal lasted four hours. “Ray Chambers is a very deep individual,” says Williams. “He’s like Elaine’s boss on Seinfeld – always looking for something more in life. He gives away so much of his money and his time – he moved me so much that I felt like giving away 70 percent of the $100 million.”
Soon after, Williams gave away $20,000 to Meadowlands vendors and staff who had lost wages during the lock-out, a donation the Nets owners matched.
The night he signed the deal, Williams called Katz. “Lewis,” he said. “It’s me, Jayson. Do you need a loan?”
Unlike the other owners, Katz is already making his presence felt with the team. “Lewis is always coming around here to all the practices,” Williams says. “He wants to be like George Steinbrenner.”