By Ross Kerber, The Boston Globe Knight Ridder/Tribune Business News
Oct. 29--Steven B. Belkin has dressed up like one of the Blues Brothers, a member of the Village People, and as a contestant from the reality television show 'Survivor' to motivate the employees of his holding company, Trans National Group.
'I love to bring out the little kid in people,' he said. Now Belkin, 56, is empowering the little kid in himself. The one-time high school basketball star, who made his fortune in credit cards, is the lead investor in a pending $250 million deal to buy the Atlanta Hawks basketball team, the Atlanta Thrashers hockey team, and the four-year-old Phillips Arena from Time Warner Inc.
It's an ambitious step for Belkin, but one he's been preparing to make for more than 20 years after several unsuccessful runs at other basketball teams, including the Boston Celtics. As both the Hawks and Celtics prepare for their season openers tonight, Belkin thinks he's ready.
Corporate owners such as Time Warner and the Walt Disney Co., who both acquired sports franchises in the past decade, are selling them because the rewards of sports ownership don't always fatten the bottom line. 'Time Warner viewed it just as a business, and they didn't give it appropriate attention because it wasn't one of their core strategic businesses,' Belkin said in a recent interview. 'I always think sports franchises should be owned by entrepreneurs.'
Belkin certainly answers to that description. He's created more than a dozen successful enterprises under the umbrella of his holding company Trans National, based around the corner from Fenway Park. With revenue of around $200 million, Trans National is best known for pioneering new ways to market credit cards through medical associations, consumer clubs, and other 'affinity groups' before Belkin sold most of that business to financial services giant MBNA Corp. in 1993.
Sharing power with the other investors could be a challenge for Belkin, who has been the unquestioned boss in previous ventures. Belkin says that won't be a problem because among the owners he'll have special responsibilities for the basketball squad. Another member of the investment group, Maryland publisher Bruce Levenson, said Belkin isn't like business leaders who scrap for control.
'Frankly, when I saw he had been a sole proprietor, that was a concern,' said Levenson. 'But in the year we've worked together it just hasn't proven out. We don't get defensive if we have a disagreement.'
Basketballs signed by Celtics patriarch Red Auerbach and Lakers star Shaquille O'Neal dominate the shelves of Belkin's office, and his Weston home includes a court in the basement.
Belkin grew up in Grand Rapids, Mich., and was recruited to play basketball at Cornell. He soon skipped practices for engineering classes. He graduated from Harvard's MBA program in 1971 and began a travel company financed with credit card debt that soon topped $15,000.
Braving bill collectors, Belkin eventually found additional investors and the company evolved into TNT Vacations, which arranges wholesale travel packages. Through it, every five years Belkin flies all Trans National Group's 350 employees on a day trip to Bermuda, a junket that's been widely copied by TNT customers such as Jordan's Furniture.
Another hit was Trans National Communications, a reseller of long-distance services to small businesses. It has doubled its revenue every year since 2000 to a current $55 million. With a direct sales force, access to fiber-optic lines and relationships with many small businesses, it benefited from the collapse of larger competitors, said Bill Weidlein, the Trans National vice chairman. 'Our competition dried up and our supply went through the roof,' he said.
The credit card business left the biggest mark of all. In its first year in 1982 it created 50,000 new customers a year for its partner banks; by its peak, in 1993, it was adding 3 million new customers a year.
David Robertson, publisher of The Nilson Report, a payment systems industry newsletter in Oxnard, Calif., says Trans National's key insight was figuring out how to use organizations such as trade groups and clubs as sales channels, and striking deals between them and credit card issuers. 'Out of the chute they were faster at recognizing the industry's potential,' Robertson said.
It remains the signature accomplishment of Belkin and his senior lieutenants. 'I kick myself for not being in the right place at the right time like these guys. These guys were earth-shakers in this industry,' said James L. Accomando, a banking consultant in Fairfield, Conn. Affinity and co-branded cards now account for 40 percent of the 818 million credit cards in circulation in the United States.
Like many company founders, Belkin is cagey when it comes to exact figures and won't discuss the price of the MBNA deal or confirm a figure of 'more than $150 million' reported in a 1996 Harvard Business School case study about his career.
Not every business has worked out. Of the 26 businesses Belkin's team has created, half have either been closed or sold at a loss. He's overseen layoffs in the travel business in the industry downturn after the terrorist attacks of Sept. 11, 2001.
'He has a very high tolerance for failure as long as it wasn't a stupid failure,' Weidlein said. He's a well-known philanthropist as well, serving on the boards of the Combined Jewish Philanthropies, the Museum of Fine Arts, and Boston Medical Center, among other organizations.
So far sports has been his toughest field to crack. In 1983 Belkin was about to buy the Celtics but withdrew after news reports that a Trans National executive was convicted of bookmaking in 1977, just before he went to work for the company. The executive resigned but Belkin ended the run at the team amid the negative publicity, 'It wasn't fun anymore,' he said.
Later reviews by the NBA found no wrongdoing on Belkin's part. That helped last year when a partnership of Belkin and former Celtics star Larry Bird was a finalist to buy the NBA's Charlotte, N.C., expansion franchise. But the NBA instead chose television mogul Robert L. Johnson, the first African-American owner in league history.
Belkin says he took the loss hard, but that in retrospect it left him free to strike the sweeter deal for the Atlanta sports assets that Time Warner is unloading to reduce debt. 'It shows that everything works out,' Belkin said.
The Atlanta deal is more attractive because it includes the Hawks and a second sports team, the National Hockey League's Thrashers, plus the arena where both play -- all valuable assets, said Smith College economist Andrew Zimbalist. 'You're dealing with a large, wealthy market and you've got franchises in two premier leagues,' he said.
The National Basketball Association must still formally approve the deal. Belkin says he expects no problems. On an Oct. 20 conference call NBA Deputy Commissioner Russ Granik called a meeting with Belkin's group 'constructive.' 'I would think there's a chance that the NBA could have its approval process done in another three weeks or so,' Granik said.
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