Drayton McLane

Duration: 45Mins 51Secs
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Corrected Transcript


Interview with:  Drayton McLane
Interviewed by:  Jim Barlow            
Date:  March 24, 2010

 


JB:       This is the City of Houston Public Library Oral History Project.  Today we are talking with Drayton McLane over at the McLane Group based in Temple, Texas, one of its many companies, that owns the Houston Astros baseball team.  Today is March 24, 2011.  I am Jim Barlow.  Thanks very much for talking with us.

DM:     It is a pleasure being here today.

JB:Let me see.  You were born in 1936.  You grew up in the central Texas town of Cameron.  Today, it has about 6,000 people.  What was the place like when you were young?

DM:     You are very kind giving it 6,000.  When I grew up there, I graduated from high school in Cameron in 1954 and the town had 5,600 people there then. Today, it has about 5,600 people so over 50 years later, it is about the same place.  But it is high quality of life people live there.  Most people are involved in agriculture, teaching and city and county government.

JB:       So, you grew up there.  Did you play sports in high school?

DM:     I did.  I wasn’t one of the better ones.  I remember my coach used to say, “I hope you plan to go to college,” so that meant that I’d better have another occupation later in life.  But I enjoyed sports.  I was not one of the better ones.  You know, there were 87 people in my graduating class so it was not a large class.  There were a lot of good athletes in the small school but you would get an opportunity to play all the sports, no matter whether you were really a gifted athlete or just an average one like myself.

JB:       ____ need somebody to scrimmage against.

DM:     Absolutely.

JB:       So, you went to Baylor.  Why did you go there?

DM:     Waco was 60 miles away and growing up in Cameron, I thought going to Waco was kind of like going to New York City.  I thought, boy, this has got to be one of the bigger cities.  And then, I followed . . . Baylor athletics was easy to do.  My parents took the Waco Tribune newspaper and I loved reading about Baylor’s success in athletics and in the old Southwest Conference.  It was just a natural attraction.  Out of our graduating class, I only knew of one other person that went to Baylor.  And so, this was just something I wanted to do and thoroughly enjoyed 4 years in Baylor.

JB:       And then, you went to Michigan State?

DM:     I surely did.  That was one of the early MBA programs.  This was 1958.  MBA programs were just emerging and they were mainly on the East Coast.  Michigan State . . . I heard a professor at a meeting I went to one time who was the Dean of the Graduate School of Business at Michigan State and I came home and told my parents that I wanted to go to graduate school at Michigan State University.  They thought I had lost my mind.  I had only been out of Texas 4-5 times at that time.  I certainly had never been to Michigan.  I did not know a great deal about it.  You did not have the ability to research things in 1958 as you do today.  Baylor had a little over 5,000 students, I thought it was quite a large university and I just assumed Michigan State would be about the same size. When I got there to enroll, they had 48,000 students.  And so, you know, you learn fast when you get in a totally new environment.

JB:       After you went to Michigan State, why did you decide to come back to Texas and work the family firm?

DM:     When I finished the MBA program, it was a 2 year program, there were 72 in the class – most of those had had 5-10 years experience in business, working for my father in the summertime was the only real business experience I had had other than going to school for 6 years, and I had learned a lot and I saw the lifestyle and the success these young men had working for large food companies throughout the United States, so I actually secured a job in San Francisco. That is where I wanted to go. I came back after having finished my MBA program and I told my dad . . . he asked me what my plans were and I told him that I wanted to work outside the family business for 3-4 years and then ultimately come back.  He said the business environment had changed, they needed to reinvest in our family business that my grandfather had started in 1894 and he said if I wanted to come back in the business, he was ready to let me assume responsibilities and reinvest in the business, but if I was going to go work somewhere else, he would just manage the business and own the business for just a few more years and either sell it or liquidate it.  He said, “But if you are going to come in the business, you ought to come now.  Changes need to be made.”  I was 21 at the time and living single in Cameron did not really strike me as something exciting to do.  But I went home that night and I had seen my father and had known of my grandfather’s success in business and I wanted to be an entrepreneur like they were, so I could not wait for 7 o’clock the next morning and I told my dad, “I want to be a businessman like you.”

cue point

JB:       You worked in the business when you were in high school?  What did you do?

DM:     I was a janitor.  My dad, when school was out in the summertime, when I was 9 years old, he told me that I would get 1 week off when school was out that I could play with my friends but the rest of the summer, he was going to get me up at 6:15 in the morning and at 6:30 or 6:45, we would go to work. I had to work until noon.  I was the janitor, swept in the warehouse, did that for a number of years, but I was learning how to work with people.  I did not know I was doing that and so that was kind of a good education for me.

JB:       So you went to work for your father.  What did you do?

DM:     After I got out of college?

JB:       Yes.

DM:     I thought I was going to be his number one vice-president!  My dad at that time had 67 employees.  It was the largest employer in Cameron. I  thought I was going to be one of the top people and he told me the only job he had that I was qualified for was to work on the third shift at night loading trucks.  I said, “Dad, I have been to college for 6 years.  I want a management job.”  He said, “Son, that is not where you will start.  You will start loading trucks.  You need to learn this business from the ground up.”  Well, that really irritated me.  There were 16 people on that third shift.  That was ultimately the kindest, best thing he could have done for me.  It taught me the business from the ground up.  Later when I had more responsibility and somebody was telling me about a problem, I already had it figured out before they quit telling me what the problem was because I had done each step.  But the most important – it taught me how to work with people who work in warehouses and distribution centers and loading trucks – how to appreciate them, how to respect them, how to communicate with them and how to build them as a team.  I actually did that for 18 months and then I moved to the second shift.  So, that was progress. And then, in about another 6 months, I moved to coordinate all of the warehouse activity.

JB:       A lot of people find it difficult to work in a dad’s business, to work for your father.  Was that true for you?

DM:     The majority of the time, it was a pleasure.  My dad gave me responsibilities, let me work with him and when I needed correction, he would call me in his office and he would say, “Now, Son, this was what you were supposed to have accomplished.  Unfortunately, this is what you did accomplish.  Why don’t you tell me what you learned and how you would do it differently?” Well, sometimes I would beat around the bush and would not really face the issues.  And then, he was very kind – he would let me finish.  And then, he would say, “But let me tell you what you really should have learned from that experience.” 
I had a great relationship with my dad and several times, I wanted to put in a computer system.  In 1962, that was the early, early stages of it.

JB:       ______.

DM:     Yes, there wasn’t even one in the county, and I am not sure there was one in any of the surrounding counties.  He was very hesitant.  I appealed to my mother.  She was a rural judge.  And so, she said, “Well, I’ll talk some to your dad.”  Finally, he let me do that.  He gained confidence in my skills and ability.  I made a lot of mistakes but I worked with my dad directly for 27 years.  It was one of the best thrills of my life.

JB:       Now, your two sons are in your business.

DM:     Yes.  Both of them, when they were finishing high school and went to college or were getting ready to go to college, I told them that when they finished college, they had to get their first job on their own.  I was not going to help them get a job.  And they had to work somewhere outside of our businesses for 5 years.  After 5 years, if they wanted to work for us, they had to call me – I was not going to offer it to them – because I think too often, children of people in business feel trapped into that type of business and I did not want them . . . I did not feel trapped in my dad’s business.  My dad never approached me.  I had to approach him.  So, my oldest son worked for another company in Dallas in marketing for 6-1/2 years and he called me and he got involved in a family business that was located in Dallas for several yes.  Then, we moved him to Temple and he is involved in 3 different businesses.  I have a younger son who married a young lady from Birmingham.  They actually live in  Birmingham, Alabama and they have 2 young sons, and he has not called yet.  So, he is kind of independent.  He is 33 years old, but is now slowly accepting some responsibility from Birmingham and some international businesses we have.

JB:       As I understand, when you took over the company from your father, it was a $3 million yearly business.

DM:     That is correct.

JB:       And when you sold it, it was a $19 billion business. How did that happen?

DM:     Several things.  I learned a great deal.  My father gave me a running start in the business.  He encouraged me to get a good education and then he allowed me to have responsibilities faster than I would have ever been able to have had them in other businesses.  And then, he had some good executives that I learned from and ultimately helped me do this.  I have always been one to try to get new ideas, not determined what everybody else is doing.  One of the professors, his name was Dr. Kenneth Wilson at Michigan State, he made a statement one time, he said, “When you are selecting your career, one piece of advice I would give you in what you do and how you practice your career – seek adversity.”  He said, “Everybody seeks the easy way, the normal way.”  He said, “Don’t do it.”  He said, “Seek adversity because the lines are shorter.”  And that is what I have tried to practice in business, is develop new business systems and ideas.  We used computers faster than everyone else in the food logistics business during 1962.  I am a risk taker by heart, so we tried that.  Then, we tried to bring people together, get them to buy into what we did because when we were doing $19 billion, we had 12,000 employees all over the United States.  So, bringing people together, let them feel part of the business, using new ideas.  Then, I learned from both my father and my mother a great principle of life in business is honesty, integrity, accuracy and principles.  And we say that to everybody we work with.  People like to feel good about what they do. We grew 30% or more for 32 consecutive years.

JB:       Was that part of the internal growth or were you also acquiring growth?

DM:     We made a few acquisitions but that would not have been a great part of our business. It was internal growth, new customers, developing new ideas, services we could provide people.

cue point

JB:       In addition to supplying retail grocers, you did other things as far as the grocery business, didn’t you?

DM:     Well, we provided to retail supermarkets and then we really started in the 1960s and moved forward in supplying convenience stores that were just emerging.  McLane Company then and is today a leading supplier of convenience stores.  We are the leading supplier to fast food restaurants of all kinds.  Quick service restaurants of all kinds.  And then, we would supply mass merchandisers like Wal-Mart, Target, K-Mart.  And then, we would supply drugstores like Walgreens or CVS or other people like that, so almost all form of retailing that had grocery and grocery-related products.

JB:       What does it take to build a successful business like that?  It appears to me that that kind of business does not have a lot . . . the margins are not great.

DM:     Razor thin.  If you can effect something one-quarter of a percent, you have really accomplished something.   So, you’ve got to do it extremely efficient and that is by my personality and what I would work for, is to strive to use efficiency, use computers, use material handling equipment, use large over-the-road trucks, and logistics ideas.  Some of the things we did were kind of breakthrough.  Not all of them worked.  Some of them worked, some didn’t.  So, we quit doing what did not work and accentuated what did work.  So, we just constantly were pushing forth for big ideas.

JB:       And then, you sold to Wal-Mart.  Now, Wal-Mart is known as one of the most technologically advanced retailers.  How much of that technology came from your company?

DM:     Initially, we started supplying them before Wal-Mart ever started building the supercenters. They were just the older Wal-Marts of about 135,000 square feet and we supplied the grocery products they had in there and some of the perishable products.  They had a limited amount.  And so, we did a great deal of business with them and we were their logistics systems for candy items which were perishable, tobacco products of all types that we supplied them, and then a  number of other items that were very sensitive to the heat or to the cold.  And so, we taught them how to deal with perishable, or short-dated products, and then overall grocery products.  Later in 1990, they decided to build a supercenter.  Sam Walton came to me and said he was going to take the 135,000 square foot Wal-Mart store they had and break it apart and put a 55,000 square foot supermarket right in the middle of it and have a 200,000 square foot store called the supercenter.  And he said they were going to open it 7 days a week, 24 hours a day.  I said, “Sam, I am not sure people want to buy groceries at 2:30 in the morning or if they want it open 24 hours a day.”  He said, “Drayton, I didn’t come asking your opinion of this is what we should do.  I want to acquire McLane Company.  You will continue to be the CEO of McLane Company and supply all of the groceries and the perishables for Wal-Mart and then you be the vice-chairman of Wal-Mart.”  And do you know what I told him?  “No.”  I told them they didn’t have any vision.  One of the mistakes we all make in life and business – we get too caught up in what is succeeding and we fail to see what is on the other side of the mountain or we are not curious enough to see on the other . . . I told him no for about 3 months.  And then, I had forgotten . . . my dad was 92 years old at that time, did not come to the office every day but would come 2-3 times a week, understood the business and I stopped in his office one day and said, “Dad, there is something I failed to say to you.” I told him about  Sam Walton’s and David Glass’ idea about us merging with Wal-Mart, being a separate company and me becoming the vice-chairman of Wal-Mart.  My dad had joined his father in business in 1921 when he got out of college, and so the business had been in the family 96 years at that time and owned by our family totally.  I thought he would be totally opposed to it.  He was 92 years old and he looked at me and he said, “I think that is a good idea.” I nearly fell out of my chair!   Why did a 92-year-old person have to tell me . . . I was too caught up because we were successful.  I was too caught up in what I was doing and did not see a bigger picture.  So that startled me.  I thought about it and the next day, I thought, it might be a good idea.  So, I went to see Sam Walton and David Glass in Bentonville and in 30 minutes, we did the deal.

JB:       And then, you stayed with them for awhile.

DM:     Yes, I stayed with them for 5 years.  I ran McLane Company and was Vice-Chairman of Wal-Mart.  That was interesting.  I helped them improve and move forward their logistics system.

JB:       Why did you leave?

DM:     The same reason that I stayed in Cameron and did not go to work for Kraft.  I am an entrepreneur and I love starting businesses, developing new ideas and I am intrigued as a risk taker.  Ultimately, I bought the Houston Astros.  I had not been to 3 Major League games in my entire life.  Even though I was a sports fan, I would read the sports page every day, but I had never spent one minute thinking about owning a Major League team.

JB:       Before we get to that, let me ask you:  You owned a number of different companies, one of them is McLane Advanced Technologies which, as I understand, provides advice that goes to the  Department of Defense and Logistics.

DM:     You sure have a good information source.  I am not sure where you are coming from.

JB:       On the internet.

DM:     Well, O.K.  You cannot always trust what is on the internet but I had a friend that had retired as a colonel in the Army and he was in the supply side of the military for a number of years.  When he came out of the military, he wanted a job and we gave him a job in the transportation division of one of our distribution centers.  He came to me one day and said, “I know you will find this hard to believe but the logistics systems that you are practicing here, the technology here, this is 30 years ahead of the military.”  I was startled.  He said, “I will take you over to Fort Hood and show you this.”  I got interested and it took several years . . . I started a company called McLane Advanced Technology, and we helped develop logistics systems and technology for the military.  We are a Department of Defense contractor, so we help them all over the world in their logistics programs.

cue point

JB:       And, as you know, amateurs talk about tactics, professional soldiers talk about logistics.

DM:     Yes, that is what wins battles.  You’ve got to have the right things at the right time.

JB:       O.K., let’s talk about baseball.  You bought the Astros Major League team from John McMullen or whatever you call him – Dr. McMullen.

DM:     Yes, I did.

JB:       He has a Ph.D. in Naval Architecture.  How did that involvement come about?

DM:     That was a pure accident.  A lot of life is accident.  A lot of companies that we ultimately got as customers for McLane Company, I certainly did not know them or heard about them or give them a call, like Sam Walton.  I called on Wal-Mart for 18 months and never got any business.  I got to know Sam and I told him about what we could do in logistics and he said, “Drayton, I don’t need anything you do.  We’ve got more warehouses than you do and we’ve got more trucks than you do.”  I said, “Someday, there will be something we can do for you better than you can do for yourself.”  He called me one day about perishable products, so that is how we really got started.  One day, I got a call from Ben Love.  Ben was the Chairman and Chief Executive of Texas Commerce and was a banker and we did a lot of business with him.  I did not know Ben extremely well but had met him.  And then, with him was Bob Onstead.  Bob was the owner of Randall’s supermarkets here in Houston which, at that time, was the number one supermarket chain, and was a customer of ours, so I knew Bob very well.  They were on the phone and said, “We’ve got a big idea for you.”  That got me right there.  I like big ideas.  I thought I was going to do more business with Bob.  They said, “We are negotiating.  We’ve got about 6 key business people in town – we are negotiating with John McMullen to buy the Astros.  We want you to join the group.” I said, kind of like I did to Sam  Walton, “I have zero interest in them.”  I love business, I loved everything we were doing.  I get to go home at night.  I told them I had no interest whatsoever.  They talked to me, and just out of sheer respect for both of them – I admired them both.  I came down here . . . there were several other leading businessmen and they were negotiating with John McMullen . . . I learned a good business principle there.  There were 7 of us and we were all accustomed to being in charge. We bruised each other more than we did John McMullen.  It is hard to negotiate when you are accustomed to running it.  And then, John McMullen, if you knew him, was a very difficult person to negotiate with, even in the best of times.

JB:       He was a very difficult person in every respect.

DM:     Yes, he was, absolutely.  But I like that.  Those are the kinds of people I have done business with, all the business people.  I have never met somebody that is highly successful that was not a challenge.  And so, I just took him as another challenge.  So, after about 4 months, the group broke up.  Dealing with each other, dealing with John – it was just going nowhere.  So, they broke up and said, “We are not going to do the deal.”  I went back to Temple and I got to thinking, you know, I have really been intrigued by this, what I found out.  So, I called Ben Love and Bob Onstead and I said, “If you don’t object, I am going to try to buy it on my own.”  And they said, “If you are that dumb, after everything you have seen, have at it.”  So, I called John McMullen and I said, “If I fly to New York, will you talk to me?” and he said, “Absolutely.”  The dialogue went on for about 6 weeks.  That is how I bought the team.  I had been to 3 games in my life!

JB:       How did a baseball fan develop?

DM:     I would watch it on TV occasionally.  I love business.  I would read in the paper.  I knew the players and I knew a lot about it.  I saw it as really something complicated that a lot of reward could come from.

JB:       Rewards financially or rewards emotionally?

DM:     Both.  I thought, number one, to help make them a champion.  They had been a baseball team since 1962, never been to the World Series, been to the playoffs only twice.  And so, I thought it would be a challenge to put together a winning team.  That is what I enjoy doing, is getting people deeply involved, getting a common mission and winning.  And so, I thought, making them a champion and number two, making them successful financially.  That was going to be a bigger job than I thought it was.

JB:       As I recall, you paid $177 million for the Astros?

DM:     $119 million.

JB:       Wrong fact.  Has it been a good investment?

DM:     In sport franchises, you do not make any real money operating it as you do a business from year to year.  Where the money is made is when you ultimately sell it and it can overcome the losses you have had in between because franchise values go up.  I tell people owning the Houston Astros or the St. Louis Cardinals or the Chicago Cubs is like owning Mona Lisa.  There are only 30 Major League baseball teams.  There are not going to be any more.  If it is a pretty building, somebody else can build another pretty building or if it some kind of unusual car, somebody else will build another car.  There are only 30 Major League baseball teams and so values grow as the population grows and then, because of television, they are looking for content.  Baseball provides a lot of content due to the fact you play 162 games a year.

JB:       Did you realize all this going into the deal?

DM:     No.  I did not realize everything when I got married either, so that has been good!  I have been married 39 years, so that has been good, too.  You know, in life -  I hope I don’t misstate this – when you do something, always look does it represent honesty and integrity?  Is it lawful?  And then, if it blows up, are you are still alive after the explosion is over with? If it is yes to all that, go do it.  Is that a bad . . . that is not the deepest philosophy you have ever heard, is it?

JB:       It gets the job done.

DM:     Remember, I am an entrepreneur.

JB:       Obviously you have a management style that you have developed over the years.  Did it work in the baseball business?

DM:     Sure.  Leadership is leadership.  In McLane Advanced Technology, I got to know lots of generals and admirals and great military leaders.  In the business world, from Sam Walton . . . Sam Walton did something most unusual.  He and David Glass, who was President for 27 years.  Do you realize that is the largest corporation in the history of the world?  Started in the little town of Bentonville, Arkansas.  When I first started going up there, there were 4,000 people in Bentonville.  Wal-Mart today has 2.3 million employees.  It is going to do $437 billion this year.  There is no other corporation in the world half their size.  So, you know, getting to know Sam Walton, David Glass, other good leaders there are, Warren Buffet or others you get to know, that is the real joy of life -- getting to meet leaders and people who have integrity and honesty and value and they achieve things.  That is the best part of life.

cue point

JB:       How does baseball differ from your other businesses?

DM:     It differs because you are looking not at leadership but athletic skills.  That is about 60% of it.  Then, trying to motivate people.  There are a lot of gifted athletes.  Very few really reach the potential that they should.  Jeff Bagwell, who is probably the best Astros player in history is not the most gifted baseball player ever for the Astros.  He is the most accomplished because he worked harder at it than everybody else and he just . . . whether it was gaining the strength that he needed or understanding the game . . . if we had a 7 o’clock game, he would be here by 2 o’clock in the afternoon.  He was mentally thinking through the pitchers he was going to face and how he thought the game would develop.  And so, he was here by 2:00 or 2:30 before the 7 o’clock game.  And then, the game was over at 10 o’clock at night, he would be here 2 hours after the game.  So you are dealing with gifted, gifted athletes.  In business, you are dealing with gifted people intellectually who know how to organize, envision, and execute.  So, different skills.  And then, I did not quite understand . . . I thought I was buying the Houston Astros.  The Astros belong to the public and sports writers.  They are going to be . . . my dad was kinder to me in business than the sports writers are sometimes. And so, what happens to the team is critiqued by the media.  I was not quite ready for that and it took me about 2 or 3 years to adjust to that.  You are in the public domain.  I did not realize that.

JB:       Of course, you were well known before this but only in a restricted area.  And now, suddenly, everybody in Houston knows your name.  How has that been?  What kind of ride has this been?

DM:     Painful.  I remember when it was announced that we were going to buy the Astros in July of 1992.  I went to a game that night and some people came up and wanted my autograph.  I said, “I beg your pardon?”  And they said, “We want you to sign this ball.”  I said, “I am not a baseball player.”  I was not ready for the public to be involved.  And everything I have done . . . you know, our company was privately owned, was not a public corporation, so we were not exposed to the public.  And so, it took a while to adjust to that, particularly my wife -- I had 2 teenage sons at that time – for them to be exposed to being in front of the public.  I thought the team was in front of the public and the owner was on the sidelines but boy, I found out different.

JB:       ____ the Astros?

DM:     Like every business and all the details – I try to be the visionary person.  But even before the vision, to set the integrity, the honesty, how we are going to behave.  And then, the vision and the overall plan.  Then, I am a cheerleader.  I don’t get involved in the day-to-day work that people do but I want to be involved.  If they are going to be here at 7 o’clock in the morning, I am going to be here at 6:30.  And if they have to stay until after the game, I stay until after the game.

JB:       So, are you involved in, for example, what players they are going to acquire?

DM:     Not at all.  There are the parts of business [where] you cannot be an expert in every area. We have 42 full-time scouts, so the scouts are involved.  And a Major League team has a general manager.  Our general manager is Ed Wade.  So he is involved in the Major League team which is the 25 players, the manager and 5 coaches.  And we have about 150 players and 6 Minor League teams.  They make that.  But I help them if they want to secure a player that maybe is going to cost $10 million a year.  So I help them think through on the financial side of that and look at that.  But as far as who plays and who goes to the Minor League and who stays with the Major League team, they do that exclusively.  I give them a little advice every now and then.

JB:       Do they listen?

DM:     Not always because they know more than I do.  They are involved in it.  That is their full-time job.

JB:       So, you are _____ what you are talking about.

DM:     Yes, absolutely, because I am dead wrong sometimes.  I wander around and form opinions.  I am the type of person that common sense to me is one of the most valuable assets.  Integrity is the most important.  But just common sense; where you can sense something is not the way it should be and offer opinions and advice.  But sometimes when you see a situation and you say, that’s not right, you do not know some of the extenuating circumstances there.  So the executives explain to me in a little more detail and I say, “O.K.”  I allow them to make decisions and move forward.

JB:       What are the things that have happened in your 10 year ownership of the Astros that you are most proud of?

DM:     The fact that we have been in the playoffs 7 times.  We went to the World Series.  Did not win, unfortunately, but we went to the World Series.  We have had the excitement of achieving that.  We have had a great group of players that have represented.  If players did not behave correctly, we sent them on their way.  And so, we have had players that have represented themselves and the Houston Astros very, very well.  I am very proud of that.  Building Minute Maid Park.  Do you remember when I started in 1993, we were in the Astrodome.  That was the eighth wonder of the world.  It truly was.  I remember the first time I came in 1965, I went, wow!  I held up my hands and said, “This is the wrong place.  We need to be downtown.  Baseball is supposed to be downtown.  There are 117,000 people that work downtown Houston every day.  That is where we need to be.  The Astrodome is kind of in no-man’s land.  It is way off by itself.  It is not a destination.”  And so, moving the ballpark downtown, we created the very first retractable roof baseball stadium.  So we are able to play baseball with the roof open in April and most of May, we play with the roof open.  The rest of the year when it is hot or raining, we can close the roof and have it at 70 degrees.

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JB:       As you mentioned several times, you are an entrepreneur, you have a private company, you go your own way.  Now, in baseball, you’ve got 29 other owners and a commissioner of baseball to deal with.  How has that been?

DM:     That was a huge adjustment.  In addition to owning the team, it is very public.  The fans have opinions.  You know, you can trade a third catcher – they have opinions on whether you made a right choice or not, or do you have the right pitching rotation and their input.  And now, particularly with all the social media that is out there, they can really wrench their complaints very quickly.  I thought, again, I bought the Houston Astros – I really bought a franchise.  I am kind of like McDonalds.  I bought a McDonalds franchise for Houston because you have a commissioner that is totally accountable.  He can make any decision in the best interests of baseball.  And then, you have 29 other owners, so every quarter, the Commissioner has an owners’ meeting somewhere in the United States where we have a ball team and we talk and go through the issues.  The owners can have one opinion but the Commissioner can make the final decision.  I was not accustomed to that but you adjust, and I have really enjoyed getting to know the owners.  They are high-quality people.  Each one of them were highly successful in their own right before they bought a baseball team. And then, working with them and then working with the Commissioner, it has been very helpful.

JB:       But as you were saying earlier when you were thinking about buying, how all the people going in together on the ____ team, how they were all highly successful people accustomed to having their own way.  Is the same thing true with the other owners of the franchise?

DM:     Very true.  They have been successful in other business undertakings and then they have made the decisions on the day-to-day operations of their team, but when it comes together for decisions on umpires and rules of the game and other aspects of the game – which network is going to carry the World Series and all that – then you have input but you have to work with the other owners. Then, the Commissioner has the final say.  So, you have to abide by the Commissioner.  Or, if you do something in your franchise that is not good for everyone else, the Commissioner can correct you.

JB:       Now, you, with others, have recently formed your own television outfit for the Astros?

DM:     That is correct.  We formed, what is called RSN – Regional Sport Network.  This is a separate channel.  We teamed with the Houston Rockets.  Les Alexander is the owner of the Houston Rockets and I have known Les over the years.  So we actually formed a separate RSN, Regional Sport Network, 8 years ago, but we gave those rights to Fox and Fox televised it over their channels.  This contract is going to end at the end of 2012.  Two more years, 2011 and 2012.  After that, we are going into a new RSN with Comcast.  It is going to be managed by Comcast and we will be part owners and the Houston Rockets will be part owners and Comcast will be the owners.  And then, we will sell that to cable networks throughout the southwest. We feel this will give much better exposure, make it available and increase the popularity of the broadcast.  And it will increase our revenue.

JB:       Over the years, how much time have you devoted to the Astros?  Is it commensurate with the size of your investment?

DM:     Yes.  It was a big investment.  It wasn’t just the initial investment.  If you remember, I bought the team in 1993 – in August of 1994, we had the longest baseball strike in history.  It went from August of 1994 until May of 1995.  Missed the playoffs and the World Series.  It never had happened before.  So, you know, we had to put money back in the teams to carry us through those periods of time.  Then, we have had to put money when we built the stadium.  The stadium is owned by the Sports Authority that also owns the Reliant ball park where the Texans play and the rodeo is, and then Toyota Center where the Rockets play, but we had to fund about 40% of it, the Astros.  So, we have had to put a lot more money back into the team and we have done that over the years.  So, it is a big investment.  But in the scheme of things, I have businesses here in the United States, businesses in Europe, businesses in Asia – I spend about 40% of my time on the Astros.  Strategy, talking to the people, working out problems, developing new products for the Astros.  But then, the good part – the games are at night so I can be engaged.  I still get up 5 o’clock every morning and I am at work by 7.  And then, the game does not start until 7, so I have just extended the day.  So, I go to the games at night, and the games go until about 10 o’clock at night.  During the games, different than most of the other owners who sit and enjoy the game, I am one that likes to get engaged in things so I sit an watch the game until the middle of the second inning, then I get up and from the middle of the second inning until the last of the 7th inning, I wander all over the stadium -- walk the concourses, go to the upper deck, sit down and talk to people.  I say, “If you owned this team, what would you be doing?”  Amazing!  I don’t even need to hire consultants.  I just listen to the fans.  They’ve got good ideas and good advice.  But I enjoy the interaction with the fans.

JB:       Is the advice ever ‘drop dead?’

DM:     I have had that a few . . . by and large, they are very supportive.  They are better than the sports writers.  They are very supportive, but they have a lot of ideas.  They are not critical.  Even when we have traded players that they liked, the support is strong.  People genuinely love the Houston Astros.

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JB:       Is it harder or easier for you to affect the team performance both on the field and financially in the Astros than it is in your other businesses?

DM:     Well, in other businesses, I have businesses that are engaged . .  . I have businesses in Europe.  I had a grocery distribution business in Poland, of all places, or in Spain, Portugal, the U.K.  So, you know, you cannot come up with an idea or a business plan and then just all of a sudden implement it because you are 2,000, 3,000 miles away.  True of the Astros.  Even though I am physically here, it takes time to work through things, but leadership works in every business and leadership is not physically doing things but expressing ideas.  Being a risk taker.  Using technology.  We are going to show tonight and for our new season, we spent $13 million on a new electronics, high-definition scoreboard.  The scoreboard is 55 feet tall and is 120 feet long.  The clarity of high-definition is better than a flat screen TV in your house.  We are going to show that tonight.  It is the second largest one in sports.  The one in Dallas that the Dallas Cowboys have is the largest.  So, we like to do new ideas, new things.  We have been planning this for 2 years.  So, it takes time sometimes.

JB:       So, it has been 18 years and you put the Astros up for sale?  Why then?

DM:     Well, I have enjoyed every bit of it.  I am 74 years old.  My health is good.  I still hop up every morning at 5 o’clock and put in 12-14 hour work days, still do that with no problem, but I am a big person in planning succession and I did not want to have some health problem or not be able to be engaged and be involved or only part-time, come to the games.  Of 81 home games, I come to about 75 of them.  So, I did not want to be an absentee owner.  We had that previously with John McMullen and it did not work. Fans like to see you.  If they are going to spend their hard-earned money, they want to see that you are here, too.  This is a big investment for somebody and I wanted to make sure that we find somebody that is going to really be engaged and move it forward.

JB:       Do you have any members of your family interested?

DM:     I have 2 sons and neither of them . . . I am a firm believer that children should develop into what they are good at.  Both are very, very good businessmen, both are family members.  My wife and I have 5 grandsons under the age of 7, so we are very richly blessed.  So, they have their own families, their own interests, and baseball just did not fit what they wanted to do.

JB:       Final question:  Looking back, if you had to do it over, would you have bought the baseball team?

DM:     Absolutely.  I would have bought it earlier.  When I bought it, I was in my middle 50s.  I have had a lot of fun.  One of the reasons I bought it -- I wanted to help make them a champion as players.  I wanted to get a venue that was really good.  I think we are going to find that Minute Maid Park is going to be one of the premier baseball facilities and is good for the next 75 years.  And that is good.  So, moving forward, I have had lots of fun.  But, you know, I was in the grocery logistics business all over the world and I knew thousands of people all over the world but they were basically in a silo, in the grocery business.  One of the reasons I bought the Astros [was] I wanted to get to know a lot of other people.  I have gotten to know from the Mayor.  There have been 5 mayors in Houston since I have been here.  Political leaders, county leaders, highly successful business leaders of all kinds. It is just kind of a magnet, and the people I have gotten to know all over the United States.

JB:       Thank you.

DM:     Thank you.