Q&A: Dan Gilbert

Courtesy of Chris Haynes

How's your relationship with LeBron James?

"I think our relationship is very good, very solid. I just saw LeBron. He looked at me and said 'looks like you grew an inch.' I said I could use it. He just went out to practice. But things are great we had five great years and one bad night is the way I've been describing it. So things are good. He's had a great training camp. Looking forward to it."

Did you ever think the relationship was irreparable?

"No, I don't think so. Obviously there are a lot of fireworks at that time and a lot of emotions flying all over the place. So you sort of get back to business. You don't really think too much about what's going on. It's been four years. As far as it goes right now, it's great. The team is in great shape, the coaching staff, the front office. Just things feel really good chemistry‑wise across the board."

What does the return of LeBron mean financially?

"Yeah, I think it's one of these things that's hard to measure on a spread sheet. But for the Cleveland area, and keep in mind I had the luxury of parachuting into Cleveland because I live and work in Detroit and have done my whole life. You sort of almost get, I don't know, a less biased view when you're able to come in and out like that. I think that my view is he's extremely important as now are the entire Cavaliers and the franchise, and Cleveland, in general, is on a roll with the Republican convention coming in and all the development going on downtown, and all the young people downtown that's sort of echoing the move to urban quarters by young people across America. And the Cleveland clinic, and the Convention Center. So I think it really overall tops it off. The excitement, we got in here early this morning, and you could feel it from the second we landed at the airport."

Prior to meeting with LeBron, how confident were you that you would be able to patch things up?

"Of course you never know these things until you're in front of somebody. But I felt good about it. People have things that happen between them. I certainly don't keep grudges. He's not that kind of person, and I don't think most people are generally, there is a few that are like that, but most people aren't. There is just too much to do, too much opportunity together that we could work on together, leverage together. So from the second that I went down to Miami I felt like things were going to go on the right path, though we didn't know until we got the phone call, but it felt pretty good from the second I saw him."

Any update on Tristan Thompson's extension?

"We'd like to sign Tristan long‑term to the Cavaliers. Based on the rookie contracts when they expire, I believe October 30 or 31st here is the deadline to do that, and then you have to wait until after the season. So clearly we'd like to sign Tristan long‑term, and I don't think that's not a secret. That's something we'd like to do. I believe they'd like to do that, as well. So we'll hopefully see what happens this week."

Where do you put the expectations on your basketball team?

"Well, I learned my lessons on guarantees and predictions and stuff, so I don't do much of that anymore these days. I do believe we put together a team and a coaching staff and a front office that's worked very hard certainly to put us in a position to compete at all levels. That's why you play the games. You have a lot of great teams in the NBA. I watched San Antonio against Dallas, and they're two great teams and there are great teams in the east, as well. So it takes time to gel as we've all seen. Our team is going to go out every night and try to win, and do our best to deliver as much as we can. And hopefully things work out. So no predictions or full‑blown expectations of this or bust at this point."

What do you think the impact is going to be on activity at your casino? Will LeBron's presence here accelerate the time line for getting the second casino built, and where is that?

"Great questions. First of all any activity that happens downtown is good for all the businesses downtown, including the casino. Phase two is something that we still plan on developing. We bought all that land along the riverfront there along the river, and we're into design phases. We're trying to learn. Regional gaming across the United States has had serious challenges, not just in Cleveland or Cincinnati, but also across the United States. It's a challenge for a lot of reasons. I don't want to bore a lot of sports guys here with, but we're trying to analyze and figure out what is the best way to go about phase two? What other developments do we include in phase two from residential to retail, phase two of the casino itself, hotels, those kinds of things. And we fully expect to deliver phase two. It's just a matter of when and how."

Do you have any kind of time line that you can give us?

"We really don't except that we are committed to build phase two."

Does LeBron being here accelerate that?

"That's really hard to make that kind of connection. I know way back early in his career he said he wanted to light it up like Las Vegas, and I guess in a way he had a chance to do that here in Cleveland ironically. So that's where we're at, I believe."

Ultimately will there be two casinos?

"Yes. Well, it's really technically one license and two locations and one casino, yes."

When you look at the secondary market, Cavs ticket prices are soaring. Do you think that's revenue you're missing out on?

"See, that's always a problem for both franchises in sports as well as the fans buying them. If you try to have a completely and totally free market auction for tickets, you can imagine what can happen there, and that's probably not going to be good for all fans at all income levels. But when you cap a price in any market, if there is a secondary market, clearly there will be those people who try to take advantage and use that to buy things that are undervalued because somebody's willing to pay higher. Now what we've done, and the guys have done a fantastic job of this is really trying to monitor and watch and try to keep the scalpers and some of the unscrupulous brokers ‑‑ there are some good brokers, and keep them out of it. So really for our fans.

"I mean, we know what our revenue is based on the price of the tickets. You can always say, yeah, we could have raised prices and taken that revenue instead of letting the secondary market have it, but what we're trying to do is have a reasonable priced ticket. We didn't really raise ticket prices across the board at all this year, and make sure that people who are in this for a living aren't benefiting hugely or tremendously by they really are just fans. It's not an easy thing to do. We're trying our best. That's why we kept the season tickets at 12,000 because we didn't want to have the whole arena season ticket holders, only people that can afford season tickets, but just the average fan as well, and we have over 20,000 seats in our arena."

Can you talk about the process of bringing in David Blatt and what your thoughts are of him so far?

"Yeah, we are very excited about David Blatt. And look, people say to us, this is a risk. This guy never coached a minute in the NBA or college, for that matter in this country. But this is a guy who grew up in the United States, who played at Princeton, who learned the Princeton offense at Princeton, went on to play overseas, and went on to have an extraordinary coaching career winning 17 league championships or better in 21 years of coaching and four or five different countries, including taking Russia to the bronze medal in 2012 when they were really not expected to be anywhere near the medal round. This is a guy who speaks one or two languages but was coaching players who didn't even speak his language. One of the other major factors was we talked to virtually every single NBA player who was either in the NBA now or was at one point and played for him overseas. And to a man, they raved about him.

"And that's really a rare thing when you're interviewing anybody in business or sports. That every single person you talk to raves about him and says the exact same thing. So that sort of put us over the top. So the fact that we were able to get Tyronn Lue as well, the associate head coach, and I cannot tell you how invaluable he's been along with Larry Drew and others. I think our coaching staff is by far in the best shape that it's ever been. And I believe in David Blatt and the coaching staff as much as I've ever believed in the coaching staff."

What has these last four years been like for you?

"Business and sports particularly, I know it's sort of cliché to say, but sports is sort of symbolic of life. Everything that happens in your other businesses in a way happens in sports except you're in a fishbowl where everybody sees and hears and knows of every single move that you make. It generally happens probably faster in sports as well, and you also have a lot of limits. So you try to learn every single day. Look, you either can take risks, make mistakes and learn from them, or make no decision. I've always chosen to sometimes take risks. If you're right, that's great. If you're wrong, at least you have significant learning from it. There's been many things that we've learned from going back to the night of the decision and the letter originally to some other little things that happened along the way to how we look at it and who we hire as far as front office and coaching. Not that we're disappointed with any of our hires because we think they contributed to where we're at today, but you just learn from that. Sometimes you just have to go through it to learn from it. The last four years in my view are sort of a payment, almost, for where we're at today.

"You couldn't have been where we're at today without going through that kind of pain. I've told people several times that we would have made the extra trade or done the extra deal to get us five, six more wins in any of those seasons the whole world changes. This is like, talk about inches, it's really millimeters, right? You lose a coin flip or we won the coin flip in the 2012, I believe, I'm trying to think of the year, the 2012 lottery, which actually put us fourth or third in New Orleans was fourth, and actually the fourth place slotted team won the lottery, so they pick Anthony Davis. Obviously, we would have picked Anthony Davis, so that would have changed the whole course of everything. Who knows where we'd be today. So a lot of it is luck. A lot of it is learning, and we're just very pleased and fortunate to be where we're at today."

You called it a bad day four years ago. At that point, did you think the bridge was burned with LeBron and do you feel like you deserve to have LeBron back?

"I don't know if deserve is a word that I sort of look at in this context. No, unless you're really doing some significant harm to another human being, I don't think the bridge is ever burned. We had a night where emotions were flying high on all sides. Except for the fact that it's in the media as I was describing earlier, things like that happen a lot in business where people have phone calls and heated exchanges, and people are writing each other emails and letters, and then the next day they're eating lunch and doing business. It's not a be‑all or end‑all type of thing. Except when you're in the sports world, something like that is blown up and the whole world knows it. The learning from that is you have to understand that and watch the kinds of things that you do because it can be blown completely out of context and out of proportion. Plus, it's just not a smart thing to do in general. I think the franchise deserves what it has here, and I think LeBron deserves the city of Cleveland and the franchise, and all the perks that are around him. We can't wait to get started tomorrow night."

What do you think your emotions are going to be like on opening night?

"I just was walking in the bowl just now. It's not just the team that's been renewed. We have a brand‑new 'humongatron' as we call it. It's a pretty significant, I guess scoreboard, if you will. But calling it scoreboard is not really giving it justice. We have a new floor, we have new uniforms and we have a new game presentation. We have a new coaching staff, and in a way, a new front office because David just got going last February or March. Obviously, we have a lot of new talented players. For us, the thing that drives us the most is what you just said, delivering this for the fans of Cleveland. It will be 51 years, and that's, the emotion is really about that. Delivering for them, and hoping that day comes whether it's this year next year or the following year, whenever it comes, and we believe it will.

"That's what drove everybody during the downtime, and the four years, and the painful times and all the negative stuff come our way. So you just keep grinding. That's all you can do. I don't know if it was Winston Churchill who said when you're in hell, you just keep going. Something like that. That's probably a bad quote, but look it up on Google or something. But it's like that. I just feel fortunate and grateful that this is able to happen for all of us, but especially for the fans of Cleveland."

You never shied away from the luxury tax. Will the ultra penalties of the new luxury tax hinder you from spending to build a championship team?

"That message is unchanged, clearly the cap will be going up in the next couple of years based on the revenues of the league as well, but that message is still there. I think that when you have so much invested, if you want to look at this financially and take away the other stuff, I almost think it's kind of silly when you invest so much into a franchise and have such high costs already, and then at the margin, I know it's a lot of raw dollars when you look at it by itself, but relative to everything that's invested, I was a little bit surprised when our franchise was going to stop right there. To me, it's like getting to the two‑yard line, and okay, we're done now. I think it's not even smart business or maybe not even smart financially, because there is obviously risk involved. But when you're willing to do that, theoretically, your revenues can offset part of that as well and increase in revenues. Definitely, when the decisions are ours and they're regarding financial, that should not stop us or be any significant barrier to delivering championship‑caliber basketball here."

What do you think of the job general manger David Griffin has done?

"Griff? There is nobody better than Griff. You know what's funny, you can go back to February when we made the change, and we won six games in a row. I know a lot of people say how could that really matter? How could changing your front office in the middle of a season result immediately in a six‑game winning streak, which is the last winning streak, I think, in four years. But there was an effect immediately from David Griffin. So forgetting all the great moves that he made and all the levity that he brought to the front office, he brings a culture and a soul.

"He immediately, I mean, from the second we hired him, made sure he met one‑on‑one. Every single player, every single coaching staff member, and let them know who we are and let them feel him. Again, hard to prove. It's one of those things again not measurable on a spread sheet. But, Griff has positively impacted things. Forget the summer, but from day one when he started last February. Through the lottery, not Nick Gilbert, but he went to the lottery and pulled that off. And I think he made the right draft picks and hired the right coach. Obviously, the moves of the summer speak for themselves. There is a team around him. We work for the team, but he's leading it. I couldn't be more pleased with him.

"He is just a class guy and a smart basketball guy. He's been ‑‑ talk about grinding, he's been grinding for 15, 16, 20‑something years. He's always turning red, but he broke his leg even and he's hopping around here in a boot. That doesn't stop him. I mean, I don't know what they call it, executive of the year, we'll see, of course. But if he doesn't win it, he better be in in the running because he's a special guy."

What has surprised you the most about David Blatt?

"I'm impressed he hasn't lost a game yet in the regular season so far. So, yeah, obviously, it's early to be judging a coach totally, right? We haven't played a game yet. He's a down to earth guy. I mean, for a guy that has much winning internationally and so many different places, he's a guy that could sit down with anybody here and have a beer. Doesn't matter who you are and where you're coming from. He respects people. He has a magnetism almost to his own and he's a very charismatic guy. I think he motivates people. I think he also brings respect into the room immediately, not just from his record but also from his presence, so that, to me, I don't know if that's a surprise, but that's the best part about him. I believe he's a winner.

"Bottom line, David Blatt has never really lost wherever he's gone in his entire career. He's just won everywhere, and I think he'll do the same here."

Can you walk us through the process of Kyrie Irving and his commitment long‑term here in the next five years and what that was like for you?

"Yeah, I'm glad you brought that up, because it didn't come up earlier. The moment we signed Kyrie was really the beginning of our historical summer. The fact that he committed to us long‑term and just a few minutes after the deadline or not the deadline, but the time you're allowed to have negotiations and extend your player. His father was there, and his agent was there and a couple of my partners were there, coaches were there, and Tyronn was there, and Coach Blatt was there. It just felt good.

"It's funny, because we started the dinner at 10 o'clock but we weren't allowed to talk about it until 12:01. And we go by the book. When somebody tried to bring it up, no we got 20 more minutes. We wouldn't talk till 12:01. So at 12:01 we started talking and I think it was like 1:05 or something where we had shaken hands. That is a major, pivotal moment. If that doesn't happen, that has to put doubt in any free agent including LeBron or whoever. Because if your top player, who has been with you for three years, isn't willing to extend, which is rare in the NBA, that would put a serious derailment on what we were doing. And he didn't hesitate. He committed. He believed in what we were doing and we believe in him. I can't underscore how important that was."