KANSAS CITY, Mo. — Starting a business, John Sherman smiled and said, can be “harrowing.” He often points to the debut of Inergy L.P., which he launched shortly before the attacks of Sept. 11, 2001 scrambled his “young, fragile” endeavor.
Still …
“Some of the most fun and most exhilarating times,” the Royals chairman and CEO said in one of several recent interviews with The Kansas City Star, “are when you’re in the early stages of an enterprise.”
Particularly if you can look back at the benefits of maintaining the long view from within the crucible. So he draws on how he and his companies prospered from perspective: In 2013, for instance, Inergy merged with Crestwood to create a “combined enterprise value of $8 billion,” according to a news release.
That viewpoint served him well in 2020. Just months after Sherman and his investment group acquired the Royals for a reported $1 billion, they faced another unfathomable crisis: a pandemic that has killed a million Americans, abruptly shut down sports, condensed that season to 60 games (with no fans in the stands) and warped so much since — surely including the pace of a rebuild hinging on development of a farm system rated among the best in baseball.
While it’s not known how much money the Royals lost in revenue in 2020, the Major League Baseball average was about $100 million, wrote the Sports Business Journal.
“I actually thought baseball might be easier than (past businesses),” he said with a laugh in Arizona after the lockout was resolved. “That was not the case.”
Taking the long view
As the Royals languish on the field, it’s perhaps instructive to what we can anticipate that Sherman didn’t turn loose or furlough any employees. He embraced then-general manager Dayton Moore’s advocacy of paying minor-leaguers despite their lost season.
He held the long view despite issues that were “very dramatic in the short term,” he said.
“Baseball’s not going anywhere; we’re going to get through this,” he recalled thinking then. “So you don’t want to do damage.”
“If your culture’s not there when you come out of it,” he said, before pausing and adding, “Preserving your culture’s important.”
If it’s healthy, that is. And amid the present turbulence, safe to say he feels it is. Consider how admiringly he speaks of Moore, the fact he promoted Moore to president and J.J. Picollo to GM less than a year ago, and that the Royals in March extended manager Mike Matheny’s contract through 2023.
Which brings us to the state of the union and how we might expect Sherman to approach the dismal results on the field. The 2022 Royals are on trajectory to break the club record of 106 losses five years into a rebuild.
Sherman’s history makes only for conjecture about how it might be applied to baseball — a sport that has consumed Sherman since his early childhood, played a role even in his marriage (his first date with his future wife, Marny, was at Kauffman Stadium) and inspired him to become a minority owner of the Cleveland franchise before he led the purchase of the team in his adopted hometown in late 2019.
Still, his way here makes for a glimpse of an approach that has been both deliberate and generous as he stands at a momentous crossroads for the Royals in many ways.
As they sputter on the field, the Royals are probing a potential move downtown that would seek a public-private partnership … even as they contend with another unforeseen circumstance agitating many of us: numerous households unable to watch the Royals because of the absurd situation with Bally Sports.
While the Royals aren’t precisely an entrepreneurial endeavor, he notes, “I think sports is entrepreneurial by nature even though these are, on one hand, mature businesses. You have to constantly reinvent yourself.
“The game’s changing, the way the fans consume the games is changing, the way we deliver it is changing. So lots of creativity and innovation have to be part of the game and your business. Or you’ll get left behind.”
‘We’re not happy with the results’
We most recently spoke with Sherman last week, shortly after the Royals replaced hitting coach Terry Bradshaw, and following a victory over the White Sox marked by Brady Singer’s triumphant return and MJ Melendez’s first major league home run.
At the time, Sherman was upbeat about what that game hinted but nonetheless cognizant of the seasonal trend.
“That helps you see the future, a night like that,” he said, more generally adding, “We’re not happy with the results. We’re not where we thought we would be.”
Asked if he should be considered patient given his past, he laughed and said, “Well, patience is a relative term. … You have to balance patience with having a sense of urgency to get better.”
He added, “You want to be decisive but thoughtful. And the main thing is not to panic.”
While Sherman didn’t explicitly refer to Bradshaw, he referred to his trust in the leadership “focused on improving that performance and willing to make tough decisions to make sure that it’s clear that our expectations are higher than this.”
So, too, are those of the fans. He knows they are “disappointed and frustrated with us.”
“I appreciate the engagement of our fans and I get the sense that they care a lot,” he said. “So we’re committed to make sure that we put a good product on the field, and I do feel … like we are ultimately going to do the right things to get there.”
His journey to this point tells you why he can say that with conviction … and why that offers some reassurance at a distressing time.
Formative childhood
If baseball isn’t literally in Sherman’s DNA, it’s forever been part of his life, which began in Japan in 1955 early in his father’s 22-year career in the U.S. Air Force (in which he rose to lieutenant colonel and worked at the Pentagon.)
Sherman’s conscious fanship harkens to at least 1966, when the then-Dodgers fan (his dad was born in Brooklyn) recalled that Sandy Koufax led the rotation with 325 innings pitched (why quibble that it was 323?) while Don Sutton was the low man with 225 (225 2/3, to be precise).
He remembers asking, “What’s ERA?” and learning to compute earned-run average that drove an early interest in math that perhaps triggered a data-driven mindset.
He also was seized by the game’s romance, and we don’t mean just that first date with Marny, with whom he has raised four children. During his father’s year-long-tour in Vietnam, Sherman often would sneak his transistor radio into bed, earphone hidden under the pillow, to listen to Hawaii Islanders Triple-A games.
Football also became an important part of his life; his father, Jack, is proud to say he raised each of his three boys to be quarterbacks.
With his father gone overseas, young John recorded play-by-play of his seventh-grade exploits on reel-to-reel cassette tapes that were sent to Dad.
“He didn’t leave anything out: If the referee threw the flag, I heard about it,” his father, now 91, said in a phone interview, noting that he also sent recordings home. “Sometimes they’d hear a boom in the background. I’d tell them that’s just the artillery guys practicing. They had enough to worry about.”
Indeed, John, the oldest of seven, remembers the fearsome day his father left. His four sisters were crying, as he recalled, as they faced the piercing possibility he would never return.
A sense of crisis hovered even without the children knowing the implications of their father being deployed during the Tet Offensive. He was a navigator on a retrofitted C-47 largely tasked with spraying bullets to support infantry and dropping flares to illuminate targets for night bombing attacks.
“It would have been a bigger crisis if we lost him,” John Sherman said, pausing and adding, “But he came back.”
The family was sustained during those hard years by the nurturing touch of their mother, Ann, who died in 2008. “Anyone that knew Ann was touched by her heart, her strong faith in God, her humor, and her loving kindness for everyone,” her obituary said.
Meanwhile, Sherman said his father, though stern when he was young, also is “like the most optimistic person you ever met in the world.” That was illustrated by one of his favorite sayings: “If we can send people to the moon … and bring them back safely, we can do anything.”
‘He’s a risk-taker’
All of that cultivated a sense of possibility and a charitable spirit that helped shape Sherman’s entrepreneurial disposition and giving to Kansas City.
He ultimately settled here after playing quarterback at Ottawa (Kansas) University, where he still remembers locusts “bouncing off your calves” but also gained many of his best friends.
Sherman began his professional career in the telecom business. Then he turned to propane gas and soon saw opportunity for an innovative approach that led to his 1996 first startup, Dynegy.
(Here we acknowledge that the ways of that world frighten and confuse us, as Phil Hartman’s “Unfrozen Caveman Lawyer” character would put it. That’s why, yes, we focus on the broader lessons.)
“He’s a risk-taker, and that’s how he went from an $11,000-a-year job with the phone company to who he is now,” his father said. “He didn’t have a rich dad to help him, so he did it all on his own.”
Sherman wasn’t immune to what he called “entrepreneurial seizures” or even “sheer terror” at the outset. But he also kept faith in what he was doing and pivoted when he had to.
“Risk-taking isn’t like being a riverboat gambler,” he said. “In my mind, it’s understanding the risks and then putting a lot of your energy on managing risks.”
Philanthropy and a ballpark district
That now includes studying potential moves downtown while gathering data on what it would cost to “extend the life” of Kauffman, which opened 50 years ago.
“I’ve gotten some feedback (that says), ‘Look, I’m from the Midwest; this just seems wasteful that we couldn’t extend the life of this beautiful building,’” he said. “But it’s a very old building … And the costs of renovating it and modernizing it are, well, we’ll get specifics on that, but it’s not an easy answer.”
This is where another part of Sherman’s past should be understood to inspire any motivation for a move: Sherman has an astounding history of civic investment and philanthropy in Kansas City. His legacy in that realm certainly rivals his reputation as an entrepreneur.
If that sounds familiar when it comes to the Royals, Sherman points out he has long considered Royals founder Ewing Kauffman a role model.
“He gave his team to the community,” said Sherman, chairman of the Kauffman Foundation board, referring to the trust that kept the team in Kansas City, among other enduring gifts. “It’s pretty remarkable, one person’s impact on a community.”
A cynic might dismiss how all this figures in any incentive to move the team downtown. And Sherman of course is a businessman who should want to optimize profits for many reasons — including the very practical point of a small-market team being able to put a better team on the field.
But he has consistently demonstrated he is all about the greater good, including also serving on the Civic Council of Greater Kansas City and the boards of the Truman Presidential Library, the UMKC Foundation, Teach for America Kansas City and the National World War I Museum. As noted in his KC Chamber recognition as the 2021 Kansas Citian of the year, his Sherman Family Foundation “contributes about $4 million annually to local nonprofits, with a particular focus on urban education.”
So even as we await specifics surrounding the potential project, you can believe this is about something quite a lot more than just a stadium.
“If it’s just a ballpark,” he said when we spoke in Arizona during spring training, “we’ve got a great ballpark.”
Last week, he put it this way:
“I really think about it as a ballpark district and all that comes with it. A ballpark experience that can help be a catalyst for positive things in the community and all that comes with it inside the ballpark but also outside the ballpark with the other 280-some days.”
Meaning as what he called a “hub for community activity where people live, work and play. It creates jobs. It helps advance public transportation options. It helps develop safe, walkable neighborhoods.”
He added, “A stadium, that’s a building, right, whether we’re talking about steel or concrete. And I’m really thinking about this as a ballpark district and a ballpark experience and all that can potentially come with that that will be positive for the community and the region.”
While we’re all eager to hear the still-forming details and the case for whether to move or not, it remains unclear when the Royals might make a public presentation as they continue to solicit community input.
“In some ways it makes it more complicated,” he said. “But … I feel like it will get us to a better place and a better answer for the entire community, for a broad spectrum of the community.”
‘We don’t want to be out of sight’
Speaking of a broad spectrum of the community … Sherman hears you when it comes to the fiasco of so many of us not being able to watch Royals games.
(Sinclair Broadcast Group, which owns Bally Sports Kansas City, has been planning a direct-to-consumer app (DTC) that will allow fans to watch games without a cable subscription. The new option, expected to cost $189.99 annually or $19.99 a month, unpalatable as that might be, is supposed to be available before the Fourth of July.)
Sherman gets asked about it everywhere, including at a recent funeral.
“It’s so important for us to make sure that our games are available … We don’t want to be out of sight and out of mind,” he said. “The business side of it is that they paid us a meaningful amount of money (believed to be around $50 million a year) for these rights. But we want to help each other expand the reach.
“That’s not only important to us, but it should be important to Sinclair and Bally Sports, as well.”
‘Shining the bright lights on yourself’
At the end of Sherman’s introductory news conference as the new Royals owner, he said, “I look forward to the challenge.”
The challenge has only grown since then. Which is saying something, considering the third owner of the Royals inherited a team that had lost 207 games the previous two years.
But despite all of the oddities of the last few years and the “painful” start to this season, he said, “It does create opportunity, as well. You’re kind of shining the bright lights on yourself and trying to figure out how to get better.”
Even as we’re left to wonder how fast, and, in fact, just how, everything about his profile says he’ll figure it out again now.
