Expect a Miracle

The Mormon Way of Doing Business: Leadership and Success Through Faith and Family
by Jeff Benedict, J.D.

(Page 5 of 6)

Checketts' two-year stint as a Mormon missionary only strengthened his natural tendencies toward not taking no for an answer and for finding a way to overcome adversity. Checketts was sent to East Los Angeles in 1975, where he spent two full years teaching residents of Watts and Compton about the Church of Jesus Christ of Latter-day Saints. The neighborhoods he worked in were so tough that the missionaries were required to be in their apartment by 6:00 P.M. As a young white male wearing a white shirt and tie and pedaling a ten-speed bicycle up and down urban streets, he stood out and encountered steep opposition. He was ridiculed and sometimes even endured personal persecution.

Then one day Checketts' mission president handed him and all the other missionaries business cards bearing the name of the Church. The reverse side of the card said: EXPECT A MIRACLE, emblazoned in gold. The missionaries were instructed to carry these cards at all times.

Checketts had put off his college education and marriage to his high school girlfriend to go on a mission. But under these conditions, frustration and a sense of failure set in. Expectedly, his success rate was terrible.

"I got this card at one of the lowest points of my mission," Checketts said. "The notion of expecting a miracle is pretty powerful. It developed in me this sense of going in undaunted because somehow the Lord will open a door."

From that day forward, Checketts' approach changed. He got up every day and hit the streets of East Los Angeles expecting to succeed. "The sense of being a minority or a persecuted minority ties into this sense of going in undaunted," said Checketts.

Soon the results changed. The last year of his mission was a tremendous success. By the time he returned to Utah at age twenty-one and returned to studying business at Brigham Young University, his competitive nature was well beyond a normal range.

These traits that Checketts developed in childhood and strengthened as a Mormon missionary fit perfectly into his business career. In the summer of 1994, Viacom sold Madison Square Garden to ITT and Cablevision for $1.075 billion. At that time, Checketts was president of the New York Knicks, which was owned by the Garden. The Garden's new ownership promptly elevated Checketts to president and CEO of MSG Corp., effectively putting him in charge of the Knicks, the Rangers, the MSG network, and the myriad of live entertainment and events offered at the Garden each year. In 1994 alone, the Garden and its theater and Expo Center hosted 350 events.

MSG Corp.'s revenue in 1994 was roughly $400 million, coming from ticket sales and radio and television sponsorships. The Garden's primary competitor for concerts and live shows was Radio City Music Hall, which routinely outbid the Garden for top shows. Checketts hated losing to Radio City. The only way to beat Radio City, he concluded, was to buy it.

That was no small hurdle. At the time, Radio City Music Hall and the land it rested on was owned by Rockefeller Center, which was under the management of Tishman-Speyer, one of the country's largest real estate firms. However, Radio City Productions, which controlled the rights to the Radio City Christmas Spectacular and to the Rockettes, was owned by a Japanese company called Mitsubishi Estates. The Christmas Spectacular was Radio City's primary revenue source, grossing $70 million each Christmas season.

Checketts wanted control of both the building and the production company. But he wasn't the only one with his eye on them. Both Disney and Universal Studios were interested in acquiring them, too. And both of those companies had far more financial clout than Checketts and MSG Corp. The presence of Disney and Universal prompted MSG Corp.'s parent company, ITT, to tell Checketts to back off from trying to acquire Radio City.

Despite both external and internal opposition, Checketts pushed ahead. After all, gaining control of Radio City Music Hall couldn't be as difficult as trying to teach Mormonism from a bicycle in Watts during the 1970s. He remembered the card that said EXPECT A MIRACLE and then formulated a plan.

In Checketts' mind, it made no sense for one company to control Radio City Music Hall and for another company to control Radio City Productions, which determines the shows that are performed in the hall. To acquire control of the building, Checketts knew he had to convince those controlling Rockefeller Center to enter into a long-term lease with Madison Square Garden for Radio City Music Hall. That ultimately would mean negotiating with Jerry Speyer, one of the founding partners at Tishman-Speyer. Checketts didn't know Speyer. He set out to change that by scheduling a series of dinner and lunch meetings with him.

Over a two-year period, he cultivated a relationship with Speyer, whose firm was attempting to negotiate a new lease for Radio City Music Hall. The problem was that MSG Corp. did not own Radio City Productions, leaving Checketts in no position to negotiate for a lease. While building a relationship with Speyer, Checketts began negotiating with Mitsubishi Estates to purchase Radio City Productions. At the time, Mitsubishi Estates was in bankruptcy. But Radio City Productions was a profitable business. Checketts offered to buy 50 percent of the company for $70 million. Mitsubishi accepted-a move that gave Checketts a leg up on Disney and Universal and put Checketts in a position to negotiate on behalf of Mitsubishi Estates for a new lease from Rockefeller Center. By this time, Checketts' relationship with Speyer had solidified.

Now a 50 percent stakeholder in Radio City Productions, Checketts woke up one Monday morning and said to his wife: "Deb, I'm going to make a deal to get Radio City this week. This is the week I'm making a deal."

"C'mon," she said. "No. I'm serious. I may not see you this week. But I'm going to make a deal."

Copyright © 2007 by Jeff Benedict

About the Author

Jeff Benedict is an award-winning investigative journalist, a lawyer, and a best-selling author of six books. He is a contributing writer for the Los Angeles Times, Sports Illustrated and the Hartford Courant. His upcoming book The Mormon Way of Doing Business is based on exclusive interviews with top corporate executives at Dell, JetBlue Airways, Deloitte & Touche USA, American Express, Madison Square Garden Corp., and Harvard Business School, all of whom are Mormons.