Name: Jonathan A. Kraft
Age: 36
Position: President and Chief Operating Officer, The Kraft Group. The group is composed of companies in the paper and packaging industries and sports and entertainment. Its holdings include the Rand-Whitney Group, a manufacturer of corrugated containers, International Forest Products’ Corporation, a trader of paper commodities and Rand-Whitney Containerboard, a manufacturer of high performance recycled linerboard. In sports and entertainment the group’s holdings include the National Football League’s New England Patriots, Foxboro Stadium and the New England Revolution and San Jose Earthquakes of Major League Soccer.
Background: Kraft is on the board of directors for several organizations in New England, including the New England Israeli Chamber of Commerce and the Genesis Fund.
Education: Williams College (1986), MBA from Harvard Business School (1990)
Family: He and his wife, Patti, have a son and a daughter
Residence: Chestnut Hill
JONATHAN A. KRAFT: ‘You can’t separate being a fan from being a businessman and do a good job.’
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PBN: How long has your family been in the paper product business?
KRAFT: My dad went directly into it when he got out of business school in 1965.
What are your operations in Rhode Island?
We have a facility that manufactures corrugated boxes called Southeast Container. It’s in an industrial park off Route1A in Pawtucket. We just built a 100,000-square-foot expansion. The business is doing quite well.
Tell us about the ownership of what is to be the new Foxboro Stadium. Is it in fact, family-owned and is that rare in professional sports?
Sullivan Stadium – or Schaefer Stadium as it was called – was the first privately owned football stadium in America. They tend to be built by cities or states or universities. They are extremely difficult to build and run. Sullivan Stadium changed all that. Today, there are only three privately owned and operated stadiums in America: Pro Player, in Miami, owned by Wayne Huizenga and his family; Fed Ex Field in Washington, owned by Dan Snyder and his limited partners; and Ericsson Stadium in North Carolina, owned by the Richardson family, their limited partners and the football team. We will actually be the first people who privately owned and operated a stadium already, who will be building a new one.
So your family owned the stadium before the team?
Yes. We bought the stadium in 1988.
And the team?
We bought the team in 1994.
Have you cleared all hurdles for the construction of the new stadium in Foxboro?
All of the significant ones have been cleared. There are things you can’t get today, some permits and approvals. But we feel good. We’re in the ground now, spending a lot of money. This project is happening.
Construction has begun?
Site preparation has begun. We’ve moved a lot of earth.
And when will people be walking through the turnstiles?
Hopefully, for soccer in April or May of 2002. And football in August of 2002.
Tell us about the stadium itself.
It will have 68,000 seats. In Foxboro today we have 60,000 seats. They are all general admission. We’re basically sold out with season tickets. Every season ticket holder is guaranteed a seat in the new stadium. In addition to those 60,000 general admission seats, there are 8,000 new seats. Two thousand of those will be in the luxury suites and 6,000 will be club seats. The club seats are pretty special. There are 3,000 on each side, at the top of the upper bowl – all between the 20-yard lines. They’re the best seats in the house.
What is the draw for an individual or company to invest in a club seat or suite plan?
There are benefits to being a club seat holder. On each side of the stadium, there are 60,000 square feet of club space with views to the field. That space is being outfitted so it can have a room for a few people to have a private meeting or for 2,000 people to have a larger meeting, function or event. We will be using those spaces every day. When you are spending $325 million you have to find other uses for the stadium. One of the things we were hearing from people who have been involved in other club seat programs is that they wanted to be part of the team 365 days a year. So if you are a club seat holder, you’ve got access any time you want – on a first come, first served basis – to as much space as you like. If you are planning a meeting with your sales team, instead of renting hotel space, you let us know you need a room for 100 people. The clubs will be wired for multi-media capabilities. You hold your meeting in a special place – overlooking an NFL football stadium. If you would like an ex-player, current player or coach to talk to your group, it can be arranged.
In addition to Patriot and Revolution games, what events will we see at the new stadium?
World class soccer matches – be it World Cup qualifying games or the World Cup. We will continue to bring in the biggest rock and roll shows. The only outdoor stadium that has been busier over the past decade than Foxboro has been the Meadowlands – and that’s in New York, with two football teams. We get all the major shows. This summer, N’ Sync is coming. We have gotten more phone calls for people that want to go to N’ Sync than anything. Even more than the AFC Championship game. If you own club seats or a luxury suite, you get access to tickets first. So we will continue to do concerts, but we’ll also do other things. There will be festivals – ethnic festivals. Technology fairs.
How are the luxury suites selling?
The way we have financed the new stadium, without charging personal seat licenses, is by having a successful club seat and luxury suite program. Things have been going well. There are 20 suites left out of the 80 we are building and the club seat program also has shown strong sales. One of the reasons is that it is really the only way to get into this stadium unless you are a season ticket holder. We wanted to make the suites and the club seats the best in the NFL. Our suites are the largest ever built. The smallest is 800 square feet – the largest is 1,800 square feet. They are on the sidelines – none in the back of the end zone. If you are a suite holder, you can use your suite not only for the Patriot games and any event that comes to the stadium, but the suites are large enough so if you want your own private meeting room, it can double as a private meeting room for you and your company. The club seats, we are building 6,000. That allows us to keep them between the 20-yard lines. We’re building a glass-enclosed club with a view to the field, so it is almost like you have this huge luxury box, and then you can sit outside in big, fully padded leather seats. It’s like first class on an airplane.
I assume a lot of that business is coming from Boston. Are you getting a response from Providence companies?
Rhode Island and the Providence area have been great. Approximately 25 percent of our season ticket holders are from Rhode Island. So far, about the same percentage – 20 to 25 percent – of our club seat patrons have come from Rhode Island. We’re actually closer to downtown Providence than downtown Boston.
When you have people in on business, do they stay at Providence hotels – or is it always in Boston?
All of the visiting football teams fly into T.F. Green and stay in downtown Providence — every one of them. I think I can only remember one team over the past three years that has stayed in Massachusetts.
A year ago it looked like you would be moving the team to Hartford. It was quite a political battle. What was the most difficult part of the ordeal?
That’s a good question. The most difficult part of the ordeal was being so unsettled for that six or seven-month period. Just not knowing. Connecticut had issues associated with it. There wasn’t going to be anything done in Massachusetts. If we weren’t able to get something done in New England, we weren’t ever going to move the team out of New England. But we would not have been able to survive without a stadium and we probably would have sold it to someone who would have moved it outside of New England. That was probably the most uncomfortable thing. The most gratifying thing – and I don’t think I have ever seen this in print – is that we gave our notice to Connecticut that we were uncomfortable going forward on April 29, and our season ticket renewal date was something like April 2 or 3. We had over a 98 percent season ticket renewal rate when everyone thought we were going. Now, maybe 10 or 12 percent of our season ticket holders are from Connecticut, but the vast majority is not. That was gratifying to our family.
We write about the importance of retaining good employees – the challenges of recruiting talented new ones. How do you sell people on coming to work in New England?
With the exception of head coaches, who don’t care where you are because they just want to be head coaches, most of our management comes from New England. The players are where it makes a difference. It’s difficult, given the climate here – given the fact that we are competing with teams that play in Florida and Texas, where there is no state tax. When we are recruiting players, we say; ‘Look, we’re spending more money than any team in the NFL. And in the seven years my family has owned the team, we are in the top three in spending.’ If spending money correlates to winningyou are not going to be playing for a team here that isn’t committed to winning a championship. We haven’t had the greatest facilities. But we’ve still done all right. The team had never been to the playoffs three years in a row, except under our ownership. We’re committed to spending the money. We are building the new stadium. We’re going to do everything in our power to win a Super Bowl. When players see that, they want to go to a place.
What is the key to running a sports franchise successfully?
You have to run it as a professional business. If not, you are going to have problems. You have to bring professional management and business skills to all parts of the organization. The scouting department is sort of like R&D. The coaching department is the production team. Your players are like the capital equipment in a factory. Your sales and marketing force are out trying to create sponsorship and advertising to help you and your partners get visibility through your franchise. All those things together need to run like a professional machine or you are not going to be successful.
How do you separate the part of you that is a fan and the part of you that is a businessman?
I don’t think you can separate it and do a good job. My dad, in 1971 I was seven, my brother Dan was six, my brother Josh was four. My dad came home with season tickets to what was then Schaefer Stadium. He came home one night and opened his briefcase and showed me the tickets. It was section 217, I still remember. I was so excited. I remember hearing my mother later that night, telling him we couldn’t afford them. I think back to all the great times we had there. We stayed there in 217 until about 1985 when my dad got to know the Sullivans and there was a little improvement in where we were sitting. We sat up there – it’s at like the 10-yard line. We watched the games up there. You become a fan when you do that. We missed maybe a handful. Since that place has been open, I would bet there has been a Kraft at every single football game in that stadium – and most of the time it was all of us together. That gives you a perspective, that if you use it right it gives you a chance to be successful running the business. At the end of the day, the fans are your customers. The fans know you can’t win a Super Bowl every year. But what they want to know is that at the top of the organization, there are people trying to win a championship. They want to know you are taking their comfort into consideration. It’s the reason we put such an effort into security – into evicting people and revoking season tickets after we bought the team. We wanted to make it a better place to come watch a game. We think it is. When our season ticket holders see the new stadium, they will see how much thought went into making it a real great place without charging them a personal seat license. Those are the things you know about as a fan. You have to do that to be successful on the business end – you have to look at it from the fan’s perspective. Even then, you have to a get a little lucky. But you’ve got no chance if you are not thinking of it from a fan’s perspective.
What do you most admire about Bob Kraft, as a father and a businessman?
My dad is my best friend in the world. Growing up, he was trying to make it in the business world. So I knew him as a father first. There are things I can appreciate today. Even though he was out struggling to make it in business, he was always home to eat dinner with us, unless he was traveling. I don’t ever remember him missing a birthday, a game – anything that was important in our lives. Anything important to my brothers and I always came first. Today, as a father myself, I have an unbelievable respect for that. Especially because he did not always have the material means. He was struggling to build a business and his family always came first. I know a lot of people say it, but my dad lived it. He was always there for dinner. He never missed a special event. Now I have had a chance to work with him for ten years. In business, he has a way of persevering. Nothing ever comes easy to him. He always has to work very hard. But he perseveres. He has a great attitude. He puts up with a lot of stuff that I think a lot of other people wouldn’t. He has a positive attitude and can talk to people in a way that few can; in order to get deals done. It’s a great sense of salesmanship. But salesmanship connotes being disingenuous and he is never disingenuous. He has a great sense of salesmanship that is very genuine and real. That, coupled with his perseverance, allows him to succeed. I think most people who work in our businesses around the world would say that they love working for him and would do anything for him. That’s rare in a large organization – where you can look up to the top and feel that way. On top of that, he and my mother are incredibly charitable and they taught that to us. A significant portion of the money we make each year goes to charity. That’s something I respect and admire.
