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NBA Hall of Famer and Bay FC Board Member Rick Welts

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How do you transform a professional sports league into a household name and create a culture that leaves a lasting legacy?

On this episode of It’s Not Magic, influential sports executive and NBA Hall of Famer Rick Welts joins our host, David Stiepleman, for a conversation about his pioneering career. From Ballboy to Golden State Warrior’s Team President and COO, Rick has had a decades-long relationship with the NBA and has helped shape it into the world-renowned brand we know today. And, most recently, Rick joined our Sixth Street team as a Senior Advisor and Board Member for our recently named National Women’s Soccer League team: Bay FC.

Recorded live from Sixth Street’s annual offsite in Austin, Texas, Rick walks us through his remarkable career, shares lessons learned along the way, and predicts what’s next for the sports industry. We’re excited to kick-off Pride Month with this conversation with Rick who is also known for LGBTQ+ advocacy in sports by proudly embracing his identity and encouraging others to do the same.

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Episode Transcript:

David Stiepleman: I am David Stiepleman, one of the co-founders of Sixth Street. And I'm really happy to be here with Rick Welts. Rick, whose bio is in your app, but I think that, it doesn't even do it justice. Has been called one of the most successful and lauded business executives in professional sports and one of the most admired people in the country for his leadership in society, broadly. That's pretty good, incredible career as a sports executive associated with seven championship teams, in the NBA, the WNBA and the G League, including three titles at Golden State. In your 17-year career at the NBA League Office, you did basically everything there. You ran, I think, practically every business at the NBA becoming number three in the organization. You're the person who's invented All-Star weekends, spearheaded the dream team.

David Stiepleman: We'll talk about that, I hope, and help get the WNBA going. You were the President and COO of the Phoenix Suns. You were the President and COO of the Golden State Warriors. (Tipoff tonight against the Lakers at Seven Pacific.) And in 2018, you were elected to the Naysmith Memorial Hall of Fame Basketball Hall of Fame. A rare distinction for a business side executive, which is incredible. Are you wearing the ring? You are, excellent. And now climbing even higher peaks, you're a senior advisor at Sixth Street, which we're very grateful for. And I've just joined the board of our NWSL Professional Women's Soccer Team, which we're thrilled about. Thank you for being here. Welcome.

Rick Welts: Thank you, David.

David Stiepleman: I'd like to start with a non-denominational benediction to luck. And so, I'd love you to tell everybody who Earl Woodson is.

Rick Welts: So, I grew up in Seattle, Washington before any of you were born. And my kind of currency of a relationship with my dad was going to games. We loved going to games together. That's where we talked, that's where we had our big conversations. And I loved it. And then in 1967, the NBA awarded an expansion franchise to the Seattle Supersonics, and we started going to Sonics games in Seattle. I fell in love with the sport right away, but there was something more going on there that became kind of my direction, I think, in my career. But I was going to Queen Anne High School. The coolest kid at Queen Anne High School was –

David Stiepleman: Earl Woodson.

Rick Welts: Why was Earl the coolest kid at Queen Anne High School? Because he was a ball boy for the Seattle Supersonics. All right. So, we'd sit in the back of English Lit class, every day, and I get the gossip about my favorite players, my favorite teams. It was like, awesome. So, Earl comes into class one day, very long, look on his face. I'm like, “Dude, what's wrong?” He goes, “Oh man. Like my family's moving out of town.” Trying to appear very upset, “Earl. Like, dude, you gotta take me down and introduce me to whoever hires ball kids at the Sonics.” And he did that. And so, at 16 I had my dream job and really the one, you know, the thing that changed my life more than anything else.

David Stiepleman: And you stuck around there for a while. You were working there through college. I didn't realize this, or I didn't put this together when I was reading up about you, that the most incredible, one of the most incredible people maybe ever in the world, Bill Russell, who became your friend, was the coach and general manager of the Supersonic, sometime in the mid-seventies. You're, you're, how did, how did, how did that relationship form him? And I'm thinking about all the young people in the room or people who just started here. How did you get yourself noticed, or what did he see in you, do you think?

Rick Welts: So, we had a very small business officer, more people at this front table than we had. I was working for the Sonics at the time. But Bill Russell was a very early riser, and I didn't have an -- I was going to University of Washington working part-time. I had to work, you know, around my school schedule. So, I would often be in really early in the morning, even on a weekend. And Bill, I'd hear these big footsteps coming up the stairs. And at the other end of the hallway -- I didn't have an office. I had a desk in the hallway. I'd see, you know, Bill Russell going into his office. And I look, you know, I'm in awe. I would never speak to Bill Russell. 11 championships in 13 years with the Boston Celtics. And this would go on a lot. I'd be, you know, at my desk at seven in the morning, and he'd be, you know, at the other end of the hall going in. One day, he like sticks his head out of the office and he goes, “Hey, white boy down the hall.”

David Stiepleman: .

Rick Welts: And for whatever reason, I really can't tell you, that kind of started a friendship that lasted a long, long time till his passing last August. I got to speak at his memorial service last August. But I think he, you know, he saw something in me that I cherish forever. It's a friendship that I could never have imagined, or never thought would have as a blessing in my life. But I don't know for sure. He never really told me. But I will say every time we spoke till the day he died, he would answer the phone or address me as “white boy down the hall.” So, quite an honor.

David Stiepleman: We were just talking outside. You told me a story about kind of getting yourself noticed and how you got into the marketing department. Can you tell people that story?

Rick Welts: I loved your open video today. I loved your open video today and the messages it sent to the young employees about how you get noticed at Sixth Street. I'm doing, a video speech tomorrow for young employees of the G League, and I'm gonna use some of the material there. Cause it's what I talk about all the time. It's like, you know, doing your job great is like the given, right? It's how do you find that opportunity that sets yourself apart and adds value where no one else saw the value before. And so, I'm a, you know, 17-year-old ball kid for the sonics, and I'm looking at our bench one night, and we have these like kind of metal containers for the water behind the bench, not very attractive. So I went in that weekend, I bought some spray paint at the hardware store.

Rick Welts: I spray painted them all green, like I stencil the Sonic logo on the cans. And the next game we go out there and we got like these really kickass water containers behind the bench. And the marketing guy, you know, came up to me like, “Where do we buy those? Like, well, guys, you know, I just kind of did it over the weekend and silly story, but I got offered a part-time job, you know, when my ball boy career was over, got offered a part-time job in the marketing department. And part of it was just like they saw somebody who could look around the edges and maybe see something that wasn't being done.

David Stiepleman: I love that story. You went to the NBA in 1982. Not exactly, what it's like now, like a global juggernaut. What was it like? Why did you that? You had a great gig.

Rick Welts: Because I was so naive. I thought I was in Seattle, Washington. We won a championship in 1979, that NBA was the biggest thing that ever happened. But I knew it wasn't a career. So, I had left and joined a little sports marketing company in Seattle. None of you were old enough to remember before we had cell phones. You'd come, you had one main office number, you'd come back from, lunch and you'd see these little pink slips on your desk that said, “While you were out… I recognized the phone number, but I didn't know the -- I didn't recognize the name. I called back, it was an NBA number. And this guy on the other end of the phone said, “Hey, I’ve just been put in charge of starting a business operation at the NBA and I'd like to meet you.

Rick Welts: I heard about you.” So flew back. I got to fly back to New York, stayed hit the Waldorf Astoria Hotel. Oh my gosh, that was so exciting. I walk over to my meeting in the Olympic Tower where the NBA still is. And my half hour appointment with this guy went about two hours. And I ended up going to work at the NBA as the first – that sounds crazy. In 1982, as the first person ever to go out and try to talk to corporate partners about investing, marketing dollars in the NBA. That function didn't exist. We scheduled games and signed referees, . Now I thought this is gonna be the best gig ever. I had the worst job in America, okay. You have no idea what a damaged property the NBA was at that moment in time. First league with widespread accusations of drug use by its players.

Rick Welts: Talk about teams going out of business, not any talk about expanding the league. Sports Illustrated did a famous cover where they had a deflated NBA basketball in the cover with, you know. The story inside, offering the conventional wisdom that America would never embrace a sport where three quarters of the athletes were Black. Like, duh. You know? So that was, that was what we were up. Again, I couldn't get a meeting, I couldn't get anyone to talk to me about, you know, spending money on the NBA. The biggest part of luck for me on that was that guy that recruited me was a guy by the name David Stern. And, two years later, the owners would be smart enough to elect David Stern Commissioner, which he served in that role for 30 years. But he had this band of crazy young warriors that were working for him that got to ride the train at that point. I ended up spending 17 years there and every job imaginable, seeing the world. And it was great career, but the NBA was in a terrible situation and needing, needed a total reboot to be successful.

David Stiepleman: What was your pitch and how did it evolve? Like when you're trying to get corporate sponsors role.

Rick Welts: Well, you know, it was always the fourth in the category that would talk to me. You know, the, the number one, two and three would never even take a meeting for me. So, I think my first deal is with Fuji Film, because I tried for, you know, a year to get Kodak to talk to me. I couldn't. But here, I mean, I think it's another example of trying to just, you know, find something new. We were going Stern had been elected commissioner in 83. He was gonna take office after the All-Star game in 1984. And he'd already said a couple of the themes that he wanted to get out there. We’re getting in touch with our sport again. We had no connection to our history, our players, our coaches. We had no video record or photographic record of our history.

Rick Welts: We had to, that was our job. We were the caretakers of the league, and we were gonna go to Denver for the All-Star weekend. Those of you are sports fans know that Denver had a very rich ABA, American Basketball Association, history before they joined the NBA. And in 1976, one of the most famous events in the history of basketball, 1976-88 slam dunk contest, where this player named Julius Erving took off from the free throw line and dunked a basketball. No one had ever seen it before. And he won the ABA slam dunk contest. So, Carl Scher was the president of the Denver Nuggets, came to New York like three months before the All-Star game to start to talk about planning it. Now it takes like six years to plan an All-Star weekend, but three months before he goes, “Hey, I think it'd be great if at halftime we did a slam dunk contest.

Rick Welts: We're in ABA city, it'd be great.” I'm like, “Oh, Carl, sorry. CBS has got this red on round ball thing that they run at halftime. We don't have halftime. I went home that night, turned on the TV. As luck would have it, there's a baseball old timers’ game on tv. And I watched this 60-year-old guy get up and hit a home run over the Cracker Jack sign, right field back. Okay, I think I got it. So, I went in the next morning in the Stern's office, said like, “What if we do a second day of events? We only ever just show up for a game and everybody goes home. So, we could do a slam dunk contest that kind of honors the heritage in Denver, and we could do an old timers game where you wanna get back in touch with the history of the game and all these players.

Rick Welts: And he was like, “I like it. So, I'm gonna go talk to the commissioner.” Who was Larry O'Brien at the time. Stern came back like, “Yeah, no, commissioner says last weekend in office. Yeah, we're not gonna try this.” I don't know what happened. Came back a few days later and said, “Okay, commissioner says, you can do it. You have no budget, you gotta figure out how to pay for it, and you can't embarrass him on his last weekend in office.” So, with that, it's like, here we go. Right? So, I actually had something to go out and talk to sponsors about. So, there was this little beverage company in Indianapolis called Gatorade. So I got to make the league's first deal with Gatorade to sponsor the slam dunk contest. It’s actually the longest standing sponsorship the NBA has. Gatorade still sponsors the NBA.

Rick Welts: Gillette wouldn't talk to me, but I got Schick to sponsor the old timers’ game. I got American Airlines to pay the airfare. And we showed up at the Brown Palace Hotel. This is another one that falls in the luck category. There's Jerry West, there's
Oscar Robertson. You know, there are these amazing players that all of a sudden feel like part of the family again. And the writers and reporters are running around. They've got these great stories to write about the All-Star Weekend. So, we get to McNichols Arena, we sell it out $5 a ticket. And what happened was just a lot of luck that day. So, I will tell you this. The introductions of the old timers -- thrilling. You know, here are these guys that we've watched forever the game. It's better to watch 60-year-old baseball players than 60-year-old basketball players, okay.

Rick Welts: Not so pretty. Okay. We had to, we had to have a seamstress in the locker room, what to expand some of the waist sizes and some of the uniforms. But then Julius Erving, God bless him agreed to come back at the very end of his career and do the slam dunk contest again. And the very last matchup was Larry Nance, who was a rookie, against Julius serving. And last dunk, Julius picked up the ball and did exactly what he'd done in the ABA contest. He walked the full length of the floor, came running down, took off probably at this stage of his career, this far inside the free throw line, but dunked the ball, the play, it went nuts. But he didn't win. And it was a changing of the guard, both from a player perspective.

Rick Welts: And then that weekend, O'Brien turned the commissionership over to Stern. Sports Illustrated gave us like six pages. They'd never covered the All-Star game before. Stern was viewed as like this new marketing genius. He's gonna change the NBA off, like on a rocket ship start. But it was, you know, it was another example of finding something we've never done. Now, if you watched it this year, you may not be especially happy that I invented that, but it's been something that every league has adopted.

David Stiepleman: Wait, why?

Rick Welts: Well, it was kind of unwatchable.

David Stiepleman: Oh, I see, I see. Apologize for that. No, no, it's not, that's not your fault. That’s – more of the stories watch baseball, I think .

Rick Welts: Or women's soccer.

David Stiepleman: Or women's soccer. We'll get there. We're gonna talk about that. We talk a lot about culture here. Super important. I think it's axiomatic. Maybe talk a little bit about why you think that is, but also, I'm interested… Let's talk about the culture of the NBA. What, from obviously way outside in, my understanding of David Stern, it's kind of an interesting mentor for you. How did that work and not work sometimes?

Rick Welts: Yeah. I do say my greatest accomplishment was reporting to him for 17 years and living to talk about it, . Because you know, his reputation, pretty volatile. Not sure his style would fly in 2023 on a few different levels. But a passionate leader and just a genius leader as far as I was concerned. At that point, he could know everybody in the company, right? We had 40 people and, you know, I could have a bad day in his office in the afternoon where I left the building feeling like this is never gonna work and go home. And at 10 o'clock, my home phone, remember home telephones? My home phone would ring, and it was Uncle David, you know, and we'd sit there and talk for half an hour. And I was, by the time that conversation was ready was over, I was ready, come in the next day and knock down walls for this guy and for this league.

Rick Welts: And he was a genius leader. That leadership had to evolve when you grow, right? I'm sure you guys knew every employee differently then than you do now, right? You had to grow. But, you know, he had a different… He had the ability, the kind of Clinton-esque ability to treat, have a completely unique relationship with everyone. And screaming at me wasn't particularly effective. It didn't really bother me that much. Like I kind of knew his act. But he knew how to poke me in ways that just would kill me, right? And know where my vulnerabilities were and get me to do a lot better. What was the other part of the question? Culture. So here's a great advantage that we had, okay? In 1982, baseball's really successful. Football is obviously really successful. We're not even a competition.

Rick Welts: And we don't have any employees. So, we start hiring at that point. And, you know, our employee base looked very different. Still does, by the way, then baseball or footballs. We had a lot more women in positions of responsibility. We had a lot more people of color in the organization that much more kind of reflected our society at that time than it did. This longstanding institution of traditional success. I think it was a huge advantage. And Stern brought a huge social conscience to our organization. The idea that we have this amazing platform and shame on us if we don't use it to try to improve our society or the communities in which our teams operate. So that, those two things were really drivers for us. The value we didn't know what DEI was, but the value of having a very diverse workforce, making decisions about the future of our league and doing it with the social conscience that, that we had seen, that we had the opportunity to do something beyond our business that might make the world a little bit better.

David Stiepleman: I was gonna ask this later, but I'll ask you now cause you kind of brought it up. Social conscience. It's something that your public about, but maybe our employees and certainly people who we deal with want us to comment on things. What's your framework for that? You were asked to comment and talk to the NBA owners about playing the All-Star game in Charlotte in 2019 or something like that. They had passed in North Carolina, had passed, an anti-LGBTQ statute. And I thought you had a very interesting framework for how you advised the, the owners to think about that.

Rick Welts: So you haven't told 'em I'm gay.

David Stiepleman: I mean, you're gay. You didn't just come out here. You came out in 2011. Okay, I wanna talk about that too. This just, we skipped to the end of my outline, so I didn't… We skipped over.

Rick Welts: It's part of the story .

David Stiepleman: Fair enough. That's why we're doing this together. .

Rick Welts: So we did have a situation, they called it the Bathroom Bill in North Carolina, where, you know, in response to the city of Charlotte passing some very progressive LGBTQ legislation, the state of North Carolina took away the ability of cities to do that and actually imposed this bathroom bill where everyone was required to use the bathroom that you know, was their assigned gender at birth. And it put us in a real spot because the team there owned by Michael Jordan had done everything right in the community. We were all rooting for a great all-star there, but did it mesh with our kind of beliefs? And so, we were really torn. And we have a board of governor's meeting it was actually in Las Vegas, I remember. And Adam Silver, the commissioner came over before the meeting, said, "We're gonna have this conversation, but I want you to have the last word in the conversation.”

David Stiepleman: At this point you're at the Warriors.

Rick Welts: Yeah, I am at this time. So, we're, you know, people are talking about how important this would be to North Carolina to our Charlotte franchise torn by, you know, what we stand for as a league. And, then Adam called me up. And I could, you know, what I could say to him is in kind of this role that I have played since 2011, I'm in a position where people, you know, will reach out to me who are struggling with being gay or whatever in their organizations, and aren't ready to take that step or aren't confident enough that they can do it and still be successful in their jobs. You know, men's sports is kind of still way behind where our society is on that. So, I could, you know, just say to the owners very simply, like, “When you make this vote, when you make this decision, I just want you to think of the people who work for you.

Rick Welts: Because I'm in touch with a lot of people on a lot of teams who don't feel in the organization, they're in a position to come to work with their authentic self. And I just want you to think about them when you, when you vote” And, you know, the owners voted not to play the game there. We ended up a couple years later, going back when North Carolina, they rescinded that bill, and we actually made that All-Star Weekend kind of a celebration of diversity. It was really a good outcome. But you know, it's one of those things, positions, I never thought I would be in.

David Stiepleman: I like what you – I think you said it at the time, maybe someone said it about what you had said to the owners was, “There's always this argument like, ‘It's a slippery slope, if we're gonna take a position on everything.’” And what you said was, or again, somebody said, was, “Look, no, it's too hard, to test everything that you do, everything you say against every standard that you possibly could have. But when you have your spots that you can pick, you should pick 'em.”

Rick Welts: I agree. I agree. And it's getting more complicated.

David Stiepleman: It is getting more political.

David Stiepleman: So, 2011, you came out as a gay man, it was on the front page…

David Stiepleman: Yeah. Sorry, I'm going back now. Spoiler alert. It was on the front page of the New York Times Big news. I remember it. And you just, you just used the phrase that I was gonna ask you about, which is being your authentic self. You said in your Hall of Fame induction speech, most important thing you ever did was merging your public and your private lives. And you then went to the Warrior, just spent 10 years there, pretty successful 10 years, three championships. You built the Chase Center. What was it like? I mean, was it, you were already a pretty successful guy. Like how did it feel? How did it feel to be your authentic self in that job? Why does that make a difference?

Rick Welts: Well, for me, I knew I was gay at a really young age. I knew I was different, figured out that that meant I was gay. But I could never reconcile it with my love for sports and my desire to be a part of that industry. You know, I never saw anybody, there was nobody out there that I could say, wow, which worked out pretty well for them. And that was a real impediment to me. I wasn’t any different at work than I was at home, but I put barriers around myself about what I talked about, and people kind of honored that by not asking me anything. Like, I was never asked my entire career if I was gay. Now, people, some people had to know I would, I mean, you know. You got gaydar. You can tell sometimes, right?

Rick Welts: But I never got asked. So, you know, I had reached a point in my life. I had a very tough personal loss. I lost a 17-year partner to AIDS in New York City in 1994 and had to go through that completely privately away from my work life, which was, I wouldn't wish on anyone. I had a 14-year relationship that was kind of on the rocks. I'm in Phoenix now because I can't bring the most important person in my life into my work environment. Think about that. My dad had passed away, my mom had been diagnosed with lung cancer, and it was kind of for me, like, okay, like, this is it. This is my time. Like, I didn't know what to do. Like I didn't know if this was a big thing or a little thing.

Rick Welts: I sought out a really wonderful guy in the media business in New York City named Dan Clares He had a huge PR firm there and asked him to go to dinner with me. And the scene's gonna look great in a movie. Snowy night, Upper East Side. Table in the window. I’m like, Dan, here's my story. Like, I can just talk to the people I work with, and it could be great. Or if there's something more that could be accomplished here, I just can't put it in perspective. And he looked across the table at me and goes, Ricky, he still calls me Ricky. He goes, if you wanna do this, number one, I wanna help. And number two, I think it's Page One New York Times, which I describe as my “oh s**t” moment. Like, this is not exactly what I thought I was signing up for.

Rick Welts: But he paired me up with a Pulitzer Prize winning reporter, still writes for the New York Times, named Dan Berry. Dan flew out to Phoenix, and, you know, he was great. He's like, you know, you're, you know, you've done a really good job, but nobody knows who you are. Like, but the people you've befriended over your career who know you, every sports fan knows them. And if they would tell your story, it’d be much more impactful. So, I got an airplane and flew up to Mercer Island, flew up to Seattle, drove on Mercer Island. Bill Russell knocked on the door, big door, opens this giant of a guy with a Celtics hat is standing there. My stomach's like in a knot. Like, okay, hey, so we go sit in his study, between us is a picture of the President with Barack Obama saying to Bill my inspiration, you know, nothing intimidating about this seven whatsoever, .

Rick Welts: It's like, Bill, like, here's my deal. I want to ask you to do the one thing you hate doing more than anything else in the world, which is talking to a reporter. And he was like, within 30 seconds, yeah, of course. You know, and then two hours of like just laughing and talking about old times and repeated that with our two-time MVP at Phoenix, Steve Nash, David Stern, Val Ackerman, others. And, you know, I was blessed, in May of 2011 with what turned out to be a front-page story in the New York Times. Beautifully written and changed everything. I didn't know how I was prepared. I think for 80%, really positive, 10%, really negative, some in between. I still keep on my shelf binders, people who took the time to find me thousands of emails, and I keep 'em, and once in a while, open 'em up and read 'em.

Rick Welts: It doesn't… It sounds like I'm making this up. I swear to God, I'm not. Out of all the people who found a way to get in touch with me, I did not receive one negative response, which to me kind of blew my mind. But it was different. I'd done kind of everything I could do at the Suns at that point and got introduced to these new owners of the Warriors. And I remember going to the interview in Athertonto talk to Joe Laham and Peter Guber. I remember sitting there, or on the way in the car there going like, this will be the first time in my life that I've ever gone through a job interview where everybody knows my story. Like, I don't know how that's gonna be. And we sat down Joe's living room, and we're talking for probably 30 minutes before one of 'em said, oh yeah, like that New York Times story, how'd that work out for you? So, I said, okay, I could work for these guys. All right. That was, you know, and the fact that they would hire, you know, an openly gay president for their prize franchise, said a lot about the culture there. And I gotta tell you, from the players to the coaching staff, you know, my husband was as much a part of our owner's room as anybody else. Our players, you know, high five Todd on the way out to the court. Like, it's been an amazing, amazing experience.

David Stiepleman: Thanks for that. When you got to the Warriors, well, something that I think is, I sort of think it's really hard to change culture. Really hard. Like once a culture's kind of in a place like it's to, it's very, very difficult to root that, root it out if it's not good. When you went to the Warriors, you said, we're going to rejoin the NBA, what did you mean and how did you, what did you do?

Rick Welts: So, anybody who had been involved in the NBA had looked at the Warriors franchise for 20 years and said, “Oh my God, like, if you could ever get this in the right ownership management hands, this should stand toe to toe with any franchise in any sport, right?” The market that we live in, the crazy fan support for a team that hasn't made the playoffs in 16 out of 17 years in a league where half the teams make the playoffs every year, that's impossible to design that plan, and execute it. And the corporate support, you know, the companies that are, or the companies that are in our area, like are charting the future of the world, including the one who's here today. You know, if you're a 20-something interested in the world around you and a great basketball player, who wouldn't wanna be in that environment.

Rick Welts: So, I'll never forget my first day at work, I brought all the staff into the into the conference room and said like, “Here's the deal. Here's what this can be.” And, you know, it was like an invitation for everybody to jump on board. You can be on this train. Some of you've been here a long time, maybe don't believe we can really do it, probably time for us to talk about a graceful exit. And that first year, we probably turned over a third of the staff. We had some real gems that hadn't been in a position of responsibility there, and I was able to elevate them who were very well-liked by their peers to areas of much more responsibility, which was great. Fill in the gaps. I had a great recruiting story with the expertise we didn't have.

Rick Welts: And the same time this was going on, we had Mark Jackson as our coach. You know, we had a culture of losing in the business office. You just expected to lose pretty good gig seasons. Your years over April 15th, every year you get along summer vacation, you get a raise, come back, you do it all over again. Players basically had the same attitude, took the court every night expecting to lose. That's what the Warriors did. And Mark Jackson came in and really changed the mindset of the players. At the same time, I was trying to change the mindset of the team, and we started having some success. We started having some business success, and we started winning some games, and we ended up going to the playoffs. And that success just started to feed, you know, off itself. And you really could just feel this momentum growing.

Rick Welts: And we made some hard decisions. We fired Mark Jackson after he got us to the playoffs, something that the Warrior weren't very accustomed to, and we replaced him with Steve Carnell. Let me give you that setup. So, let's see. Mark Jackson was a player who, became a broadcaster who never coached a game before. Now you're firing him. You're gonna hire Steve Kerr, who is a player, and now a broadcaster who's never coached a game before and expected a different outcome. But Steve was our general manager in Phoenix, and I knew what we were getting as a human being. And you know, his first year, he went to Andre, Iguodala, perpetual All-Star. Started every game he ever played, and said, “I think the best role for you to help the team would be to come off the bench.” And then he held his breath and Andre said, “Okay.” And that in the locker room changed everything. If Andre Iguodala was willing to make that sacrifice for the good of the team, who am I to not do whatever it is that adds to the value I give to our team? And, you know, Andre Iguodala ended up being the MVP of the NBA finals that year when the Warriors won the championship in 2015. What came out of the locker room, which became the mantra for our whole organization, and it wasn't a marketing slogan –

David Stiepleman: Strength in numbers.

Rick Welts: Strength in numbers. And what that meant was that everybody knew their role, and everybody knew that collectively. The belief was, unless you did your job well, we weren't gonna get to the ultimate place we wanted to get. Everybody had to accept their role, understand how it fit in, and be great with it. All right? And that's what we tried to cultivate in the business organization culturally. And that's why the Warriors teams have been so successful.

David Stiepleman: And you preach no silos on the business side. I think you're also telling us a story about how the success on the sports and the business side radiate back and forth through each other. People take pride in the organization. It's an unbelievable decade. Not surprising that the Warriors were named Franchise of the Decade in all sports. I mean, for that, it's, unbelievable. I don't want to lose sight of the future. So, we heard Lauren, our colleague, Lauren Wheatman, gave a talk this morning on Taylor Swift and the economics of Taylor Swift. I have a feeling it rhymes with how you see the future of sports over the next 10-15 years. And maybe talk about that. Talk about the NWSL team, how you see that fitting in, why you decided you could do a lot of things. You're talking with us, which is amazing. You're also spending all your, you know, a lot of your time on this, on this soccer team of ours, which is an unbelievable boon for us and the team in the region. Why that?

Rick Welts: Well, you know, I don't think I knew who Sixth Street was six months ago, and then I got this cold call from this guy Alan Waxman. Have you heard of him? Started describing, quite enthusiastically, I might say, this opportunity.

David Stiepleman: Oh, Alan. Yeah.

Rick Welts: Yeah, yeah. Okay. And we did a Zoom, we got together in person, and clicked, on a lot of different levels. And what I, what it gives me, and I'm so excited for you guys, you're gonna have an amazing team to root for. It's a perfect intersection of, you know, I was there when we launched the WNBA, I know why women's sports is so important. WNBA is the today the longest, standing professional women's sports league anywhere. And what's happening in women's sports right now, we're at a completely unique place we have never seen before, okay. Where, you know, the Women's Final Four in basketball is the highest rated Final Four ever. The men's Final four, the lowest rated Final Four ever, right? The trajectory is amazing, and so this combines my love and belief that women's sports is really important with building great team organizations and hopefully at some level, even helping the league be successful. So, it's a perfect intersection, and I gotta tell you, everybody I've met from Sixth Street, like, this morning session to see, or culture to see the process that you go through, it’s incredibly impressive to somebody from the outside looking in. I'm kind of excited to be on the inside looking out a little bit.
David Stiepleman (36:01):
We are too. I If you think about and away from the soccer team necessarily, but sort of like where you see sports going, whether it's, yeah. Like where should we be thinking about allocating dollars, our investors dollars?
Rick Welts (36:12):
Yeah. Wow. So, you know, live game distribution is gonna be the biggest question mark out there. We’re about to see a huge shift in how people are consuming live sports. The great thing about it when you're on the content side is a lot of companies are gonna live and die and be successful and fail by how they figure out how to get content. We have the content; everybody wants live sports. Nothing drives viewership in numbers the way live sports drives viewership in numbers. Yeah, we got that going for us. But how we figure that out, how we figure out the old model of regional sports networks and network television is dying, okay? The new model of direct to consumer is emerging, but we haven't figured out how to monetize it in a way that's comparable to our old system yet. So, a lot of disruption, a lot of opportunity and a lot of opportunity to know our customers much better, right? The, the beautiful thing about not giving your product away to a third-party distributor is you have potentially a direct connection with your customer. And you can know everything about your customer, and you can know everything they're interested in. You can satisfy needs that you can't possibly satisfy right now in our current system. I think that's the biggest question mark here. The, the future is amazing. There's nothing about, you know, I've read that Sixth Street might have paid $53 million for this franchise. I don't know if that's true, but –

David Stiepleman: Can't believe everything you're read in the press, but we'll confirm.

Rick Welts: I think Alan could have bought the entire league for that about five years ago. And, but what's happening? Show me an example where sports franchise valuations have gone the other way. They don't, they go up. And the question is, can we build, you know, a 2024 organization that has, you know, an approach to everything that's focused on the future as opposed to we're not burdened by any of the historical past with our franchise. So, I think that's gonna be important. I, you know, there's a lot of challenges, social media, our players now are their own brands. They can go direct to our fans without, you know, needing the team to be the intermediary to tell their stories. That presents opportunities and challenges. But I have never been more optimistic.

Rick Welts: If you're gonna invest, I'd invest in soccer and basketball. Those are the two sports worldwide that are over the next 20 years going to own the world. It's not gonna be baseball, it's not gonna be American football. You can't retrofit that to the rest of the world. America is discovering soccer in a way they've never discovered it before. The Women's World Cup is gonna be awesome for us. So, I've never been more excited or optimistic and we’re gonna build something great in the Bay Area around women's soccer.

David Stiepleman: Agree. We definitely agree. What are you reading? What are your reading habits? How do you stay smart? What do you like to do?

Rick Welts: I am a voracious news reader more than anything else. I can't start my day without New York Times, Wall Street Journal, still reading the San Francisco Chronicle, Sports Business Journal, Sportico. And then I can have my second cup of coffee. Seriously, that's how I spent my first 90 minutes of the day. I wanna know. I'm sending you, or someone else a story I just saw about – by the way, did you see where – yesterday, Arsenal had 60,000 fans in attendance for the women's soccer game. I can't remember what sport we are. Their women's soccer team. 60,000 people at the Emirates yesterday for Arsenal. And I had to send that to you yesterday morning cause it's the most exciting thing that I saw. That's great. So that I love reading business books. I'm a business book geek. I just read Bob Bagger's book again and, you know, so I love reading business books, but I'm really like more a news junkie than anything else.

David Stiepleman: This is delightful. I have a million more questions and things to talk about, but luckily, you're here so people should spend time with you. I'm gonna just read something you said in your Hall of Fame speech about the unique power of sports to bring people together, to be a source of pride, inspiration, and connection in communities everywhere. Not a bad thing to spend your career on. And we thank you for it, and we're so happy that you're spending time with us. And thanks for this.

Rick Welts: Thanks, David. Appreciate it. Thanks everyone.

AUM presented as of 9/30/23 and excludes assets and commitments of certain vehicles established by Sixth Street for the purpose of facilitating third party co-invest opportunities. Calculation of assets under management differs from the calculation of regulatory assets under management and may differ from the calculations of other investment managers.