We've seen time and again that it can't. But that isn't stopping Big Data pioneer Vivek Ranadivé from using the NBA to bet $1 billion on Sacramento
Vivek Ranadivé is set to sit down in his modest office at the Sacramento Kings’ practice facility, just before his team takes on the Dallas Mavericks. Then he has a better idea. “Let’s go over to the court. My son is in there shooting.”
Settled into a courtside plastic chair in a practice gym across from Sleep Train Arena, watching his 26-year-old son, Andre, fire off jumpers, the Kings’ new owner relaxes, smiles and compels his soft voice above the din of bouncing basketballs. Then he drops this: The billion dollars he and his partners are sinking into Sacramento, he says, will be “one of the best investments in a decade”.
By yourself and your partners, you mean? “No, by anyone.”
Welcome to the through-the-looking-glass world of Vivek Ranadivé. Educated at MIT and Harvard Business School, Ranadivé, 56, made his fortune down the road in Silicon Valley, pioneering real-time information processing for Wall Street (his stake in Tibco, the financial data company he founded, is worth more than $150 million). Later, Ranadivé’s re-imagining of how to play basketball almost turned his 12-year-old daughter’s diminutive team into national champions with a nonstop press that exhausted bigger, better rivals (the David versus Goliath tale was made famous by a 2009 story in the New Yorker). In his first foray into the NBA, the value of his small stake (under 10 percent) in the Golden State Warriors almost doubled in three years as smart arena development exploded the team’s worth from $450 million to $800 million. Ranadivé sold when he bought the Kings.
“It’s not that he likes to think outside the box—he thinks outside the rules,” says Kevin Maney, who co-authored the management tome The Two-Second Advantage with Ranadivé. “To forget everything about the way things have always been done and think about how you’d do it if no rules existed.”
Yet, nothing Ranadivé has ever done is on the scale of what he’s up to now. “We are building the 21st-century city,” he explains, zero doubt or irony in his voice. “It goes back to Rome. Cities are built around their coliseums.” To remake Sacramento, the city will own the new arena, and the Kings’ group will develop the area around it, igniting a downtown renaissance.
Ranadivé’s gamble hinges on the often tried, often failed if-we-build-it-they-will-come model of economic development, this time stealing from San Francisco. Rising Bay Area prices will spur a 90-mile eastward migration creating demand in Sacramento, he says. “The food industry and the health care industry are here, and San Francisco is getting expensive,” he says, sidestepping the notion that Sacramento is not San Francisco. As for the new arena, city financing has yet to be approved. He doesn’t care. “There is no point in going to a place that’s already big,” he says. “The point is to build something here.”
Of course, as any sports economist will tell you, he’ll have to be the second coming of Robert Moses. Sacramento, the state capital, is a particularly long long shot. You won’t find a lot of Silicon Valley money sloshing around here. Unemployment is at 8 percent, and more people are employed in the public sector than any private industry. Office vacancy rates sit at 20 percent. It’s hard to see who will fill Ranadivé’s city of the future.
(This story appears in the 07 March, 2014 issue of Forbes India. To visit our Archives, click here.)