Tar Heel Tattler - July 2006
Bobcats boss has folks scratching their heads
Soon after he bought the rights to start the Charlotte Bobcats, Bob Johnson made clear why he would be the boss: “Any business I put $300 million in, I’m the CEO.”
So it was surprising when in March he promoted Ed Tapscott to CEO of Bobcats Basketball Holdings, the limited-liability company he formed to own and operate the National Basketball Association franchise. It was even more surprising when two months later Tapscott resigned rather than accept a demotion. His duties went to Van Sinclair, president of Bethesda, Md.-based The RLJ Cos., which manages the billions Johnson made from Black Entertainment Television, the cable network he started and sold.
The Bobcats declined a request for an interview with Johnson. But a minority owner says the team has been losing money and the board didn’t think Tapscott had enough business experience to fix the problems — plus his contract was to expire in June. “There were some philosophical differences between Ed and Bob, and everybody collectively decided it would be better to part ways,” says Nelson Schwab III, managing partner of Carousel Capital, a Charlotte investment firm.
He admits that it was “a little strange” to promote Tapscott two months before offering him a demotion. Schwab says Tapscott was bumped upstairs from chief operating officer to make room for Peter Smul, who had assumed responsibility for sales and finance. “It was just kind of recognition of what was going on at the time. It just kind of happened. There wasn’t any major thought about it. It just made sense at the time.”
Not much that came afterward did. Sinclair became acting president — one of Tapscott’s titles was president — and COO, giving the Bobcats one COO too many. Just two weeks later, that problem was fixed by Smul’s exit. The Bobcats wouldn’t say how or why he left.
Schwab says Johnson had been rethinking the organization’s structure with the help of NBA officials. About a week after Smul’s departure, another shoe dropped: Basketball great Michael Jordan bought part of the team and became head of basketball operations, which already seemed in good shape. Jordan’s marketing value is great; his track record as an NBA executive with the Washington Wizards is not. But if you spend a fortune to buy a business, it’s your right to shake things up — no matter how strange it all seems.