- The Phoenix Suns improved their culture and now want to capitalize on NBA playoff business as they snapped a decade-long postseason drought.
- The Suns are back in the NBA playoffs for the first time since the 2009-10 season.
- CNBC talked with team owner Robert Sarver about what he's learned to help the team succeed.
Philosophy, process and people. That's the Phoenix Suns' new formula that helped the franchise break a decade-long drought.
The Suns are one of the best teams in the National Basketball Association's 2020-21 season, sitting second in the Western Conference and going 20-7 since the All-Star break. Business improves as the wins accumulate and the refurbished arena welcomes fans back.
"In my view, people are the most important," team owner Robert Sarver told CNBC on Wednesday hours before the team beat the Los Angeles Clippers, 109-101. "In this business, from a basketball standpoint, it's people that can identify talent, develop talent, and people that can coach talent."
One of those people is team general manager James Jones, who helped establish the agenda and position Sarver to increase the team's $1.7 billion valuation.
"Your team in general needs a clear philosophy," Jones told CNBC. "That's what I learned [with the Miami Heat]. It was, 'This is our philosophy. This is our process. And these are our people.' You need all three of those things to be aligned," he added.
So far, the plan is working. The Suns are back in the NBA playoffs for the first time since the 2009-10 season. Back then, the faces of the franchise were Steve Nash and Amar'e Stoudemire.
But the road from the NBA's basement to a club that now attracts top corporate partners started with a key move in 2019, when Sarver changed executives. It showed signs Sarver was maturing in selecting people.
When Sarver purchased the team for roughly $400 million in 2004, former Suns owner and respected basketball executive Jerry Colangelo said he was "the right guy" to own the club. Unlike most NBA owners, Sarver isn't afraid to look outside the box while hiring.
He did it when he hired then top player agent Lon Babby to run the team in 2010. And before that, Sarver put Steve Kerr in charge to run the club.
From 2013 to 2019, the team went through three coaches under McDonough. The final attempt came after he hired Igor Kokoskov. Days before the 2018-19 season, Sarver fired McDonough and gave the keys to Jones, a well-traveled NBA player.
"I just knew it was time to make a change," Sarver said of the move. "There is no perfect time to make a change, but when it's time to make a change, you need to make a change."
Sarver said he built a relationship with Jones while Jones was playing for the Suns. He also admired how Jones was able to study under well-established NBA executives, including Larry Bird in Indiana, Pat Riley in Miami, and Larry Miller in Portland, Oregon. Sarver said Jones would instill a "championship culture" when he promoted him.
Said Jones: "Robert is showing confidence and belief in me as a young, fresh executive to help lead this franchise and guide it back toward where we know it should be — one of the top franchises in the NBA."
Jones' first move saw the team hire Monty Williams as head coach. And perhaps the best move since then was when he brought in All-Star point guard Chris Paul. The plan with Paul was to accelerate the growth of younger players such as Deandre Ayton and to prove to current franchise player Devin Booker the team was committed to winning.
"Chris helps our young guys get up to speed faster so we can accelerate their growth, and they're better able to withstand and shoulder the burden of what the franchise will expect from them for us to compete," Jones said. "In order to win championships, your expectations must be high," he added. "And you don't have championship culture unless you win a championship."
While James is helping steer the basketball side, Sarver has kept Suns CEO Jason Rowley commanding the business.
The Suns brought in $220 million in revenue during the 2019-2020 season, according to Forbes, and are locked in to a local media deal with Sinclair. The jersey patch deal with PayPal is secure and should see an increase in value once the postseason starts.
And the Suns are positioned to capitalize on sports betting in Arizona, following a partnership with FanDuel. The betting company will have a sportsbook retail location inside the Suns' arena.
But a key asset up for grabs is the arena name. The Suns building went through a $230 million renovation, which included $150 million from the City of Phoenix, locking the team in until at least 2037. Talking Stick Resort didn't renew its arena rights deal and ended the partnership last November.
Rowley said the asset is available at the right time and the naming slot could benefit smaller companies looking to increase branding.
"We're not lacking a name on our building due to a lack of interest and conversation," Rowley said. "We're making sure we pick the right partner, and it's a good fit for the partner and us. These are long-term relationships that need to be mutual and beneficial."
Rowley has been with the club since 2007, taking over his current role as CEO in 2012. If anyone in the franchise besides Sarver can appreciate the team returning to the postseason, it's Rowley. He called the Suns' retooling an "inflection point," crediting Sarver's improvement as a sports owner.
"The thing about Robert that has not changed or ever will change is his passion and his desire to win and his commitment to winning," Rowley said. "He's gotten better and matured as an owner, as anybody does in a position that's new to them."
Asked about his maturity improving, as Sarver went through a learning curve in his ownership era, he responded: "Over time, you learn the business and get better at it. There is no substitute for experience — learning everything from evaluating players to understanding how trades work to agents to dealing with coaches to dealing with fans and sponsors. It's just experience."
Sarver wouldn't describe in two words what type of sports owner he is now, but he said he's grown in evaluating and recruiting key people to his franchise.
"Professional sports is humbling for successful businesspeople," Sarver said. "Most people get into a position to own a franchise because they've had success in other things they've done and their success rate is probably better than 50[%] or 60%. But in sports, we have to figure out another way, because only half the teams win every night. It's not a business you get in and be right 99% of the time."
The job isn't done, though. Returning to the playoffs will make the spotlight even bigger for Sarver and the Suns. But the championship window is open again, and Jones and Rowley said the franchise is prepared and aligned on its culture.
"Nobody has a crystal ball," Rowley said. "But if you look at the people we have on the team, and most importantly, you look at the culture that's been built here — when I look at the success we're having now, I feel like we're just scratching the surface. We have the opportunity to have something sustainable."
Disclosure: CNBC parent Comcast and NBC Sports are investors in FanDuel.