The Gambler

The north end of Aurora Avenue where Shoreline butts up against Seattle isn’t among the region’s most scenic drives. The area is best known for its noise, bus fumes, dingy-looking pawn shops, the crumbling asphalt of used car lots and signs that warn against soliciting prostitutes.

In this border town, casinos and card rooms thrive, luring a male-dominated crowd drawn to the smoke-filled rooms that offer games of chance to hard-core players, occasional fun-seekers and every once in a while, the well-funded newbie.

Five years ago, Adrian Hanauer fell into the latter category, taking a seat at a table in the Hideaway Restaurant and Casino, a place that describes itself as a “customer friendly” venue with “great poker.” It was the latter that drew Hanauer, a successful Seattle businessman, entrepreneur (he owns several businesses including Museum Quality Framing) and investor (with a big payoff fromaQuantive, Inc.). “I had played some poker with my grandfather and brothers as a kid,” he recalls with the faintest hint of nostalgia in his soft, tenor voice. “But I hadn’t played in 20 years, and it just seemed like a good way to get the competitive juices flowing.”

Hanauer, who favors button-down shirts and Gucci and Prada shoes, expected the men at the Hideaway to be rough around the edges. But they were actually very friendly to the newcomer. Later, he found out why.

“Poker players tend to like a rookie sitting down at the table because they know they can take his money,” Hanauer says with the laugh of a man who failed to grasp the obvious his first night at the Hideaway. “I got my ass kicked.” Luckily for him, the betting limit was only $200. Determined not to get fleeced by more-experienced players again, Hanauer bought several books about poker and became a student of the game, visiting licensed card rooms in Seattle and making the occasional trip to Las Vegas to play in tournaments. Last summer, he walked away from a no-limit Texas Hold ’Em tournament at the Bellagio in Las Vegas with $100,000 in his pocket.

It’s perhaps no surprise that Hanauer was drawn to poker, a game that’s always a calculated risk. The Puget Sound–area native—he lived in Bellevue’s Newport Hills before moving to Mercer Island with his family in 1978—has been taking chances in the business arena for most of his adult life. But his biggest risk is probably his most recent. By bringing together a group of investors, he’s managed to convince Major League Soccer (MLS) to award Seattle its latest sports franchise, betting that the city will support a team. It’s a gamble that has yet to see a big payoff in any city that plays host to a pro team, with the possible exception of Los Angeles, where international soccer star David Beckham plays for the Galaxy before sellout crowds.

 

Hanauer has loved soccer since he was a little boy. He started playing soccer at age 3 and saw his first Seattle Sounders soccer game (Seattle's minor league team)when he was 8. He followed the team the way many young boys are more likely to follow the Mariners or Seahawks.

“Soccer mimics art to me,” says Hanauer, whose short black hair tops an athletic frame. “To watch the magic of [French soccer star Zinedine “Zizou”] Zidane, George Best or Pelé is truly to see art being created spontaneously.”

 

When he reached ninth grade, he was one of only two freshmen to make the Mercer Island High School soccer team and he entertained notions of playing professionally until he was 15. “After that first year in high school, all the other kids got bigger, stronger and faster, and I didn’t make the team as a sophomore,” Hanauer says. But he never stopped playing soccer. He was on intramural teams while at the University of Washington and still plays on two teams in the recreational Greater Seattle Soccer League.

And he followed his passion in another way, by becoming an investor and managing partner of the Seattle Sounders in 2002. His first goal was to stem the losses the team was taking, which were in just under $1 million per year for the five years prior to his involvement; he’s reduced that to $350,000 a year. His other goal was to field a team that could compete at the highest level of the United Soccer Leagues, the league in which the Sounders play. “I’m supercompetitive and I wanted to assemble a superstrong group of players right away,” he says. The year he got involved, the Sounders posted 23-4-1 season, the second-best regular season record in league history. Since 2002, the team has made it to the league championship game three times and won it twice. And players recruited by Hanauer and Sounders coach Brian Schmetzer have made the jump to MLS, including Brian Ching, a starter for the Houston Dynamo; Preston Burpo, a goalie with the San Jose Earthquakes; and Maykel Galindo, a scoring sensation at Club Deportiva Chivas USA.

Through his work with the Sounders—who, despite their success on the field usually play to tiny crowds at Qwest Field—Hanauer has been stoking the passion of local soccer fans. Though he’s never seen a return on his investment, he has pumped millions into the club while quietly running a campaign to bring a pro team to Seattle.

Garnering a MLS franchise requires several basic things: investors with deep pockets; a venue where the franchise will share in or retain most of the revenue generated by concessions, suites, parking, tickets sales and merchandise—and with available dates for games; and investors who have a long-term vision and passion for the game.

 

He had several of those things in 2004, including a deep-pocket investor and a plan to rent Qwest Field from the Seahawks. What he didn’t have was control over game dates at Qwest, or a revenue-sharing agreement for concessions, suites and the like. So the league passed him over, awarding a franchise to the better-prepared Salt Lake City. “They promised the league they would build a soccer-specific stadium, they had deeper pockets than we did and they had experience running sports cable networks,” Hanauer says. “They had experience in sports. In 2004, we didn’t. Still, it was disappointing to say the least.”

Discouraged, but not defeated, Hanauer continued to work with the Sounders, and spent as much time as he could learning from more experienced local sports executives, such as Seahawks CEO Tod Leiweke. In May 2007, he got a partial fix for his jones for another soccer team by investing $200,000 for a 15 percent stake in Cambridge United FC, a pro team based in Cambridge, England. “It was purely an investment out of interest and passion,” Hanauer says. “The club was going through some hard times and needed some investment.” He relishes the chance to take advantage of the English system of promotion and relegation that allows teams to move up and down the various leagues based on their competitive level. “With the right magic, you can build this thing up to a meaningful Premier League club and that’s really cool,” Hanauer says, his voice becoming excited as he imagines the possibilities.

 

Hanauer’s pursuit of soccer has sometimes taken a back seat to his business dealings. He is the son of Jerry and Lenore Hanauer, and his family owns the Pacific Coast Feather Co., which makes down pillows, feather beds and other high-end bedding products. Started in 1884 in Germany, Pacific Coast Feather Co. became a multimillion-dollar business in Seattle under his father’s stewardship.

Hanauer has never held an executive position at Pacific Coast, but he did work at the company, starting at age 13. “I pushed boxes and cleaned the drainage system,” he recalls with a wry laugh. “All three [brothers] always had the worst jobs. My dad would put someone in charge of us and tell them to make us work.”

Today, he owns a regional chain of picture-framing stores that includes Museum Quality Framing, Frame Central and Beard’s Framing, as well as the six-store Mad Pizza chain. But he really hit it big when he became an early investor in Seattle-based online advertising company aQuantive Inc. in 1997, turning a substantial profit when the company went public in 2000, and again when Microsoft bought aQuantive for $6 billion in May 2007.

The business of soccer got rolling last fall when he met an investor with enough financial horsepower to secure a new MLS. At the league’s All-Star game in Denver last July, Hanauer was introduced to Hollywood movie mogul and fellow soccer fanatic Joe Roth. After the game, the league’s commissioner, Don Garber, arranged for the men to meet in a suite at the center. Mark Abbott, the league’s president, calls the men a good match. “Adrian’s dedication to the Sounders and his work to develop that team and his continued efforts to bring [Major League Soccer] to [Seattle] for years shows his passion for the sport. And Joe Roth has tremendous business experience.”

Hanauer and Roth broke the ice by talking about another shared passion—poker. “We hit it off right away,” Hanauer says. “We both love to play in no-limit Texas Hold ’Em tournaments in Vegas.” Hanauer made a good first impression on Roth, who has produced and directed films such as America's Sweethearts and Christmas with the Kranks. “At first I thought, wow, this guy is so young,” says Roth, 58, who played soccer at the high school and college level. “Yet, he seemed very dedicated to pro soccer and the Sounders.”

Over the next few weeks, the two kept in touch—with Roth coming to Seattle to take in a few Sounders games and get to know Hanauer better.

By early November, the two men had brought on key investors: Paul Allen, whose Vulcan Sports & Entertainment owns the Seattle Seahawks and the Portland Trail Blazers; and actor, comedian and self-professed soccer nut Drew Carey. The team’s biggest shareholders, in order, are Roth, Hanauer, Vulcan and Carey.

The addition of Allen was key—and not primarily for his deep pockets. Allen and Vulcan bring years of experience running pro sports franchises, access to veteran sports executives like Leiweke and the ability to leverage the Seahawks ticket, field and promotional operations for the new soccer team. According to Hanauer, Carey brings flash to the group, and says the comedian is also “absolutely obsessed with connecting and delivering to the fans in a way that makes this team about the fans and the city and not the owners.” Carey is a champion of what Hanauer calls “democracy in sports,” a movement where fans can vote on key parts of the new club’s business, such as what to name the team and whether to keep the general manager. “We’re sort of carrying the torch, but that idea originated with Drew,” says Hanauer, who is fully aware that, as general manager, his neck could be on the line if the new team doesn’t perform well.

Last November 13, MLS Commissioner Garber announced that Seattle had won a MLS franchise and that games would be played at Qwest Field. The franchise quickly started taking deposits on season tickets; to date, more than 13,000 deposits have been made. In April, the team name was announced: Seattle Sounders FC. Hanauer says he wants 20,000 season-ticket holders by the time the team takes the field for the first time in April 2009. Having 20,000 season tickets would leave just 5,000 seats per game available at Qwest Field (the stadium normally holds a crowd of 67,000, but for soccer, the upper levels will be cordoned off to make the venue more intimate), potentially making the new team one of the hottest sporting events in town.

 

Shortly after the November announcement, Hanauer suffered a personal setback when his 80-year-old father died after a long fight with lung cancer. “My dad was a soccer freak like Adrian,” says Hanauer’s older brother, Nicholas, a venture capitalist at Seattle-based Second Avenue Partners. “It’s a shame he won’t be around to see this professional team come to Seattle.”

While his father’s death wasn’t unexpected, Hanauer went through a traumatic time when his older brother, Joff (short for Jonathan), died of injuries sustained in an automobile accident in August 1997. “I was really close with my brother,” Hanauer says, adding that it took about two years to get over his brother’s death. “The thing that came out of it the most for me was the importance of living every day as though it might be my last,” he says.

His grief over the loss of family members will be with him when the new team plays at Qwest field—but there will also be joy in finally reaching his goal. “I know that some Sounders fans had always hoped I’d spend more money promoting the minor league team, but my eye was always on the real prize, and that’s Major League Soccer,” Hanauer says. “I couldn’t justify it in my own mind to spend a lot of money promoting the Sounders because I always knew Seattle was going to get an MLS franchise.”
 

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WHAT YOU DIDN’T KNOW ABOUT ADRIAN HANAUER:
He’s a serious foodie. His favorite breakfast spot is Café Presse (on Capitol Hill), where the owners are big French soccer fans. (The only time Presse ever turns on the television above the bar is for European soccer games.) His favorite lunch spot is Two Tartes Bakery in Georgetown, where he has a weakness for cupcakes and cookies. At dinner time, look for him at Belltown’s Lampreia or Capitol Hill’s Lark. “Wine lists aren’t very important to me, because I seldom drink,” he says. “It’s all about the food for me.”

Also, he hates shopping. His girlfriend, a slender Vietnamese woman named Khanh Tran, picks out his shoes for him online. He shops at chic clothing stores like Mario’s—but only twice a year. “There’s a guy who works at Mario’s who selects a bunch of clothes for me,” says Hanauer as though he were describing a trip to the dentist for a root canal. “I go down there, try on a bunch of stuff and buy what I like and what fits best. I try to get it all done in under an hour.”

AN MLS PRIMER
Now heading into its 13th season, Major League Soccer has 14 teams and will have 16 by 2010. No American pro soccer league has ever been able to deliver on the promise that steady youth involvement in the sport will translate into consistently massive crowds like those enjoyed by elite overseas teams such as the English Barclays Premier League or Spain’s La Liga de Fútbol Profesional.

Still, there are signs that soccer is gaining popularity in the United States. At an average of 15,000 fans per game, MLS isn’t far behind the NBA and the NHL, which were averaging about 17,150 fans apiece in mid-March.

Qwest Field has demonstrated the ability to draw huge crowds when the right soccer teams come to play. Since 2003, elite European teams such as Manchester United FC and Chelsea FC—both of the English Premier League—have played before capacity crowds at 67,000-seat Qwest Field.