Golden State Warriors value construction

Golden State Warriors during these years is very well known by the performance done in the Steph Curry era, the Splash Brothers, Kevin Durant, Draymond Green and Steve Kerr.

But this is just part of the story. The changes in the franchise to reach this peak of performance started in 2010 when Peter Guber and Joe Lacob acquired the franchise for $450 million (Mandalay Entertainment). This amount of dollars were considered a crazy amount of money during those years.

I will use the draft value chain map as basis to explain all changes happened in the organization.

I will leave the team, players, coaches value chain analysis for other post, focusing now on the foundation of the franchise: culture and organization.

The reconstruction of a franchise organization (2010-2014)

I will start with some key elements of the value chain map:

Key events:

• Rick Welts is appointed as President in 2011.
• Rick Welts motto is “ownership, ownership and ownership”. This starts changing their culture.
• Bob Myers joins the organization in 2011, and is appointed as General Manager in 2012.
• Strength in Numbers – depicts the organization’s overall philosophy of inclusion, for the greater good, to help achieve its goals. This is not so much known by the average fan, but this is part of the foundation of the organization.
• High standards on recruitment in all corners of the organization.
• “Winning” was set as the first thing.
• They are the first team to include the digital media strategy in their business program.
• The organization reorganize the way to reach their fan base, increase the presence in the digital media, take the fan attention outside of the bay area.
• GSW are able to attract to their facilities to a lot of new fans in a city full of tech companies with employees willing to spend money in entertainment. They were able to increase the revenue of their facilities, and many of new ways.
• The three players mentioned in the map, were in the inception of their careers.
• The relationship between Mark Jackson (head coach) and Steph Curry was exceptional, this was an important aspect of the team cohesion and growth of the players team.
• During these years the “Splash Brothers” were born. This cohesion has resulted to be key.
• The “Dub Nation” term, used to identify the GSW fans is used in every corner of the world.
• In 2012 the project of the new facilities in San Francisco were announced by GSW owners and David Stern. This initiative was privately funded.

At the end of this period, the organization was completely different, the basis for a different franchise was built and this was recognized with the Sports Business Awards as the Team of the Year (2014).

At the end of the 2013-14 season:

• The team was behaving as a team, and the core players were clear to everyone.
• The franchise was able to increase their annual revenue to $44.9m, which enabled the franchise to aspire to the next level.

2014-2015 changes under a solid structure

At the end of the 2013-2014 season, the organization did a decision, considered very unpopular: they fired Mark Jackson with a record in percentage of win/loss, and hired Steve Kerr, that came from Phoenix Suns organization from a management role (2004-2010).

Mark Jackson had several problems, starting with the relationship with ownership, that was asking to have better assistant coaches. Jackson refused to hire new assistants, and an owner that was looking for winning, this was not acceptable.

The players were against of this decision and publicly talked about it.

What during these days so many people forgot was that Steve Kerr was in San Antonio Spurs as players in two periods, winning two additional rings (three with Chicago Bulls), working with Greg Popovich, one of the more influential persons for Steve Kerr during these years and he was looking for being head coach, and during around two years he was writing a manifesto about how he would coach (apparently he started writing it after a conversation with Stan Van Gundy).

With a healthy organization being able to tackle more ambitious goals, they added key players to the roster: Andre Iguolada (2013), Shaun Livinstone (2014), Leandro Barbosa (2014).

The results were more immediate than expected as they won the NBA title during that coming season 2014-2015.

2015-2019 explosion

The GSW trajectory on the court is very well known since 2015. In a nutshell:

• They lost the finals in 2016 against the Cleveland Cavaliers.
• They won the finals in 2017 and 2018 against the Cleveland Cavaliers.
• They lost the finals in 2019 against the Toronto Raptors.

After losing the finals in 2019 against the Toronto Raptors, the team was being under a shock with the lose of Klay Thompson (2 years injured) and Kevin Durant (left the team). Despite of these main visible issues, the organization has trusted their pillars and decided to continue working on the same line of evolution.

Right now we can see a lot of green shoots build during the last 11 years. What would be the outcome? I do not know, but if you review each component of this value map, and see how they are doing, they are doing exceptionally, let’s see what happens on the court where so many other variables are put in place.

Valuation

Some data about the progress in terms of revenue done by the management team.

The jump from $14.3m from 2009-10 to $44.9m in 2013-14 enabled them to face the next steps on the franchise aspirations. The sport results in 2015, 2017 and 2018 rocketed the brand to a global position that could not be possible without the franchise organization built during 2010-2014.

The following chart shows the GSW valuation in comparison to the other teams (limited to 2017):

In May 2021 GSW was valued at $4.7B, just 11 years later that was acquired by $450m. This includes the new facilities in the bay area that are valued in around $1.6B.

In 2022, the franchise continues being very aggressive in their aspirations, and their are making the bets to get it. You can just see the salary cap exposure they have:

This is a great story of value generation that started with the vision of the owners and the leadership in the management office.

Simon Wardley always says “you cannot separate the strategy from the execution”. Peter Gruber has in his personal web site this link to what GSW represents to Mandalay Entertainment: