Johnny Football: Yes or No?

By Mark Yost
The Houston Business Journal

Former President George W. Bush and Texas Gov. Rick Perry will take in Texas A&M quarterback Johnny Manziel’s pro day on March 27 in College Station. So will the Houston Texans. Regardless of his performance, the question on every Houstonian’s mind is this: Will the Texans make the player nicknamed Johnny Football the No. 1 pick in the NFL draft on May 8?
FootballTexans and Aggies fans will have to wait to find out. But what does the Houston business community think about the player who famously said he wanted everyone to want him on the team, from Texans owner Bob McNair to the janitor.
Houston’s business community seems divided along two lines:
There’s no business case to draft Manziel because the Texans have a 24,000-person season-ticket waiting list and, despite an abysmal 2-14 season in 2013, Texans PSLs continued to appreciate.
Then there’s this — forget the business model, he’s the most exciting player in football.
John Grayson, a principal in Cokinos, Bosien & Young, and a 1980 A&M grad, is in the latter camp.
“Forget height, weight, stats and all that other stuff. In terms of competitiveness, natural ability and pure excitement, there is nobody like Johnny,” he said. “Of course the Texans should draft him. Big mistake if they don’t.”
Grayson’s boss, Greg Cokinos, is also in the “draft Manziel” camp.
“The Texans need a quarterback, so lets get the best one,” he said. “He is a Texan, born, bred and raised. How on God’s green earth could we pass on all that?” Cokinos said.
Dan Bass, managing director of investment banking at Performance Trust Capital Partners and University of Texas at Austin grad of ’86, is in the camp that thinks Manziel was great in college, but there’s “too much downside risk” to draft a player who barely stands 6-foot-1 into the NFL, where linemen average about 350 pounds.
Bass, always focused on key mergers and acquisitions in Houston, also doesn’t see the business case for making Manziel a Houston Texan.
“It isn’t like you need to draft him to sell tickets to the Aggie faithful,” he said. “Ticket sales aren’t a problem.”
Chris Begala of media relations and PR frim Begala McGrath said drafting Maziel would be the “most exciting and significant selection by any Houston pro sports franchise,” ranking up there with the Houston Oilers making Earl Campbell the No. 1 draft pick in 1978 and the Rockets drafting Hakeem Olajuwon in 1984.
“Drafting Johnny Football would send a charge through the entire state of Texas, not just Houston,” Begala said. “The Texans would elevate themselves throughout the nation as Johnny Football Texans jersey sales would instantly reach top five.”
Lane Clelland, a financial advisor at JEB & Co, perhaps has a little more authority to speak on the subject. He played football for Notre Dame from 2008-12.
“I think he’s going to do well,” Clelland said. “I think he’s going to surprise some people and could be a good pickup for the Texans.”
While most everyone had something to say about Manziel, Trevor McGinnis, a CPA at Fitts, Roberts and a Texans season ticket holder since 2002, was very succinct.
“Do not draft him,” he said.

Bugatti: The Marriage of Art and Design

By Mark Yost
The Wall Street Journal

Oxnard, Calif.

BugattiThere have been many exhibits on Bugatti, but none quite like the one now at the Mullin Automotive Museum. “The Art of Bugatti” looks not only at the gorgeous cars that defined the Art Deco movement’s marriage of art and design, but at the Bugatti family itself—Italians whose story often gets lost in the glare of the headlights of their fabulous French creations.

“If you think about it, there has been no other family like them in the past 500 years—with multiple generations that have had such influence on art and design,” said Peter Mullin, an insurance billionaire and collector who has a soft spot for the Art Deco period and its pieces. You could debate that, but what’s not disputable is the depth and breadth of this exhibit, which features 27 Bugatti automobiles, the single-largest collection of the luxurious marques ever displayed (many of them from Mr. Mullin’s private collection), and a thorough history of the family told through paintings, sculptures, furniture, manuscripts, design sketches and other heirlooms, some on display to the public for the first time.

The tone of the exhibit, officially curated by Brittanie Kinch but very much a labor of love for Mr. Mullin, is set early when visitors enter a circular gallery—one curved wall featuring short biographies of the Bugattis; the other, a timeline of the cars. Visitors learn that automotive patriarch Carlo (1856-1940), the son of architect and sculptor Giovanni, was as well known for his silverware and furniture—his Art Nouveau Snail Room furniture suite wowed crowds at the 1902 Turin Exposition of Decorative Art—as for his automobiles. His son Rembrandt (1884-1916) hewed to the art world, while Ettore (1881-1947) would take the car company to what many consider its pinnacle of artistry.

Bugatti 2To reflect the exhibit’s theme that the family’s artistry spread well beyond the garage, works such as Rembrandt Bugatti’s 1908 sculpture “American Bison,” cast in bronze at Paris’s Hébrard Foundry, are intermingled with four cars, including a 1929 Bugatti Type 46 coupé. A short film in the exhibit further connects these dots, noting the similarity between the sleek lines of Rembrandt’s 1914 bronze sculpture “Stalking Panther” and those of the 1936 Bugatti Type 57SC Atlantic, considered one of the greatest creations of Jean Bugatti (1909-1939), son of Ettore, and a car that Mr. Mullin bought for an estimated $35 million in 2010.

Also on display throughout the museum—which has devoted all of its nearly 47,000 square feet of display space to the Bugattis—is a rare Carlo Bugatti banjo, circa 1898; a Carlo Bugatti oil-on-canvas portrait of his wife, Thérèse; and a 1927 Ettore Bugatti wooden horse-drawn carriage.

An interactive kiosk in the second major gallery—Bugatti Power—compares and contrasts the engine that Ettore built for the luxurious Type 41 “Royale” (more than 12,000cc, producing 300 horsepower at 1,800rpm) and the engine that his eldest son, Jean, built for the sportier Type 50 (a little less than 5,000cc that produced 225 horsepower at 4,000rpm). It notes that if there was any rivalry among the talented Bugattis, it was between those two men. “He took creative and financial risks that gave even his famously idealistic father pause,” the kiosk says of Jean, who was killed when he was just 30, testing a Type 57 racer that had just won Le Mans.

The Type 41 (1926-33) was one of the most expensive cars ever built because of its size, engineering and materials used. It cost more than 650,000 francs, or six times the average price of a Rolls-Royce. Ettore had planned to build 25 Type 41s, but made only six (and sold only three) because even Europe’s aristocracy, crimped by the Great Depression, found them too expensive. Jean’s Type 57, a panel here tells us, was in direct response to the decline of the luxury market in the 1930s. From 1934 to 1939, 660 Type 57s were produced in three versions: standard, the sportier 57S, and the 57SC that Mr. Mullin acquired in 2010. The Type 57, with its sleek lines, oversize fenders and bulbous cockpit, we’re told, “cemented Jean’s position in the high pantheon of automotive artists and made him a worthy contemporary of 20th-century modernists like Picasso and Chagall.”

Many of these cars were made at the Alsatian estate that Carlo Bugatti bought in 1909. True to the Art Nouveau movement, even the hinges on the factory doors in Molsheim, France, where Bugattis are still made today by its parent company Volkswagen, VOW3.XE +0.41% were custom-made and fabricated on site.

While all of this family background is news to many, the true stars of this exhibit are the cars. In addition to the models previously mentioned, all of which are on display here, the pièce de résistance is the Type 64 that Jean was working on when he was killed. Mr. Mullin has put his considerable resources into completing the unfinished masterwork, built to what many believe would have been Jean’s wishes and based upon a handful of drawings Jean made of the prototype. Mr. Mullin’s version includes a hybrid aluminum body that’s impossible to weld because of its metallic properties and instead is riveted like an airplane. In displaying the car, Mr. Mullin chose to suspend the body a few feet above the chassis, because “what’s underneath is as beautiful as the exterior,” he said.

Next to the completed car is a beautiful mahogany buck, a new wooden silhouette like the ones that auto makers used to build so they could hand-shape the individual body pieces and hang them. “Auto makers, of course, don’t do that anymore,” Mr. Mullin said. “It’s a lost art. So I thought it was important.”

It is important, as is most everything shown in this exhibit—one of the best ever put together showcasing the marriage of art and the automobile.

Mr. Yost is a writer in Houston.

‘Stocks are for lovers, gold is for haters’

By Mark Yost
The Houston Business Journal

That’s the view of David Zervos, the chief market strategist for Jefferies Group LLC (NYSE: JEF), who was the keynote speaker at a March 25 meeting of the Houston chapter of the Financial Executives International.

Jefferies market strategist David Zervos.

Jefferies market strategist David Zervos.

Zervos has a somewhat unique view on the fact that the world’s major central banks have been printing money like crazy, raising central bank assets from $6 trillion in 2008 to $17 trillion today. While some people decry this easy-money policy, particularly at the U.S. Federal Reserve, Zervos called it “the greatest monetary policy experiment in history.”
Zervos, who himself has worked at the Fed, said Chairman Ben Bernanke pursued the policy that resulted in 2 percent inflation and pretty much zero interest rates on savings accounts to “send people into other assets” such as gold, equities and real estate, the three things in the world “that Fed can’t dilute.”
Zervos said the Fed policy of pushing money into the U.S. economy through quantitative easing came about from Bernanke’s study of the Great Depression.
Bernanke“What did people do in the 1930s?” Zervos asked the crowd of money, finance and oil and gas executives. “Deflation and the hoarding of cash gripped the U.S.”
Zervos argued that the Fed’s monetary policy of easy money — much decried by deficit hawks — is better than a repeat of the 1930s.
“We’re either going to land in the ’90s or ’70s,” Zervos said. “Not the 1930s and not Japan’s lost decade.”
The U.S. economic downturn in the 1970s resulted in something economists called Stagflation, a stagnant economy coupled with double-digit inflation. The 1990s had the tech bubble burst, but eventually resulted in some of the strongest year-over-year economic growth in U.S. history.
That’s where he gets his signature tag line: “Stocks are for lovers, gold is for haters.” Zervos is clearly a lover.
In short, he said that if you’re somewhat of a pessimist — a hater — and think the Fed’s monetary easing can’t go on forever, and the system is destined to crash, then you think we’re going back to the 1970s and want to be in hard commodities, such as gold. But if you think the U.S. economy is eventually going to emerge from this period of low growth and eventually recover, much like the 1990s, then you’re a lover and should be in equities.
Zervos doesn’t dismiss the potential pitfalls of printing money.
“We will have some side effects of this QE, our antidepressant,” he said. “But for whatever reason, our system fosters growth and innovation. The incentives for us to be greater have never been better.”

Wildcatting in the Arts

By Mark Yost
The Houston Business Journal

To say that Alecia Lawyer, founder of the River Oaks Chamber Orchestra, takes a different approach to the arts in Houston would be an understatement.
She’s focused as much on ROCO’s ROI as its repertoire.

Alecia Lawyer of the River Oaks Chamber Orchestra.

Alecia Lawyer of the River Oaks Chamber Orchestra.

“I like to call it wildcatting in the arts,” said Lawyer, who founded the 40-person chamber music group in 2005 and says her entrepreneurial streak works well in Houston.
“Teaching musicians to be entrepreneurial is a necessity,” she said. “Most artists don’t have a business side. They’re uncomfortable talking about money.”
That’s because “this isn’t something they teach at Julliard,” said Lawyer, a graduate of the prestigious New York music school and ROCO’s principal oboist.
“You practice for hours in a room by yourself, graduate and they wish you good luck, and send you out into the world,” Lawyer said. “What they don’t tell you is that orchestra chairs are lifetime tenured positions.”
For oboe, that means maybe three seats a year open up.
“Outside of a tenured position, the music schools don’t teach you how to make money doing what you love,” Lawyer said.
Lawyer is trying to change that by operating ROCO more like a business than an arts group. The approach seems to be working. ROCO’s budget has doubled nearly every year since it’s founding and it only relies on ticket sales ($25 each) for 15 percent of its budget.
Instead, ROCO sells $5,500 sponsorships to every chair in the orchestra. Lawyer also teaches musicians to treat patrons like a business treats its customers. So chair sponsors aren’t just allowed to sit in on rehearsals — they get to sit next to their musicians on stage. And instead of having a traditional intermission, the musicians go out into the audience and mingle.
“Every audience member is a friend we haven’t met yet,” Lawyer tells her musicians, half of whom live here in Houston and half of whom come from out of town. “I tell our musicians, ‘It matters who’s in your audience. It matters that you know their name and they know yours.’ ”
The strategy seems to work. Lawyer befriended a group she calls “the founding consortium.” Originally, it was just three River Oaks ladies who were spending just $1,500 on a partial chair sponsorship. Since hosting a sponsorship party at their home, the group has grown to more than a dozen friends who now sponsor five chairs, or $42,000.
Lawyer is also entrepreneurial in the way she presents the group, which performs just eight concerts a year as a whole but has various trios, quintets and quartets that perform the rest of the year.
“I tell our musicians to look at our group like Legos,” Lawyer said. “Sometimes we’re altogether, but then can break apart into smaller groups and still make money doing what we love.”
And like a lot of arts groups, Lawyer understands that her biggest challenge isn’t luring young or old people, but couples in the middle busy with kids. So she started ROCO Rooters, a combination music education program/babysitting service for young couples. ROCO Rooters provides an educational session for kids followed by pizza and movies. Lawyer said it gives parents a three-hour date night.
“We understand that our competition isn’t Houston Grand Opera or the symphony,” Lawyer said. “It’s staying home with a glass of wine and Netflix.”

With NRG, Texans get partner with deep NFL experience

By Mark Yost
The Houston Business Journal

More than the signs are going to be changing at Reliant Stadium as parent company NRG Energy Inc. (NYSE: NRG) brings a wealth of National Football League experience to the Houston Texans stadium.
“They’ve always been a very active partner with us and the rodeo,” Houston Texans President Jamey Rootes told the Houston Business Journal. “We work with them each year and with this transition, I think it has the potential to only get better.”

Houston Texans President Jamey Rootes.

Houston Texans President Jamey Rootes.

While Reliant, now a unit of NRG, set the sports naming rights record when it signed with the Texans in 2003 for $300 million over 20 years, NRG has experience working with the Dallas Cowboys, Washington Redskins, New York Giants and Jets, the New England Patriots, and the Philadelphia Eagles.
In other words, NRG, which has dual headquarters in Princeton, N.J. and Houston, has partnered with every team in the NFC East and half the teams in the AFC East. And now, with one of the teams in the AFC South.
The partnership change couldn’t come at a better time for the Texans, who will host the Super Bowl for the second time in 2017.
“Reliant has been an integral partner since the stadium’s inception,” Rootes told HBJ. “It’s been a great relationship. Five years ago, they became part of NRG. Now with this name change, if anything, it’s just a closer alignment with the parent company out of Princeton.”
NRG already made its presence felt when CEO David Crane was part of the Houston team that convinced the NFL to bring Super Bowl LI here.
“I think the partnership with NRG will provide us with greater opportunities,” Rootes said. “We’ve worked hand-in-hand with NRG to get more closely aligned with the NFL. We’re proud and pleased to see that they’re expanding their NFL footprint.”
The Harris County Sports & Convention Corp. board of directors voted on Wednesday to approve the name change. Reliant Park and its entities will be renamed NRG Park, NRG Stadium, NRG Center and so on.
NRG applied to rename Reliant Park to push its “master brand” and services and products, NRG Retail Texas President Elizabeth Killinger told HBJ March 12.
TailgatingThe name change is effective immediately, and NRG hopes to have new signs in place by the beginning of the Texans’ upcoming season.

To read more about the business of the NFL, buy my book, Tailgating, Sacks and Salary Caps.

‘Masters of Disguise’ at the Intrepid

By Mark Yost
The Wall Street Journal

The Intrepid Sea, Air & Space Museum, the historic aircraft carrier moored on Manhattan’s West Side, could have taken the easy way out for its latest exhibit on camouflage. It could have pulled photos out of the archives showing ship camouflage in World War I and II—something most people are familiar with—found a nook on the main hangar deck to display them, and been done with it.

What Eric Boehm, the museum’s curator of aviation and aircraft restoration, did instead was give visitors a thorough and engaging history of camouflage in both the natural and the man-made world.

The entrance to “Masters of Disguise,” tucked into a starboard-side hallway, opens with a camouflage pattern shining down on the deck and an informative wall panel that explains that while camouflage was certainly used by early prehistoric man to hunt for food, it didn’t come into widespread use in the military until World War I. Camoufler is a French theater term that was originally used to describe getting dressed up for a role or a disguise. But in 1917, trying to gain any advantage it could on the barren battlefields of Flanders and the Somme, the French military came up with “camouflage,” which, by definition, “aims to hide its wearer or mislead pursuers.”

F4Step inside the entryway to the three small rooms that house the exhibit’s displays of photos, models and interactive kiosks and the first thing you see is a mannequin dressed in a modern-day ghillie suit—the cover made of netting and webbing, then adorned with local foliage to help snipers and scouts blend into their surroundings. The ghillie suit, a panel says, was first used in the Scottish Highlands by ghillies, Gaelic for “young helpers,” who stalked game. The suits were used by Lovat’s Scouts, a Scottish commando unit, in the Second Boer War (1899-1902) and in World War I.

The ghillie suit is an example of obscuring camouflage, one of four types of camouflage discussed here. In the natural world, the best example of obscuring camouflage is that of the common wood frog, whose colors help it blend into its surroundings and make it less susceptible to predators. For humans on the ground, mottled patterns of greens and browns are a type of obscuring camouflage that breaks up the outline of a sniper creeping into a favorable firing position. Also on display here is a model of an F-4 painted in the green camo pattern that helped the aircraft blend into the jungle canopy of Vietnam.

In a small room to the right of the ghillie suit is the Intrepid’s display of mimicry camouflage, “which makes an object appear to be something very different from what it is.” Two of nature’s best examples of mimicry camo are those of the orchid mantis, which makes itself look like an orchid to lure prey, and of walking sticks, a class of insects that hide from predators by mimicking tree sticks.

DazzleShown here are photos of a Lockheed factory in Burbank, Calif., during World War II. Worried about a mainland attack from Japan following Pearl Harbor, West Coast arms factories camouflaged themselves to look like something else. In Burbank, overhead netting and false structures make the factory look from above like rural fields and farmhouses. Fast-forward to the late 20th century, and a model of the Navy’s F-18 Hornet shows that the bottom is painted exactly like the top, including shading that mimics a cockpit. The object: to fool attacking aircraft.

And then there’s an 8-foot-high, faux tree stump that visitors can actually crawl into. In the middle of the night during World War I, work crews would sneak into No Man’s Land and dig up tree stumps that had been partially destroyed by artillery barrages and replace them with metal fakes, which were then used as observation posts to direct artillery and report on troop movements.

The middle gallery focuses on disruptive camo, “visual cues that obscure an object’s true features.” The most famous examples of these are zebra stripes and those deceiving dazzle paint schemes on the sides of warships, conceived by Norman Wilkinson, a marine painter and Royal Navy sailor, during World War I to thwart U-boat attacks. Visitors can look into a periscope and see what a German sub commander would have seen, which is a dazzling pattern that makes you wonder in which direction the ship is heading, thus making torpedo targeting more difficult. Also on display here is a model, on loan from the Maritime Industry Museum at Fort Schuyler, of the RMS Mauretania, a passenger ship that was converted to a World War I transport, complete with puzzling side camouflage.

The last gallery looks at countershading camo. Abbott H. Thayer came up with Thayer’s Law around the turn of the 20th century. He found that when natural light falls on a uniformly shaped object, the top tends to appear lighter and the bottom darker. Some species, such as reef sharks, squirrels and mountain goats have different shading to make them less detectable. Man adapted Thayer’s Law to the F6F Hellcat, a carrier-based World War II fighter that had a three-color blue pattern to help it blend into its Pacific surroundings.

Today, of course, the camouflage used in Iraq, Afghanistan and elsewhere has gone high-tech and is based on advanced scanning equipment and complex fractal elements that try to fool the human eye. A new Multicam pattern was developed by Crye Precision in New York, not far from the Intrepid, and takes into account the changing climates, altitudes and lighting that modern soldiers must fight in.

In short, this exhibit on not seeing is well worth seeing.

Mr. Yost is a writer in Houston.

A Seat at the Bar: Fuad’s

A Seat at the Bar: Fuad’s Piano Bar

Fuads 1So what’s better than a great piano bar?
One that’s on your way home from work.
My search for My Bar in Houston has taken me to Fuad’s on Westheimer a few times. It has great potential, and it’ll definitely be a more-than-regular stop, but I don’t see it becoming My Bar.
First, the good stuff.
For me, Fuad’s has a great location on Westheimer, about halfway between work and home.
I originally stumbled in here after the St. Thomas University Catholic fundraiser at the River Oaks Country Club. One of the two Bubba’s I know in Texas (his real name is Francis) suggested we go. Bubba loves the piano player and likes to sing American Songbook classics from Sinatra and Dean Martin when he’s there.
So we walk in and Geoff Allen, the piano player, whom I think I’ve never seen before in my life, says, “I know you. You’re Mark Yost. You put me in the Houston Business Journal.”
KeatonLong story short: He was the piano player at the Diane Keaton private dinner I attended. If you look at the photo I used in the paper, on the righthand side of the photo, reflected in the mirror behind Diane Keaton, is Geoff’s wonderful face. He was there that night playing piano.
Fuad’s is definitely a unique place. There is no dinner menu. You simply tell them what you want to eat and they make it (I think some dishes, like Peking Duck and Lobster Thermidor require 24 hours notice).
But I don’t go to Fuad’s to eat, and neither do most people. I go there to sit around the piano and take in the eclectic — I’m being polite — crowd that loves to hear Geoff sing, and occasionally belt out their own tune.
And Geoff is a great host. He’s introduced me to a handful of the regulars that are there most Friday nights. In fact, I went there this past Friday night after being shown the intricacies of the Reliant Stadium sound system by Rodeo Houston COO Leroy Shafer (see my last post).
Fuads 2Here’s a typical night at Fuad’s: I walked in about 10:15 and there were no seats at the piano. Geoff smile at me as I walked in and he sang some Elton John song.
I went to the back bar and got a Beam & Coke — $10, which is one reason why Fuad’s won’t become a regular stop for me — and then went back up front and stood near the piano.
Between songs, Geoff introduced me to a handful of the regulars. He’s a great host that way, mixing in songs, banter and creating just a casual, relaxed atmosphere that allows you to forget the world outside. Something the perfect bar MUST be able to do.
So, being a reporter, I notice things. So I start asking Kathleen (I think that was her name), one of the regulars, to explain the goings on around the bar.
First off is a good looking 60ish guy with salt and pepper hair and a wad of 100s that’d choke a horse (or hawse, as my beloved Boston-born mother used to say). He has a wedding ring on, but he’s hitting pretty hard on a woman on one side of the piano (not an unusual activity for the money class of Houston). After 15 minutes or so, he goes over to the other side of the piano and sits down next to this really cute 30ish brunette with a great rack and starts putting his hands all over her thighs. So I turn to Kathleen and ask, “What’s the story with them?”
Turns out they’re married, but she likes other women. Her husband was over on my side of the bar, hitting on the other woman to try and get her to go home with his wife.
The night goes on.
Sitting next to me is a classic River Oaks couple: He’s about 60, good looking, some sort of doctor. In between him and me is his ex-wife, who’s all of 30, platinum blonde, fake tits out to here, noshing on caviar and sipping white wine. I start chatting with the ex-wife because, A. She’s right next to me, B. One of the regulars says to her, “Oh, you should meet Mark. He’s from Brooklyn,” and she just moved back from Brooklyn (where she dated a bunch of guys she didn’t like, all of it financed by the cuckold ex-husband, I lean). And, C. Did I mention she had a rack out to here?
So as I’m speaking to her, I notice that every 20 minutes or so, the doc is going out to the parking lot. Kathleen, my tour guide for all of this, tells me that the blonde bombshell has five yapping Pekinese that she takes with her everywhere. They’re out in the doc’s car, with the air conditioning running. He’s going out at her request to check on them and occasionally walk them. It takes all my personal restraint when he comes back from the next parking lot sojourn to not say to him, “Buddy, run for your life!!! And let the dogs loose in the parking lot before you drive away as fast as you can.”
WilliamsAmid all this, there was some minor drama going on at the piano. One of the regulars sings “Crazy” (how appropriate). Well, a semi-regular woman got up and sang….you guessed it….”Crazy.” So the regular “Crazy” singer had her nose out of joint the rest of the night.
So that’s Fuad’s.
It’s a great bar that I’ll come back to. I love Geoff. We had a great conversation about the great Paul Williams the first time I was there, and he played some Billy Joel and Sinatra for me on my last trip.
But I don’t see Fuad’s as My Bar in Houston. Yes, the patrons are interesting, but not that interesting. I don’t see myself hanging out with these people. And the drinks are pretty steep for a lowly business columnist. But Geoff almost — almost — makes the drink prices worth it.
So, the search for My Bar in Houston continues.
Stay tuned…

At Houston Rodeo Concerts, It Pays to Sit in the Cheap Seats

By Mark Yost
The Houston Business Journal

As the money reporter at Houston Business Journal, I am fortunate enough to cover some pretty exclusive events.
Dinner with Diane Keaton. Black-tie fundraisers. And some of the best corporate hospitality at the Houston Livestock Show & Rodeo.
I don’t go simply to see and be seen, but to pick up some news and let readers know what decision-makers are thinking.

The house mixing board at Reliant Stadium.

The house mixing board at Reliant Stadium.

So I was a little surprised when I sat in some of the most expensive seats in the house at Reliant Stadium — front row and the 800-level suites — for a few concerts and the sound wasn’t all that great. The rodeo’s concerts are its No. 1 revenue generator.
That wasn’t just my opinion, but a common complaint I’d heard from the bankers, accountants and financial planners who were my hosts.
So I called outgoing COO Leroy Shafer, who had told me in an interview that the sound system was one of his proudest legacies. He agreed to show me around Friday’s Keith Urban concert and prove me wrong.
He did, and I was.
Turns out, the most expensive seats aren’t the best seats when it comes to rodeo concerts. The area in-between is.
Standing at the mixing board at the south end of the stadium just before the concert started, Shafer pointed to the individual stacks of speakers that are shaped like a banana and hung in an array in the center of the arena.
“That’s a shaped system,” he explained. “Those speakers are aimed at a specific section” and the sound is designed to go a certain distance “and then die,” so that listeners don’t get the reverberations and echoes common at other arenas.
More importantly, Reliant’s sound system is designed to give the best sound to the largest section of Reliant Stadium.
To prove it to me, Shafer ran me around Reliant Stadium — up stairwells, through back passageways, to hear the sound that general admission patrons hear on a number of different levels.
Keith Urban's sound guy at his mixing board.

Keith Urban’s sound guy at his mixing board.

So what about the expensive seats?
Because the main speakers are hung in mid-air, the rodeo’s sound technicians can’t get the best sound down to the front-row seats or up to the highest suites.
“Getting sound to project into the dirt does present a bit of a challenge,” Shafer said in his humble West Texas way. “That is why we allow the Chute Seat patrons to return to their normal seats if they so desire.”
As for the folks way up high, in the 800-level suites, with the catered food and drinks, they’re better off watching the concert on their in-suite TV because there are structural impediments in Reliant that don’t allow the best sound to get up there.
“We’re working on it,” Shafer said.
The one exception with the corporate seats is the Director’s and Chairman’s Clubs. They hang out over the mid-level seats, giving most of those listeners the good sound. But for those that choose to sit back in the club and sip their drinks and talk, “The concourses and suites only have a distributed PA system — the same system used for football and tractor pulls,” Shafer said.
In short, sit in the cheap seats for rodeo concerts. In terms of sound, they really are the better seats.

Meet the Man Who Dresses Houston’s C-Suite Executives

By Mark Yost
The Houston Business Journal

Murry Penner of Houston's M. Penner.

Murry Penner of Houston’s M. Penner.

Looking for a recession-proof business? Talk to Murry Penner.
The tony, Uptown Park, second-generation clothier, M. Penner, dresses Houston’s C-suite executives in custom-tailored Italian suits that can cost up to $10,000 each.
“We take care of this level of guy the way he’s used to being taken care of,” said Penner, who went to work for his dad, Morris “Sonny” Penner, 30 years ago.
Back then, the store was at the corner of San Felipe and Post Oak. In 1984 it moved to Kirby “before anyone heard of Upper Kirby.” In 2006 it moved to its current location, where it’ll celebrate its 40th anniversary this year.
While Penner does sell items off the rack, by far the largest — and steadiest — segment is his bespoke suits, which average about $4,000 each and come exclusively from three suit makers in Italy and one in Canada. Penner’s shirts come from Italy, as well as an upscale shirt maker in New Jersey.
While the off-the-rack business slowed down in 2009 amid the financial crisis, the bespoke business “doesn’t suffer” in recessions, Penner said. And now, “it’s growing like crazy.”
He has one customer who comes in every few years and gets fitted for 12 suits at a time, but historically most of his customers bought just one or two suits. That’s changed as the Houston economy has taken off again.
“Now, it’s four or five suits at a time,” said Penner, who not only makes everything to measure, but to character, as well. “We take all the usual measurements, but we also factor in things like your posture. So if one shoulder is lower than the other, we tailor for that.”
Bruno La Montaga, a master cobbler from Kiton's in Italy.

Bruno La Montaga, a master cobbler from Kiton’s in Italy.

Penner recently treated some of his best customers to dinner at Tony’s in Greenway Plaza. Afterword, they all got fitted for $3,500 custom-made shoes by Bruno La Montaga, a master cobbler from Kiton in Italy, one of Penner’s exclusive suppliers.
“He started out with a simple tracing of the customer’s foot on a legal pad,” Penner said. “But by the time he was done, that sheet was full of notes about arch, stance, heel position.”
Montaga even had a palette of dyes he mixed to make custom colors.
“He would mix a little red with the brown, apply it to a leather swatch and get exactly the color the customer wanted,” Penner said.
While he refers to one American fashion trend as “the casual Friday debacle,” Penner has started making inroads with the customers that every business wants to woo: Millennials.
Z Zegna is a special project of the famed clothing and fabric maker, Ermenegildo Zegna, that is geared toward millenials. The suits are made in Mexico and cost about $1,200. Penner does well with those, but is also seeing younger execs — mostly lawyers and bankers — migrate to his more-expensive lines, as well.
“They’re very interested in looking good,” Penner said of Millennials. “The guys that work in finance and law are immersed in big deals. They understand that you want to dress for aspiration — where you wanna go, not where you are.”

Houston Livestock Show & Rodeo: The Place to do Business

By Mark Yost
The Houston Business Journal

Halfway through the Houston Livestock Show and Rodeo, it’s clear that Houston’s signature event is the place to do business in March.
“It’s especially popular with our international clients,” said John Porter of Baker Botts, Houston’s fourth-largest law firm. “Last year we hosted a client’s global legal team at the Gary Allan concert. It’s a year later, and those lawyers are still talking about what an exciting, memorable experience they had at the rodeo. They had no idea who Gary Allan was, but they sure loved the event and the great country music.”
BubbaFirethorne is a 1,400-acre master-planned community located in Katy/Fulshear that has purchased season tickets to the rodeo since 2007. General Manager Wayne Meyer said he invites their top-producing Realtors, as well as marketing directors, clients and suppliers.
“It’s a great time to interact with Realtors, have a fun evening and build relationships,” said Firethorne Marketing Director Janet Burkett.
Asia Society Texas took a group of global trustees to this year’s rodeo.
“This is a high-level, international group who will be in Houston in early March for a meeting at the Texas Center,” said spokesman Chester Jacinto.
J.D. Joyce is a financial planner affiliated with Wells Fargo & Co. (NYSE: WFC).
“I particularly enjoy having a night out at the rodeo where we’ll invite a few clients who may or may not know one another prior to the event,” he said. “This makes for a fun event, and it is a good way to spend quality time with people whom we already enjoy and with those we’d like to get to know better.”
Carmen Jordan is the new Houston president of Iberia Bank, which sponsored the Cork ‘n’ Fork barbecue cook-off team this year. The bank shared its hospitality tent with some of its energy clients.
“It’s an incredible cross-selling opportunity,” said Jordan, a Nederland native who had to network within the bank to get cook-off tickets. “And in terms of the Houston business community, you really gotta be there.”
“It’s a more relaxed atmosphere,” said John Grayson of law firm Cokinos, Bosien & Young, which has a suite at the rodeo. “You can talk business if you want, or not. But mostly, it lets you get to know your clients in a more social atmosphere.”
Todd Riddle, another Cokinos attorney, is also a volunteer who has met dozens of clients through the rodeo.
“People will ask, ‘How do you know so-and-so?’ and the answer is ‘rodeo.'”
Among the bold-faced business names that are rodeo volunteers: Tax Managing Director Gregg Steffen of UHY Advisors, Houston’s fifth largest public accounting firm, is one of the vice chairmen who oversees about 460 volunteers on the parade committee; Mark Kelly, chairman of Vincent and Elkins, Houston’s largest law firm, is a rodeo director, while V&E Partner Harry Perrin is a lifetime vice president.