J.W. Sean Dorsey
Trends and lessons learned from a 35-year dealmaking career that spans baseball to buffalo wings
J.W. Sean Dorsey has closed hundreds of deals over his 35-year career, helping familiar brands like Buffalo Wild Wings and 1-800-Contacts go public. But “everyone wants to talk about the Cleveland Indians,” says Dorsey — the founder and CEO of League Park Advisors, an investment banking boutique named after the original Indians stadium.
Long before he founded a handful of dealmaking firms in Cleveland, Dorsey began his career as an attorney. As a first-year associate at Baker & Hostetler LLP, Dorsey was part of the team that helped real estate developer Richard Jacobs purchase the Cleveland Indians for $35 million in 1986.
After transforming the struggling franchise into an American League powerhouse, Jacobs took the Indians public in 1998. Dorsey, who was a banker at McDonald Investments by then, helped orchestrate the first IPO in Major League Baseball history. To conduct due diligence for the deal, he spent five weeks on the road with Jacobs and Indians general manager John Hart, attending the team’s Fantasy Camp and spring training.
Dorsey was also part of the team that helped Jacobs sell the Indians to Larry Dolan for $320 million in 2000. His dealmaking aptitude kept expanding, as he ran M&A for KeyBanc Capital Markets and then led the investment banking and capital markets businesses at National City Corp. before becoming “a deal entrepreneur.” Now, through various dealmaking firms and partnerships, Dorsey remains on the frontlines — closing about 10 to 12 deals per year.
“A lot of times, people talk about what they did 20 years ago, but the deal business is always evolving,” Dorsey says. “Being relevant and fresh and on point are really critical aspects of the deal business. Staying passionate about it makes for a very interesting career.”
Smart Business Dealmakers sat down with this Master Dealmaker to discuss how the dealmaking business has shifted through the decades and the insights he’s learned along the way.
Cleveland through the decades
Back in the ‘80s, Cleveland was a large corporate headquarters town. There were a lot of large international banks here, and a lot of business was a function of those big companies. A lot of those big companies moved on, but left people who stayed here for the lifestyle. As a result, the infrastructure of private equity started to grow here.
Early on, a lot of the capital was debt-oriented and municipal finance, but the tax code changed in 1986 to stop deductibility of interest on these bonds — which morphed a lot of companies going into equity and hurt a lot of real estate.
Fast-forward to today, whether it’s cryptocurrency or family offices or what’s going on with unitranche financing — the dealmaking business is always changing. That’s what I love about it; it’s never a stale business. That’s what makes it interesting.
Current deal environment
I tell people, ‘If you’re not successful in the deal business now, then you should not be in the deal business.’ It’s the best market I’ve seen in 35 years. Of course, there are always challenges — for example, it’s been a struggle to find second-tier venture money in town, but there are people trying to fill that space. Banks are lending, there’s plenty of private equity and lots of investment banking, so it’s a great time to be in the deal business.
What motivates me in selling a business is that I feel an obligation to help people reap the fruits of 20 or 30 years of labor — financial obligations, sacrifices, soccer games missed. On the buying side, you’re putting someone’s financial assets to work, and you need to get a return on them.
I like to think about the intrinsic nature of why you’re actually doing a deal. It’s not just the deal for me. It’s the people.
Essential deal ingredients
People make deals. So, the psychology of deals — how people think about what’s fair and what’s not fair — is fundamental to whether a deal happens or not. Integrity and honesty are the most important things to build your credibility as a dealmaker. Cleveland’s a small town, so people either trust you or they don’t.
One thing that deal people sometimes forget, in the expediency of trying to get deals done, is this whole issue of the business operating successfully after it’s bought or sold. So, the real issue around deals is transparency: Do buyers understand what they’re getting into, and do sellers understand what they’re doing? I like to think of myself as an expert guide who helps companies through the process of buying or selling a business.
The Last Word
The perfect funding fit
There are three things investors want to see:
- Demonstrated success, either from the business or its jockey.
- A path to a real return that meets their expectations.
- And most importantly, you need that jockey; you need the operator.
It’s not worth investing in a good business if you don’t have a person who can run it. The most important trait companies should look for in a funding partner is a common vision. Every deal is different, and every private equity firm has a different vision and a different perspective on your business. Most people tend to think that the money is interviewing you, but I like to turn it around: You should interview the money and make sure the fit is right.
How to reach: League Park Advisors, www.leaguepark.com