Andy Russell, who sports two Super Bowl rings from his stint as a center linebacker for the legendary Pittsburgh Steelers of the 1960s and 1970s, has a long track record in business, a career he started in the off seasons as a partner in Russell, Rea and Zapalla.
For the past decade, Russell has teamed with partner Don Rea and managing director Jeff Kendall to access capital for their own growth and acquisition projects. The trio's merchant bank company, Laurel Mountain Partners, continues to foster a growing string of success stories every year.
Russell points to Liberty Waste Services, a landfill and solid waste company he, Rea and Kendall took from a single landfill with $3 million in revenue in 1996, to 28 acquisitions later, more than $50 million in revenue and more than $12.5 million in free cash flow.
Russell, in typical self-effacing manner, attributes Laurel's achievements to good luck and a good choice of compatible partners. He describes Rea's role as that of idea man, Kendall's as executor of good ideas, and his own, perhaps ironically, as that of a cheerleader. Time and time again, Russell's eternally optimistic philosophies of "if at first you don't succeed, try 600 more times," and "of course we can do it," emerge from his own tales of triumph through perseverance.
Kendall and Rea concur that informed innocence and not knowing it can't be done have played a part in Russell's success.
"I would say that if we knew going in to each of the deals that we've done-what the problems were that were going to come up, we may not have done any," Rea says. "But once we were into it, we had to solve them. So we solved them and survived."
Recently, Russell published his memoirs, a tale packed with football and business war stories. "A Steeler Odyssey" tells how his credo, "Get the bat off your shoulder," took him around the globe and to the top of the business world. In this SBN interview, Russell talks about his book and what it took to make that successful leap from football to business.
In your book, you describe how you and your partner at the time, Sam Zacharias, turned tours around the world to talk about football into business trips-more like business odysseys. Most people wouldn't have thought to turn a sports-oriented tour of Japan into a business trip.
Don't misunderstand; those were a lot of fun. I love those clinics for children and giving speeches and telling humorous stories to audiences. They seemed to enjoy those stories regardless of what their ethnic background was. But in the daytime, during the hours away from that, I was able to make presentations to investors, and that was ultimately a very successful strategy.
Sam Zacharias and I were simplistic thinkers. We thought, "Well, we're in investor products, there are moneyed investors all over the world, and why not?" The first trip, we went to the Middle East, Saudi Arabia. At that time, they were making a million dollars a day, the government [in oil production].
First of all, I did have an interest in seeing the world, for the pure joy of understanding other cultures and seeing other places. But for me, to take that kind of time without working-it might take us a month to go around the world, and we did five [trips in five] years. The shortest trip was two weeks. So for me to take that much time, I had to justify it in my mind, see if I could develop the business and expand a little. We made thousands, literally thousands of presentations, to everything from private Swiss banks to Saudi sheiks out in the desert sitting on oriental carpets drinking goat's milk and goat's blood, to Indian caste members of the Zoroaster religion, to Japanese industrialists like Sony-it was very exciting.
How did you find the right people to talk to?
We approached some of the corporations in Pittsburgh which had businesses in these countries and asked for referrals. We had no contacts. We started exactly at zero.
I think you just have to do it. You can be scared to death, but just do it. Nike's right. Get the bat off your shoulder and do it-I'm a big believer in that. Everybody worries. I had people telling me my whole life, "You can't do that! Who do you think you are?" You know, you can do things. I've always had partners who think really big. I think sports does help one in the sense that you are used to rejection. In this case, you're used to defeat, and you know about coming back, never giving up, all those trite things-but they work in business.
How many times did you get rejected in that first year?
Hundreds, hundreds of people said no. Only a few said yes. The first trip, I was telling dumb football stories-I thought I was there to make a presentation about tax-sheltered investments to these American employees of RAMCO, and Gulf Oil had told me, "Andy, take the Super Bowl highlight films." I said, "What for? I'm not going there to spread NFL goodwill." They said, "Don't be stupid." So I took them.
But I knew we were in good shape when, the first year, we made a presentation in the RAMCO headquarters in Dhahran, the oil-producing entity in Saudi Arabia. I gave a presentation to almost entirely Saudis, all sitting in their white robes and headdresses. There must have been a couple hundred of them, and afterwards, one of the officials of RAMCO asked me if I would come back the next year and do this again.
I said, frankly, "I couldn't afford to do that, that I'm a businessman. I'm here trying to sell my investment products." He said, "You Americans are so impatient. You need to learn patience. We need to get to know you, become friends first, and trust. Why don't you come next year, and...could you teach our children how to run and jump?" I said, "I think I could do that." He said, "We'll send our plane for you." I said "You'll send a RAMCO plane to Pittsburgh and pick us up?" He said, "Absolutely." That was a light bulb going off.
We ended up with our first deal overseas. We built a warehouse which was a tennis bubble for RAMCO. They used it as a warehouse in the desert. That took us months, after we made the initial contact. That was the second trip.
So it took two visits before any deals even got started?
Oh, yeah. We went around five years in a row. Really, the biggest connection we made was the final presentation in the fifth year, to a Swiss investor. I wrote that in the book, called the Sauna.
Having gone around the world five years in a row, making presentations in every city, Tokyo, Osaka, Hong Kong, Bangkok, Singapore, Bombay, Jedda, Dhahran, London and Frankfurt, and finally, after literally hundreds of presentations, and literally hundreds of rejections, we found an investor that ultimately proceeded to do a lot of business with us, millions of dollars worth of business. So there was a lot of perseverance in that. A lot of people thought we were foolish-if we had had a financial adviser, he probably would have said, "Stay home and take care of business right here-you don't need to be flying around the world."
Do you still do business with any of those people?
Yes, we still see those people, and we're still doing international business. In fact, I'm leaving tomorrow for Amsterdam to negotiate the acquisition of two cable television systems.
What was one of the craziest things you've done about which others have told you it's never, ever going to work?
Probably the craziest thing I ever did was finance a movie about Rocky Blier, a documentary, and I paid for a camera crew to go to Green Bay, Wis., follow him around his hometown, and then we played the Green Bay Packers. And Rocky, who was just barely a starter at that time, had this wonderful game. He had like 137 yards rushing; he had the game of his lifetime. And I had this camera crew there. I'm standing there on the sideline thinking, "You're so smart." And it was just perfect. Then NFL Films wouldn't allow us to use it. They had the rights to the films, so we couldn't use that in the movie, and that was a loser. We certainly didn't bat 1,000.
What about a crazy one that turned out to be a winner?
Some of these were just unbelievable. We bought a landfill in Houston, Texas, right underneath the noses of BFI, Sanifill. All the major players were in Houston. I asked Jeff [Kendall], "How can we possibly buy a landfill from under their seats? What are we, the experts? They don't know about this?" I said, "Let's go ask them if they'll go joint venture with us." So we went to BFI and Sanifill and told them about it. They said, "Why don't you sell it to us? We'll double your money." We said, "No, that's not what it's worth, but we'll take this much." They said, "Forget it. You guys will never get this done. It's got too many problems, politics." They just didn't believe we could get it done.
So we did. We spent the money and time to go through all the legal, and get the permitting, and host community agreement, and all that kind of stuff, get some lawsuits settled, and we were about to open it, had X amount of dollars in it, and Sanifill came in and said, a week later, "We'll pay you two times X." I said, "We offered it to you three months ago for half that price." And they said, "But we gotta have it." So it's just beyond belief. We sold it.
That sounds too easy.
Well, all of it's not easy. Because the problems... like, we bought a hauler in Chicago from an old Dutchman who had been there for 55, 60 years. And Waste Management had been trying to buy him for 40 of those years, never could buy him. And Jeff Kendall bought that company. He said it was easy.
Well, he called the owner every day for a year. Talked to him every day for a year. He became like a son. I mean, the guy loved him. That's what it took to get that deal done. He thinks that's easy. I said, "People don't do that, Jeff. They get worn out."
On one hand, you want to do deals that are not completely off the wall, but on the other hand, it seems like you're doing deals that big people say are crazy. Why?
I could give you a list of deals that I didn't do that I should have done. I've turned down deals that have turned out to be huge. I meant to put a list down some time, everything from a steel manufacturing company that ended up being one of KKR's first deals, Kolberg, Kravitz and Roberts-one of the biggest leveraged buyout groups in America. Back when we were starting out, I got offered one of their deals, turned them down, and they did it-and made huge bucks, everything from that to being asked to raise money to search for a ship that sunk off the coast of North Carolina back in the 1800s with gold bullion on it, a treasure hunt.
I said, "What are you, crazy? I'm going to get involved in a treasure hunt?" And I showed it to one investor, a friend in South Africa, and he said no way, so I said no.
They found the boat, and it's worth zillions. It's called the Central America. I bet I've got 20 stories like that, deals that I just thought were crazy. I'm a serious businessman; I can't do that deal. And yet it turns out to be just unbelievable.
Do you think that being a little more risk-averse is a good place to be now, or if not, how are you going to stay fresh?
That's a good question. I think there is a certain degree of cynicism that gets into large companies. They go ahead and become bureaucratic and become less and less of a risk taker, whereas a younger person or a newer person into the arena might be less cynical and more hopeful, and more optimistic, and maybe more na?ve. But sometimes, guess what happens? By getting the bat off your shoulder and just trying, it turns out to be successful. Your point's well taken; maybe as Don and I get older, maybe we'll get a little more cautious.
My guess is we're not afraid of risk, never have been, and we will do our homework. If the risk-reward ratio is in balance, we'll do it. It's a corny thing to say, but that's probably what it'll come down to.
Maggie Bennett is a Pittsburgh-based freelance writer.