‘The Front Door To Utah’

Qualtrics cofounder Ryan Smith is now officially the owner of the Utah Jazz. And in taking over the NBA franchise, he’s bringing along two of his closest friends in tech.

Smith, 42, was approved as the new majority owner of the Jazz by the league’s Board of Governors on Friday, making the Utah-based billionaire the league’s youngest controlling owner. But in a twist, Smith is including several of his closest allies in the tech and venture capital ecosystem in the ownership group, which paid $1.66 billion for a majority stake, sources said in October when the deal was first announced: Atlassian cofounder and Australian tech billionaire Mike Cannon-Brookes, 41, and Accel investor Ryan Sweeney, 43.

In separate exclusive interviews with Forbes, Smith, Sweeney and Cannon-Brookes detailed how the group came together: a decade of a friendship anchored around a belief in tech entrepreneurship outside of Silicon Valley and a shared love of basketball.

“I said, hey, if this was a tech company, how would I do this? And with the history I’ve had, you surround yourself with the best, people who are additive, but not too many,” Smith says. “There are no extra points for going it alone.”

The NBA’s First Australian Co-Owner

Smith had only recently met Sweeney, a Bay Area-based partner at venture capital firm Accel, when the investor connected him to Cannon-Brookes. Accel had backed Cannon-Brookes enterprise software company Atlassian in 2010, the firm’s then-largest single investment in an unlikely place in Australia. In 2012, Sweeney and Accel were vetting a company with some similar traits in Qualtrics, where Smith also spent years bootstrapping a business away from venture capital’s traditional corridors, then looked to take on a large investment relatively late in the startup journey.

On their first-ever call, Cannon-Brookes remembers Smith giving him a hard time for running a business that sold project management software to other companies. “You can make money doing that?” Cannon-Brookes remembers Smith saying. Then Cannon-Brookes found out what Smith and Qualtrics offered: online surveys. “I’m like wait, you’re the one giving me [a hard time]? And we’ve been fast friends ever since,” says the Australian, whom Forbes values at more than $15 billion as Atlassian trades at a market capitalization north of $60 billion.

A former amateur player himself in school and then for his company’s work league team, Cannon-Brookes says he grew up watching the NBA’s “Game Of The Week” on VHS and a highlights show on weekends. He already visited Utah several times a year with several of his wife’s relatives living in the state, and attended Jazz games with Smith when he did so. In addition to his software success with Atlassian, Cannon-Brookes could open up new possibilities for the NBA and the Jazz in Australia as the league’s first co-owner from the country, Smith says.

“Australian tech gets on really well with the Utah tech industry. Ryan and I both built businesses outside of Silicon Valley,” says Cannon-Brookes. “You’ve got to think differently when you don’t have that ecosystem around you.”

Long-term Investors

To round out the new ownership group, Smith turned to Sweeney and two partners at his venture capital firm Accel, Andrew Braccia and Rich Wong. Sweeney says he was texting Smith the day after SAP announced it was buying Qualtrics just ahead of its planned IPO in November 2018 to see what was next for Smith. While Smith has stayed at Qualtrics since, now serving as its executive chairman with plans to spin the business back out via an IPO in 2021, he called Sweeney to see if the investor and Braccia, an early investor in Slack and a fellow Midas List top VC investor, wanted to join. Wong, who knew Cannon-Brookes well as a longtime board member at Atlassian, also personally invested in Smith’s business entity running the Jazz, Smith Entertainment Group.

According to Sweeney, Smith is probably one of just several NBA Governors who can dunk a basketball – likely joining NBA legend Michael Jordan, and not many others, if any. Sweeney, Smith and Cannon-Brookes declined to provide the exact breakdown of the ownership group, but Smith is the Jazz’s majority owner, with the others taking significant, but much smaller, stakes. Smith, as majority owner, has final authority and speaks for the group with the NBA. “He doesn’t want to leave anybody behind,” says Sweeney.

‘The Front Door To Utah’

What should Jazz fans expect of the team’s new ownership? The group say they’re all young, love basketball, and above all, are betting on Utah long-term. Smith says that assuming the team wouldn’t be for sale, he’d look at other ownership groups and franchises, desperate to be part of the NBA. “I went hard at Minnesota and talked to a couple others. I really liked those teams. But at the end of the day, my wife reminded me in February that we’re Jazz fans, that’s what us and our kids do,” Smith says.

The group call owning the team a “stewardship” entrusted to them by Gail Miller and the Miller family, the former longtime owners of the team who will keep a minority stake moving forward. The purchase of the team was unusual in that regard, as trust and a commitment to Utah were as important as profits, says Smith, who adds he pulled up the Forbes valuation of the Jazz – $1.5 billion – on his phone as he negotiated an offer. He ended up bidding very close to that.

“I have never done a transaction, and we’ve done a lot of big transactions, where the entire process has been about a third party. And the third party is not the buyer and the seller, but the state of Utah,” Smith says. “So it’s almost not a business deal.”

Moving forward, Smith says he has no plans to change the team’s name, despite what New Orleans basketball fans might ask on Twitter. He believes his experience with Qualtrics, which offers “experience management” software to measure employee, customer and brand engagement, can be useful to the league as it moves forward. But Smith also stresses that the Jazz already have strong leadership in place in Dennis Lindsey, the team’s executive vice president of basketball operations, and that he has no plans to meddle in basketball or roster decisions.

Smith says his full-time job remains Qualtrics; Cannon-Brookes remains co-CEO of Atlassian. Both businesses are far larger than an NBA franchise by headcount and revenue. For those who question how a few forty-somethings with full-time jobs will have the time to be effective owners, Cannon-Brookes says the same questions were asked of him and Smith when they were unproven software entrepreneurs twenty years ago. “We’re three pretty competitive dudes,” Cannon-Brookes says. “We’re not here to take photos.”

The group’s most ambitious goal: build out the Jazz franchise alongside the Utah tech scene, which has seen other recent successes beyond Qualtrics, and in which Smith is a lead organizer as part of the ‘Silicon Slopes’ group and conference. More talent and entrepreneurs will develop and relocate to Utah in the years to come, they believe; it should be the same with the state’s most prominent professional sports franchise.

“If there’s an individual who can turn the Jazz into a big market team it’s Ryan Smith,” Sweeney says. “He doesn’t know how to do things half-hearted. He’ll figure out a way to stretch the number of hours in a day to 36 instead of 24.”

Smith says he’s already received calls from fellow owners and tech billionaires Mark Cuban and Steve Ballmer. Their advice, he says, is consistent with what he already planned to do: be himself. And that means bringing more business – and fun – to his home state, at either business. It all flows together, Smith says: “The Jazz are the front door to Utah. Period, end of story.”