LAFAYETTE — The sale of the Golden State Warriors is scheduled to begin this week, and Larry Ellison, chief executive of Oracle, is likely to be the predominant name that swirls around as a potential suitor.
Just don't tell Mark Mastrov that.
With an impressive resume of his own, Mastrov, founder of 24 Hour Fitness, which he sold for $1.6 billion and later left, salivates at the idea of being the next owner of the Warriors. That's not just because he's a lifelong fan and East Bay resident, but from a business perspective, the 52-year-old Mastrov believes he could run it just as well as anyone.
"We would build a stable organization that is strong in the draft, strong in development, but at the same time brings in quality players to put a quality product on the floor," Mastrov said. "We want to put a consistent product on the table that is going to be very competitive for a long time, and we feel we can do that."
Last month, Warriors owner Chris Cohan announced he had retained Galatioto Sports Partners to conduct the sale of the team for a price tag that is expected to climb past $400 million.
The Warriors are expected to select as many as four final bidders who will have up to three weeks to make official bids for the franchise, according to SportsBusiness Journal.
Mastrov's current firm, Lafayette-based New Evolution Fitness Co., would serve as the holding company for the Warriors. Jim Rowley, its CEO, would also be part of Mastrov's team.
Rumors have circulated that well-known sports names such as Magic Johnson and Lance Armstrong could be added to the ticket, but Mastrov says he has never said who would be on the team.
"Hopefully, soon we will be able to talk about specifics on our team, and people will understand why we're confident," Mastrov said.
The general sentiment shared by fans and sports talk show hosts is that Cohan has been a bad owner because the Warriors have only made it to the playoffs once since he took control of the team in 1995. But winning percentage isn't the only metric for measuring success, Mastrov and Rowley say.
"It comes down to how you measure a successful franchise," Rowley said. "They may not translate well on the court, but they've put together a good entertainment package at the game and they've made a lot of money."
If the team is sold for $400 million, it would be a 332 percent return on Cohan's investment compared with the $119 million he bought it for. Home attendance during this past season averaged 18,027, which ranked 11th in the league.
"Maybe Chris's team has maximized every corner, maybe he hasn't," Mastrov said. "We won't know for sure until we go in and look at it."
A resident of Lafayette who grew up in the East Bay and was a starting point guard for Castro Valley High School, Mastrov remembers going to Warriors games when he was 5 years old with his father, Bert. Now 52, he, as much as any other fan, wants to see the Warriors put a contender on the court every year.
"I'm not a guy that can sit there and take the losses," Mastrov said. "I will scratch, claw and do whatever it takes to win, and that's what I think the fans are looking for in an owner."
Mastrov received the majority of the $1.68 billion buyout for San Ramon-based 24 Hour Fitness in 2005 before cutting all ties with the company in 2008 to start his own private equity firm with Rowley, New Evolution Fitness Co. The firm owns several gyms that have different approaches to fitness. The current portfolio includes Crunch, UFC Gym and Yoga Works.
When talking about his own business philosophies, Mastrov says Warren Buffett is someone he likes to use as an example. Mastrov received a business degree from Cal State Hayward, now Cal State East Bay.
"I like that Buffett invests and holds for long term," Mastrov said. "He builds around great management teams and focuses on strong cash-flow-performing businesses.
"Sports teams traditionally haven't been known to be your best use of capital because they don't give you your best rates of return," he added. "But if you can buy the right team and grow it properly, you should be able to make a lot of money."
Considered by his peers as a visionary, the seed that led to 24 Hour Fitness was planted by Mastrov in San Leandro. At 23, Mastrov had been working out at a local gym, Nautilus Health Spa, rehabilitating a knee injury. So when the owner needed help, Mastrov was a perfect fit.
In 1983, when the club changed ownership, Mastrov was promoted to manager and partner. From a $15,000 loan given to him by his grandmother, Dolly, Mastrov bought a 10 percent stake in the company. Later, he bought out his partner, Leonard Schlemm, and became the majority owner.
The idea of having a gym open around the clock came about because Mastrov felt it made more sense to keep the doors open then having to wait for patrons to leave and reopen just a few hours later. He called it 24 Hour Nautilus, and the concept took off. People loved it because their excuse of "not having enough time to workout" was eliminated, Mastrov said.
"We began growing from that point by building new or acquiring facilities that hadn't performed well at a good price," Mastrov said.
That strategy led to a core group of clubs in Northern California and attracted the attention of investment banking groups.
In 1994, 24 Hour Nautilus partnered with McCown De Leeuw and soon acquired the Southern California-based Family Fitness Centers chain. It was after that acquisition that it was renamed 24 Hour Fitness.
When Mastrov left 24 Hour Fitness in 2008, it is the largest privately owned U.S. fitness center chain. The company now serves more than 3 million members and has more than 400 clubs worldwide.
"Mark built 24 Hour Fitness from a one-club operation into an innovative leader in the health and fitness industry," said 24 Hour Fitness CEO Carl Liebert. "His leadership laid the foundation for the continued success and strength of the company."
Mastrov left 24 Hour Fitness because of philosophical differences on the direction of the industry. He believes the future of the industry lies in creative and differentiated workout opportunities.
"I had a great 25-year run there but, honestly, I don't think about (24 Hour Fitness) much any more," Mastrov said. "I wish them well, but I'm now excited to focus on these new ventures, including the Warriors."
Mastrov and Rowley, who served as president of 24 Hour Fitness' Northwest Division, say the management of an organization such as the Warriors needs to be broken down into three areas: basketball operations, marketing, and customer relations.
Basketball operations encompass finding the right coach and players to lead the team. With LeBron James, Dwyane Wade and Chris Bosh eligible for free agency this summer, Warrior fans dream about having one of these marquee names.
As a fan himself, Mastrov would love to have them as well. But as an owner, it might not be financially realistic.
There are many examples of successful teams, such as the Portland Trail Blazers and the Oklahoma City Thunder, built around a core of young players and two or three solid veterans, Mastrov said.
In marketing and customer relations, Mastrov and Rowley envision taking advantage of social media such as Facebook and Twitter to grow the customer base.
"It's not just about the season ticket holder, but the Warriors fan that might just go to one game a year, or just watch it on television," Rowley said. "We want to make it a great team for everyone."
Mastrov would love to keep the team in the East Bay because that's where he grew up and currently lives. But if another opportunity, such as San Francisco, comes up, it's a conversation he'll at least listen to. Oracle Arena is "not a phenomenal facility," but it's a "very good facility," Mastrov said.
Luxury boxes and ticket sales are a big component in how the team does, because more money translates into better salaries and better players, Mastrov said.
"This is not an ego play for us," Rowley said. "If we do purchase this team, it will be based on business analytics and not anything else.
"If Larry buys it and he puts the time and energy behind it like he did with the America's Cup, we'd be just as happy as anyone," Rowley said. "We are just confident that we can do a great job."
Contact David Morrill at 925-977-8534.
Principal of New Evolution Fitness Co., founder of 24 Hour Fitness
Education: Castro Valley High School; business degree, Cal State Hayward (now Cal State East Bay)