When Alex Meruelo walked to the microphone last week to introduce himself as the probable new owner of the Atlanta Hawks, fans saw a soft-spoken businessman, clearly uneasy in front of the cameras.
Confessing he had never participated in a press conference before, Meruelo looked the part, stammering, gulping and sweating as he spoke about his lifelong dream of being a part of the NBA.
Off camera, in his element, Meruelo is decidedly different. Those who know the Los Angeles area entrepreneur describe him as a confident, aggressive businessman who has seized opportunity and elbowed his way to success.
“He has a very good sense of timing, I tell you,” said William Lyons, a Southern California homebuilder who started an Orange County bank with Meruelo. “He is very shrewd. You can talk to him about a deal, give him 15 items [of information]; he’ll talk it over and then make a decision.”
Earlier this year, the Meruelo Group bought the massive Grand Sierra Resort and Casino in Reno for a reported $42.5 million. Just six years earlier, the property went for $151 million. But it was an even better deal than is apparent, Meruelo quickly added, pointing out that the previous owners put in $100 million in improvements.
“So it was more like [worth] $250 million,” he said. “I stole it. It was a good deal.”
Similarly, he bought a Spanish language TV station in Los Angeles this year, he said, for less than $40 million. List price? It once was $245 million, he said with obvious pride.
The price tag on the Hawks has not been released. However, Marc Ganis, president of the sports business consulting firm SportsCorps, said Meruelo paid about $300 million for an 80 percent stake in the Hawks and arena rights.
Meruelo, who would become the first Hispanic to own an NBA team, said he can’t talk about it. His purchase of the team is still subject to league approval.
Meruelo, who grew up in Los Angeles, forayed into business early, as a teenager, when he opened a tuxedo store. In his early 20s, he ventured into tough neighborhoods to open pizzerias. Later, he dove into real estate, stocks, banking, construction, TV and gaming. Along the way, he became a multimillionaire.
“I always wanted to make money, to get ahead in life and make a name for myself, he said.
Three years ago in court filings in a securities case, Meruelo was described as an “extreme speculator.” But Meruelo takes exception to that characterization in that deal or in his success as a whole.
“I did it the old-fashioned way, penny by penny, dollar by dollar, day by day,” said the 48-year-old son of Cuban immigrants who came to the country after Fidel Castro took over. “I was always very driven, very focused.”
But he never liked crowing about it. He stopped talking to the media in the mid-1990s because “they build you up on the way up and kick you on the way down.”
His ambitions have made anonymity impossible. Buying the Hawks has forced this private man and father of three to become a public person. “I really don’t like the spotlight,” he said. “I’ve always been under the radar, and I like it that way.”
The buy-low, sell-high ethos was installed by his parents. His mother ran a dress shop in Los Angeles, and in 1972, his parents bought the earthquake-damaged building that housed the shop and repaired it. Later, they bought other buildings in Hispanic areas where prices were falling.
In 1986, Meruelo started a restaurant in a Hispanic area under-served by restaurants. Some saw a dicey neighborhood. He sensed opportunity. His pizza recipes carried south-of-the-border ingredients such as jalapenos and chorizo and low prices for working-class clients.
It was a grueling run. He worked seven days a week and was robbed at gunpoint. But the business flourished. Five years later, he ran 26 La Pizza Locas throughout Los Angeles and Orange County. By 1995, that number had doubled.
“He is willing to take a risk, but does so only after doing due diligence,” said David Lizarraga, a Southern California developer who once sold a construction company to Meruelo. “He knows how to take advantage of a niche and knows when to stop.”
Meruelo did that with his pizza business, topping out at about 50 pizza restaurants before moving on to other endeavors.
In the early 1990s, the real estate market in Los Angeles crashed. The young entrepreneur again saw opportunity. He started snapping up rental units, many that had been $160,000 were then $18,000.
“I went all out,” he said. “I was buying them from the bank. People said I was crazy. I said, ‘OK.’ But I kept buying and buying.”
By the end of the 1990s, he had more than 1,000 residential units, with their prices having risen to pre-crash values. Then he stopped buying.
He decided to focus his energy on purchasing stocks, investing in companies, buying construction companies involved in the utility industries and even going in on a bank in 2003. About then he was watching another boom in real estate.
“I watched prices climb and climb and climb,” he said. “I felt kind of stupid (being on the sidelines). But I didn’t get in.”
His younger brother Richard, however, jumped into the real estate frenzy in a big way, reportedly becoming the largest private owner of real estate in downtown Los Angeles. Richard also was a player in the political realm as the biggest fundraiser for Antonio Villaraigosa, the first Latino mayor of Los Angeles in more than 130 years.
But the real estate market collapsed. The younger, and higher profile, Richard became involved in bitter court proceedings after his company filed for bankruptcy two years ago.
Other family members’ holdings in the south Florida region also have been devastated by the collapse, leading to several rounds of court battles.
Meruelo said his businesses are “very different” from his other family members’ and that their dealings are separate.
“His brother is a more out-front guy,” said Andy Camacho, a Southern California restaurateur who provides concessions at the Staple Center, where the Los Angeles Lakers play, as well as at Dodger Stadium and other sporting arenas.
Meruelo is conservative in both financial and political matters, having supported several Republican candidates and donating to the Swift Boat Veterans for Truth, who attacked Democratic presidential candidate John Kerry’s war record in the 2004 election.
“Alex has an excellent reputation. He’s a conservative guy and a workaholic. He believes no one owes him anything. He’ll earn it.”
Meruelo has often seemed to own a Midas touch. A recent case in point would be his holdings in Hypercom Corp., which designed and sold electronic transaction terminals.
In March 2009, Meruelo had 3.5 million shares when the price sank below a dollar. He started loading up on the stock, doubling the number of shares while the price hovered between $1 and $3, according to Securities and Exchange Commission records and filings compiled by Bloomberg.
In March, he sold more than 1.5 million shares at more than $12 each, according to SEC reports. On Aug. 4, the U.S. Justice Department approved the sale of Hypercom to rival VeriFone. Hypercom shares closed out at $8.56.
“I was the largest shareholder. I got bought out by VeriFone,” he said, with a healthy hint of satisfaction.
His most recent buying spree — the TV station, the casino, the Hawks — all indicate a good run in recent years.
“You buy when the opportunity is right; now, the purchases make a lot of sense,” he said.
Despite the downturn — or maybe even because of it — he was ready. “I was lucky,” he said. “I was not very leveraged. I was well positioned. I had a lot of liquidity.”
Lyons called Meruelo “a self-made man” and maybe the hardest working person he has encountered. Lyons attends Lakers games with Meruelo, a former high school player, and said buying the Hawks “is a life’s ambition for him, his life’s dream.
“This is not just a business deal for him; it’s something much more than that,” he said. “He’ll put in a disproportionate amount of time into it. He’ll devote the money, time and effort to make it work.”
Meruelo said he is returning to Atlanta in September and is looking to buy a house. Odds are, he gets a good deal.
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Behind the story
Alex Meruelo is being heralded as the man who can lift a lightly regarded Atlanta Hawks franchise to prominence and draw fans to Philips Arena. We take a deeper look at the Los Angeles entrepreneur who, pending the NBA’s OK, would take control of the historically under-performing team.
