A Giant Leap
He shepherded Microsoft through its stormiest period and helped bring a World Series title to San Francisco. In both cases, says Bill Neukom, it was all about the team.
Photo: Michael Sugrue
By Ann Killion
The white-haired man in the front row seat at San Francisco's AT&T Park doesn't look like an average sports fan. He is wearing a patterned bow tie, dress shoes and a patrician gray flannel suit that helps fend off the chill from the cool April night.
But he is studying the Giants game intently. He leans forward, cups his hands around his mouth and barks out, "C'mon, Miggy!"
Miguel Tejada, standing in the on-deck circle, looks around and gives a respectful nod.
"He's got rabbit ears," quips the man who signs Tejada's check.
Although the man in the front row has been rooting for the Giants for more than half a century, he is definitely not an average fan.
The giveaway is that when William H. Neukom, JD '67, brings his hands to his mouth to shout encouragement to Tejada, one finger sparkles with white gold and diamonds. On request from his guests at this early season game against the Dodgers, Neukom casually passes his brand-new World Series ring down the row for others to enjoy. He watches with pleasure as his guests turn the massive ring, feel its weight, ogle joyfully at the design he helped create.
"I don't think I've ever seen him so happy," says his son Jay, JD '04, one of Neukom's four children.
The Giants managing general partner and chief executive officer, Neukom will forever be known as the owner who brought the World Series championship—the ring, the trophy, the banner, the glory—to San Francisco.
He took the helm of the Giants ownership at the end of the 2008 season. Two years later, the team finally had its grail: the first World Series title since the franchise moved to San Francisco from New York in 1958.
There was no dramatic shakeup during those first 25 months Neukom was in charge. The Giants retained both general manager Brian Sabean and field manager Bruce Bochy, avoided bank-breaking free agents and made no blockbuster trades. They abandoned the franchise's traditional reliance on a centerpiece star and cobbled together a lineup of castoffs and overachievers to go with a talented but enigmatic pitching staff. Few people, least of all long-deprived Giants fans, expected the magic this alchemy produced: a season that will be remembered for generations.
Was Neukom a force in the outcome? Or was he simply in the right place at the right time?
He's been there before. The right place was Seattle and the right time was 1978. The managing partner of the Seattle law firm then known as Shidler McBroom Gates & Baldwin stuck his head into Neukom's office and asked the junior partner if he would mind advising a new company founded by his son. The 23-year-old wunderkind was moving his fledgling business—something to do with computers and electronics—from Albuquerque to Seattle. Neukom signed on, beginning a relationship with Bill Gates and Microsoft that lasted almost 25 years.
By 1985, Neukom had left the law firm and become full-time general counsel at Microsoft. He built Microsoft's legal department from nothing to a staff of hundreds, and led the aggressive and groundbreaking defense of the company in a long series of antitrust cases.
In U.S. v. Microsoft the Department of Justice charged that Microsoft's bundling of the Internet Explorer web browser with its Windows operating system was anticompetitive and an abuse of its monopoly in the personal computer market. The presiding judge in the case ordered the company broken in two, a ruling that was overturned on appeal. Neukom negotiated several settlements that provided minor remedies but protected Microsoft's right to keep its software intact, an important victory for the company.
While the Giants offer the boss their own form of torture and tension, it's a distinct brand from the antagonistic legal battles that Neukom fought for decades. "It's an intense game," Neukom says of baseball. "But it's not the same as writing a brief. It's not that intellectually demanding."
In the early 1990s, Neukom found himself with what he politely terms "a windfall" from his extensive stock holdings at Microsoft. His Law School classmate Chuck Armstrong, JD '67, president and chief operating officer of the Seattle Mariners, had once thought of approaching Neukom about investing in an ownership group when the Mariners were on the market. But at the time, "Bill was up to his eyeballs in Microsoft."
However, in 1995 Neukom contacted Peter Magowan, '64, who had helped put together an investment group to keep the Giants in San Francisco two years earlier. Neukom was intrigued by investing in something that was not only a piece of his boyhood but a part of the community.
"It's not just a widget company," says Neukom, who retired from Microsoft in 2002. "I liked the quasi-public-trust nature of baseball. I thought, 'Wouldn't that be cool?' "
Neukom bought into the Giants investor group a year after a devastating player's strike, while the league's finances were unsteady and the team was still tethered to unprofitable Candlestick Park. As cash calls increased, some investors balked and Neukom picked up their shares, calling himself "a utility infielder" of investors.
Soon he had a significant share of the team and in 2003 was made a general partner, giving him a broader role in the decision making and direction of his favorite baseball team.
Neukom's Peninsula neighborhood in the 1940s was the right place and time for cultivating a lifelong San Francisco baseball fan. Neukom lived in San Mateo Park, next door to Charlie Graham Jr., whose father owned the San Francisco Seals. He played catch in the street with Graham's daughter Tina and was happy to be her guest at Seals games.
When the Giants arrived in 1958, Bill's father gave him 10 shares in the National Exhibition Corporation, the investment group Horace Stoneham created after bringing the Giants west. It was both a token of baseball appreciation and a lesson in capitalism.
Though he attended Giants games, by then, 6-foot-4 Neukom was more focused on basketball. He remembers seeing college teams at the Cow Palace and being enthralled by Bill Russell and the USF Dons. But a knee injury his senior year derailed any aspirations to play in college.
"He was very interested in athletics," says Peter Steiner, a childhood friend who has remained close to Neukom. "He was very bright, articulate, reliable."
And well-rounded. Young Neukom was always trying to get his friends to listen to his jazz records, eager to turn them on to John Coltrane and Thelonious Monk. Steiner recalls driving with Neukom to the inaugural Monterey Jazz Festival in October 1958, where they saw the Dave Brubeck Quartet.
As student body president of San Mateo High, Steiner appointed Neukom chief justice of the first high school court and jokes that he is "basically responsible for Bill's career."
Neukom was accepted to Stanford as an undergraduate, but chose to attend Dartmouth.
"I got a nice note from the admissions director, I liked the colors, they had a good basketball team, and there was an allure to New England coming from California," Neukom says. "Those things affect a 17-year-old."
In the fall of his junior year, he traveled from New Hampshire to New York to meet his father and see the still brand-new San Francisco Giants play the Yankees in the World Series. (The Series was an early installment of the misery that visited the Giants in postseason play prior to 2010: The Yankees won Game Seven 1-0 when second baseman Bobby Richardson caught a line drive by Hall of Fame first baseman Willie McCovey with runners on second and third and two out in the ninth inning. It took 27 years for the Giants to reach the World Series again.)
After earning his undergraduate degree in philosophy in 1964, Neukom returned to the Peninsula and enrolled at Stanford Law School. He received his draft notice, but his balky knee kept him out of Vietnam.
He played on the Law School basketball team with Armstrong, who remembers Neukom's competitiveness and effective left-handed hook shot. As Neukom studied at the table in his upstairs apartment near campus, he kept the radio tuned to Giants games, listening to Willie Mays hit home runs. "There was always a strong cord of attachment to professional baseball," he says.
These days, Neukom stands behind the batting cage at every home game—thanking Bochy for the privilege after each session—and travels to about a third of the team's road games. He delights in his interactions with the players: for example, an amusing run-in with workout fanatic Brian Wilson in the team weight room.
Neukom and his wife, Sally, maintain a home in Seattle, but Neukom spends significant time in San Francisco. His daily routine combines executive duties—he spends several hours working "like an adult" in his third-floor office at the ballpark—with his role as First Fan, watching batting practice or entertaining guests in the stadium's suites.
Neukom approaches baseball with an academic curiosity, says longtime broadcaster and former Giants player Mike Krukow. "He's trying to learn every facet of the business. And you better be careful when you're talking baseball with Bill Neukom, because he knows the answers and he knows the topic."
When Neukom agreed to succeed Magowan following the 2008 season, after serving as a general partner for the previous five years, he had a say in the team's direction and understood the details of the franchise. The goal was a seamless transition in the midst of rocky times.
The Giants had cut ties with Barry Bonds after the 2007 season, ending a relationship that had been successful and profitable but problematic. Bonds's indictment for perjury, culminating in a trial in federal court this spring, sullied the Giants' name and landed the team in the Mitchell Report, major league baseball's independent report on performance-enhancing drugs. Though the team had built one of the most beautiful new ballparks in the country and appeared in the 2002 World Series (losing to the Angels in another painful Game Seven), there had been questionable personnel moves, such as the $126 million contract given to a pitcher in decline, Barry Zito. The Giants needed direction.
"I think all the investors, particularly the largest investors, bear the responsibility for not designing a transition plan from the Bonds era to another era," Neukom says. "We didn't, as a group, think it through. The people in the front office, the stewards, should have spent more time on it. I take more responsibility as a significant investor."
Once again, Neukom was in the right place at the right time. The Giants had already begun the transition to a new phase. The farm system and scouting departments had been rebuilt. Three months after the Giants announced that Neukom would take the reins, they drafted Buster Posey, a future Rookie of the Year; a few weeks after Neukom officially succeeded Magowan, Tim Lincecum won his first of two (so far) Cy Young awards.
And the Bonds era was over; the controversial slugger was not Neukom's problem. "Nor was he my asset," Neukom says sharply. "He won baseball games for this team every day he played. There's a tradeoff there. The model worked very well. We just hadn't put enough brainpower into the transition and there was a gap."
Neukom took his time before extending the contracts of Bochy and general manager Brian Sabean, taking a wait-and-see approach. "He didn't immediately look to overhaul the operation," says longtime Giants beat writer Andrew Baggarly of the San Jose Mercury News. "He wanted to find out what people needed in order to do their job well. He gets credit for showing restraint."
Neukom applied the lessons he learned at Microsoft to the Giants. Hoping to articulate a clear institutional philosophy, he developed—and was mocked in some quarters for it—an internal document detailing "The Giants Way."
"I just got back to basics," he says. "I built the law department at Microsoft on the same principles. What's our strategic plan? What sort of guidance can I give? It's difficult to develop and painful to create, but it's better than the alternative."
Some of the cornerstones of Neukom's philosophy were already in place. (Insiders say he had pushed for their inclusion from his position behind the scenes.) The Giants already had begun to rely on homegrown talent, realizing that budget constraints precluded them from buying players in the manner of the Yankees. But other Neukom ideas were less tangible, subtler. He tweaked the organization to give it a more cohesive, team-oriented point of view. "The biggest difference is that there's more integration," Sabean says.
Neukom insisted on looping the baseball people in on all major decisions. "At Microsoft and other technology companies, the fountainhead of the organization is the software engineers and the scientists," he says. "That's the precious trust. You have to make sure that part is right before anything else works.
"The fountainhead of our business is our baseball people," he continues. "If you get the right people in the baseball positions, a lot of good things will follow. We had to find ways to integrate the fountainhead function of our organization into the rest of the community."
It had puzzled Neukom, as a general partner, that Sabean would present information to investors and then leave the room while the rest of the meeting took place.
"Here's my chief financial officer, my chief legal officer, but why did my chief baseball officer just leave the room?" Neukom wondered.
He changed that. Twice a month Neukom's 10-member management committee convenes in a conference room in the Giants offices. Included are Neukom, Sabean, team president Larry Baer and other senior officials.
Some meetings involve a rundown of different department goals and objectives. But more often they involve fleshing out lively discussions of major issues. Should the Giants be involved in a Showtime documentary called The Franchise? How can the team accommodate the post-World Series crush at the ballpark? Is the Giants stadium security prepared for any event? Department heads who once were tentative in the new format now understand that their opinion is both encouraged and valued.
"We interact in a more organized fashion, there's more conversation," Sabean says. "It allows people to understand how things work, how other departments think. It's very team-oriented."
Another of Neukom's fundamental tenets was creating a culture of collaboration, where leaders deflect credit and work is rewarded. Again, he borrowed from the horizontal organizations he saw flourish in the technology world.
"The notion of the workplace as a meritocracy," Neukom says. "People work harder and smarter and enjoy their work more if they're evaluated on the quality of their work and not on other considerations. You get the most out of your teammates."
The changes were understated but addressed a point of tension that had simmered for years within the Giants organization. At various times, behind the scenes, there had been a grinding tug-of-war over who deserved credit for the team's successes. The question of credit bubbled up publicly in the early 2000s, and led to a bitter parting with popular manager Dusty Baker after the 2002 World Series.
"It's been pretty impressive what Neukom has been able to enact, in terms of a culture change," Andrew Baggarly says. "It's a culture driven toward one goal as opposed to individual goals. Trust the person next to you."
Did the new emphasis on teamwork in the front office trickle down to the field? Did Neukom tweak just enough to create a winning environment that led to the team's first World Series?
"This happened faster than anyone expected," Sabean says. "How much of a direct effect, I don't know. But everyone is pulling on the same rope. To win a World Series takes a special group and a special person like Bochy. The people in uniform won the World Series.
"But, hopefully we created a culture that helped. A good place in time."
The World Series championship electrified the city, indeed the region, and brought Neukom—the guy in the bow tie—a measure of celebrity. Fans approach him in restaurants and thank him. They ask him to sign baseballs. They honk their horns and yodel praise to him from passing cars.
Neukom accepts the attention with a self-deprecating sense of humor. Friends laughed when he arrived at a recent dinner wearing bright orange pants. He'll sign the baseballs, but purposely avoids "the sweet spot"—the narrow space between the seams where players normally sign. When the World Series trophy was on display at Stanford's Arrillaga Alumni Center in April, Neukom welcomed visitors for 90 minutes, answering all their questions. (He was back on campus in May for the dedication of a new Law School building that bears his name. See page 29.)
Once the World Series was over, Neukom began work on a plan for how the Giants would respond to being champions. This season's theme is "Gratitude," the marketing campaign "Together We're Giant." It's a nod not only to the millions of fans who celebrated the team's achievement but an acknowledgement of the thousands of people in the organization—players, coaches, staff—who came before.
"When you walk out on that platform at City Hall and see 300,000 people cheering, you understand how broad a community of support we have," Neukom says.
Now Neukom guides the team into a new, post-championship era. One ongoing issue is the battle with the Oakland A's over territorial rights to the South Bay. Neukom, adhering to major league baseball commissioner Bud Selig's request for a gag order, won't address the topic these days, but he did when he first took over, saying, "It's a significant part of the rights package that makes up the value of this franchise." Neukom's history with Microsoft indicates he will be a formidable opponent when it comes to defending his company's position.
As the Giants move forward, the man in the bow tie will ask questions, deflect praise and tweak the organization as needed.
"Bill understands the culture of the Bay Area," Mariners president Armstrong says. "He's creating a legacy that will live past his time."
Bay Area writer ANN KILLION is a regular contributor to Sports Illustrated and Comcast SportsNet.
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