Video: Inside Kraft's playbook

By Producer
CNBC
updated 1/27/2008 6:36:22 PM ET 2008-01-27T23:36:22

When Robert Kraft achieved his dream of owning the New England Patriots in 1994, a sparkling new stadium was in the works and the team’s books seemed to be in order too.

The son of a dressmaker, Kraft had grown up in the Boston area before heading off to Columbia University, where he played football. But in 1963, Kraft left his gridiron dreams behind and headed for the Harvard Business School, the first stop in a business career that began with his founding International Forest Products, one of the world’s largest traders of paper and wood. Today, that company is part of a diverse mix of businesses called the Kraft Group, with annual sales of more $1 billion.

Kraft added the New England Patriots to that mix, and turned his attention to building the team’s record to match the success of his other holdings. To do so, Kraft turned his attention to the Patriots own playbook and made his most important hire ever. In an almost unheard of move, Kraft gave up a first round draft choice for an unproven coach named Bill Belichick.

Belichick was a mercurial manager who’d previously worked as a Patriots assistant coach, but in five years as head coach of the Cleveland Browns, he had only one winning season. Still, Kraft recognized Belichick’s management savvy — including an undergraduate degree in economics — and knew they would click.

CNBC: You didn’t see his record, necessarily, you saw something beyond that. Because he had limited success as a head coach before that — you saw something there.

KRAFT:  Well, in all our businesses, we try to find people who fit in with our culture and our chemistry and can we get along with them, do they have the intelligence we want. You know, in life there’s a certain simpatico that you feel when you choose your life partner — it usually goes that way. And in key strategic positions you don’t read about it in the textbook, it’s really your gut or your nose, something just tells you, "I think this can fit for what I want in our system."

And Belichick has fit brilliantly despite, or because of, a famously taciturn temperament — especially with the media. He agreed to sit down with CNBC to talk about the man who signs his checks.

CNBC: What kind of boss is Bob Kraft?

Belichick: My relationship with Mr. Kraft is more as a partner … you know, certainly he’s the boss; he owns the team. But we work more as partners in terms of trying to do things together in the best interest of the football team and the organization.

CNBC:  When you come on the field before a game, the first person you come and greet is Mr. Kraft. You have a pretty good relationship, you’re pretty comfortable around each other.

BELICHICK: Well, we’ve worked together here for eight years. And then, prior to that in 1996, so we’ve been together for quite awhile and know each other well. I think (we) have a good working relationship and a good personal relationship. He’s a funny guy; he’s a good man to be around. I enjoy his company and we’ve had a lot of success together.

Michael Holley has watched the relationship closely as a Boston sports radio host and author of the book Patriot Reign.

HOLLEY: Before Belichick got here, you read some of the clips in the paper — one of the lines from a Boston columnist — they called him Amos Alonzo Kraft thinking that, he’s the football guy, he’s out there with the stopwatch, looking at players.

CNBC: How would you describe his relationship with Bill Belichick?

HOLLEY: Ideal. They both have an understanding of the salary cap. They understand business, and they both have an appreciation for football. Bill Belichick is a master at football but Kraft is a big football fan. So they have really connected on a business level and they’ve connected on the best way to run an NFL franchise.

Kraft’s instincts to hire Belichick proved right. Just two seasons later, only months after the Sept. 11 attacks, the Patriots, then 14-point  underdogs to the St. Louis Rams, pulled off one of the greatest upsets in NFL history to win Super Bowl XXXVI.

“The hard work, the perseverance, the mental toughness overcoming obstacles —  those are the ingredients to being successful in any business,” said Kraft. “And hanging in there.  And believing in the power of will.  So all those emotions were encompassed — on that day and that season."

It would be the Patriots first-ever title, but the winning wouldn’t stop there — with back-to-back championships again in 2004 and 2005.

By capturing three Super Bowls in four years, Kraft’s Patriots had cemented their place in NFL history.

“For us, any business we're in, we don't want to be good just one year,” Kraft told CNBC. “We want to be the best we can be every year.  We want to try to sustain what we consider excellence. And you want to sustain excellence, you also have to be thinking about next year and the year after.  How you do contracts.  How you draft people.  How you keep everybody together in an organization where things are very visible.”

Entering the 2007 season, all eyes were once again on the New England Patriots. After falling a step short of the Super Bowl, the team had re-tooled, trading for superstar receiver Randy Moss. Moss was a great talent on the field, but had numerous problems off it, with a reputation for being difficult to handle.

But to Kraft, the vision of quarterback Tom Brady throwing touchdowns to Moss convinced him to take a chance few other owners would.

CNBC: How do you maintain this level of excellence that you've built?

KRAFT: Well, in the football industry, it's complicated. Any business we go into, we always look for how we can differentiate ourselves. We try to do the things the other people don’t want to do or can’t do, and we try to figure out how we get a competitive advantage.

But in their first game of the season against the New York Jets, the Patriots may have taken that desire for a competitive advantage too far. They were caught videotaping signals from Jets coaches during the second week of the season, a flagrant violation of NFL policy and a case of corporate espionage that the media dubbed Spygate.

The league fined coach Belichick $500,000 and the team an additional $250,000. The Patriots also were forced to forfeit a future first round draft pick, and Kraft was left to defend his team to the country. In September,  Kraft told NBC sportscaster Al Michaels that he first heard about the practice after the Jets game was over.

“Before last Sunday's game, I had no knowledge of this practice,” Kraft said during the a telecast the week following the Jets game. “I must tell you, it was really disappointing, especially after such a great game. What made it particularly disheartening, in our group of companies, we hold people to very high standards and this isn't what we're about. I've discussed that with coach Belichick.”

The incident only cemented feelings in certain circles — including the media and some other NFL franchises — that the Patriots were an arrogant organization, willing to do anything to win.

CNBC: People were calling you cheaters. And integrity is one of the biggest principles that you carry.

KRAFT: It's very important to us. And I think we dealt with it at that time and I think people know where I stand on the issue. 

CNBC: Did it hurt?

KRAFT: Absolutely.

CNBC: Does it still?

KRAFT: We've moved on.

Kraft’s oldest son, Jonathan, the Patriots team president, says the episode hurt his father more than he lets on.

“What probably hurt my Dad the most was that the public perception of what went on, and how it affected this franchise, did something to affect an image that we were very proud of,” Kraft’s son told CNBC. “The Patriots image was tarnished because of some of the actions. And because he views the Patriots, I think, as one of his children, it certainly — of all of our businesses, the one he loves the most. Truly, truly loves the most. I think he was proud of what we had achieved, and anytime it takes a shot, you get hurt.”

CNBC: In your statement afterwards, you said one of your biggest concerns was that people were going to look at your team in a different way.

KRAFT: Well you can just look what happened on the field this year and decide whether they’ve earned the recognition.

Kraft believes they have, and if he was unhappy with Coach Belichick, he certainly didn’t share it — not with the public and not with CNBC.

CNBC: Was there ever a time after that where you thought about firing the people who were involved?

KRAFT: Well, I'm not going to go into this because I covered it.  I don't think people have all the facts. But this is in the past and I'm just going to move on from it, and we can just continue to perform the way we've been doing on the field and do a good job. I think people who know us, and know the facts, know what we're about.

Not only did Kraft not fire a single person over the incident, he reportedly gave Belichick a new contract worth millions — though talks were said to have wrapped up before hand. For his part, Belichick says he was grateful for Kraft’s support.

BELICHICK:  It was great: it certainly starts at the top and that’s important — the support from ownership, the team, the fans, everything. It was great; I appreciated it.

CNBC: Some owners may have taken a different approach; they may have remained silent on the issue. But (Kraft) made it a point — and he did it with us, we asked him about it — and he backed you absolutely.

BELICHICK: I absolutely appreciated it. And I told him that and thanked him for it, and it was huge.

© 2012 CNBC, Inc. All Rights Reserved

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