Empire of the Sons
Banker and Twins owner Carl Pohlad spent a lifetime doing deals—transactions that made him one of the richest men in America. Yet his most ambitious plan may have been his most personal one: grooming his three sons to make the family synonymous with Minnesota business.
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THE SNOWS OF JANUARY have long ago melted into the now-verdant fairways of Edina’s Interlachen Country Club, and the sights and smells of the well-manicured grounds are easily taken in from the home where Carl Pohlad and his wife, Eloise, lived for much of their lives. Six years ago, when Eloise passed away in the bedroom of that home, the couple’s three sons—Jim, Bob, and Bill—made eating Sunday brunch with their dad a permanent part of their schedule. That ended last January, when Carl, the 93-year-old patriarch of the family’s business empire—a man listed by Forbes as the 102nd-richest person in America—died in his sleep.
A few days later, each of the sons eulogized their father before 1,400 mourners at the Basilica of St. Mary in downtown Minneapolis. But that next Sunday, Jim, Bob, Bill, and their spouses were back at their father’s house, meeting for brunch once again. In the weeks and months that followed—as winter turned to spring, and spring turned to summer—the three sons continued to take turns rustling up the Sunday meal, even while they couldn’t help but wonder when the ritual will have run its course. “At first we thought it would be really weird and creepy,” says Bob. “And it was sad, but it wasn’t bad either. And so we have continued doing it. I don’t know how long we will keep going. You go into my dad’s house, and I used to do it every day, and it is exactly the same. Except it’s not.”
The same, but not: In the wake of Carl Pohlad’s death, that phrase could just as easily be used to describe the family’s business interests, a bundle of enterprises that focus on three industries: banking, beverages, and baseball. It is a portfolio that Carl built with his inimitable stamp, a blend of charm, tenacity, and intuition—and an uncanny ability to create and exploit opportunities to buy out smaller players in those industries. “Carl had a great nose, maybe the best sniffer in the world,” says Irwin Jacobs, the erstwhile corporate raider and current president and CEO of boat-builder Genmar, who engaged in numerous business forays with Pohlad, including part-ownership of the Vikings. “He could smell a deal and put it together in his head quicker than anybody else.”
Of course, dealmaker is not how most Minnesotans think of Carl Pohlad. Most Minnesotans will forever associate him with the Minnesota Twins. And while some will be eternally grateful that he “saved” the team by purchasing it from tightwad Calvin Griffith and building the teams that won two World Series, others will never forgive him for effectively blackmailing the citizenry: first by signing a letter of agreement to sell the franchise to a Charlotte businessman, then by agreeing to contract the team out of existence in exchange for $150 million from his fellow Major League owners. That neither threat came to fruition while a new baseball stadium, funded primarily with taxpayer monies, is set to open next year has only cemented his reputation as a shrewd negotiator—and a heartless cheapskate.
Yet for all of his acumen, all his money and notoriety, its clear that Carl Pohlad’s greatest enterprise wasn’t banking or baseball. It was to orchestrate the grand vision of his family legacy, to quietly, painstakingly position his clan to become a modern-day version of the Daytons and the Pillsburys—to become the First Family of Minnesota business.
AT THE BASILICA, Bill Pohlad described his father’s life as something out of Twain or Steinbeck, or like the mythical cowboys that Carl himself invented for the tales he told the boys at bedtime. Bill wasn’t exaggerating. The Carl Pohlad biography is a picaresque tour of hard-bitten 20th-century Americana, iconic in its grit, heroism, and rags-to-riches arc.
The son of a railroad brakeman, Carl was born and raised in Iowa before heading west. As a young man playing football at a California junior college, he was recruited to play for Gonzaga University by the school’s most famous alumnus: Bing Crosby. He boxed as a prizefighter, though he did so under an alias so he could keep his pugilistic persona distinct from his business pursuits. He worked as the muscle on bank collections during the Great Depression. He rode the rails like a hobo, growing hungry enough to poach and slaughter a sheep at least once. And he was a hero in World War II, earning three Purple Hearts and two Bronze Stars.
The post-war years were clustered with milestones for Pohlad. He married Eloise in 1947. His first born, Jim, arrived in 1953, then Bob in 1954, and Bill in 1956. At the same time, he was trying to forge a career. Carl had gone into business with his brother-in-law, Russell Stotesbury, in Iowa before the war. By the early 1950s, the pair acquired Marquette Bank in Minneapolis. Not long after, however, Stotesbury died unexpectedly. Just like that, Carl was the president of a bank, working without his longtime business partner, and responsible for a trio of infants.
And so he began making deals. A lot of deals. Many states, including Minnesota, had laws on the books prohibiting bank branches at the time, which meant that the industry was dominated by small independently owned operations. In the mid-1950s, Pohlad began buying those operators up, though he would usually retain the bank’s name and identity. By 1980, he controlled 30 banks.
During that same period, Pohlad’s instincts accurately surmised that Pepsi’s nationwide ad campaign, based on competitive taste tests, would eat into Coca- Cola’s market hegemony, and he began snapping up dozens of Pepsi franchises.
Be they banks or bottlers, the businesses were primarily family-run operations in the heartland, many of them lacking the additional capital required to compete in the dynamic market of the ’60s. Over time, Pohlad concocted a brilliant deal-making mechanism. Because capital-gains taxes were so high, and because many of the owners didn’t really want to retire so much as retain job security and establish the prospect of a safe landing later in life, he retained their management at a handsome wage and amortized the purchase with profits from the seller’s own company. The strategy was a forerunner to what would come to be known as leveraged buyouts.
At its peak, the holding company for Pohlad’s Pepsi franchises was a Fortune 500 firm generating about $800 million in annual revenue. “From Monday through Friday Carl was a banker, but flying around on the weekends, he was an entrepreneur,” says Don Benson, one of the men from the Arthur Andersen accounting firm who crunched numbers for Pohlad and among a trusted inner circle of advisers. “Carl always wanted to come away from a successful negotiation with something in writing signed by both parties. Sometimes it was the back of an envelope or a scrap of paper—nothing enforceable—but Carl believed in the psychology that the seller would be more likely to follow through on the deal.”
From the beginning, the Pohlad boys had a front-row seat on the action. They all remember the plane rides: Carl may have worked too long and too hard to be much of a presence in his sons’ lives during the week, but on Saturdays he would load them into his small company plane for his business trips to the Dakotas or Iowa. The aircraft was drafty and noisy and he often had to prep on the way out—with newspapers and spreadsheets draped across his knees—but even that face time was better than none at all. Besides, what kids don’t enjoy a little airplane adventure? And, once they’d landed, it was a chance for them to see the old man in action. “I loved those trips,” says Bill, the youngest Pohlad son. “Not just because of being with dad, but as we got older, watching him do business.”