Yes He Khan

YES HE KAHN

How does a kid from Lahore, Pakistan, grow up to one day pay cash for an NFL franchise in the Deep South? It’s your typical rags-to-riches story, really, though perhaps spiced with a bit more cardamom and cumin than usual • Kid moves to the U.S., Gets job washing dishes. Studies engineering in college. Designs a new truck bumper. Marries college sweetheart. Has two kids. Makes a fortune in the auto business. Befriends pro football team owners. Strokes a check for $700 million and change.

“I heard that the streets were paved with gold.
I found that to be true.” 

Shad Khan can make a statement like that about his adopted country that and not have it come off as boastful. He can dock his 220-foot yacht Downtown and have it be-come an attraction, not an ostentatious display of excess wealth. In an era of abundant economic misfortune, he’s a member of the scorned “one percent” that the average blue collar Joe Jacksonville can’t help but like.

His story has received quite a lot of attention over the last two months. Previously a virtual unknown figure in Northeast Florida, his amazing business success and engaging personality have quickly made him a household name and something of a cult hero. His mustache and long hair, an unusual, albeit slight, accent (part Midwestern, part Eastern immigrant), and his plain-spoken manner have endeared him to many in the region, which is a good thing because being liked is an advantage when trying to fill a stadium with ticket-buying fans.

On January 4 of this year, Khan officially became the owner of the Jacksonville Jaguars, purchasing the team from founders Wayne and Delores Weaver and their partners for a reported $760 million. The deal was announced a short six weeks earlier. The sale caught the city by surprise. Despite the fact that the team was not playing well, and hadn’t in recent seasons, few saw the change coming. And that’s just how the Weavers and Khan wanted it. The number of people who knew a deal was in the works, including Khan’s wife Ann, would barely fill a comfy booth at a coffee shop.

Despite being a bonafide billionaire, his newfound place in the spotlight is not something he attained (or really desired) in the past. Khan is president and owner of Flex-N-Gate Corporation, an automotive parts supplier that employs some 14,000 people at 48 manufacturing plants and nine product development and engineering facilities in five countries, including the U.S., Mexico and Spain. The privately held firm’s line of products includes interior and exterior plastics, lighting systems, mechanical assemblies, metal structural body components and exterior metal parts. If you drive an SUV or pickup truck built within the last decade, it’s a sure bet that at least a few pieces of Khan know-how are riding around with you.

He got his feet wet and fingers greasy in the auto business in 1970, when he began working at the company he would eventually own while studying engineering at the University of Illinois, Urbana-Champaign. A native of Pakistan, Khan came to the U.S. as a 16-year-old college student. Graduating in 1971 with a degree in industrial engineering, he was promoted to an engineering manager at Flex-N-Gate. He left the company in 1978 and, with help from a $50,000 small business loan, he founded Bumper Works. The company would go on to revolutionize the bumper business. In short, Khan brought to market a one-piece bumper design that was lightweight, efficient to make, and less prone to rust and corrosion.

“The amazing thing about the auto industry is that you have to be paranoid and you have to be humble because you are very dispensable,” he says. “The only way to get around that is to innovate and add value every day.” Adding value and innovating is something at which he’s proved to be very good. Today, Flex-N-Gate provides parts to every major auto manufacturer in North America, Japan and Europe.

Khan, 62, describes his childhood in Pakistan as normal and middle class. His father was a lawyer and entrepreneur. For a time, he worked for the massive British Indian Railway system as a clerk. Then he started a business making surveying instruments and selling engineering supplies. A young Shahid worked with him and recalls his father working late into the night more often than not. His dad Rafiq passed away a few years ago. His mom Zakia still lives in Pakistan.

Education was a paramount concern for his parents. He attended missionary Catholic schools for both grade school and high school. He says he was good in math, and engineering seemed like a fitting career path. He applied to a few engineering schools and was accepted at Illinois. His parents encouraged him to seek “fame and fortune.” So, at age 16, he packed what he could carry and traveled to America.

His father’s work ethic obviously rubbed off on Shad. Almost immediately upon arriving in Urbana, he got his first job in the States–washing dishes at a Greek diner. “I had many jobs then,” he says, recalling his time in college. “I loved the summer because you could work two or three jobs. I worked construction, delivering pizzas, the men’s department at Sears. I got my first car in the summer of 1968, a Karmann Ghia. I loved the idea that you could work, buy a car, create a lifestyle.”

He says it was a car that caught the attention of his wife Ann, also a University of Illinois alum. He first met her in a campus bar. He was a likable enough guy, in a popular fraternity and all. But it was an Italian sports car that sealed the deal. “I was 19 and driving a white Alfa Romeo Giulietta,” he says with a laugh.

The couple wed after college and have two grown children, Shanna and Tony. Their time spent studying, working and zipping around Urbana remains significant to the Khans. They have donated millions to the school, funding endowments and contributing to the building of several facilities including a library, performing arts center, science building and a shiny new tennis complex.

He remains a car guy, though he says he prefers cars that he can drive with regularity. “Cars are machinery. I want to use them. I don’t want to have to put them in a museum.” So, if you see a Porsche Carrera GT, for example, ease up next to you at a light, it might be Khan behind the wheel.

“Life has been good to me,” he says. Few could argue with that. And few would hold it against him for saying so.

jacksonville magazine: At what point in your life did you switch from being just a fan to wanting to own a team?

khan: You get to a point of frustration, particularly watching college games, where you say, ‘I could do that better.’ And then you start looking around. For me, discretion is very important. I spent quite a bit of time talking with the league, with other owners understanding the business fundamentals of what it would take, and really preparing for a day that you would have the opportunity.

jM: How long ago did you start thinking seriously about owning a team?

khan: I think probably six years ago or so.

jM: That’s pretty quick from having the idea to owning a team.

khan: Yeah, I think it is. For several reasons. We’ve gone through a challenging, turbulent financial time. Also, not many teams sell. And the ones that do sell have a lot of hair on them—lots of partners, other options, rights, some are not so clear. So, to be able to own a team, 100 percent, without a lot of drama, is a unique opportunity.

jM: Your 2010 attempt to buy the franchise in St. Louis obviously didn’t sour you on the NFL.

khan: No, not at all. That [situation] isn’t accurately reported, quite frankly. I went into it knowing [part-owner] Stan Kroenke had rights. My goal wasn’t to go into it and trample on them. Other than the result, it was a very good experience. That’s certainly my view of life. The outcome isn’t always what you expect, but you learn from it. Stan exercised his right and kept the team. I got to know him very well. I like him and respect him. As a matter of fact, he was the first guy I called after the deal was struck, even before it was public.

The league was very helpful after the Rams experience. I got to know more of the owners. They knew me. There was no issue of approval. They could move quickly. Wayne’s desire and my desire were absolutely aligned. We wanted to get everything done and have a high degree of certainty. We agreed on the deal and it was announced (November 29), and a week later we had unanimous [NFL] finance committee approval, another week later unanimous owners’ approval. We could have closed the day after. But Wayne and the partners wanted to wait until the first of the year, for financial planning purposes. [January] 4th was the earliest we could close. It’s unprecedented.

jM: There weren’t a lot of hands in this deal. You and Wayne sat down and hashed it out without much difficulty. It even came to a final plan written out on a cocktail napkin.

khan: Absolutely true. From my previous experience, I understood some of the drama, the math and the complications. And so did he. We knew what was a fair deal for both sides.

jM: Think he liked you as a businessperson, as a guy? And that helped the deal go so smoothly?

khan: He liked me, and I like him. I met Wayne probably five years ago. I have a huge amount of respect for him. A lot of people don’t know about his background, how hard he’s worked for the success he has had. Getting a team in Jacksonville? What are the odds of doing that? I don’t think I could have done it. You’ll have to ask him if he likes me, but I have nothing but affection for him.

jM: That was a big check you had to write to close the deal. Any moment of hesitation prior to signing, concerns that you didn’t get a good product at a good price?

khan: No. I broke every piggy bank, busted every mattress.

jM: In hindsight, has it occurred to you that you actually got the better deal, a franchise in Jacksonville instead of St. Louis?

khan: It’s a delicate issue. For me, with 20/20 hindsight, there’s no question that I’d want the Jacksonville deal instead of the Rams deal. No question. For a lot of different reasons. First of all, I’m not really a partner kind of guy. In no circumstance, did I feel Stan would be selling all [of his stake in the team]. Here, it was never an issue that 100 percent of the team was the offer.

Today, I’m delighted things worked out like they did. Look at the weather. I think the fans are football crazy. It’s the only game in town. You don’t have other major league sports. It’s a tax efficient state. It’s got everything going for it. However, if the Rams deal had happened, I would still think I won the Lotto, my ship rolled in. I would be as happy over there serving the fans in St. Louis as I am here. This is fate, destiny, kismet.

jM: The NFL is an unusual management situation. Not being a “partner guy,” as you say, now you are one of 32 owners.

khan: The NFL is the greatest ownership group on planet Earth. Yes, you are partners in the NFL. But it is very different than being partners in a team. Totally different. I think one wants to contribute to growing the NFL pie and then working yourself to get a piece of the pie.

jM: Pro football can be an emotional business. How will you try to balance the emotional desire to win with the need to make smart business decisions?

khan: They are both really very related. You’re not going to win every game, as much as you’d like to. Over the course of time you want to be able to win championships. Because of the parody in the league, the way the system is set up, you will have to go through some short-term pain for long-term gain. But I’ve gone through emotional roller coasters like that in the auto business. I’ve had to forgo some business, or what have you, for long-term good. So this is not new for me.

jM: Any of the other NFL owners that you’ve met or observed to whom you would compare your ownership style?

khan: All of them are unique. They all have great qualities. All of them contribute. For me, I’m very comfortable in my skin. The ideal Jaguars are going to be a combination of teams but also unique in their own right.

jM: General thought this off-season is that the team needs to be more competitive. More fans will come when the team wins more games. Do you agree?

khan: Absolutely. We want to win. They are interrelated.

jM: Have you established a bar for success in year one? What are the goals?

khan: To be the best we can be.

jM: You’re an international businessperson. Why hasn’t the league’s success translated more overseas?

khan: The fans really want the NFL experience. The league has really only gotten serious about that in the last two or three years. Before that, they had NFL Europe which was not as successful as people wanted it to be, for a variety of reasons. It wasn’t the true, authentic product. As the sport gets introduced, it will get more successful overseas.

jM: Do you consider yourself a competitive guy?

khan: Yeah. The auto industry is brutally competitive. You want to win but win the right way, too. Don’t leave a trail of bodies in your wake.

jM: Still consider yourself an engineer at heart?

khan: I think engineering is probably the best background a person can have. It’s very rational, logical thinking. That background translates into just about any venue you’d like to apply it to.

jM: This is a city that doesn’t have much in the way of celebrity personalities. You might be the biggest one now.

khan: I am? Well, thanks for telling me. If there is any surprise in the whole process it’s that I was not expecting this level of scrutiny and media attention. The boat [Kismet] I’ve had for five years and nobody cared. We [Flex-N-Gate] have 13,000 employees. This team has what, including the players, less than 200 employees? [Flex-N-Gate] revenue is north of $3.5 billion. Here, the revenue is $220 million or something like that. It’s infinitesimal compared to what I’ve done the last 40 years. Nobody asked me for an autograph or a photo session before. So, I’ve been really surprised. I now make sure I go out in a t-shirt that’s fully laundered…

jM: Lastly, the mustache. It’s already a local symbol. You know you can’t shave it off now even if you wanted to.

khan: Yes, it’s a Jacksonville stimulus product. Have you seen all the t-shirts that have been sold? It has brought a new level of entrepreneurship to the city. It’s stimulated the economy. I’m delighted to contribute…

For more about Shad Khan’s purchase of the Jaguars, including a timeline of events beginning with the November 29 announcement of the team’s sale and continuing through to the start of the new season in September, check out the February 2012 edition of 904 Magazine. Available at most area magazine newsstands and online at JacksonvilleMag.com.