No, not cops shooting firemen; and no, not killings in the Chiefs parking lot at Arrowhead. The town is abuzz with talk about hometown phone company Sprint moving its headquarters moving to California.
Imagine that, Softbank execs not wanting to have to fly over Silicon Valley and its growing 1,000 person R&D facility to have meetings in here Kansas City?
In flight, Son can look out the window of his G5 as he crosses the coastline at 40,000 feet and see his 9-acre, $117.5 palatial estate below. Why would he want to do that? I doubt he does. But will Sprint move?
All the armchair quarter backs and talk show hosts are playing Madam Cleo; prognosticating possible future outcomes, weighing in and opining away. One of the worst examples I heard is the line, “They moved the headquarters once before when they merged with Nextel, they could do it again!”
Well, no they really didn’t.
Former Sprint head honcho Gary Forsee had a condo in Reston and he spent time there, but a better description of those days would be that some operations were “shifted” out East in the 2005 merger.
Overland Park remained the designated operations headquarters and, let’s not forget, that whole boondoggle led to the most ineffective, poorly planned merger in telecom history.
They’ve learned a lesson in that, I assure you.
Sprint’s Dan Hesse brought all the operations back to the campus here in early 2008 as one of his first acts. His reasoning at the time was the obvious disconnect of having senior management in Reston and key operational teams in Overland Park.
Hesse knows his stuff and that move was the single most valid thing Sprint has ever done; things simply don’t work when the tower of pure thought is that disjointed.
You can discount Hesse all you like, but he’s orchestrated this Softbank move and I think it will prove to be brilliant five years down the road.
The main difference between this move and the Nextel merger?
It’s not a “merger” we are talking about here, Softbank runs the show now and has a lot more involvement than most expected. SoftBank is now the source of subject matter experts and Sprint is turning to them for the technologies SoftBank uses in Japan currently.
Hey, in exchange for writing $20 billion checks, you get some clout. Which can also include choosing the city you operate from.
OP execs have already been holding regular meetings in California and Son is on record stating, “I’d like to bring Silicon Valley into the mix. We’re bringing SoftBank capital, our know-how and myself to this.”
Softbank’s Son, who is preferential to the Coast, has claimed all along that what they build in Silicon Valley won’t replace Sprint’s current headquarters in Overland Park but rather will be focused on “innovation and procurement.”
However when you decode all the double speak, what does it really mean to the 14,500 people who reside on the Sprint campus today?
My contacts at Sprint who have spoken to me this week offered the following quotes;
“Son’s home is California; he went to Berkley, he has real estate there. Why would he want to be in Kansas City?”
“I heard we are moving to Seattle because Son and Gates are such good friends!” (That’s Bill, not Ollie)
“Sprint may have a decreased presence in the area, but the campus is still a nice real estate play with more and more of it occupied with other corporate customers, not Sprint.”
“The Silicon Valley operation will grow; attrition will lessen the campus presence, but it won’t go away.”
What your well-coiffed scribe predicts?
The last quote holds the answer, I believe. Kansas City will see a decreasing presence, but Sprint won’t move the company in total. Eventually, you’ll see Sprint housed in maybe four buildings on campus, the rest will be leased to other Kansas City firms.
I think they simply couldn’t abandon that behemoth of a campus, but do the math; it’s a tiny percentage of a percent of the purchase price – in other words, meaningless in the scheme of things.
Do they have to stay where they started or get a black star in their corporate permanent records? We’d all like to think so, but in the end, what they owe is shareholder return, first and foremost.
If you’re not from Wichita, you may not recall the day the fat cats who started Pizza Hut were sitting around the board room table when one of them whispered, “You guys KNOW we live in Wichita, don’t you?”
Next thing the Chamber of Commerce knew, Pizza Hut was headed out of town. So it can happen.
Five years from now, the 14,500 people on campus will look more like 9,000, it’ll happen slow and become less and less a topic of conversation.
Things change, people change, and like I said, in the end, Hesse is going to be seen for what he is, brilliant.