Calculated Risks

Danny Villanueva was on an emotional high, even as the temperature reached a bone-numbing low. It was Dec. 31, 1967, the National Football League’s championship game; Vince Lombardi’s Green Bay Packers at home against Tom Landry’s Dallas Cowboys. On the field, it was 13 degrees below zero. Some three decades later, it would still be legend: the Ice Bowl. * “It was horribly cold,” Villanueva recalls, “but I was feeling great.” For good reason. In the game’s waning moments, the Cowboys led, 17-14, thanks in part to a field goal and two extra points from Villanueva. * “The Packers got the ball one last time. I didn’t believe they could make it. We were going to win,” Villanueva says, a boyish smile appearing on his face, “and my field goal would be the difference! I was planning my campaign for mayor of Dallas.” * But there’s another reason besides weather that this game is a part of NFL lore. Packer quarterback Bart Starr led his team down the field and, with 16 seconds left, sneaked the final two feet behind guard Jerry Kramer into the end zone. * “Bart Starr was brilliant,” effuses Villanueva, on this day sipping coffee in a country club dining room in the sunny hills above Oxnard, a long time and a long way from the ice of Wisconsin. “Starr could have panicked, but he didn’t. He kept his cool. And Vince Lombardi could have called for a field goal and tied the game at 17, sending us into overtime. But he took a gamble and went for six to win. That’s what great people do: [Take] calculated risks.”

Villanueva pauses and takes another sip of coffee. He motions to his hands. “I’m still searching for that elusive championship,” he says, his head hanging low. “I never won a championship ring with the Los Angeles Rams or the Dallas Cowboys and that bothers me as an athlete. That’s the one deep disappointment I have--no championship ring.”

*

The main hall at the Century Plaza Hotel & Tower is dark as guests file in for the annual banquet of the Latin Business Assn., but people still manage to spot Daniel D. Villanueva. “Danny,” they call out. He offers a handshake, sometimes an abrazo. A photographer motions that he would like a picture of Villanueva, who in turn signals those nearby to join him for the photo. Afterward, Villanueva, 59, quickly returns to introductions: Jim meet Alfredo, he’s with Merrill Lynch; Alfredo meet Robert, he works for the city; these are my sons, Jim and Danny Jr.

Many people know Villanueva as the former pro football player, a groundbreaker in a field that at the time had no Latino players. Some know him from his days at Spanish-language television station KMEX, or more recently as chairman of the board of Bastion Capital Corp., a venture capital fund. Others know him as an owner of the L.A. Galaxy, the city’s Major League Soccer team.

“If you asked me to name on one hand the most influential Hispanic businessmen in this town, I’d only get up to three fingers and Danny is among those three,” says Frank Moran, president of the Latin Business Assn.

Who’s in Villanueva’s league? Moran is asked. Former HUD Secretary and San Antonio Mayor Henry G. Cisneros, who recently moved to town as president of Spanish-language TV network Univision, already is considered a power player. “But he’s only been here a few months,” says Moran. “Give him a little more time and he’ll be right up there.” The other? Daniel P. Garcia, senior vice president of real estate planning and public affairs at Warner Bros., who also is president of the Los Angeles Board of Airport Commissioners.

“But Danny has staying power,” Moran says. “He’s been around in a position of influence longer than anyone I know. He has a proven track record, from banking to the L.A. Galaxy to his work with charitable programs. His success comes from his character. When he makes decisions, he takes into consideration the values and principles by which he was raised. A lot of people argue you have to be cunning and shrewd to be successful and that not being this way weakens you. Danny is proof that you can stick to your principles and still be victorious.”

Kate McLean, president of the Ventura County Community Foundation, is equally impressed with the man who also serves on the board of the nonprofit community organization: “Danny does not come across as a hard-nosed, stuffy businessman constantly looking for the next deal. . . . He’s successful because people trust him, and he makes you feel important, and you want to work for him. And once you’ve met Danny, he knows you. He never forgets you. You’ll always be in his sphere.”

That trait, she says, is a cornerstone of Villanueva’s business success. Seven years after he retired as general manager of KMEX, the Villanuevas are, according to published estimates, the second-wealthiest Mexican American family in the United States, with a net worth of more than $86 million. That is surpassed only by the $233 million in oil, gas and bank holdings of Texan Antonio R. Sanchez Jr.

Villanueva’s wife of 40 years, Myrna, is a Mennonite, and they share a philosophy of modest, simple living. Wealth is something Danny prefers not to discuss: “I find it uncomfortable, distasteful. Success shouldn’t be measured by how much you have but by how much you give back.”

At Bastion, he is always looking for investment opportunities with promising growth companies. One of the fund’s first investments was in something Villanueva knew well: Spanish-language television. Bastion now owns almost 20% of Telemundo Group Inc., the nation’s No. 2 Spanish-language broadcast network.

Ironically, Villanueva at one time was senior vice president at Spanish International Communications Corp., the network that would become Univision, Telemundo’s primary competitor and by far the nation’s No. 1 Spanish network. Every week in the national Spanish-language Nielsen ratings, Univision typically claims at least 15 of the 20 top-rated programs. The network’s local affiliate, KMEX, is the single most powerful Spanish-language outlet in the country, blanketing a fifth of the nation’s Hispanic market. Its 6 p.m. newscast routinely tops others in its time period in the ratings, beating all competitors, English or Spanish.

*

As 50,000 packer fans celebrated their 21-17 ice bowl victory, Danny Villanueva only briefly pondered his future. “I decided then and there that it was my last year in pro football,” he remembers. “I had played eight years. I never expected to play pro ball. I was a free agent, a walk-on. I never expected to play college ball. At one point, I was told I couldn’t even play high school ball. I told myself I’d drained every ounce I could get from my talent, and it was time to move on.”

The next day, Villanueva was in Dallas, packing his bags for a flight to Los Angeles. Before going to the Cowboys, Villanueva had played five seasons for the Rams, who signed him as a free agent in 1960. While in Los Angeles, he and Myrna had purchased a home in Sepulveda, living there even as he played for the Cowboys and returning home as his schedule permitted.

“I’m not sure why I fell in love with L.A.,” Villanueva says. “When I was a kid growing up in Calexico, Los Angeles was like ‘Wow!’ We used to go to Rams games. L.A. has always been a special place for me.”

So it was an appropriate spot, he thought, to start a new career and raise his family. As a Ram, he had been introduced to the management of KMEX and soon was doing sports commentary when he wasn’t on the field. Now that he’d left football, the station was offering him a job as sports director.

As a student at New Mexico State University, he had studied English and worked on the campus paper. Before that, he’d been a stringer for the Los Angeles Herald Examiner, reporting high school scores.

“Journalism,” he says, “is something I knew I could do. This was going to be my new passion.”

Villanueva’s arrival paralleled KMEX’s rising prominence as an L.A news source, and he soon advanced to news director. In the spring of 1968, more than 10,000 students walked out of five predominantly Hispanic East L. A. high schools, protesting general conditions and demanding a Board of Education response to their call for better education. It was a pivotal movement in California’s Chicano movement, and word of the walkout spread fast.

“I decided I had to cut into programming to bring our viewers the news,” Villanueva recalls. “I didn’t know exactly what the walkout meant, but I sensed it was something historic. There was an uneasiness bubbling in the community.” He remembers rushing to a technician and demanding that he switch from regular programming to the news feed.

The technician refused.

“Do it and I’ll take responsibility,” Villanueva shot back. “If you don’t do it, let’s go outside, because you’re going to have to beat me up to stop me from doing it.”

The technician paused, looked at the former football player’s broad shoulders and let the news director flip the switch. “I should have gotten fired,” Villanueva says. “Instead, I got promoted to head of operations and station manager.”

Still, as he established KMEX as a major player in local news, his credentials were being challenged in different quarters.

“One day I was covering a farm workers’ strike and violence broke out,” Villanueva says. “I walked up to this barricade and a security guard or sheriff, I don’t really remember, told me: ‘You’re not the press. You’re one of them.’ Even as the press, I realized Latinos were not being granted parity.

“We used to get bomb threats at the station. We’d get telephone calls from people calling us a ‘Spic’ station. And with Chicanos, I was considered a part of the establishment. I was attacked on one hand for being a militant and on the other for being a pacifist.”

Rodolfo Acuna, a Chicano studies professor at Cal State Northridge who was active in the movement, says that “many of the Chicanos thought that KMEX should have been presenting more local news and more news favorable to what we were doing. We felt the station wasn’t doing as good a job as it could have. There was an awful lot of mistrust about everyone, including Danny.”

Villanueva says that he was doing his job as a journalist. His peers agreed. Under his tenure, KMEX won a Peabody Award--one of broadcast journalism’s highest honors--for its coverage of the turmoil surrounding the Chicano movement and the controversial 1970 killing of journalist Ruben Salazar by a sheriff’s deputy.

*

The success in news led to similar results on the business side. “Because of our commitment to solid journalism, we had a solid product. Our billings went up. KMEX was bringing in 70% of the profits for the whole company,” Villanueva says. That company was Spanish International Communications Corp., which also owned TV stations in New York, San Antonio and Fresno.

When he joined KMEX full time in 1968, Villanueva’s salary was $9,000 a year, a 50% cut from the $18,000 he made the previous year in football. SICC’s owners, however, would reward him in 1972, offering him--for $30,000--a piece of what would become the company’s Miami station. Villanueva took the risk, promptly raising the money. It was, he says, “my first business investment.”

Federal legislation limiting foreign ownership of U.S. broadcast stations then helped Villanueva increase his stake. The family of the late Emilio Azcarraga Milmo, former president of Mexico’s Grupo Televisa S.A., the largest producer of Spanish-language programming in the world, owned 20% of SICC. When Azcarraga’s ownership exceeded federal limits, Villanueva quickly purchased the spillover. He won’t say how much he owned when Hallmark Cards Inc. purchased SICC and its sister company, Spanish International Network, for about $550 million in 1987 and 1988, but the sale no doubt provided the springboard for Villanueva’s subsequent ventures.

“The biggest criticism you might hear about Danny Villanueva is that he’s made a lot of money from the Hispanic market,” says Alex Nogales, chair of the National Hispanic Media Coalition. “But Danny gives a lot back. He knows right from wrong and he tries to act in the best interest of the community.”

Echoes Acuna: “If not Danny, someone else would have made all that money, and someone else might not have given back as much as Danny has. I know for a fact that he wants to see more Latinos in public office. He has helped electoral politics and it has helped the community.”

Federal elections records show that in 1996 Villanueva contributed to various politicians, including $1,000 each to L.A. Congressmen Esteban Edward Torres and Xavier Becerra. He’s quick to add that he also has supported the campaigns of Congressman Ed Pastor of Arizona, L.A. County Supervisor Gloria Molina, L.A. City Councilman Mike Hernandez, state Sen. Richard G. Polanco and various Assembly members.

“Latinos need visible leaders so our people don’t lose hope,” Villanueva explains. “We need to give people reason to participate in the process.”

While his sons were investing in radio--buying and selling stations from San Francisco to Houston to Washington, D.C.--Villanueva in 1990 joined Guillermo Bron to launch Bastion Capital. As managing director in the corporate finance department of Drexel Burnham Lambert in Los Angeles, Bron had met Villanueva after the sale of SICC to Hallmark. By 1994, they had raised $80 million in capital commitments from several of the nation’s leading institutional investors. By 1995, they had raised an additional $45 million.

Bastion’s goal was to invest in companies that directed goods and services to the Hispanic community. Its largest investor is the California Public Employees Retirement System; its largest investment, Telemundo Group Inc. In the past 30 months, Telemundo’s price per share has almost tripled. Villanueva sits on the Telemundo board but insists he has no input in the network’s day-to-day operations.

“Honestly,” he admits, “I don’t watch much Spanish-language TV.”

In 1994, Villanueva was among a group of investors who purchased Pan American Bank in San Mateo for $11.4 million. It is among the largest Latino-owned savings banks in the United States and is the state’s biggest. And in 1995, Villanueva and his son, Daniel L. Villanueva, known as Danny Jr., joined another Drexel Burnham Lambert alumnus, Marc Rapaport, and 13 other investors to form Los Angeles Soccer Partners L.P., the operating owners of the Los Angeles Galaxy. The reported price tag: $8 million.

The senior Villanueva reflects on his financial success: “I was told so many times, ‘You’re a good high school player, but you’ll never make it in college.’ In college, I was told, ‘You’re good, but you’ll never make it in the pros.’ When I started Bastion, they told me, ‘You’ve picked the worst time in recent memory to start a venture capital fund--and a minority fund to boot. You don’t have a chance. You have no idea what you’ve done.’ I like being a trailblazer. I like doing what no one has done before.”

And he is not afraid of calculated risks.

*

Daniel D. Villanueva was born Nov. 5, 1937, in Tucumcari, New Mexico, the ninth of 12 children. “When I was 6, we were living near Phoenix and we moved to Calexico,” he recalls. “There was only one part of town--the poor part--and that’s where we lived. I grew up in settlement homes run by Methodist missionaries who didn’t know if a football was stuffed or inflated. My dad was a migrant minister who followed the farm workers.”

In Calexico, football was the social event: “About 6,000 people lived in Calexico, and it seemed like 5,000 went to the high school game every week. I saw how the players got free Cokes. That’s when I had the first inkling that football was worth something. I guess, like the other kids, I saw football as my ticket out.”

His mother “was a little Mexican Indian who never set foot in a school. She was illiterate, but she could somehow read the Bible. We still don’t understand that. She sensed that sports was one thing that would keep us on the right track. The other things were church and the closeness of our family. She wouldn’t allow comic books, movies or dancing. She had a gentle hug, but also a firm stick.”

Dora Renison, a translator for the U.S. government, lived next door to the Villanuevas in Calexico and says that the family had strong values: “They never got drunk, no drugs. They never got into trouble. All they did was clean, wholesome fun. I sensed they had a fundamental feeling they did not want to disappoint anyone.”

Danny Villanueva won a spot on the high school football team. “I tried kicking field goals and I did pretty well. When the team won a game, I would go home and my mom would have a big meal and we would be happy and neighbors and friends would be there. It felt great. When we lost, I would come home and the house would be dark. No lights. No dinner. All week long, mom would throw little jabs: ‘Did you do your best?’ ‘I hope you’re not a loser.’ ‘What are you going to do to win next time?’

“That had an impact on me. I hate losing. I hate coming home to a dark house.”

His strong right leg and Mom’s drive earned him an athletic scholarship to New Mexico State University in Las Cruces, where he played football but planned for a career in education administration. During Villanueva’s senior year, Rams scout Chuck Benedict came to a New Mexico State game to check out the team’s star halfback, Purvis Atkins. That day, Villanueva kicked a 48-yard field goal.

“After the end of the season, I was teaching at Las Cruces High School,” he remembers. “The school secretary came into my room and said, ‘It’s Elroy Hirsch on the phone.’ Of course, he was the general manager of the Rams. ‘I’m busy right now,’ I told the secretary, ‘but if Napoleon calls, let me know.’ Then the vice principal came in and said, ‘No really, it’s him.’ I took the call and the next thing I know I was on my way to the Rams. I finished school in June 1960, and in July I was in Los Angeles.”

Villanueva was cognizant of the unique role he had to play as professional football’s only Latino: “I saw it as an opportunity to do good. I made about 150 appearances a year, talking to kids and groups. The guys on the team ridiculed me for doing ‘freebies’--not charging. But I didn’t see it that way. I did it because I felt I had a responsibility to do it.”

Villanueva has never hesitated to lead, and he continued interacting with the community at KMEX. He recalls how, 11 days after the devastating September 1985 earthquake in Mexico, KMEX was on the air with a telethon to raise money for the victims. “We raised $15 million.”

He pauses, then continues: “I always got the feeling that people were thinking, ‘You Hispanics get a lot of benefits, but you guys are not participating.’ Well, philanthropy is the playground of the wealthy. And most Hispanics are not wealthy. They live and die by their own means, working hard for their families. It’s interesting, but when we received donations at the station, the money was going to strangers in Mexico, but people were still doing it for their families. They gave donations in memory of their mothers and fathers and grandmothers.”

One of Villanueva’s longest continual contributions has been Navidad En El Barrio, which annually provides Christmas food baskets and toys to more than 20,000 needy families in eight Southern California counties. He founded the organization in 1972 while general manager at KMEX, and today an important part of the fund-raising comes from an annual telethon on Telemundo’s KVEA-TV.

Villanueva’s most recent community project is Destino 2000: Hispanic Legacy Fund, an endowment managed by the Ventura County Community Foundation. He joined the foundation board in February 1994, shortly after moving to his ranch in the area. With Villanueva as chair and planting a $10,000 seed, Destino 2000 this year reached its first fund-raising goal of $100,000. Interest from the money will be used to address “the general needs of the area’s Hispanic community, from illiteracy to employment to youth mentoring,” says foundation president McLean.

Villanueva admits the initial interest earnings will be modest, but he calls it an important starting point. “It was a goal that was not unreasonable. And, yes, we targeted Hispanic [contributors]. People perceive the Hispanic community with its hand out. This is a way of turning the hand over and giving back to the community.”

Pilar Villanueva, his mom, died in 1979 at age 80; his father had died a few years earlier. But the lessons endure. “I guess the most I learned from my mom was that we had to give to receive,” Danny reflects. “You have to help someone, and then you will be blessed. Today, most of my brothers and sisters are in some form of public service. Two of my sisters are missionaries; two are social workers. My brother is a preacher. ‘You all have your pulpits,’ my mom would tell me. ‘Yours is TV.’ ”

*

The Villanueva home is a working ranch sitting on 2,800 acres surrounded by the strawberry fields and lemon groves of Ventura County. Its South Mountain location offers views of Santa Paula, Camarillo and the Pacific. “I always wanted to be a farmer, growing lemons and avocados and raising cattle,” he says. A serene picture, for sure. But Villanueva is far from packing it up.

“Dad’s retired from more professions than anyone I know,” jokes Danny Jr., president and general manager of the L.A. Galaxy. “Certainly, at this point in his life, he could spend all day on his ranch, but he’s too industrious. He has the makeup of a competitor. He’s always willing to shift gears and take on new things.”

Among his dad’s new projects: forming an investment group with enough experience and cash to get an NFL franchise in Los Angeles. It’s a project the senior Villanueva admits would be the last hill he wants to climb. Bastion Capital Corp., he says, “has been an important project for me, but an NFL team would be the culmination of all my childhood dreams.”

He’s convinced that his background in football and the media, his business acumen and contacts, and his company’s willingness to commit at least $20 million to $30 million would make him an attractive general partner. “Football is a marketing and media venture,” he says. “I spent eight years in the NFL and 20 years in the media business. I think I’m perfectly qualified to have this team.”

L.A. Councilman Mike Hernandez thinks Villanueva is a natural: “One of the obstacles would be that the NFL currently has no Latino owners. We have to deal with those politics. Danny is also competing with other players in the city with the money to put together a team. To his advantage, Danny represents the future of this city.”

But really, other observers ask, does Villanueva stand a chance? He faces wealthier, even better-connected competitors. Billionaire Philip Anschutz and Edward Roski Jr., owners of L.A.’s hockey team, the Kings, say they’re willing to commit $500 million for a franchise and a Coliseum make-over. They already have strong support in both the business community and City Hall. And Rupert Murdoch, currently negotiating to buy the Dodgers, has deep pockets and an existing relationship with the NFL through his Fox television network.

“Of course, at this point there are a lot of people who say they want to own an NFL team,” says Steven Soboroff, senior advisor to the mayor and vice chair of Football L.A., the task force formed by Mayor Richard Riordan to lure the NFL back to Los Angeles. “There are a few people who can fit into any ownership group, and one is Danny.”

Villanueva says he is not interested in being a minor partner, just a name in an investment group. “I don’t want that,” he says. “I want to be a significant party, a general partner. I’m bringing something to the table.

“In Los Angeles schools, 68% of the 700,000 kids in kindergarten to eighth grade are Latino. That’s the future of the NFL in Los Angeles.”

And so the man who has tasted success on the football field, in the media and the world of high finance, would like to lead one more time.

“The ultimate joy for me would be to have a football team and a championship. Then I’m done. I’ll flap my wings and try to get to heaven.”