Milan Mandarić on exile from Yugoslavia, success in California and his return to Europe
In 1970, like millions before him, Milan Mandarić arrived in the USA to try to achieve his own American dream. However, he did not arrive empty-handed. Already established as one of the most progressive entrepreneurs in the former Communist bloc, Mandarić took Silicon Valley by storm, got rich thanks to Steve Jobs and, later, heavily invested in his big passion – football.
Born near Gospić, a small Croatian town, in September 1938, his childhood made him tough and innovative. His family had to hide in the mountains during the war and his father was taken into a concentration camp for four years. When they returned to their village, they found it destroyed and so they moved to the Serbian city of Novi Sad.
“Whatever does not kill you, makes you stronger,” Mandarić said. “When you are a young boy and you go through not too much comfort and have difficulties, later it is far easier to overcome some problems.” He is 78 now, as sharp a dresser as ever, and the owner of the Slovenian champions Olimpija Ljubljana.
His mission at the moment is to return Olimpija to a position of pre-eminence after several years in Maribor’s shadow. Before his arrival, they had gone more than 20 years without winning the title. As at Portsmouth, Leicester City and Sheffield Wednesday, all three of which he took over when they were close to bankruptcy, Mandarić saw opportunity in difficulty.
After the war, Mandarić’s father opened a mechanical workshop for car components in Novi Sad. Upon finishing his studies at a local engineering school, the 21-year-old Mandarić took over the company and, in five years, turned a small business into one of the biggest corporations in the former Yugoslavia. Later, however, they ran into difficulties with the regime and Mandarić fled to Switzerland, having been described as a “capitalist traitor” by the Communist leader Josip Tito.
After a few months, he travelled to Chicago for a family wedding and one of his relatives, knowing of his entrepreneurial skills, suggested he should try his luck in California. He secured a good job in Silicon Valley and quickly became a millionaire, with his property portfolio reportedly being worth around £100million.
When asked about the source of his wealth, Mandarić immediately points to Steve Jobs, the founder of Apple, who was not just his inspiration but “made him rich”. In the early eighties, having already built several factories in Los Angeles and broken through in Silicon Valley, Mandarić sold his computer components company Lika and set up a new corporation Sanmina, its name a merger of the names of his two daughters – Sandra and Jasmina.
“Sanmina manufactured systems and components for electronics companies and Apple was one of our biggest goals, hence my marketing and engineering department made a proposal for them,” Mandarić explained. “At the time, Stevie lived only a few blocks from my house and I met him in the neighbourhood occasionally. We became friends and he helped me a lot. We were supplying circuit-board systems and programs.”
As a boy, though, Mandarić had not dreamed of becoming a famous engineer. He wanted to be a great footballer, but was not good enough. “I was never really a superstar,” he said, “but I really loved the game.” When it was clear that he would not make it as a professional, Mandarić invested his money into football. He was there at the beginning of the Northern American Soccer League.
“It was a difficult task, because Americans had their own business in sport already: American football, baseball, basketball, ice hockey,” Mandarić said. “And soccer was not so big for them. Moreover, people had to grow up with it. Also people like you, reporters, they had to grow up with the game and really understand the game to be able to talk about it. Sometimes, to these reporters, it was more important how many pints of beer George Best had during the night rather than whether he was playing great.”
Best played for Mandarić’s franchise, the San Jose Earthquakes, and they developed a firm relationship: Manchester United’s legend eventually called his son Milan. “It’s strange to be Irish and to be called Milan Best,” Mandarić said. “That’s a sign of how close we were to each other. George is one of those I really miss today.”
When NASL fell apart in 1984, Mandarić decided to move into European football. After short spells at Charleroi and Nice, he was introduced to people at Portsmouth, who were in severe financial trouble, by the Belgrade-born USA international Predrag Radosavljević, better known by the nickname ‘Preki’. “I always invest in clubs that have problems, because I like challenges,” Mandarić said. “I like doing something that other people did not do, to turn it around and at least to have some impact. For me, if I took over Manchester United today, what could I do with them? Okay, they are at the top already, so it is not a challenge.”
He took over at Fratton Park in 1998 and five years later Portsmouth secured promotion to the Premier League under Harry Redknapp. “But then there was one little problem with Harry,” Mandarić said. “While we became good friends, Harry always wanted to bring more players and to do things. One day he said that it was not really doing well, he would really like to take time off, that his wife was not doing well and that he wanted to leave me. I just did not feel very good about that and what happened: Harry did not really want to leave me. He departed for a rival club in Southampton. So he went there and I hired a coach from France, Alain Perrin. He was a good coach, but he struggled a little with staying up and Harry took Southampton down. So, Harry one day called me and said, ‘I would like to come back.’ To make the story short, I could not resist.”
They remain good friends and when the Olimpija coach Marko Nikolić called the Nigerian striker Blessing Eleke a “black idiot” last spring, Mandarić even considered appointing Redknapp. “I turned around,” Mandarić recalled, “and I could not find anyone who would help me out, so I called Harry and he said, ‘Yeah, I can come, but I’m worried that I’ll not be successful because I don’t know any players, the team, the other teams you are playing.’ He was fair enough to tell me that – it is better to find somebody who really knows the environment. I really appreciated that he was honest.”
For a successful businessman like Mandarić, what happened at Portsmouth remains a wound. He sold the club to Alexandre Gaydamak in 2006, and they won FA Cup two years later, but then began to decline and ended up in League Two following major financial problems. “It was my biggest down because I always wanted to leave a legacy, to leave the club on the top so it can prosper,” Mandarić said. “I loved all those people, because they were very good, honest people. Supporters loved their club and really gave me tremendous support. Without that kind of enthusiasm, without that support, I don’t think I would have been successful there. And that was my first real love affair with football in England at that club. Even today, sitting here, I wish I could help them and, you know, maybe one day I will be back and help them, but right now I just don’t feel good about that, because Gaydamak, a good young man who really showed me what he was going to do, interested in everything… and I thought he would continue to build the club. Actually, he did some good things, such as winning the FA Cup, but then, later, he just left the club alone. I was able to get a permit and finances for a new stadium, everything was organised. And he just sold the club to other people who had no real interest – they just sold some players and took advantage of the situation. It was a bad thing to do.
“It happened when I was at Leicester and I wanted to stay with them for some time to keep the club and take them further.” Leicester was another traditional English club he saved, then sold for a reported £40m in 2009 to a consortium of Thai businessmen, who still own the club. When Leicester won the title, Mandarić was a forgotten figure behind their success.
He is clear, though, does not regret selling: “I had done my job there. I got them up after I found good people and helped them. Now, they are on their way. I am proud of what they have done there and I am proud of the club and those people. Everyone recognises what I have done there.
“For me, money is not a reward. It is that you know that you have done something proper and right and put a smile on people’s faces.” After Leicester, he managed to do something similar with Sheffield Wednesday.
In England, his reputation was significantly damaged after a long investigation into his and Redknapp’s tax affairs, although both ended up being cleared. “I did it for him and what I did was nothing wrong,” Mandarić said, leaning forward a little. “The investigation showed that we were right and they just spent the government’s money. They apologised to me and paid back all the expenses. He has done nothing wrong: I invested his money into some stuff with the hope that he could make some money. They thought that was the money that was given to him as a bonus from the club and he did not need to pay taxes on it. But you don’t pay tax until you receive a profit on that. It was a total misunderstanding and we did nothing wrong. It is a system. With the system, you have to prove that you are not guilty and if I had my choice I would rather never have anything like that but it is not my fault.’
According to Mandarić, running a business and running a football club are very similar. “You have to develop a good team, with people who are capable of doing things in their positions,” he said. “In football, in order to be successful, you have to have two things: you have to love the game and you have to have a head for the game. You have to run it as a business as well, as professional business with certain rules.”
He gestured around him. “There is no difference, for example, with this restaurant. You have to know what the guy at the bar is doing, what the guy at the door is doing, the girl who answers the phone. You have a team, everyone has a contribution to make, has to be professional and to know what he or she should do. Otherwise, you have no chance. Can you imagine if that guy at the bar was answering the phone? Or if a woman is making the bed instead of staying in the kitchen? For a good job, you need team effort.”
He insisted that football always has to be run as a big business. “Your product is your play and you have to develop your product properly and get it together into the form,” he said. “You have to have people who present your product and to do that you have 20 or 25 players chosen for that particular game. The best eleven play. So, it is a business in my opinion. Anyone who runs it other than as a business will get into trouble. You spend money on the wrong players, you don’t have good training facilities, you don’t have good staff.”
But in his opinion, money is not everything and the best proof is Leicester’s success. “Look what they have done,” he said. “They won one of the most prestigious leagues in the world by having a proper direction and without big spending. Yes, you need to have money, but you don’t need to have money to throw at what you think are the best players to be successful.
“It’s like a puzzle – you have to put everything together. It’s more about management than money. How you manage it, how you choose the players, how you select your coaching or medical staff, facilities, what your academy looks like. All these things work together. At the end of the day, you are successful if you get results.”
According to him, it is important to find a balance between the financial situation and results: “Financial success never comes unless you have success on the sports side. When you have results, when you have a lot of young players, a good academy, then you might get into Europe where you receive rewards. A lot of supporters come to pay for tickets, you are more successful with marketing companies, you have good-quality players who are an important asset of the club. Hence, the main formula to be financially successful is to have results.”
Mandarić will turn 79 later this year. “I think I have achieved a lot in football,” he said. “I am very proud of what I have done and I have had a lot of fans wherever I have been. I have always left in a very friendly way so people appreciated me and gave me respect and I always kept my enthusiasm and energy to return to football again, because I think I like to do this, not just football, but running companies. I was always running companies that were in trouble in America and I managed to build them into bigger companies.
“And, what I like to do, you know, I just like to be challenged. I had never anything easy in my life, so I was always working really hard and I really enjoyed that. You have to be positive and prove yourself and get the job done.”