Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hi everyone, welcome to the Deal. I'm your host Jason Kelly.
Speaker 3: Hello, I'm Alex Rodriguez.
Speaker 2: We're here in New York and this episode. David Rubinstein.
Speaker 2: He is the co chairman of the Carlo Group, which
Speaker 2: he founded back in nineteen eighty seven. He is a
Speaker 2: television host. You've been on his television show on Bloomberg Television,
Speaker 2: but that's not why we're talking to him today. He
Speaker 2: is also the relatively new owner of the Baltimore Orioles,
Speaker 2: a franchise you're very familiar with.
Speaker 3: Yeah, and David Rubinstein, he's a renaissance man. I mean
Speaker 3: he's Masterdard of building a private equity giant. He's also
Speaker 3: donated tens of millions of dollars to philanthropy and now
Speaker 3: he's the latest challenges the Baltimo Oriioals, which is one
Speaker 3: of the true five or six iconic franchises in sports.
Speaker 3: They have the number one farm system. Camden Yards is
Speaker 3: one of my favorite parks, not only to watch a game,
Speaker 3: but more importing to play a game. But it is
Speaker 3: one of the great sports venues around the world. Jason,
Speaker 3: I still remember in nineteen eighty three when the Baltimore
Speaker 3: Orioles beat the Phillies and my hero Kyle Ripken caught
Speaker 3: a line drive for the last out of the Baltimore
Speaker 3: Oriols Championship. And I can't wait to see more base
Speaker 3: on that stadium.
Speaker 2: David has talked about this deal as being unique for
Speaker 2: him because it's essentially half investment, half philanthropy. He's going
Speaker 2: to talk a lot about the community building aspect of
Speaker 2: what it means to be an owner with something you
Speaker 2: certainly can understand from a lot of different perspectives. So
Speaker 2: much to get into with the great David Rubenstein that's
Speaker 2: coming up on the deal, all right. So we like
Speaker 2: to start every one of these shows by having the
Speaker 2: guests introduce themselves and what they do.
Speaker 4: I'm David Rubinstein.
Speaker 5: I am the chairman of Carlisle Group, a firm I
Speaker 5: started in nineteen eighty seven with a few other people,
Speaker 5: and I do some other things, but I guess that's
Speaker 5: probably what I do mostly.
Speaker 2: You also have recently gotten involved in the game of baseball.
Speaker 4: That's correct.
Speaker 5: Despite my appearance as a Little League All Star shortstop,
Speaker 5: didn't think it would go very far, but I had
Speaker 5: now regained my baseball acumen and interest, and I am
Speaker 5: now the principal owner of the control partner they call
Speaker 5: it in baseball of the Baltimore Orioles Baseball team. I
Speaker 5: grew up in Baltimore, and after fifty years of not
Speaker 5: really focusing on Baltimore and the Orioles, I'm now refocusing
Speaker 5: on it.
Speaker 2: And boy are you ever. Let's just dive into this deal.
Speaker 2: How does this come to you? What's the process by
Speaker 2: which you end up owning this team?
Speaker 5: A little convoluted, like everything in the big world of sports.
Speaker 5: The team has been owned for thirty years by the
Speaker 5: Angelos family. They bought it out of bankruptcy in nineteen
Speaker 5: ninety one or nineteen eighty two. And let me just
Speaker 5: clain what happened. Saint Louis Brown's were a team in
Speaker 5: Saint Louis. They weren't doing well there. They went to Baltimore,
Speaker 5: and Baltimore group of people bought up for two million dollars.
Speaker 5: Two million dollars that's in nineteen fifty four. Edward Bennett
Speaker 5: Williams bought it when the family wanted to sell that
Speaker 5: owned the Hofburger family. He bought it nineteen eighty one
Speaker 5: for roughly twelve million dollars. When he passed away, his
Speaker 5: estate sold it to Eli Jacobs, a buyout person in
Speaker 5: New York, for roughly seventy five million dollars, and then
Speaker 5: when that went bankrupt, it went into bankruptcy court and
Speaker 5: was bought in bankruptcy court for a net price of
Speaker 5: roughly one hundred and fifty five million dollars by a
Speaker 5: lawyer in Baltimore, Nate peter Angelo's. He did have some
Speaker 5: other Baltimore people come in with him, most famously, I
Speaker 5: would say Tom Clancy, who was a very author lived
Speaker 5: in Baltimore, and Pam Shreiver, among others. But he owned
Speaker 5: it and was the control partner for a long time.
Speaker 5: His health went south and his son began running it
Speaker 5: about five years ago, his son John. I don't know
Speaker 5: exactly why they decided to entertain an offer, but I
Speaker 5: had thought they might be interested in selling it. I
Speaker 5: was told by some people in Baltimore that maybe they'd
Speaker 5: be recepted to somebody from Baltimore buying it, and so
Speaker 5: I actually teamed up with Ted de Jonsis, who owns
Speaker 5: the Washington Caps the Washington Wizards, and he said to
Speaker 5: me correctly he knows more about sports than I did.
Speaker 4: Why don't we team up?
Speaker 5: I would invest in Monumental and then Monumental would buy
Speaker 5: the Oriols. And he'd led the negotiations with John Angelo's
Speaker 5: about a year before we actually consummated the deal that
Speaker 5: actually happened, and then it didn't work out. They couldn't
Speaker 5: reach an agreement and so it fell apart. Last summer,
Speaker 5: John Angelos, who was renting a house in Nantucket, came
Speaker 5: to see me at my home in Nantucket and he said,
Speaker 5: why didn't I buy a minority interest in the team.
Speaker 5: If I liked the Oriols and didn't work out through Monumental,
Speaker 5: I could buy a minority steak. And I went back
Speaker 5: to him and said, well, maybe if I could buy
Speaker 5: a steak that would get me to control at some point,
Speaker 5: I'd be much more interested. He came back and said, okay,
Speaker 5: but it doesn't have to be over three or four years,
Speaker 5: which is what I anticipated. He said, maybe we can
Speaker 5: buy control sooner, and so I decided to move forward
Speaker 5: with it. I called somebody who had once said to
Speaker 5: me he'd like to buy the Ools with me, and
Speaker 5: it's a guy in New York named Mike Arraghetti, who
Speaker 5: is really the sea As a very excellent private credit
Speaker 5: firm private equity as well, and so I called him
Speaker 5: and said, there may be a chance to buy the Oros.
Speaker 5: Would you like to come in with me? And he
Speaker 5: said yes, and then together we negotiated for six or
Speaker 5: nine months or so with Johnny Angelo's. I didn't think
Speaker 5: the deal was going to happen at one point because
Speaker 5: in Christmas when we were negotiating the deal, it blew
Speaker 5: up a bit. It wasn't looked like it was going
Speaker 5: to happen, and I maybe lost my cool and I
Speaker 5: walked away from the deal saying, this is not going
Speaker 5: to happen.
Speaker 4: I'm not happy.
Speaker 5: And then for about a week it kind of was nowhere.
Speaker 5: But then like deals always come back, it seems, and
Speaker 5: this one came back and we negotiated the deal and
Speaker 5: we closed it. The first part of it right at
Speaker 5: the beginning of the season, right the poor opening day.
Speaker 5: And then the second part of the deal was we
Speaker 5: bought forty percent at the beginning and the remaining sixty
Speaker 5: percent we just closed.
Speaker 3: That's incredible. So I mean, you go to Duke undergrad
Speaker 3: then you get a law degree in Chicago, you run
Speaker 3: what i'd call the Yankees of private equity in Parlia.
Speaker 4: One of the most.
Speaker 3: Amazing companies that you started, manage almost half a trillion
Speaker 3: dollars today. And you say, well, I'm not good enough
Speaker 3: to make a major lye baseball team, but I'm rich
Speaker 3: enough not to buy one. How does that conversation go, David,
Speaker 3: when you're like, all right, I am ready, because this
Speaker 3: is a big move for you.
Speaker 5: It's always complicated to figure out what you want to
Speaker 5: do with your life when you're past running something. So
Speaker 5: I gave up at the age of sixty nine. I
Speaker 5: gave up being the co CEO of Carlisle, and I
Speaker 5: became the co executive chair and then the co chair.
Speaker 5: And I have a family office that I invest through
Speaker 5: called Declaration, and I chair seven nonprofit boards, so like
Speaker 5: the Kennedy Center or the Library of Congress, Board, the
Speaker 5: National Gallery of Art Board, Universityago Board and Counselor Correlations
Speaker 5: and so forth. So that takes time, and then I
Speaker 5: try to do one book every two years, and then
Speaker 5: I try to do TV shows on a place called Bloomberg,
Speaker 5: So I do a couple of TV shows there and
Speaker 5: and some on PBS. So I have a lot of
Speaker 5: things to do. And I'm not sure why I thought,
Speaker 5: at my current age, an age that I never thought
Speaker 5: i'd live to be this old, that I would go
Speaker 5: back and buy a baseball team. But the reason I
Speaker 5: really did it was not because I thought I'm going
Speaker 5: to make more money and that's going to make me
Speaker 5: a happy person having more money. That wasn't it. I
Speaker 5: just grew up in Baltimore. I got a public education there,
Speaker 5: public school education. My parents were born there, they were
Speaker 5: raised there, they were married there, they lived their whole
Speaker 5: entire life pretty much there until they retired, and they're
Speaker 5: buried there. And I realized I won't, no doubt, be
Speaker 5: buried in Baltimore as well. But I thought I hadn't
Speaker 5: really done enough for Baltimore compared to what I've done
Speaker 5: in other philanthropic areas. And I thought, if the ownership
Speaker 5: was ready to be sold and the owner, the current owners,
Speaker 5: were ready to sell it, I would maybe come back
Speaker 5: and bring in some other people in it and try
Speaker 5: to infuse some energy into the team.
Speaker 2: You come into this at a moment where you've seen
Speaker 2: a number of your friends and peers, and you and
Speaker 2: I have talked about this. Over the years, you've seen
Speaker 2: them get into sports and in various forms and fashions,
Speaker 2: whether it's Tony Wrestler or Steve pel Huger, Mark Lazri
Speaker 2: many others. What did you hear from them that made
Speaker 2: you either initially disinterested or interested? Like, what did you
Speaker 2: take from those conversations?
Speaker 5: Initially I had opportunities to buy sports teams as well.
Speaker 5: In fact, the Wizards and the Caps owned by Abe
Speaker 5: poland Abe was a friend of mine. He asked me
Speaker 5: to consider buying it well before he actually sold it.
Speaker 5: I didn't do that or buy any other team for
Speaker 5: this reason. I was running a large private equity firm
Speaker 5: with my partner who was the co CEO, and I thought,
Speaker 5: if I say to my investors, who are giving me
Speaker 5: money to try to get a good rate of return,
Speaker 5: by the way, I'm not spending that much time on
Speaker 5: your investments. I got a sports team I'm spending time on.
Speaker 5: I thought they would criticize me, and I thought they
Speaker 5: would say, you're not focused on what we were giving
Speaker 5: you money for. But as I saw some of my
Speaker 5: colleagues in private equity who had the same dilema I
Speaker 5: had by sports teams, the rates of return didn't go
Speaker 5: down and they actually made money on the sports teams.
Speaker 5: I said, maybe I was wrong, Maybe you can do both,
Speaker 5: And so I maybe regretted that I didn't participate in
Speaker 5: some of the earlier deals when NBA teams were bought
Speaker 5: for a lot lower prices than they were bought for
Speaker 5: it today, and the same with baseball teams. And since
Speaker 5: I wasn't really running Carlisle day to day any longer,
Speaker 5: I thought I could afford to do it. But what
Speaker 5: I learned from others is that you know, you got
Speaker 5: to put energy into in time, and it takes more
Speaker 5: time than I originally thought. I mean, I knew it
Speaker 5: would take time, but what happens is you get addicted
Speaker 5: to showing up at the games. So I hadn't been
Speaker 5: to Oriols games very much, but now I'm going to
Speaker 5: more Ools games than I ever dreamed of. He was
Speaker 5: going to because as the owner I feel and the
Speaker 5: control partner I feel, I should show up as a
Speaker 5: symbol of the ownership group that I put together. And
Speaker 5: it can be rewarding but also very time consuming.
Speaker 2: Talking about your deal, consensus out there is you got
Speaker 2: a pretty decent deal for this franchise. Does it feel
Speaker 2: that way to you, Well.
Speaker 5: I think we got a good deal because you know,
Speaker 5: if they had auctioned it off and said, whoever the
Speaker 5: highest bidder is, we'll get this, maybe somebody would have
Speaker 5: come in at a higher price. However, the Angelos family
Speaker 5: did not want to be seen as putting a company
Speaker 5: or the team up for sale in a way that
Speaker 5: might lead to somebody coming in and wanting to move
Speaker 5: the team from Baltimore. It's very important Baltimore to have
Speaker 5: the team stay there. And while a lease was signed,
Speaker 5: was really a fifteen year lease. It might turn out
Speaker 5: to be a thirty year lease, but it's a fifteen
Speaker 5: year lease. And I think Baltimore was always nervous that
Speaker 5: maybe somebody from a big city would come in and
Speaker 5: say we're going to buy the team, but ultimately move it.
Speaker 5: So the fact that I was from Baltimore, I think
Speaker 5: made the family feel more comfortable in selling to me,
Speaker 5: maybe at a slightly lower price, but maybe not as
Speaker 5: much as you think slightly lower price, and maybe others
Speaker 5: would have paid. His team was not without its challenges
Speaker 5: because remember they have not been in the World Series
Speaker 5: in forty years, and while the team was very good.
Speaker 5: The year before I bought it with my partners, teams
Speaker 5: had some real challenges up until the last year, and
Speaker 5: so it's not a foregone conclusion that it's going to
Speaker 5: be a home run that buy it at the price
Speaker 5: we paid.
Speaker 2: Well, he's you know, he's already using the you know,
Speaker 2: the metaphors to you know, talk about his sports team.
Speaker 2: Talk to us about putting this consortium of investors together.
Speaker 2: You mentioned Mike Garrighetti, the CEO of ARES. He's a
Speaker 2: big baseball fan, grew up in Rockland County, you know,
Speaker 2: really a self made guy. You know, Yale goes to aries,
Speaker 2: et cetera. You also, I think, in a very savvy way,
Speaker 2: put together some people who have also relationships to Baltimore.
Speaker 2: Tell us about that process.
Speaker 5: Well, I thought it was important to have people in
Speaker 5: Baltimore who would show to everybody that is in Baltimore
Speaker 5: related effort. So Kurt Schmoke, who was a former mayor
Speaker 5: of Baltimore and I grew up with Kurt, he agreed
Speaker 5: to come in. He's not a wealthy person by the
Speaker 5: standards of private equity people, because he'd been in public
Speaker 5: services whole life. But he came in. I asked cal
Speaker 5: Ripken if he would come in, and he did come
Speaker 5: in as well. And then the number of wealthy Baltimoreans
Speaker 5: who had not had a chance to invest in the
Speaker 5: team when Peter Angelos bought it, they were willing now
Speaker 5: to invest in it. So I mostly was focused on
Speaker 5: people from Baltimore or that area. There are some from outside.
Speaker 5: But what I've also found there's a lot of people
Speaker 5: who left Baltimore have always retained an interest in Baltimore.
Speaker 5: So there's one person who I won't raim him, but
Speaker 5: who has an obsession with Baltimore Orioles. He mentioned to
Speaker 5: me one time when I was with him in a
Speaker 5: business meeting, and he said, if you ever buy the Oriols,
Speaker 5: let me know. I'd like to come in to friends
Speaker 5: and family. I thought he might be put in a
Speaker 5: million dollars or something, but he put in, ye' say,
Speaker 5: well over fifty million dollars and obviously wealthy guy, but
Speaker 5: he told me that he's not missed a game in
Speaker 5: twenty years. If he's not physically there, he watches it
Speaker 5: on MLB dot com. And he's just got this obsession
Speaker 5: with the Orioles. And I found there are a lot
Speaker 5: of people that have this obsession with the ools. For example,
Speaker 5: the owner's suite income to the New Yarts has fifty five
Speaker 5: seats more or less. I told the management people, always
Speaker 5: make sure it's filled with people from Baltimore or season
Speaker 5: ticket holders or little leaguers or people that are diverse,
Speaker 5: and we're not just a bunch of old white guys
Speaker 5: like me sitting there. So they've done a very good job,
Speaker 5: and we have it filled every night. That's one of
Speaker 5: the dangers of actually being an owner. There is filled
Speaker 5: every night. But there's a lot of food this in
Speaker 5: the owner's boxes, and I found that you can gain
Speaker 5: a lot of weight because the food is, you know,
Speaker 5: like pizza and French fries and so forth.
Speaker 2: So I got to be very careful ballpark food.
Speaker 4: Yes, I have it filled up.
Speaker 5: And there are people who have been season ticket holders
Speaker 5: for forty years, forty five years, and they said they've
Speaker 5: never been the owner's box and they just love the ools.
Speaker 5: And so I'm trying to say to people, look, I'm
Speaker 5: not criticizing my predecessors. They had a complicated situation, but
Speaker 5: I'm now trying to say this is part of the
Speaker 5: revitalization of Baltimore that I'm trying to help with. Baltimore
Speaker 5: is a city that has a lot of challenges. When
Speaker 5: I was growing up, it was the ninth biggest city
Speaker 5: in the United States, population of roughly nine hundred and
Speaker 5: thirty thousand people. Today it's about half that size, a
Speaker 5: little bit more than half that size, and one of
Speaker 5: the reasons is that there's been white flight to the
Speaker 5: Baltimore County. Baltimore City is one of the two cities
Speaker 5: the United States, the other being Saint Louis that is
Speaker 5: not in a county. So when you leave Baltimore City
Speaker 5: and go to Baltimore County, your income taxes and your
Speaker 5: property taxes don't flow back to Baltimore City. The city
Speaker 5: therefore has had lots of challenges that you see in
Speaker 5: urban areas, and it has had, you know, crime problems,
Speaker 5: It's had STD problems, the illiteracy problems, and so I'm
Speaker 5: not by myself going to solve all those problems, obviously,
Speaker 5: but what I'm trying to do is say, let's revitalize Baltimore.
Speaker 5: Let's get some corporate headquarters that come back there. Many
Speaker 5: corporate heaculars have left, and so what I'm trying to
Speaker 5: do is infuse the team with a sense of energy,
Speaker 5: and hopefully more people in the city will say this
Speaker 5: is a great place, we should stay here, and maybe
Speaker 5: people from outside of Baltimore City might relocate there or
Speaker 5: move back there. I hope that will happen, but obviously
Speaker 5: it takes some time.
Speaker 2: Before we get too far away from the ownership. We
Speaker 2: probably should also point out that Mike Bloomberg is part
Speaker 2: of the ownership group.
Speaker 3: So David playing against Baltimore for almost twenty five years,
Speaker 3: I'll tell you it's one of the greatest iconic blue
Speaker 3: chip franchise, not don't even baseball, but in all the sports,
Speaker 3: and for me playing there for so many years, it
Speaker 3: was my favorite stadium. Canden Yards is just amazing. Kyle
Speaker 3: Ripken is my favorite player, So I'm very tied to
Speaker 3: Kyle kinn senior Eddie Murray in the great history of
Speaker 3: the Orioles.
Speaker 2: What kind of.
Speaker 3: Owner are you going to be or are you? Are
Speaker 3: you one that talks to the GM and says, hey,
Speaker 3: one guy's moved around. Do you tell Gunnar Henderson to
Speaker 3: get your elbow down, get it up? Are you kind
Speaker 3: of more just like watching from the stands and hoping
Speaker 3: for the best.
Speaker 5: Well, I have to be very honest, I don't know
Speaker 5: as much about baseball as as maybe I wish I did.
Speaker 5: I played Little league baseball, and I peaked at eleven,
Speaker 5: and then the twelve or thirteen people started getting bigger
Speaker 5: than me. And I thought, when I was eleven, you know,
Speaker 5: maybe Jewish Little League All Stars would get to the
Speaker 5: major leagues. But I found out that doesn't usually happen.
Speaker 5: So I haven't followed baseball as closely as other people have,
Speaker 5: and therefore I'm learning the game right now. We have
Speaker 5: a general manager who was voted the American League General
Speaker 5: Manager of the Year last year. His name is Mike Elias,
Speaker 5: who was a baseball player at Yale. Very smart person
Speaker 5: from the Washington area, went to high school in Washington.
Speaker 5: He has what they call sabermetrics down cold. What was
Speaker 5: described as moneyball years ago is hieroglyphics compared to what
Speaker 5: it is today, because today it's so much more sophisticated.
Speaker 5: And so when he comes to me and Mike arragety
Speaker 5: and says this player is worth X or Y or Z,
Speaker 5: I don't really know how I can challenge him, because
Speaker 5: he knows much more than I do. And he's got
Speaker 5: about twenty some people on his team that do statistics
Speaker 5: and do scouting and so forth. So it's hard for
Speaker 5: me to say, well, you should do this or do that.
Speaker 5: So I am the type of owner right now says
Speaker 5: I'd like to be informed. If you want my judgment,
Speaker 5: I'm happy to give it to you. But I really
Speaker 5: don't have enough knowledge to tell you do something different
Speaker 5: than you want to do. So, for example, when the
Speaker 5: trading deadline came, everybody's sitting around for a couple of
Speaker 5: days trading. I really don't have the ability to say
Speaker 5: you should get this picture versus that picture. I don't
Speaker 5: have that kind of background. So I can help the
Speaker 5: team by saying, look, I know the CEO of this company.
Speaker 5: Maybe they can be an advertiser, or they could buy sponsorships.
Speaker 5: I can do that now. If i'd seen Alex Rodriguez,
Speaker 5: I'd say we should get this guy signed up. But
Speaker 5: you know, I haven't seen a lot of Alex rodriguez
Speaker 5: is floating around. But if I see one, say we
Speaker 5: should sign that person up.
Speaker 2: You mentioned that the other owners mean you've been in
Speaker 2: some interesting consortia of investors before. What's this group been like, well.
Speaker 5: It's an interesting phenomenon. I think it's true with the
Speaker 5: NFL and the NBA. When you own a team, people
Speaker 5: treat you with much greater respect generally than maybe you
Speaker 5: would have expected. In other words, if Carlisle owns a company,
Speaker 5: I don't really have people walking up to me in
Speaker 5: the streets saying, hey, you bought a great automobile parts company. Yeah,
Speaker 5: that's great. You're doing a great job for America. I'm
Speaker 5: making automobile parts more readily available. Nobody says that, like
Speaker 5: when you buy a baseball team or a football team,
Speaker 5: people come up and you say, hey, you should do this,
Speaker 5: you should do that. People feel more engaged, They're willing
Speaker 5: to talk about it much more, and I've reconnected with
Speaker 5: a lot of people. People will call me all the time,
Speaker 5: you can get me tickets for this, or can I
Speaker 5: come to the owner's box. And you know, it's a
Speaker 5: good feeling because I'm, you know, making people happy because
Speaker 5: they want to come to the owner's box, and I
Speaker 5: enjoy it at the time being it's been relatively pleasurable.
Speaker 5: That's because we're doing reasonably well. If we weren't doing well,
Speaker 5: I guess I wouldn't be so happy. I can't say
Speaker 5: that I'll get great air from it because I already
Speaker 5: have great It's fun. I can see why people who
Speaker 5: are owners enjoy being owners. You're treated with some respect
Speaker 5: in most cases, not always. You're building something, you're doing
Speaker 5: something to help your local community. And I can see
Speaker 5: the pleasure that people get out of owning sports. And
Speaker 5: if I had it before, maybe I would have done
Speaker 5: it earlier, but I didn't.
Speaker 2: Did any of the existing owners, the more senior owners
Speaker 2: or folks who've been in the game, did they give
Speaker 2: you any advice when you came in?
Speaker 5: Yes, one owner said, you know, I like you, You're
Speaker 5: a good guy, but you should have paid a higher price.
Speaker 5: So what do you mean, he says, Well, I think
Speaker 5: my franchise of is worth more than you think it's worth.
Speaker 5: In other words, I think baseball franchise are worth more.
Speaker 5: And so you didn't pay a high enough price, right,
Speaker 5: you put a comp in the market that he didn't.
Speaker 4: Yeah, so I guess that's right.
Speaker 5: I won't identify that person, but I'm reasonably happy with
Speaker 5: where we are today. I hope we continue to do
Speaker 5: reasonably well.
Speaker 2: And what about within your group? You know, I mean,
Speaker 2: Mike Irraghetty is a really interesting figure, and I mean,
Speaker 2: I don't think you guys were super close friends.
Speaker 4: I did really know him that well.
Speaker 5: Mike knows much more about baseball than I do, and
Speaker 5: did Mike played fantasy baseball for twenty seven years. Wow,
Speaker 5: I didn't even know what fantasy baseball really was. And
Speaker 5: he also played baseball in high school, so hees much
Speaker 5: more background. He really knows the players inside out, upside down,
Speaker 5: much better than I do, honestly, So I'm really learning it.
Speaker 5: So like the situation was this, I did follow baseball
Speaker 5: until I went to college in nineteen sixty six. My
Speaker 5: mother then threw away all my baseball cards, threw away
Speaker 5: all my baseball books, and so I kind of been
Speaker 5: rip van Winkle for fifty years. I kind of coming back.
Speaker 5: And now I'm learning that there are statistics that I
Speaker 5: did never heard of before in nineteen sixty six, so
Speaker 5: I didn't know what war meant, wins above replacement. I
Speaker 5: never heard of that really before, and now I'm digging
Speaker 5: into that, or quality starts. I mean, the old days
Speaker 5: was complete games. Now quality starts or ops, so the
Speaker 5: statistics are a little bit different than the ones I
Speaker 5: used to know about and focus on. It's amazing how
Speaker 5: much data you can get now and how much the
Speaker 5: statistics are so important at analyzing whether players good or not.
Speaker 5: And then other way is you know, in the free
Speaker 5: agency situation in baseball, you can get these large contracts.
Speaker 5: I don't know if you know anybody ever got a
Speaker 5: large contract, but these contracts going to be very, very large,
Speaker 5: and in some cases they work out, some cases maybe not.
Speaker 4: But you have to make these big bets.
Speaker 5: And then you know, sometimes you can give a person
Speaker 5: a large contract and they get injured right away, you're
Speaker 5: on the hook for a long time.
Speaker 2: Well, some people know a little bit about being on
Speaker 2: both sides of a large contract, right, no comment. So
Speaker 2: I want to go back to this notion of the
Speaker 2: team as a community asset. You and I have talked
Speaker 2: a lot over the years about patriotic philanthropy. Your philanthropic
Speaker 2: portfolio is fascinating to sort of go down the list
Speaker 2: from documents to pandas what did you learn through those
Speaker 2: essentially philanthropic almost investments, as I think you might consider
Speaker 2: them that informed this deal.
Speaker 5: Well, clearly, if you buy something like the Declaration of Independence,
Speaker 5: people feel that you're you know, in fact, contributing something
Speaker 5: to the country, because all these will be in effect
Speaker 5: publicly available, and I'm not just courting them and putting
Speaker 5: in my house to show just my friends. And so
Speaker 5: when I bought the Magna Carta, I gave it to
Speaker 5: the National Archives to put on permit display. And so
Speaker 5: I realized that people are thanking other people who do
Speaker 5: things for the country, but people also thank people do
Speaker 5: something for a city. So if you buy a baseball
Speaker 5: team and you're thought to be adding value to the city,
Speaker 5: you're going to do more than just try to make profits.
Speaker 5: You're going to try to help the city. You're going
Speaker 5: to re energize the franchise, You're going to help do
Speaker 5: things that make people in the city.
Speaker 4: That's a plus.
Speaker 5: In Baltimore, like some of other cities, there aren't as
Speaker 5: many other outside activities as there might be in New
Speaker 5: York or Los Angeles. So in Baltimore, the Oriols have
Speaker 5: been a really important part of the culture for such
Speaker 5: a long time. And when the Colts left years ago
Speaker 5: to go to Indianapolis, that also tore away some of
Speaker 5: the fabric of Baltimore. Now where they do have the
Speaker 5: Ravens an excellent team, but it's not quite the same
Speaker 5: as the Cults in many respects. So it's a very
Speaker 5: good team and have a very good owner. The Oriols
Speaker 5: are just part of the fabric of Baltimore. And I
Speaker 5: remember when I was a little boy, you could get
Speaker 5: a letter from your mother or father saying I want
Speaker 5: to be excused to go to opening Day, and every
Speaker 5: teacher would honor that because going to opening day of
Speaker 5: the Oriols it's like a patriotic kind of thing. How
Speaker 5: could you not let your student go to do that?
Speaker 5: And it is interesting though, when you think about sports teams.
Speaker 5: Why is it that somebody lives in Baltimore roots for
Speaker 5: the Baltimore Oriols, what is it? Or lives in Los
Speaker 5: Angeles roots for the Dodgers or the Angels.
Speaker 4: Why is it?
Speaker 5: Because it makes people feel proud of the area they
Speaker 5: live in. They feel like they're part of something. And
Speaker 5: so if the Minnesota Timberwolves, for example, is a good example,
Speaker 5: it's a state name around it, not in Minneapolis, right,
Speaker 5: So people and throughout the state are probably very proud
Speaker 5: of the team, as they should be. And some teams
Speaker 5: are really focused on cities some are states, but people
Speaker 5: take a pride in that. Just like when our Olympic
Speaker 5: team goes overseas, all Americans are proud of what the
Speaker 5: American Olympic team does. And when your local team does well,
Speaker 5: you feel kinds of pride in. I guess it's a
Speaker 5: sense of people feeling that I'm more than my body, myself.
Speaker 5: I'm just more than just one person. I am part
Speaker 5: of a larger organization. It makes me feel proud to
Speaker 5: be part of a larger organization that's doing well. That's
Speaker 5: why I guess people root for these teams and they
Speaker 5: feel so passionately.
Speaker 3: About them, you know, David, I always find that interesting.
Speaker 3: When Carlile has a great return on capital and a
Speaker 3: big investment, your investors don't say we, They just said Carlow.
Speaker 3: And I'm an investor, right. But when the Oreas win
Speaker 3: is we won or we lost. In my mood either
Speaker 3: goes up or down, depending on winds and losses. I
Speaker 3: find that to be fascinating.
Speaker 5: It's true when we go to a game and we win,
Speaker 5: I feel really happy, I'm really cheering. I'm going out,
Speaker 5: you know, getting selfies with people who want them, and
Speaker 5: so forth.
Speaker 4: When we lose. I'm so dejected.
Speaker 5: It feels like a dagger was in my heart, and sa,
Speaker 5: how could I have let the fans down? Why didn't
Speaker 5: we do better? I noticed I get fewer selfie requests
Speaker 5: after we lose the game. People don't as interested in
Speaker 5: pictures anymore, and I feel bad for people. The little
Speaker 5: boys will come up to me, and girls as well,
Speaker 5: and say, will you autograph my baseball? And I say, look,
Speaker 5: I'm not, you know, a player, but they, for some reason,
Speaker 5: they want my autograph. And so I don't have very
Speaker 5: good handwriting, and as you know, signing a baseball is
Speaker 5: not not easy. And I think when handwriting was being taught,
Speaker 5: I think those were the Jewish holidays. So I wasn't
Speaker 5: in school, and so I have to write, I do
Speaker 5: this little print, and then because I'm a lawyer, I
Speaker 5: write I put the date in. No other person puts
Speaker 5: the date in when they sign the autograph, but I
Speaker 5: want to make sure they know it's it actually happen
Speaker 5: on a certain date.
Speaker 2: Do you think you could do some sort of clinic
Speaker 2: with him signing baseball?
Speaker 3: That's about the only thing tease David Rubenstein.
Speaker 2: You do raise a really interesting point that I've been
Speaker 2: thinking about because you make your career, I mean, we'll
Speaker 2: do a very quick career journey. You know, you start
Speaker 2: as a lawyer, you work in the White House, you
Speaker 2: work for some law firms, you start Carlas. I'm going
Speaker 2: very fast here. Obviously, you're very successful at Carlisle. You're
Speaker 2: one of the pre eminent fundraisers in the industry in
Speaker 2: across Wall Street. Then, as you mentioned, you do a
Speaker 2: TV show with Bloomberg, and you know, you get a
Speaker 2: little notoriety from that, and people want to come on
Speaker 2: your show and talk to you. This feels like an
Speaker 2: entirely new level of notoriety. Tell us what that's like
Speaker 2: and how you're responding to it.
Speaker 5: Well, in all the years I've been in private equity,
Speaker 5: nobody ever came up to me in the streets and said, hey,
Speaker 5: you're doing a great job at private equity.
Speaker 4: Nobody ever said that.
Speaker 5: They might have said the opposite they maybe they did,
Speaker 5: but nobody ever paid attention. I run around the world,
Speaker 5: Nobody ever pay attention. I will walk down the street,
Speaker 5: nobody know who I am. When I started doing the
Speaker 5: Bloomberg Show. Bloomberg is all over the world, and so
Speaker 5: any city I go into now, there's inevitably somebody will
Speaker 5: come up to me and say, I really like your
Speaker 5: TV show.
Speaker 4: It's great.
Speaker 5: That's amazing to me that young people or older people
Speaker 5: see it all over the world. But baseball is even
Speaker 5: a higher degree than that. I mean, I am recognized
Speaker 5: more than I ever have been because I own a
Speaker 5: sports team, and not because I've only done anything good
Speaker 5: for the sports team yet day you know, we haven't
Speaker 5: done anything so you know, to win a World Series.
Speaker 5: Yet since I've been an owner, I am amazed at
Speaker 5: how many people are happy to talk about it. People
Speaker 5: don't come up to me on the street and say,
Speaker 5: let's talk about this private equy deal.
Speaker 4: You did recently. No one does that. They say, let's
Speaker 4: talk about the team.
Speaker 2: Yeah.
Speaker 5: It is amazing, and how I've reconnected with people that
Speaker 5: I hadn't seen in twenty or thirty or forty years.
Speaker 5: It's a good way to reconnect. I recognize that, like
Speaker 5: anybody who's an owner of a team, you're really a
Speaker 5: temporary custodian because somebody's going to own it after you,
Speaker 5: and then somebody's going to own it for that person.
Speaker 5: So you're really representing the city for a relatively finite
Speaker 5: period of time. Now there are owners who owned teams
Speaker 5: for fifty years or so, but generally most owners probably
Speaker 5: own it for a shorter period of time than that.
Speaker 5: And it is an interesting phenomenon how the business of sports,
Speaker 5: as you all have recognized so well, has taken off
Speaker 5: in a way that didn't exist when I was a
Speaker 5: little boy. You didn't see owners selling teams all that much.
Speaker 5: You didn't read about profits being taken all that much. Today,
Speaker 5: many people buy these teams and in four or five
Speaker 5: or six years they go on the next thing, or
Speaker 5: they sell their team at a big profit. It's a
Speaker 5: different world. Maybe better, maybe not, but in any way,
Speaker 5: it's a much different world. And it's not only confined
Speaker 5: to the United States. Obviously, overseas people are buying sports
Speaker 5: franchise as well, and people in America are buying sports
Speaker 5: franchise all over the world. And then in the old days,
Speaker 5: it was only males who were sports figures who are
Speaker 5: on these teams. Now you have women sports that has
Speaker 5: also done quite well financially for people.
Speaker 3: So I'm going to go back to something Jason said,
Speaker 3: because you know, you talked about being one of the
Speaker 3: greatest prolific fundraisers. Two things I really admired about you
Speaker 3: from a long time, even before we've met is ability
Speaker 3: to capital raise, but not only capital raise, but do
Speaker 3: it at a time. Well, you were crossing the pond
Speaker 3: across the globe. When you go to Saudi or you
Speaker 3: go to London and you go to Paris, people know
Speaker 3: you and they think you're a celebrity over there like
Speaker 3: they're doing Baltimore now. And then also recruiting great talent.
Speaker 3: But focusing on the first one, what makes you such
Speaker 3: a great capital raiser one? And two what gave you
Speaker 3: the idea to be a visionary to go across the
Speaker 3: pond and raise capital for Carlisle.
Speaker 5: Well, you could argue that maybe I couldn't get any
Speaker 5: investors in the United States, so I had to go overseas.
Speaker 5: Now what happened was I came up on an idea
Speaker 5: that wasn't going to win a Nobel prize. But the
Speaker 5: idea was you could build a private equity firm based
Speaker 5: in Washington, which was not seen as a capital center,
Speaker 5: and I could do it by saying, we understand companies
Speaker 5: heavily affected by the federal government better than the guys
Speaker 5: in New York. So that was a bit of a
Speaker 5: niche that we could exploit. But then the other two
Speaker 5: things that I tried to do was I would say
Speaker 5: that we were going to do more than buyouts. Historically
Speaker 5: buyout firms only did buyouts venture capital and did venture capital.
Speaker 4: And so forth.
Speaker 5: But when you were in the mutual fund business, for example,
Speaker 5: you could have mutual fund A or B or C
Speaker 5: or D under a fidel that you have ninety different
Speaker 5: opportun I thought I could do the same in private equity,
Speaker 5: have a buyout fund, a venture fund, a growth capital fund,
Speaker 5: of real estate fund. And the theory was, if you
Speaker 5: liked our brand name, you give us a chance, and
Speaker 5: all these other things. And then I decided to globalize
Speaker 5: it by setting up partnerships in Europe, Asia, Latin America
Speaker 5: and Middle East, Africa and so forth. And that was
Speaker 5: novel at the time. So building a multi discipline firm
Speaker 5: and globalizing it was unusual at the time. Others have
Speaker 5: done it, and some have done it better than we did.
Speaker 5: But to do that, I had to go around the
Speaker 5: world to raise money, and so I just made myself
Speaker 5: into a fundraiser. I wasn't trained that way, and I
Speaker 5: just basically tried to learn how these investors would react
Speaker 5: to the kind of things I was selling and try
Speaker 5: to follow up. And the key is being polite, knowing
Speaker 5: what you're talking about. Assistance follow up is always key,
Speaker 5: and just trying to have a good track record too.
Speaker 5: If you don't have a good track record, you can't
Speaker 5: sell almost anything. So it turned out that I spent
Speaker 5: you know, twenty plus years running around the world raising
Speaker 5: money for Carlisle and you know, help us build along
Speaker 5: with a good track record, a very good franchise.
Speaker 2: Well you also we're keyed in pretty early to the
Speaker 2: idea early in the Carli journey, especially to the power
Speaker 2: of showing up right, I mean to actually getting on
Speaker 2: the plane right and going and actually asking for money.
Speaker 5: You know, people like to say, you've heard this phrase
Speaker 5: from time to time. I hate to ask you for money,
Speaker 5: and then they ask you for money. So the way
Speaker 5: I looked at it, there are three types of fundraising
Speaker 5: you do. One is for business. You're trying to raise
Speaker 5: money and you're saying that people give me money, but
Speaker 5: I'm going to give you more back, so ultimately you're
Speaker 5: getting something really very tangible. That's not the hardest to
Speaker 5: do because you're giving money back to people if you're successful.
Speaker 5: The second is philanthropic. Philanthropic, you're saying that people you're
Speaker 5: going to get to heaven more quickly if you give
Speaker 5: this charitable and that's hard to do because some people say,
Speaker 5: you know, I like the tax deduction, but I have
Speaker 5: my money and maybe I don't want your cause. The
Speaker 5: third is political fundraising, which I've not been involved in.
Speaker 5: I don't make political contributions. But that's a tricky one too,
Speaker 5: because you're asking people to make a contribution to a candidate.
Speaker 5: You're not getting a TAXI duct for it. With the
Speaker 5: philanthropic investment or gift, you're getting a tax deduction.
Speaker 4: So with political.
Speaker 5: Basically you're helping somebody get elected and you have to
Speaker 5: hope that that person does what you think they should do.
Speaker 4: So those are the three different types.
Speaker 5: They have different skill sets, and different types of people
Speaker 5: do well in them. Very few people do well in
Speaker 5: all three of those.
Speaker 2: You certainly did well in the first two, though, So
Speaker 2: what did you learn from that?
Speaker 4: Well, how did you learn to do it?
Speaker 5: It's an interesting if you go to Harvard Business School
Speaker 5: or Stanford Business School and say, you know, I want
Speaker 5: to be a fundraiser. You know, there's no courses in
Speaker 5: fundraising by and large, or maybe they have one now,
Speaker 5: but they used to not do that because fundraising was
Speaker 5: considered the lowest part of the totem pole in the
Speaker 5: private equity world. A star is the guy that's doing
Speaker 5: the deals and the person at the bottom is the
Speaker 5: person who is raising the money. It wasn't taking that
Speaker 5: seriously and it was something that people didn't really want
Speaker 5: to do. If you had the ability to be a
Speaker 5: deal maker, that was considered better than being a fundraiser.
Speaker 5: I made myself and a fundraiser because I really didn't
Speaker 5: have the skill set the background to be an investor.
Speaker 5: So while I was sure of the Carlo's investment committees
Speaker 5: that the other people really day to day doing the
Speaker 5: deals and overseeing them. So I made myself into a
Speaker 5: full time fundraise, which hadn't quite been done before in
Speaker 5: the private equity world, where a founder of affirm basically
Speaker 5: was spending most of his time fundraising, and that was novel.
Speaker 5: Now many others do something similar.
Speaker 3: But David, I don't think you're giving me you some
Speaker 3: enough credit, because there's a lot of people out there
Speaker 3: were not a lot. But there were some other folks
Speaker 3: that were doing just as good as Carlisle as return wise,
Speaker 3: but they weren't raising the capital you were raising. Did
Speaker 3: you find the key to your sauce was the actual
Speaker 3: deals to deal flow the returns, or actually that you
Speaker 3: were connecting with the investor and you were gritty as hell.
Speaker 5: Oprah Winfrey said to me she wasn't a great interviewer,
Speaker 5: she's a great listener. So I think the best way
Speaker 5: to do it is I've learned over the years, is
Speaker 5: when you go in to make a presentation to somebody,
Speaker 5: it's not to say, here's why this fund is great,
Speaker 5: here's why you should come in. You get in there
Speaker 5: and listen to what they're interested in. Let them talk first.
Speaker 5: Let them say here's what they're interested and here's what
Speaker 5: they're doing, Here's what's going on in their country, here's
Speaker 5: what's going in their city. And then you can understand
Speaker 5: what is making them tick, and then you can pivot
Speaker 5: what you want to say by blending in with what
Speaker 5: they like they want to hear. You have to go
Speaker 5: in and listen to people, and then you all will
Speaker 5: have to follow up. When you have a good fundraising meeting,
Speaker 5: and you meet with somebody who wants to give you
Speaker 5: money as interested in it. The good will lasts about
Speaker 5: two and a half weeks because in two and a
Speaker 5: half weeks they're going to go into something else. If
Speaker 5: you haven't followed up in two and a half weeks
Speaker 5: and made another connection with a follow up letter more
Speaker 5: materials they want, it's probably not going to happen. So
Speaker 5: you've got to make sure you follow up. That's the
Speaker 5: key is making certain that you are telling them why
Speaker 5: what they want to do is something you can help
Speaker 5: them with. And you've got to be very polite, and
Speaker 5: you have to learn how to say no or take no.
Speaker 5: For example, when Steve Schwartzen and pe Peterson were raising
Speaker 5: the money for Blackstone, their first fun Steve wrote in
Speaker 5: his autobiography they only got money three percent of the time.
Speaker 4: Three percent of the time. Wow.
Speaker 5: So these very well known guys, they were not as
Speaker 5: well known that as they later became. But they were
Speaker 5: being turned down by friends and people told them they
Speaker 5: would give them money and they didn't give them money.
Speaker 5: I would say probably early on I had a similar percentage.
Speaker 5: But you can't take it personally. Sometimes people might say
Speaker 5: to you come and see me, and then you actually
Speaker 5: go see them and they really don't want to give
Speaker 5: you money, but they're just trying to be polite. I'm
Speaker 5: sure you may have encountered some of that. And sometimes
Speaker 5: it's hard to read what people are really thinking, and
Speaker 5: you don't know whether they're really interested or not. I
Speaker 5: say the most of the money that I raised for
Speaker 5: Carlisle in the early years came for people I hadn't
Speaker 5: known before. The people that I knew before I didn't
Speaker 5: really raise that much money from. Maybe they knew me,
Speaker 5: they didn't want to give me money, But you just
Speaker 5: never know who's going to lead to something. So when
Speaker 5: I recruited the people for Carlisle, I recruited them in
Speaker 5: a circuitous way, right the people I didn't know before
Speaker 5: It led to one thing led to another. For example,
Speaker 5: the co CEO of Carlisle for many years and the
Speaker 5: chief investment officer was Bill Conway, and I didn't know
Speaker 5: him from Adam. He lived in Washington, but I didn't
Speaker 5: know him. I went to recruit a woman who was
Speaker 5: just become the treasurer of Gannett and that's a big position.
Speaker 5: And this is in nineteen eighty seven and I went
Speaker 5: to her and said, here's what I'm gonna do. I'm
Speaker 5: gonna start to pry out firm in Washington. I'd like
Speaker 5: you to join us, one of the original partners. After
Speaker 5: I made my presentation, she said, let me see if
Speaker 5: I got to write. You've never done a buyout before, right,
Speaker 5: that's right. You're going to bring people together, never worked before,
Speaker 5: right together before? Yes, you have no money yet, that's right.
Speaker 5: And you want me to leave my position as treasurer
Speaker 5: of Gannett to come do that. I don't think so,
Speaker 5: but she said. As I was leaving out, she said, Oh,
Speaker 5: there's a guy named Bill Conway who's the chief financial
Speaker 5: officer of a company in Washington called MCI.
Speaker 4: I heard he might be leaving. Why don't you getim
Speaker 4: a call? So I called him. I've never known him before.
Speaker 4: We had lunch in ultimate. He became my partner for
Speaker 4: forty year old. So you never know where this is
Speaker 4: going to lead.
Speaker 2: You've made some sort of evolutions and pivots along the way,
Speaker 2: and one sort of concurrent with your success in private
Speaker 2: equity was being a philanthropist, but a very involved one,
Speaker 2: especially on a number of boards. And I would say
Speaker 2: you're more active and more involved and spread across as
Speaker 2: many as I've ever seen anyone do. What's your thinking
Speaker 2: behind that? How did you create that playbook?
Speaker 5: I have four standards for philanthropy. I want to start
Speaker 5: something otherwise wouldn't get started, Finish something otherwise wouldn't get finished.
Speaker 5: Be intellectually involved, so that I'm going to do more
Speaker 5: than write a check. And and four, I want to
Speaker 5: see progress in my lifetime. The third thing, which is
Speaker 5: to say intellectually involved, which I will go on a
Speaker 5: board typically if I'm giving money, or very often I will,
Speaker 5: and for reasons that are not completely clear to me,
Speaker 5: I've often wound up as the chairman of the board.
Speaker 5: So I've chaired a lot of organizations in the nonprofit world.
Speaker 5: I've chaired all the cultural major culture organizations in watching
Speaker 5: and I chaired the Smithsonian, still chair the Keunnedy Center,
Speaker 5: Share the Library Congress Board, and now the National Galley
Speaker 5: of Art. And it's because I enjoy it and I
Speaker 5: love learning about it, and I think I'm giving back
Speaker 5: to the country in that way. So you have to
Speaker 5: be motivated as well. I chaired my two university boards.
Speaker 5: I went to Duke, I chaired that board for four
Speaker 5: years and now I'm the chair of the Universiticago.
Speaker 2: You know, it's been fun to watch you, you know,
Speaker 2: really lean into this role as an interviewer. And I'm
Speaker 2: not just trying to plug your show, although I'm happy
Speaker 2: to plug your show at any time. I was there
Speaker 2: at the inception. What drew you to being on that
Speaker 2: side of the microphone. You had given many speeches, you
Speaker 2: had been interviewed. You were probably the most public face
Speaker 2: of private equity for a long time, and then you
Speaker 2: turned around and started asking questions.
Speaker 5: It isn't like I hired Mackensey and said, tell me
Speaker 5: what I can do to be more visible. It happens,
Speaker 5: like most things in life, by happenstance. So what happened
Speaker 5: was Carlisle had big events, a thousand people, fifteen hundred people.
Speaker 5: We want to have people come to these events, and
Speaker 5: so I was hiring people that would be a draw.
Speaker 5: I wasn't the draw. So I would hire former presidents
Speaker 5: of the United States, former secretaries of state. You'd pay them
Speaker 5: speaking fee and they would come. But they were often boring,
Speaker 5: and so people were looking at their watches and they
Speaker 5: didn't couldn't wait tho speeches over. So I said to
Speaker 5: the speaking agent, you think I could interview these people
Speaker 5: make a difference, and you know, I think I could
Speaker 5: live en up and use some humor. And they said,
Speaker 5: is the fee going to be the same? I said,
Speaker 5: the fee is the same. So I said, they're.
Speaker 4: Happy to do it because they don't have to prepare speech.
Speaker 4: So I started having these people come. I interviewed.
Speaker 5: I made people look funnier than weren't so funny, and
Speaker 5: made people look charming. And then I became the president
Speaker 5: of the Economic Club in Washington. Vernon Jordan asked me
Speaker 5: to succeed him, and I was supposed to get business
Speaker 5: people to come in and speak, and they were boring.
Speaker 5: So I finally said, my watch is interview them. And
Speaker 5: then Bloomberg at her about five years, has heard about it.
Speaker 5: They saw it and they said, let's make a show
Speaker 5: out of it. I remember at the kickoff, I said,
Speaker 5: what are you going to call the show? They said
Speaker 5: they're going to call it David Rubinstein Show, Peer to
Speaker 5: Peer David Rubenstein's Show. I said, you think a long
Speaker 5: Jewish ethnic name is going to work? And Mike Bloomberg said, no,
Speaker 5: it's not a problem. So now it's been ten years
Speaker 5: and we have two shows, Peer to Peer, and then
Speaker 5: there's one or more financi oriented Wealth with David Rubenstein.
Speaker 5: I've enjoyed it, and what I like is the intellectual
Speaker 5: challenge of talking to other people. But I prepare as
Speaker 5: you obviously do as well, and preparing gives you an
Speaker 5: opportunity to learn more about people. And one of the
Speaker 5: things I'm trying to do is this, when you reach
Speaker 5: a certain age, you always begin to worry are you
Speaker 5: losing it? So I'm trying to figure out what I
Speaker 5: can do to keep me my brain active. And one
Speaker 5: of the things I can do is interview people, and
Speaker 5: we do it regularly. I'm preparing for it. I'm intellectually
Speaker 5: challenging with these people when I talk to them, and
Speaker 5: so it keeps me busy. And also a lot of
Speaker 5: the times I'm interviewing authors and authors I think is
Speaker 5: a courtey you should read the book when you're interviewing them.
Speaker 5: So I'm reading a lot of books all the time,
Speaker 5: and I'm hoping it keeps my brain sharp.
Speaker 4: We'll see.
Speaker 2: So let's talk a little bit more about the intellectual
Speaker 2: challenge of baseball. So this is a business that you know.
Speaker 2: You're obviously familiar as a fan growing up in Baltimore.
Speaker 2: You're aware of it. You talk to your friends who
Speaker 2: were team owners. But now you're in it. What have
Speaker 2: you learned so far that has surprised you about the
Speaker 2: business of baseball?
Speaker 5: Well, first, everybody should remember these are small businesses relative
Speaker 5: to the businesses that the big buyout firms typically buy.
Speaker 5: So there's no baseball team that has revenues of a
Speaker 5: billion dollars or two billion dollars. Earlier today, Carlisle and
Speaker 5: now is a deal where we're buying a company, a
Speaker 5: spin out from an automobile supplier. It's about a billion
Speaker 5: and a half revenue company or something like that. Those
Speaker 5: are not considered all that big. We've bought companies in
Speaker 5: the buyout where we bought a company with Blackstone at
Speaker 5: the helmet and Freemant for thirty six billion dollars a
Speaker 5: few years ago. These are big companies and gigantic revenues.
Speaker 5: When you buy a baseball team, you're buying a team
Speaker 5: that might have one hundred million, two hundred million.
Speaker 4: Dollars in revenue.
Speaker 5: So they are small businesses relatively speaking, but their business
Speaker 5: the get enormous amount attention, So you've got sports writers
Speaker 5: who are spending all their time to figure out whether
Speaker 5: you're doing something right or wrong. And the amount of
Speaker 5: coverage is enormous, So you're under a microscope when you're
Speaker 5: on a team, and if you say something wrong or
Speaker 5: do something wrong, everybody's going to criticize you. It's also
Speaker 5: hard to please everybody. So what I've learned is people
Speaker 5: really have a fanatical care for their local team too.
Speaker 5: You've got to be very careful what you say about
Speaker 5: the team publicly because everybody's paying attention to everything you
Speaker 5: say and anything you might do. I also learned that
Speaker 5: it can be fun. Everybody likes to win in life,
Speaker 5: and people don't like to lose. And say you win
Speaker 5: more than you lose. It's good, but I recognize that
Speaker 5: the team that my partners and I bought was in
Speaker 5: pretty good shape when we bought it.
Speaker 2: On the ascendancy, how do you think the business of
Speaker 2: baseball will evolve? You've made a living of very good
Speaker 2: living investing in things that grow in value. I know that,
Speaker 2: as you mentioned, this is an asset that is, you know,
Speaker 2: part of financial purchase and part of philanthropic win, but
Speaker 2: you do want the overall business to grow. How do
Speaker 2: you affect that and how do you think it should go?
Speaker 5: Well, Baseball was considered the national pasttime for a long time,
Speaker 5: and then obviously the NFL came along in NBA, and
Speaker 5: they have taken a lot of TV dollars away from
Speaker 5: baseball and fans support away from baseball.
Speaker 4: Baseball is a.
Speaker 5: Sport that has enormous number of ingrained supporters, but it
Speaker 5: also doesn't have everything you want. For example, right now,
Speaker 5: probably of the Major League Baseball players, maybe seven or
Speaker 5: eight percent or African American, and maybe the fan base
Speaker 5: is four percent African American, so it's relatively small. Because
Speaker 5: a lot of African American young boys are now playing
Speaker 5: basketball and football, and that's a sport that is attracting
Speaker 5: more people. And one of the ways that baseball has
Speaker 5: got more African American boys playing is to do things
Speaker 5: in the youth leagues in parts of cities that they're
Speaker 5: going to likely have young African American boys playing. But also,
Speaker 5: as you probably know, in some parts of Latin America,
Speaker 5: baseball is a religion, and so in the Oriels case,
Speaker 5: we have a training facility down in the Meinican Republic,
Speaker 5: and we're not the only ones that do that as well.
Speaker 5: So you've got to get people engaged. We have to
Speaker 5: make sure the fan base is not aging too much.
Speaker 5: I think the fan base could be younger, and I'd
Speaker 5: like to try to get the fan base younger in Baltimore.
Speaker 5: That's all the thing I can focus on. I also
Speaker 5: want to make sure that people are bringing their children
Speaker 5: there because they want to educate their young children at
Speaker 5: baseball and help them kind of feel about baseball as
Speaker 5: many people my age do because they were brought up
Speaker 5: with baseball. Now many young kids are not brought up
Speaker 5: on baseball as much as they used to be.
Speaker 4: It's not easy to do.
Speaker 5: Baseball is not as international sport as probably basketball is.
Speaker 5: The NFL is trying to become a global sport as well,
Speaker 5: going to Europe and doing other things they're Baseball is
Speaker 5: played overseas, of course, but it doesn't have the overseas
Speaker 5: residents yet that I hope it ultimately will have.
Speaker 3: David, You've been really good in your career over the
Speaker 3: last forty years of taking a big idea, hiring a
Speaker 3: great team, and then executing. If you had that same
Speaker 3: challenge in baseball, and I think Rob Manford belonged in
Speaker 3: the Hall of Fame just for the time clock alone.
Speaker 3: I mean, that was an incredible move for a game.
Speaker 3: What are two or three things if you were commissioned
Speaker 3: for a day that you would focus on to make
Speaker 3: the game livelier.
Speaker 5: Well, I'm nervous about answering that question directly because I'm
Speaker 5: the newest owner in baseball. So for the newest owner
Speaker 5: of thirty owners to say here's what Baseball should do,
Speaker 5: it's probably going to get me in trouble. So I
Speaker 5: only want to say is all the other owners are
Speaker 5: much more experience, They know much more than I do.
Speaker 5: It's a diverse group of people in some respects in
Speaker 5: terms of their backgrounds. I would say Baseball I think
Speaker 5: wants to appeal to younger people than it does now.
Speaker 5: It wants to expand the television audience that it currently has.
Speaker 5: I think it would like to expand overseas a bit
Speaker 5: if it can, but that's obviously going to take some time.
Speaker 5: And I also think it probably like to, you know,
Speaker 5: find more ways to get the game into people's homes,
Speaker 5: either through streaming or other kinds of devices that enable
Speaker 5: people to watch it, even if they don't go to
Speaker 5: the game.
Speaker 3: So, David, I am interested because you've done a fantastic
Speaker 3: job in identifying great talent again for our audience. It's
Speaker 3: a very entrepreneur driven. What are some of the qualities
Speaker 3: you look for when you hire someone young men or
Speaker 3: women for one of your companies.
Speaker 5: Well, you're always looking for somebody who's reasonably intelligent. Don't
Speaker 5: have to be a geniuses. Genius are hard to manage.
Speaker 5: Reasonably intelligent, hard working, they have a sense of willing
Speaker 5: to cooperate with other people. They know how to share
Speaker 5: the credit. They also people that know how to get
Speaker 5: along with other people and give orders in a way
Speaker 5: that isn't offending other people. You want people are ethical
Speaker 5: as well. You don't want people that are cutting ethical corners.
Speaker 5: You want people that other people want to be around.
Speaker 5: And so I've made a lot of hirings over the years.
Speaker 5: Some people worked out well, some people didn't work out well.
Speaker 5: I hired a young man years ago, nice man, and
Speaker 5: he now is the chairman of the Federal Reserve Board.
Speaker 5: I didn't realize that Jay Pow would be the chairman
Speaker 5: of the Federal Reserve Board. I heard another young man
Speaker 5: one time, and he later became the governor of Virginia,
Speaker 5: Glenn Younkin. So sometimes you make very good decisions about
Speaker 5: young people. Sometimes you know, not everything works out.
Speaker 4: You want to hire me future, but I don't know
Speaker 4: if I could do.
Speaker 2: A ten year contract.
Speaker 5: You know, when you're hiring people, you really want people
Speaker 5: that you can work with, that you think that you
Speaker 5: enjoy talking to and you can listen to them and
Speaker 5: they will listen to you, and you know you want
Speaker 5: to have a good working relationship with people.
Speaker 3: Is there one particular deal over the last twenty years
Speaker 3: in sports? They said, boy, if I can have that
Speaker 3: one back? Which one of that deal?
Speaker 5: The greatest sports deal I think financial deal that was
Speaker 5: ever done was done in the last couple of years
Speaker 5: when the number of people who were at Guggenheim bought
Speaker 5: the LA Dodgers. Because they structured in a way where
Speaker 5: they didn't have to write I think a personal check.
Speaker 5: I think the purchase price is roughly two point one
Speaker 5: billion dollars or something like that. They didn't put up
Speaker 5: that much equity. They put it in a modest amount
Speaker 5: relative to what it's now worth. So that was one
Speaker 5: of the best deals of all time. One of the
Speaker 5: best deals you could say is also the New York Yankees.
Speaker 5: I think in nineteen seventy two when CBS sold it
Speaker 5: for roughly ten million dollars to George Steinbrenner, if I
Speaker 5: have it correct, I think he put in two hundred
Speaker 5: and fifty thousand of his own money and he syndicated
Speaker 5: the rest. And you know, the franchise is probably worth
Speaker 5: five to seven billion dollars today. And I think, if
Speaker 5: I got it right, they only put it in two
Speaker 5: hundred and fifty thousand initially. Now it's a long time ago,
Speaker 5: but still it's a pretty good deal. Mm hmm.
Speaker 2: Well they've paid some players along the way to a
Speaker 2: pretty good effect. All right, So we're going to move
Speaker 2: to the last portion of the interview, which is a
Speaker 2: rapid fire around, so you can just answer as quickly
Speaker 2: as when I'll start, and then you can pick up.
Speaker 2: What would you say is one word to describe your
Speaker 2: deal making style?
Speaker 4: Modest?
Speaker 3: What's more important good instincts or data and making big decisions.
Speaker 2: Instinct what's the hardest part of deal making the beginning,
Speaker 2: middle or the clothes?
Speaker 4: The clothes for sure.
Speaker 3: Who's your dream deal making partner?
Speaker 5: Well, the people that bought the Minnesota Timberwolves, they did
Speaker 5: a pretty good deal, I would say, so I'd like
Speaker 5: to have those people on my side.
Speaker 2: What's the best deal you've ever made?
Speaker 5: Best deal I ever made was probably decided to start
Speaker 5: Carlisle and hiring the people that did the outset. That
Speaker 5: was the best business thing I ever did.
Speaker 3: What's the best piece of advice you've received on deal making?
Speaker 5: Always try to remember what the other side needs to do,
Speaker 5: and so they have to come away with a victory
Speaker 5: as well. You can't make it to one sided.
Speaker 2: What's the worst advice been given?
Speaker 4: Trust your own instincts only.
Speaker 3: What's your hype song before you go into a big meeting?
Speaker 4: My way Frank Sinatra. That's good.
Speaker 3: You can only watch one sport for the rest of
Speaker 3: your life. What sport would it be?
Speaker 4: Major League Baseball?
Speaker 2: This is a very easy one. What team do you
Speaker 2: want to see win a championship more than anything?
Speaker 5: The Baltimore Orioles Number one, the Duke, Blue Devil's number two.
Speaker 3: One fun fact about you that your colleagues will be
Speaker 3: surprised about hearing about that.
Speaker 5: I am a great athlete and that I actually I
Speaker 5: try not to show this when I played tennis or
Speaker 5: with other people, but I am actually a spectActor athlete,
Speaker 5: but I try to hide it from people.
Speaker 2: David, it has been our pleasure to have you.
Speaker 5: Thank you for congress our success, and thank you for
Speaker 5: having me.
Speaker 2: It's good to be on the same network as you.
Speaker 4: Thank you very much. Thank you, dude.
Speaker 1: The Deal is a production from Bloomberg Podcasts and Bloomberg Originals.
Speaker 1: The Deal is hosted by Alex Rodriguez and Jason Kelly.
Speaker 1: Are producers are Anna Mazarakus, Stacey Wong, and Lizzie Phillip.
Speaker 1: Original music and engineering by Blake Maples. Our managing editor
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