WEBVTT - The Investment Case for Youth Sports with TCG's Jesse Jacobs 0:00:03.120 --> 0:00:09.440 Bloomberg Audio Studios, Podcasts, radio news. 0:00:15.400 --> 0:00:16.720 Hey, what's up. You're in Minnesota. 0:00:16.960 --> 0:00:18.360 I am in Minnesota. Where are you? 0:00:19.040 --> 0:00:19.960 I'm in New York. 0:00:20.000 --> 0:00:22.279 I'm in my cozy little studio here in you know, 0:00:22.360 --> 0:00:26.000 the Bloomberg Empire's headquarters. It's a nice little spot. So 0:00:26.200 --> 0:00:28.200 coming up, we're going to catch up with Jesse Jacobs. 0:00:28.240 --> 0:00:30.600 This is the guy you know better than I do. 0:00:30.720 --> 0:00:33.600 I know him by reputation. I'm psyched to talk to 0:00:33.680 --> 0:00:37.720 him because he's invested in a whole bunch of different things, 0:00:37.760 --> 0:00:41.839 but especially recently in youth sports, which I want to 0:00:41.840 --> 0:00:44.000 talk to you about. But before we do that, all right, 0:00:44.040 --> 0:00:47.319 a couple headlines caught my attention. One over the last 0:00:47.400 --> 0:00:49.800 couple of weeks is our buddy Jerry Cardinal. He was 0:00:49.800 --> 0:00:53.000 a guest on the show. He's creating this new company 0:00:53.640 --> 0:00:56.400 that's basically going to invest in college sports. 0:00:56.400 --> 0:00:57.160 What do you make of this? 0:00:57.520 --> 0:01:01.560 Well, this reminds me, Jason, of the time before social media, 0:01:01.600 --> 0:01:05.000 right before Facebook, before Instagram. The world is about to 0:01:05.080 --> 0:01:07.039 change and is in a very fluid spot right now. 0:01:07.080 --> 0:01:08.960 That's why it's difficult to speak about this, and that's 0:01:09.000 --> 0:01:12.240 why it's so interesting. But I think Jerry Cardinal has 0:01:12.319 --> 0:01:14.680 proven over the last two and a half three decades 0:01:15.040 --> 0:01:17.360 that he's always one step ahead of the curve, and 0:01:17.520 --> 0:01:19.880 in many ways, what he's doing today I think is 0:01:19.920 --> 0:01:22.240 a preview of what we may see in four or 0:01:22.280 --> 0:01:25.679 five years, which is is Duke basketball owned by Blackstone, 0:01:25.920 --> 0:01:29.039 Is Michigan Football owned by KKR? I think is going 0:01:29.040 --> 0:01:30.280 there faster than people think. 0:01:30.880 --> 0:01:31.840 Yeah, So it's funny. 0:01:31.880 --> 0:01:33.560 I dug into this a little bit just because I 0:01:33.560 --> 0:01:35.880 always want to understand as you do, what Jerry's doing. 0:01:35.959 --> 0:01:39.720 So as I understand it, He's created this company. It's 0:01:39.760 --> 0:01:43.360 a partnership that is basically going to loan money to 0:01:43.680 --> 0:01:46.520 college athletic departments. We're talking like fifty million to two 0:01:46.600 --> 0:01:49.680 hundred million dollars, and essentially they're learning the money to 0:01:49.800 --> 0:01:53.280 build out these organizations to take advantage of all these 0:01:53.360 --> 0:01:57.320 new name, image and likeness opportunities, other media related and 0:01:57.360 --> 0:02:01.400 commercially related opportunities, and of course the upside for them 0:02:01.680 --> 0:02:03.640 is a cut of future earnings. 0:02:03.800 --> 0:02:04.760 I started thinking. 0:02:04.520 --> 0:02:06.600 About, like, well, why would they do this, and it's 0:02:06.640 --> 0:02:08.960 exactly for the reasons that you described. The other thing 0:02:09.000 --> 0:02:11.200 that struck me, and this came up in our conversation 0:02:11.240 --> 0:02:15.399 with Jerry, they did legends, they did on location. These 0:02:15.440 --> 0:02:17.600 are live experience businesses. At the end of the day, 0:02:17.639 --> 0:02:19.600 college athletics are live experiences business. 0:02:19.600 --> 0:02:20.160 So when I. 0:02:20.200 --> 0:02:22.840 Started to look at it from that perspective, it makes 0:02:22.880 --> 0:02:26.480 a ton of sense because these games and I'm thinking 0:02:26.480 --> 0:02:28.839 about you going to visit your daughter at the big 0:02:28.840 --> 0:02:31.519 House at University of Michigan. I mean, think about all 0:02:31.600 --> 0:02:34.880 the money flowing around a University of Michigan football game. 0:02:35.000 --> 0:02:35.200 Yeah. 0:02:35.200 --> 0:02:37.400 And also, don't forget the S network for Jerry Carnell, 0:02:37.440 --> 0:02:39.800 who you started that with, Yes, you know two thousand 0:02:39.840 --> 0:02:43.000 and one four George Steinberunner's partnership of Cannas Saxo when 0:02:43.040 --> 0:02:45.600 he was just thirty three years old. Look, I think 0:02:45.720 --> 0:02:47.920 this world of college is so interesting and we should 0:02:47.919 --> 0:02:49.760 all keep an eye on it because it's one of 0:02:49.840 --> 0:02:51.960 the most ever changing. 0:02:52.160 --> 0:02:53.400 Business models that there is. 0:02:53.440 --> 0:02:57.040 I mean, you've gone from take Michigan football, you mentioned it. 0:02:57.040 --> 0:03:00.000 It went from a very simple model of big revenue, 0:03:00.000 --> 0:03:02.120 low expenses. You take care of the head coach, you 0:03:02.160 --> 0:03:04.560 take care of your coaches, and after that you have 0:03:04.639 --> 0:03:08.320 the regular administration. Right today, you have bigger revenues and 0:03:08.400 --> 0:03:11.600 growing tremendously because of the TV contracts, and now you 0:03:11.680 --> 0:03:12.799 have to run a. 0:03:12.760 --> 0:03:13.880 Mini semi protein. 0:03:14.120 --> 0:03:16.680 Now you have to care players, You need to institutionalize, 0:03:16.919 --> 0:03:19.040 you need to bring more a business people, M and 0:03:19.080 --> 0:03:21.960 A people, and this is something that universities are not 0:03:22.040 --> 0:03:26.080 quite equipped today. So I like what Jerry's doing because 0:03:26.240 --> 0:03:28.639 through Debt with a Kiss on top, when you say 0:03:28.639 --> 0:03:30.600 you get a little bit of the upside, I call 0:03:30.639 --> 0:03:33.280 it the side door. But I think the debt side 0:03:33.320 --> 0:03:35.680 is the most coacher side and the easiest side to 0:03:35.720 --> 0:03:38.800 approve because you keep the institutions in control. 0:03:39.280 --> 0:03:40.880 Okay, I'm going to say it. This is one of 0:03:40.880 --> 0:03:43.080 my favorite phrases. It's ever been undered on our show, 0:03:43.520 --> 0:03:47.160 Debt with a Kiss on Top. I mean, that's fantastic. 0:03:47.320 --> 0:03:49.360 I don't feel like I'm going to use that like 0:03:50.080 --> 0:03:53.160 later today. All Right, we got to talk about U 0:03:53.160 --> 0:03:54.640 sports because it's going to be a big part of 0:03:54.640 --> 0:03:57.600 our conversation with Jesse Jacobs. I've been dying to ask 0:03:57.640 --> 0:04:01.520 you this because you came up through youth sports in 0:04:01.560 --> 0:04:04.080 a very meaningful way. I know you have a couple 0:04:04.160 --> 0:04:08.000 deafews who played baseball coming up. I've been a parent 0:04:08.120 --> 0:04:11.120 of a kid who went through the club system for lacrosse, 0:04:11.120 --> 0:04:13.560 and now I was playing in college. When I say 0:04:13.600 --> 0:04:16.120 youth sports to you, what do you think about? Well, 0:04:16.200 --> 0:04:18.640 I think about the craziness of parents. 0:04:18.839 --> 0:04:21.360 And of course I'm in South Florida, Jason, where every 0:04:21.480 --> 0:04:24.239 kid thinks he's going to be the next Rothfaeld Palmero 0:04:24.360 --> 0:04:27.240 or Derek Jeter or a Rod or whatever. It's a 0:04:27.320 --> 0:04:32.400 business that is very, very sticky. The reason why is, look, 0:04:32.560 --> 0:04:34.520 every time you look up, there's a new three hundred 0:04:34.520 --> 0:04:36.839 million dollar contract, two hundred and fifty million dollar contract 0:04:36.880 --> 0:04:40.599 being signed, and is irrational. For this reason, parents will 0:04:40.680 --> 0:04:44.120 do what they can't afford to send their kids to 0:04:44.160 --> 0:04:47.440 travel to pay for a five hundred dollar bat. I mean, 0:04:47.480 --> 0:04:50.320 my mother's a perfect example. We couldn't afford barely to 0:04:50.320 --> 0:04:53.800 eat steak, but she put all her money together to 0:04:53.839 --> 0:04:55.839 send me to summer camp or to buy me a bat. 0:04:56.240 --> 0:04:58.799 So I think as a growing business. 0:04:58.560 --> 0:05:02.200 And I love with Josh and Blitz are doing Josh 0:05:02.200 --> 0:05:05.039 Harris and Blitzer are doing David Blitzer and now with Jesse. 0:05:05.200 --> 0:05:07.159 I think it has a huge, huge upside. 0:05:07.440 --> 0:05:09.599 Yeah, I mean I think about this all the time, 0:05:09.800 --> 0:05:12.680 in part because I grew up as a kid, I 0:05:12.720 --> 0:05:14.560 played a little bit of travel baseball, a little bit 0:05:14.720 --> 0:05:15.680 of travel soccer. 0:05:16.040 --> 0:05:17.360 Fast forward to being a parent. 0:05:18.080 --> 0:05:22.480 These are empires that are being built to really meet 0:05:22.600 --> 0:05:25.680 the demand, which is seemingly insatiable. One of the things 0:05:25.720 --> 0:05:28.040 I really wanted to talk to Jesse about is this 0:05:28.160 --> 0:05:31.680 idea of you have to think about the economics on 0:05:31.800 --> 0:05:34.320 the part of the individuals, because, as you said, parents 0:05:34.360 --> 0:05:37.479 are willing to spend almost anything, but there are a 0:05:37.480 --> 0:05:39.720 lot of parents and a lot of families, as we know, 0:05:40.240 --> 0:05:43.400 who just simply can't afford it. And you really don't 0:05:43.400 --> 0:05:46.040 at least, I don't want a system where the only 0:05:46.080 --> 0:05:49.560 people who can ultimately play professionally or even at the 0:05:49.560 --> 0:05:52.239 college level are those who can afford, you know, tens 0:05:52.240 --> 0:05:56.040 of thousands of dollars a year to play club baseball, 0:05:56.200 --> 0:05:58.560 or to go to the showcases or go to the tournaments. 0:05:58.839 --> 0:06:01.039 I mean, it's a mitigating that has to be addressed. 0:06:01.120 --> 0:06:03.640 I'm interested to see what Unrival is doing about this. 0:06:03.920 --> 0:06:07.159 And yet the capitalist in me looks at this and says, 0:06:07.560 --> 0:06:12.160 it's a highly fractured market, as we've agreed, and I'm 0:06:12.200 --> 0:06:14.000 one of those parents willing to spend a lot of 0:06:14.040 --> 0:06:16.760 money to help their kids live out a dream. And 0:06:16.839 --> 0:06:19.039 so there's a hell of a lot of money to 0:06:19.040 --> 0:06:21.720 be made. So you can see the investment case easily. 0:06:21.839 --> 0:06:24.800 Yes, the investment case. You can talk about it in spades. 0:06:25.080 --> 0:06:26.960 But I'll share one story with you, Jason. I know 0:06:27.000 --> 0:06:29.360 a family in South Florida. There is about fifteen years ago, 0:06:29.880 --> 0:06:32.560 the mother sold her car. She now takes the bus 0:06:32.680 --> 0:06:36.760 to work. She mortgaged her house three times. And this 0:06:36.880 --> 0:06:40.360 is all to give her son an opportunity to go 0:06:40.360 --> 0:06:43.839 to college and be the next professional star. And you 0:06:43.960 --> 0:06:45.720 have to watch that a little bit. We have to 0:06:45.760 --> 0:06:47.080 take care of families like that. 0:06:47.360 --> 0:06:47.520 Now. 0:06:47.560 --> 0:06:49.600 Of course, you and I we can afford to send 0:06:49.640 --> 0:06:51.640 our kids, you know, to camp and they can do 0:06:51.720 --> 0:06:52.159 all of that. 0:06:52.240 --> 0:06:53.960 But I know my mother couldn't do that. So I 0:06:54.000 --> 0:06:54.960 was a scholarship kid. 0:06:55.040 --> 0:06:57.680 Yeah, so obviously the business is great, but from a 0:06:57.680 --> 0:06:59.640 scholarship point of view, what are you doing for those 0:06:59.680 --> 0:07:02.400 families that cannot afford? And also you want to protect 0:07:02.400 --> 0:07:05.359 them from themselves that in order to chase this dream, 0:07:05.760 --> 0:07:07.080 they're not going to file bankruptcy. 0:07:07.400 --> 0:07:09.800 Yeah, I mean, and the reality is, and you know 0:07:09.880 --> 0:07:12.679 this well from your own experience and also through family 0:07:12.720 --> 0:07:18.040 and things like that. The actual number of scholarships for baseball, lacrosse, football, 0:07:18.240 --> 0:07:22.160 basketball are very very small. I mean, the top of 0:07:22.160 --> 0:07:24.760 the funnel is massive. The bottom of that funnel in 0:07:24.840 --> 0:07:28.480 terms of the money that's actually given to people in 0:07:28.560 --> 0:07:32.320 order to get a full fledged education, especially a full. 0:07:32.200 --> 0:07:35.000 Ride, those are tiny. I mean. 0:07:35.160 --> 0:07:37.280 And then of course, like to make it in the 0:07:37.360 --> 0:07:39.520 professional it's like a fraction of a fraction of a fraction. 0:07:39.920 --> 0:07:42.600 Anyway, I'm probably rolling on this more than I should, but. 0:07:42.640 --> 0:07:44.720 No, Jason, and listen, I'm very passionate about this too. 0:07:44.720 --> 0:07:46.960 And the deal is that you know, if you look 0:07:46.960 --> 0:07:48.960 at the data, and the data is very open and 0:07:49.040 --> 0:07:51.600 very transparent, probably one out of very thousand make it. 0:07:52.040 --> 0:07:54.680 So you have to go in with eyes wide open. 0:07:55.240 --> 0:07:57.240 And I rather than say it is not an investment, 0:07:57.560 --> 0:07:59.520 I rather than say I want to give my son 0:07:59.600 --> 0:08:01.800 or my daughter are the best opportunity to advance their 0:08:01.800 --> 0:08:03.800 career as far as possible. Now that's a little bit 0:08:03.840 --> 0:08:06.440 more accurate, but the blind spot to think this is 0:08:06.440 --> 0:08:10.200 an investment for the future, chances are that is not 0:08:10.240 --> 0:08:10.880 going to pay off. 0:08:11.040 --> 0:08:12.640 So as long as they know that, that's important. 0:08:13.600 --> 0:08:21.880 Looking forward to our conversation coming up with Jesse Jacobs. 0:08:28.440 --> 0:08:29.320 Welcome back to the Deal. 0:08:29.400 --> 0:08:31.880 I'm Jason Kelly here with my co host Alex Rodriguez. 0:08:32.280 --> 0:08:34.800 So this week we're talking to Jesse Jacobs. He co 0:08:34.840 --> 0:08:38.439 founded a firm called TCG, the Churnin Group. It's an 0:08:38.440 --> 0:08:42.520 investment firm that builds consumer and media businesses and some 0:08:42.600 --> 0:08:45.560 of the deals you have definitely heard of Barstool, the 0:08:45.600 --> 0:08:49.120 Professional Lacrosse League, and one recent one unrivaled Sports, a 0:08:49.160 --> 0:08:53.240 deal they just went into with Josh Harris and David Blitzer. Jesse, 0:08:53.440 --> 0:08:54.319 really good to have you with. 0:08:54.320 --> 0:08:57.360 Us, Jason, Alex thrilled to be here. Thanks for having me, 0:08:57.679 --> 0:08:58.600 big fan of its show. 0:08:58.840 --> 0:09:00.920 All right, so Jesse, make all our guests do this. 0:09:01.040 --> 0:09:03.840 So introduce yourself because we always want to hear like 0:09:03.880 --> 0:09:06.640 how people sort of present themselves to the world. 0:09:07.160 --> 0:09:11.400 Actually have two jobs. So one job, I'm a founding 0:09:11.400 --> 0:09:15.080 partner of the Churning Group. Churning Group is a growth equity, 0:09:15.240 --> 0:09:18.520 private equity firm that invests in sports, media, content, consumer 0:09:19.280 --> 0:09:21.920 two partners. We run about three billion dollars of capital 0:09:22.400 --> 0:09:25.720 run our third fund. Majority or most of what we 0:09:25.720 --> 0:09:27.440 do is in sports, not one hundred percent. I'm happy 0:09:27.480 --> 0:09:28.920 to go through that. We've been doing that for about 0:09:28.920 --> 0:09:35.760 fourteen years completely separately. I'm a principal and main owner 0:09:35.840 --> 0:09:38.280 of a film and TV production company called North Road. 0:09:38.840 --> 0:09:42.120 We're one of the largest producers of movies, TV shows, 0:09:42.160 --> 0:09:46.280 reality shows, and we do probably more sports docs sports 0:09:46.320 --> 0:09:50.040 content than any production company and studio out there. Based 0:09:50.040 --> 0:09:54.000 in Los Angeles, currently in New York and huge sports fan. 0:09:54.240 --> 0:09:56.760 So that's me, big sadly a big Met fan. 0:09:56.840 --> 0:09:58.040 But we're doing all right this yere. 0:09:58.360 --> 0:10:02.480 So, yeah, you're a good company of like sad Met fans. 0:10:02.480 --> 0:10:04.280 I feel like that's a badge of honor at this 0:10:04.280 --> 0:10:06.439 point now. So Jesse, you know, one of the things 0:10:06.480 --> 0:10:08.320 that jumps out to me, just to play a little 0:10:08.320 --> 0:10:11.000 bit of this is your Life, is you're an English major, 0:10:11.040 --> 0:10:13.320 which I love. I was an English major as well, 0:10:13.400 --> 0:10:16.800 so like, how do you find your way into the 0:10:16.880 --> 0:10:18.520 sort of media business world. 0:10:19.440 --> 0:10:21.679 Yeah. So when I found out that I could actually 0:10:21.720 --> 0:10:25.280 go to college and read books and graduate, I was. 0:10:25.520 --> 0:10:27.920 I signed up for that. At University of Pennsylvania, I 0:10:27.960 --> 0:10:31.800 was an English and communications major, loved sports, just wanted 0:10:31.840 --> 0:10:33.280 to be in the sports industry. And when I was 0:10:33.320 --> 0:10:37.360 in college between my freshmen and sophomore year, Fox Sports 0:10:37.520 --> 0:10:41.920 got the rights to televise the NFL from a from CBS, 0:10:42.160 --> 0:10:45.080 and in between my freshman sophomore year, I flew out 0:10:45.120 --> 0:10:47.600 to LA got a job as an intern. It's like 0:10:47.640 --> 0:10:50.480 the third person in that office. And saw them build 0:10:50.520 --> 0:10:52.920 that over the summer, and when I went back to Philadelphia, 0:10:53.440 --> 0:10:55.800 they were like, hey, by the way, when we filmed 0:10:55.800 --> 0:10:59.120 games in Philadelphia and New York and Washington, we need 0:10:59.120 --> 0:11:01.920 people to sit and truck and keep track of you 0:11:01.920 --> 0:11:04.440 know how many times Emmitt Smith has run to the 0:11:04.480 --> 0:11:06.360 left in the center and the right. So John Madden 0:11:06.400 --> 0:11:08.200 can say that, or we need to when they start. 0:11:08.200 --> 0:11:10.160 When they picked up baseball, we need somebody in the 0:11:10.160 --> 0:11:13.200 truck to basically say, all right, Alex Rodriguez went from 0:11:13.240 --> 0:11:15.800 first to third after the guy back of them, you know, 0:11:15.840 --> 0:11:18.280 hit a single. And so I did that for four 0:11:18.320 --> 0:11:21.280 years and realized the more successful you get in sports 0:11:21.360 --> 0:11:25.040 TV production, if you're really successful, you work in Thanksgiving football, 0:11:25.440 --> 0:11:29.319 you're working Christmas basketball, you work in New Year's college football, 0:11:29.679 --> 0:11:32.800 you know. And I saw the lives very successful. It's 0:11:32.800 --> 0:11:34.520 just not I didn't want to be every weekend on 0:11:34.559 --> 0:11:36.960 the road, every holiday on the road, and then ended 0:11:37.040 --> 0:11:39.520 up going to business school, ended up at Goldman Sachs 0:11:39.559 --> 0:11:42.360 doing investing, investment banking, all in sports and media, and 0:11:42.400 --> 0:11:44.959 then left to start these two firms with Peter about 0:11:45.000 --> 0:11:47.520 fourteen years ago. And Peter had been the CEO and 0:11:47.600 --> 0:11:50.600 chairman Peter Churnman of Fox and News Corp. For many years. 0:11:50.880 --> 0:11:53.839 Yeah, Jesse's interesting you mentioned about once you found out 0:11:53.840 --> 0:11:56.480 about reading books and then you were excited about college. 0:11:56.920 --> 0:11:58.440 When I found out you had to read books, I 0:11:58.520 --> 0:11:59.880 passed the college, I went to the pro. 0:12:00.160 --> 0:12:03.560 So that explains it. Okay, I'm talking with two. 0:12:03.520 --> 0:12:08.040 Really smart people here, but you know of your impressive resume. 0:12:08.400 --> 0:12:11.320 You know, we've become buddies over the years, and I 0:12:11.360 --> 0:12:13.280 was selling Jason before you jumped on that you're one 0:12:13.280 --> 0:12:15.480 of the most talented people that I've ever come across. 0:12:16.000 --> 0:12:18.320 And it's not just because your high IQ, but your 0:12:18.320 --> 0:12:21.240 equ is also very strong. But I've always read just 0:12:21.360 --> 0:12:24.360 someone who has a great nose for great talent and 0:12:24.400 --> 0:12:27.839 deal flow. Where did you learn that from and what 0:12:27.920 --> 0:12:30.880 attributes do you think you know is the biggest payoff. 0:12:30.520 --> 0:12:30.880 For you there? 0:12:31.520 --> 0:12:33.199 Thank you for saying that. I mean to me, it's 0:12:33.200 --> 0:12:35.600 all intuition and psychology, you know, we're going through this 0:12:35.720 --> 0:12:38.520 right now. With there's a company, a's a person who 0:12:38.640 --> 0:12:41.360 runs it very successful. They own one hundred percent of it. 0:12:41.920 --> 0:12:43.760 And you can look at the numbers and you look 0:12:43.800 --> 0:12:45.679 in the business plan, you know, and at the end 0:12:45.720 --> 0:12:48.040 of the day, that's going to get you so far. 0:12:48.200 --> 0:12:50.880 But ultimately, can you work with that person do they 0:12:51.160 --> 0:12:53.520 have what it takes to win when you're alone with 0:12:53.559 --> 0:12:56.000 them and ask them questions about psychologically, how does this 0:12:56.200 --> 0:12:58.400 process feel to you? Are you excited about it, you're 0:12:58.440 --> 0:13:00.800 nervous about it? Are you selling me in this process? 0:13:01.040 --> 0:13:04.080 Or are you completely transparent and open about And I 0:13:04.080 --> 0:13:07.360 think you just learn those reps just through human intuition 0:13:07.400 --> 0:13:11.200 and also communication. Ultimately, ninety five percent of everybody's job, 0:13:11.240 --> 0:13:14.520 maybe not athletes. I don't know. Is storytelling, which is sure, 0:13:14.520 --> 0:13:17.120 it's when we're sitting down and saying and you know this, 0:13:17.480 --> 0:13:21.079 Alex very well from all the successful businesses you've been in. 0:13:21.120 --> 0:13:23.679 But if you get someone to invest with you, you 0:13:23.720 --> 0:13:26.319 are showing them numbers, but you are telling them a story. Right, 0:13:26.400 --> 0:13:28.400 If you are trying to convince somebody to take your 0:13:28.440 --> 0:13:30.920 money to invest in them, you are telling them a story. 0:13:31.440 --> 0:13:33.079 Our entire job is storytelling. 0:13:33.600 --> 0:13:36.160 So take us back to twenty ten, because you know 0:13:36.200 --> 0:13:40.800 you mentioned Peter Turnant like unbelievable career works for Ruper Murdoch. 0:13:41.080 --> 0:13:43.480 You guys sort of strike out on your own, you know, 0:13:43.559 --> 0:13:45.760 three of you to sort of do this, and there 0:13:45.800 --> 0:13:48.240 are some interesting choices you make, one of which is 0:13:48.240 --> 0:13:50.360 you're going to create this holding company that kind of 0:13:50.480 --> 0:13:54.640 takes away some of the traditional, candidly like barriers and 0:13:54.679 --> 0:13:58.080 obstacles that you would face as an investor. So talk 0:13:58.120 --> 0:14:00.640 to us about some of those key decision because it 0:14:00.640 --> 0:14:06.520 feels like it leads you towards maybe different investments then 0:14:06.800 --> 0:14:07.960 you would have otherwise pursued. 0:14:08.679 --> 0:14:11.439 Yeah, I think there were two things that we thought about. 0:14:11.480 --> 0:14:14.760 One was structuring ourselves as a holding company not a fund, 0:14:14.760 --> 0:14:18.079 which may seem like a technical point. I think as 0:14:18.120 --> 0:14:21.280 a fund, you raise money from a lot of different investors, 0:14:21.680 --> 0:14:23.880 you have to invest it over a specific period of time, 0:14:24.000 --> 0:14:26.280 and you have to exit over a specific period of time. 0:14:26.840 --> 0:14:30.600 We wanted way more flexibility. Most funds are investing between 0:14:30.600 --> 0:14:33.200 ten and twenty companies in one fund. If we just 0:14:33.240 --> 0:14:35.000 wanted to do four investments, if we wanted to hold 0:14:35.000 --> 0:14:37.040 on to something longer, if we didn't want to have 0:14:37.080 --> 0:14:39.800 to exit something if we wanted to put forty percent 0:14:39.840 --> 0:14:42.560 of our capital into one business. Those were things we 0:14:42.600 --> 0:14:46.119 felt were important. The second thing is we said to ourselves, 0:14:46.600 --> 0:14:51.160 you've got the big private equity firms Blackstone, kkar Apollo, Carlisle, Goldman, 0:14:51.240 --> 0:14:55.200 Sachs's investment business. We're never going to compete with them 0:14:55.240 --> 0:15:01.160 on capital never. Then you have the early stage investors Benchmarin, Sequoia, Excel. 0:15:01.720 --> 0:15:03.800 We're probably never going to compete with them in terms 0:15:03.880 --> 0:15:06.400 of being great venture cat they're exceptionally what they do. 0:15:06.720 --> 0:15:09.320 There is this lane, and I think we've done a 0:15:09.400 --> 0:15:11.840 decent job of carving that lane out where you have 0:15:11.880 --> 0:15:15.840 a mid sized company. They're too small for Blackstone, they 0:15:15.880 --> 0:15:19.040 require way too much work and way too much involvement 0:15:19.600 --> 0:15:22.360 for a traditional venture capital firm, and they need somebody 0:15:22.360 --> 0:15:24.880 who operationally can help them. You know, we get asked 0:15:24.920 --> 0:15:26.880 all the time, who are competitors. I just don't know 0:15:26.960 --> 0:15:30.080 anybody else who's going to walk into Dave Portnoy and say, 0:15:30.480 --> 0:15:32.360 all right, Dave, like we'll buy fifty one percent of 0:15:32.360 --> 0:15:34.440 your business and do a lot of the work to 0:15:34.560 --> 0:15:37.680 serve you. In terms of hiring a CEO, hiring a 0:15:37.720 --> 0:15:40.000 management team, moving to the whole office to New York, 0:15:40.360 --> 0:15:43.280 supporting your vision, et cetera. And that's what we've done repeatedly. 0:15:43.360 --> 0:15:45.200 And it's just a lane that no one else seems, 0:15:45.320 --> 0:15:46.520 very few others seem to play in. 0:15:46.960 --> 0:15:49.320 I mean, the other thing, key decision, it feels like 0:15:49.360 --> 0:15:51.160 you make. We all have a lot of friends in 0:15:51.160 --> 0:15:53.960 the private equity world that like they sort of say 0:15:54.000 --> 0:15:55.920 they're going to do It's like, no, no, no, we're investing 0:15:55.960 --> 0:15:57.600 in people, We're gonna do this. But like at the 0:15:57.680 --> 0:16:00.320 end of the day, because of all those things that 0:16:00.360 --> 0:16:03.160 you said, because like the fund has a life, you know, 0:16:03.200 --> 0:16:05.000 they've got a lot of investors to answer to, they've 0:16:05.000 --> 0:16:07.280 got a certain structure. They may want to do that 0:16:07.360 --> 0:16:10.440 even but they're not really able to do You think 0:16:10.520 --> 0:16:11.920 that's a fair comparison. 0:16:12.640 --> 0:16:15.680 Yes, with Dave we Hada deal, we're never get involved 0:16:15.680 --> 0:16:19.600 in this creative. With Reese Witherspoon, we built Hella Sunshine 0:16:19.640 --> 0:16:22.000 with and for her. Ultimately she sold that to Blackstone, 0:16:22.720 --> 0:16:24.720 never going to get involved in the creative. We're the 0:16:24.720 --> 0:16:27.840 only outset investor in Peyton Manning's business, never going to 0:16:27.840 --> 0:16:29.960 get involved in the creative. Were the only outsid investor 0:16:30.000 --> 0:16:33.760 in Questlove's business. Never get involved, and it's just we're dead. 0:16:34.120 --> 0:16:37.400 The minute we say you know what, I actually think 0:16:37.600 --> 0:16:40.760 you shouldn't have said that. You know, individual abarc it's over. 0:16:41.080 --> 0:16:42.720 So how do you pick those people? 0:16:43.360 --> 0:16:45.560 Well, I think that there are three things. One is, 0:16:46.200 --> 0:16:49.320 it has to be a person who has a passionate audience. 0:16:49.400 --> 0:16:51.960 The first time we saw the Google analytics for Dave Portnoye, 0:16:52.000 --> 0:16:53.920 we fell for chair. You know, when we looked at 0:16:53.960 --> 0:16:57.200 Reese Witherspoon's instagram, we fell off the chair. That's one 0:16:57.240 --> 0:16:59.800 piece of it. The second piece of it is it's 0:17:00.200 --> 0:17:03.440 to be that person's idea. So it was b Reese's idea, 0:17:03.480 --> 0:17:06.080 it was Peyton's idea, it's Dave's idea. It's not their agent, 0:17:06.119 --> 0:17:09.400 their manager, the representatives saying, hmm, there's a big opportunity 0:17:09.400 --> 0:17:12.840 in tequila. I think you represent that lifestyle. Why don't 0:17:12.840 --> 0:17:14.760 you do it? Tequila brand's got to be that person's idea. 0:17:14.840 --> 0:17:17.200 And the third thing, and this might be the biggest, 0:17:17.320 --> 0:17:19.919 that person has to show up. The first time somebody 0:17:19.920 --> 0:17:23.120 called us about Reese said hey, b Reese has this idea, 0:17:23.160 --> 0:17:25.960 and we said, okay, Like I've seen this before, you know, 0:17:26.080 --> 0:17:28.400 is she into it? Seven am? Breakfast the next day 0:17:28.600 --> 0:17:31.359 Porten I did one hundred percent the negotiations. Peyton Manning, 0:17:31.960 --> 0:17:35.199 you know, shows up is their texts, email, is on 0:17:35.240 --> 0:17:38.280 Instagram late at night. They're all looking for what influencers 0:17:38.320 --> 0:17:40.639 are out there. They have to show up themselves. And 0:17:40.680 --> 0:17:43.000 I think those three things have been the recipe for 0:17:43.040 --> 0:17:43.560 what works. 0:17:43.960 --> 0:17:45.919 You know, Jesse, when you talk about sort of the 0:17:45.920 --> 0:17:49.560 competitive landscape, but I'd sort of think back to even 0:17:49.880 --> 0:17:52.439 you describing how you start your careers sitting in trucks 0:17:52.480 --> 0:17:55.200 and counting stats and things like that, and it takes 0:17:55.280 --> 0:17:57.800 me to the present day in the media world, and 0:17:57.840 --> 0:17:59.960 specifically the sports media world. You know, we're looking at 0:18:00.080 --> 0:18:03.840 an NBA right steal that's being negotiated. We've seen all 0:18:03.880 --> 0:18:06.399 these records, you know, being broken over and over again. 0:18:06.480 --> 0:18:09.120 We were talking Alex and I earlier about what's going 0:18:09.119 --> 0:18:13.480 on in the college sports landscape. As you think about 0:18:13.600 --> 0:18:17.439 the sports media landscape at this point, how do you 0:18:17.560 --> 0:18:19.919 characterize it at this point and what should we be 0:18:20.040 --> 0:18:22.320 looking for sort of around the corner. 0:18:22.760 --> 0:18:26.080 If you're a league or a team, the thing you 0:18:26.200 --> 0:18:30.679 want always want is however many bidding packages you have 0:18:30.760 --> 0:18:34.400 to sell. You want one at least one more buyer. Yeah, 0:18:34.440 --> 0:18:36.800 and the NBA has that right now, you know. And 0:18:36.840 --> 0:18:39.840 I think the challenge and the concern with some of 0:18:39.880 --> 0:18:42.560 these leagues that have sold so many different packages so 0:18:42.560 --> 0:18:45.720 many different places, is some of those buyers may go 0:18:45.760 --> 0:18:48.960 away soon. So will CBS still be there where there'll 0:18:48.960 --> 0:18:51.359 still be for broadcast owts. I don't know. That's an 0:18:51.359 --> 0:18:53.720 interesting thing, and I think it was brilliant for some 0:18:53.760 --> 0:18:55.840 of these leagues to put in these long term deals 0:18:56.240 --> 0:18:58.640 so they have that guaranteed money for a period of time. 0:18:59.000 --> 0:19:01.399 The second thing is I think the college landscape is 0:19:01.600 --> 0:19:06.600