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🚨BILLIONAIRE DAVID RUBENSTEIN WARNS: AMERICA’S IS $100 TRILLION IN DEBT—ONLY THING TO SAVE US! · Earn Your Leisure

• 0:00
  Speaker 1: A country spending more interest on debt than defense spending
• 0:02
  Speaker 1: usually goes down in terms of its world power. And
• 0:05
  Speaker 1: that's what we're doing now. Currently, we have $ 40 trillion
• 0:07
  Speaker 1: of debt.
• 0:08
  Speaker 2: Is there any way out of it?
• 0:09
  Speaker 1: The only way we're going to get out of this,
• 0:11
  Speaker 1: and honestly, is paying it off in devalued dollars. There's
• 0:14
  Speaker 1: no other way out unless you want to do something
• 0:17
  Speaker 1: dramatic like increase taxes dramatically or cut spending. And people
• 0:20
  Speaker 1: don't want to do that.
• 0:21
  Speaker 3: Have you seen anything like the moment that we're currently
• 0:23
  Speaker 3: living in terms of the economy?
• 0:25
  Speaker 1: People always like to say this time is different. And
• 0:27
  Speaker 1: those are the most dangerous words in the investment world
• 0:29
  Speaker 1: because history repeats itself. In the end, nobody really knew
• 0:32
  Speaker 1: which companies were going to make it and which companies
• 0:34
  Speaker 1: were not.
• 0:34
  Speaker 2: When do you think another bear market is going to come?
• 0:37
  Speaker 1: Well, if I knew, I would be probably shorting the
• 0:39
  Speaker 1: market from right now. This uncertainty and these wars are
• 0:42
  Speaker 1: very expensive and I think don't help the global economy.
• 0:45
  Speaker 3: You said your biggest financial regrets were investments you passed on,
• 0:48
  Speaker 3: including Meta and Amazon. What have those moments taught you?
• 0:52
  Speaker 1: In the case of Meta, he told me they were
• 0:54
  Speaker 1: trying to raise $ 30, 000, so I didn't put in the $ 30, 000.
• 0:57
  Speaker 1: One of Mark Zuckerberg's roommates did do it, and I
• 1:00
  Speaker 1: think that $ 30, 000 he put in is now worth about
• 1:03
  Speaker 1: $ 50 billion. I regret that. It reminds me how lacking
• 1:06
  Speaker 1: in intelligence I am in judging some things.
• 1:08
  Speaker 3: What have you learned about leadership in this time in
• 1:11
  Speaker 3: sports that you probably brought over from your career in
• 1:14
  Speaker 3: private equity?
• 1:15
  Speaker 1: If you can't take losing and you can't take the
• 1:17
  Speaker 1: fans complaining about you, you shouldn't buy a sports team
• 1:19
  Speaker 1: because fans are not going to praise you.
• 1:20
  Speaker 2: If you want somebody to praise you, buy a dog.
• 1:23
  Speaker 2: All right, guys, welcome back. EYL special episode. We have
• 1:26
  Speaker 2: David Rubenstein. Thank you for joining us.
• 1:29
  Speaker 1: My pleasure to be here. Thanks for having me.
• 1:30
  Speaker 2: Co-founder of the Carlyle Group, one of the largest private
• 1:33
  Speaker 2: investment firms, 485 billion assets under management.
• 1:36
  Speaker 1: That's correct.
• 1:38
  Speaker 2: Yes. And you are also the owner of the Baltimore Orioles.
• 1:42
  Speaker 1: That's correct.
• 1:43
  Speaker 2: That's what we're going to talk about today.
• 1:45
  Speaker 1: I'm happy to talk about that.
• 1:47
  Speaker 3: He's going to be a New York Times bestselling author.
• 1:50
  Speaker 2: He's already a New York Times.
• 1:51
  Speaker 1: Again.
• 1:51
  Speaker 2: He's already a bestselling author. And you got the President
• 1:55
  Speaker 2: Medal of Freedom Award.
• 1:57
  Speaker 1: Presidential Medal of Freedom was given to me by President Biden, yes.
• 2:01
  Speaker 2: Congratulations.
• 2:02
  Speaker 1: Thank you.
• 2:03
  Speaker 3: That's a first for us.
• 2:04
  Speaker 1: Well, it's nice to get. I mean, it's the highest
• 2:07
  Speaker 1: civilian honor you can theoretically get, but I'm happy to
• 2:10
  Speaker 1: get it. But I'm sure there are other people who
• 2:11
  Speaker 1: deserved it more than me that didn't get it yet. Yes.
• 2:15
  Speaker 2: So we're going to talk about you owning the Oreos.
• 2:18
  Speaker 2: We're going to talk about the book. But before, let's
• 2:20
  Speaker 2: just give some background for the audience. Okay. So- You started,
• 2:24
  Speaker 2: you were in the Carter White House.
• 2:27
  Speaker 1: That's correct.
• 2:27
  Speaker 3: Right?
• 2:28
  Speaker 2: That was 1970?
• 2:29
  Speaker 1: 77. Carter started January 20th, 77. I was the deputy
• 2:33
  Speaker 1: domestic policy advisor to the president. I was only 27.
• 2:37
  Speaker 1: I didn't know what I was doing, but in some ways,
• 2:39
  Speaker 1: nobody else knew what they were doing either.
• 2:41
  Speaker 2: So when you went from working in government to starting
• 2:44
  Speaker 2: the Carlyle Group, how did that transition happen? And what
• 2:49
  Speaker 2: was the early days of starting the Carlyle Group? Okay.
• 2:52
  Speaker 1: Well, I worked in the White House for four years
• 2:54
  Speaker 1: for President Carter. We lost the election overwhelmingly to Ronald Reagan.
• 2:59
  Speaker 1: So people used to tell me how great and smart
• 3:01
  Speaker 1: I was when they wanted something from me when I
• 3:03
  Speaker 1: was in the White House. All of a sudden, they
• 3:04
  Speaker 1: wouldn't call me back when I need a job after
• 3:06
  Speaker 1: we lost the election.
• 3:07
  Speaker 2: What was your position in the White House?
• 3:08
  Speaker 1: I was the deputy domestic policy advisor.
• 3:11
  Speaker 2: And what exactly does that do?
• 3:12
  Speaker 1: Well, my boss was the domestic policy advisor in charge
• 3:15
  Speaker 1: of all domestic policy, non-foreign policy things. And I was
• 3:18
  Speaker 1: his deputy. We had a big staff. And we basically
• 3:21
  Speaker 1: advised Carter on everything from agriculture to civil rights to
• 3:26
  Speaker 1: anything else that was not foreign policy. When we lost
• 3:30
  Speaker 1: the election, I had to go back and practice law,
• 3:32
  Speaker 1: which is the only skill I really had. I'm a
• 3:34
  Speaker 1: lawyer by training. I wasn't that great a lawyer. If
• 3:37
  Speaker 1: I was a good lawyer, I would be practicing law.
• 3:39
  Speaker 1: But I wasn't that good. My clients reminded me of that.
• 3:42
  Speaker 1: And so I decided to start an investment firm in 1987.
• 3:46
  Speaker 1: And it grew to be one of the larger private
• 3:47
  Speaker 1: equity firms in the world.
• 3:49
  Speaker 3: That's an interesting year. When did you start in 87?
• 3:52
  Speaker 3: Because most people know 87 for being Black Monday in September.
• 3:56
  Speaker 1: That's correct. We started about a month before.
• 3:59
  Speaker 3: Talk about that for a second.
• 4:01
  Speaker 1: Well, in October of 1987, the stock market crashed by
• 4:06
  Speaker 1: a large amount. At the time, it was the biggest
• 4:09
  Speaker 1: crash since the Great Depression and really depressed the markets.
• 4:14
  Speaker 1: I think the markets went down, what, 500 points or so,
• 4:17
  Speaker 1: which was a big amount in those days. You know,
• 4:20
  Speaker 1: we said maybe we started the wrong time. It wasn't good.
• 4:23
  Speaker 1: But we did start it and we overcame it. And ultimately,
• 4:26
  Speaker 1: the market came back. But it was a little disconcerting
• 4:29
  Speaker 1: when you're a month into your business and all of
• 4:31
  Speaker 1: a sudden you have the biggest stock market crash in
• 4:33
  Speaker 1: 50 years.
• 4:34
  Speaker 3: I wonder, as you look at the space now, obviously
• 4:37
  Speaker 3: going through that to start the tech boom of the 90s, pullbacks, obviously,
• 4:42
  Speaker 3: in 01 with September 11th and the housing crisis. Now
• 4:45
  Speaker 3: that's AI revolution. Have you seen anything like the moment
• 4:49
  Speaker 3: that we're currently living in in terms of the economy?
• 4:52
  Speaker 1: Well, people always like to say this time is different.
• 4:56
  Speaker 1: And those are the most dangerous words in the investment
• 4:57
  Speaker 1: world when somebody says this time is different because history
• 5:00
  Speaker 1: repeats itself. Right now, we are in a complicated situation
• 5:04
  Speaker 1: where the United States is going through a transition in
• 5:06
  Speaker 1: many ways from a non-AI economy to an AI economy.
• 5:10
  Speaker 1: AI is going to revolutionize the way we live and
• 5:14
  Speaker 1: think and do everything else. Right now, we don't know
• 5:16
  Speaker 1: what the full impact of AI is going to be.
• 5:19
  Speaker 1: Some people are saying it's going to end humanity as
• 5:21
  Speaker 1: we know it. Other people are saying it's going to
• 5:22
  Speaker 1: make life better for everybody. Who knows? Nobody really knows.
• 5:25
  Speaker 1: Just like when the internet came along, nobody really knew
• 5:27
  Speaker 1: what the impact would be. And some people were right
• 5:29
  Speaker 1: when they said it would be transformative of our lives,
• 5:32
  Speaker 1: and it has been. But in the end, nobody really
• 5:35
  Speaker 1: knew which companies were going to make it and which
• 5:36
  Speaker 1: companies were not. AI is the same situation. AI will
• 5:40
  Speaker 1: change our lives, but nobody really knows whether it's going
• 5:42
  Speaker 1: to make it better or worse or how it's going
• 5:44
  Speaker 1: to impact us directly.
• 5:46
  Speaker 2: When building the Carlyle Group, what was the hardest part?
• 5:49
  Speaker 2: Was it client acquisition? Was it navigating from different investments
• 5:54
  Speaker 2: to know the trends that's coming?
• 5:56
  Speaker 1: Well, the hardest part was I was based in Washington, D.C.,
• 5:59
  Speaker 1: and most of the firms that were in the private
• 6:01
  Speaker 1: equity world were in New York, so we weren't taken
• 6:03
  Speaker 1: seriously because we were in Washington. Secondly, I didn't have
• 6:06
  Speaker 1: an investment background. I was a lawyer, so I had
• 6:09
  Speaker 1: to get people convinced I actually knew what I was doing.
• 6:11
  Speaker 1: And then my partners and I had not worked together
• 6:13
  Speaker 1: before we kind of assembled to build this firm. but
• 6:17
  Speaker 1: we didn't have a track record. In the investment world,
• 6:19
  Speaker 1: everybody wants a track record, and we didn't have a
• 6:21
  Speaker 1: track record, so we had to do deals one at
• 6:23
  Speaker 1: a time and just kind of get some credibility after
• 6:25
  Speaker 1: the deals worked out, and then we could go out
• 6:27
  Speaker 1: and raise more capital. It took a while. The firm
• 6:31
  Speaker 1: is now almost 40 years old. It took a long
• 6:33
  Speaker 1: time to be credible. We were one of the largest
• 6:37
  Speaker 1: firms in the private equity world for a long time,
• 6:39
  Speaker 1: and now we're still one of the biggest ones, managing
• 6:41
  Speaker 1: just about $ 500 billion.
• 6:42
  Speaker 2: Did you use your relationships from the White House and
• 6:46
  Speaker 2: from government to as your early initial first clients?
• 6:51
  Speaker 1: Well, of course, Carter was out of the White House then.
• 6:53
  Speaker 1: So my relationships were not that valuable, but I had
• 6:56
  Speaker 1: contacts on Capitol Hill. I had contacts around the country
• 7:00
  Speaker 1: that I'd made while I worked in the White House,
• 7:02
  Speaker 1: but they were not really that valuable. I had to
• 7:04
  Speaker 1: start all over again. And when you start your career
• 7:06
  Speaker 1: all over again, you just have to make fresh contacts.
• 7:08
  Speaker 1: So if you've ever started your career all over again,
• 7:10
  Speaker 1: you were in the financial world before, And when you
• 7:13
  Speaker 1: started this, you decided to start all over again. And
• 7:15
  Speaker 1: sometimes their contacts are useful. Sometimes they're not.
• 7:18
  Speaker 2: Do you think that Jimmy Carter had gotten a bad
• 7:22
  Speaker 2: rap in history as far as how people remember his presidency?
• 7:25
  Speaker 1: Well, I do. Obviously, I'm biased. Jimmy Carter won in
• 7:30
  Speaker 1: an upset. Nobody really took him seriously when he started
• 7:32
  Speaker 1: running for president. Nobody ever heard of him. They called
• 7:33
  Speaker 1: him Jimmy Who. And then he won, and he beat
• 7:36
  Speaker 1: an incumbent president, Gerald Ford. In four years, though, inflation
• 7:40
  Speaker 1: became very high. Gas lines were very long. And we
• 7:43
  Speaker 1: had the hostages in Iran. So Carter lost unceremoniously to
• 7:48
  Speaker 1: Ronald Reagan, a gigantic loss. And then he kind of
• 7:51
  Speaker 1: went back and rebuilt his life and became a Nobel
• 7:54
  Speaker 1: Peace Prize winner as a result of some of the
• 7:56
  Speaker 1: things he did after the presidency. I think Jimmy Carter
• 8:00
  Speaker 1: is not considered to be a great president by historians.
• 8:03
  Speaker 1: But I think many of the things he did post-presidency
• 8:06
  Speaker 1: are greatly admired. And now people are seeing that some
• 8:08
  Speaker 1: of the things he did as president were probably better
• 8:10
  Speaker 1: than people gave him credit for.
• 8:13
  Speaker 3: You brought up track record, which is vital. I mean,
• 8:16
  Speaker 3: it's vital, especially in private equity. Everybody remembers the ones
• 8:21
  Speaker 3: that changed the trajectory of the company. Can you think
• 8:24
  Speaker 3: back to the companies that you were investing in at
• 8:25
  Speaker 3: that time that really changed and created a belief system
• 8:29
  Speaker 3: around what you guys were building?
• 8:31
  Speaker 1: Well, at the time, what we were trying to do
• 8:33
  Speaker 1: was we were trying to say that private equity investments
• 8:35
  Speaker 1: can make companies better. And that was a novelty at
• 8:39
  Speaker 1: the time. Today, most people would say that private equity
• 8:42
  Speaker 1: firms do have a big impact. Now, some people still
• 8:44
  Speaker 1: don't like private equity. But in the end, you have
• 8:46
  Speaker 1: to admit that the United States economy has been fairly
• 8:49
  Speaker 1: transformative over the last 20, 30, 40 years. We're the
• 8:53
  Speaker 1: envy of the world. We have the biggest GDP in
• 8:55
  Speaker 1: the world. We have the greatest productivity of major economies.
• 8:58
  Speaker 1: To some extent, I think that's because of the techniques
• 9:01
  Speaker 1: that private equity firms have used to make their companies
• 9:04
  Speaker 1: more valuable. And many of these private equity techniques are
• 9:06
  Speaker 1: now used by public companies. They see what private equity
• 9:08
  Speaker 1: firms have done to make companies more valuable, and they've
• 9:11
  Speaker 1: used some of the same techniques, even though they're not
• 9:13
  Speaker 1: involved with private equity. So I think private equity has
• 9:15
  Speaker 1: gotten a bad rap in some respects. In the end,
• 9:17
  Speaker 1: I think it's been very good for the U.S. economy.
• 9:20
  Speaker 2: Speaking of the U.S. economy, what is your view on
• 9:23
  Speaker 2: the national debt? And are you extremely concerned that this
• 9:27
  Speaker 2: is something that is going to be a hindrance for
• 9:30
  Speaker 2: us in the future?
• 9:31
  Speaker 1: Currently, we have $ 40 trillion of debt. $ 40 trillion is
• 9:36
  Speaker 1: about 125% of our GDP, which is a number that
• 9:41
  Speaker 1: makes us comparable to countries like Lebanon or Italy, which
• 9:44
  Speaker 1: is not necessarily role models. But that's really modest compared
• 9:48
  Speaker 1: to the real debt. The real debt is the unfunded Medicare, Medicaid,
• 9:51
  Speaker 1: and Social Security liabilities. If you were to take that
• 9:54
  Speaker 1: into account, we would have much more than $ 40 trillion
• 9:56
  Speaker 1: of debt. So it's a serious problem. If you go
• 9:59
  Speaker 1: through history, and you take a look at other countries
• 10:02
  Speaker 1: that have had this kind of problem, generally they have
• 10:04
  Speaker 1: not survived as well as they would like, and particularly
• 10:06
  Speaker 1: when you pay more interest on your debt than you're
• 10:09
  Speaker 1: spending on your defense spending. When a country is spending
• 10:11
  Speaker 1: more interest on debt than defense spending, it usually goes
• 10:14
  Speaker 1: down in terms of its world power, and that's what
• 10:17
  Speaker 1: we're doing now. Right now we're spending more interest on
• 10:20
  Speaker 1: our debt than we are spending on defense spending, and
• 10:23
  Speaker 1: we have a big defense budget. So I think it's
• 10:25
  Speaker 1: a serious problem, and it's not going to be addressed
• 10:26
  Speaker 1: anytime soon because nobody wants to raise taxes, nobody wants
• 10:29
  Speaker 1: to cut spending.
• 10:30
  Speaker 2: Is there any way out of it?
• 10:31
  Speaker 1: The only way we're going to get out of this,
• 10:33
  Speaker 1: and honestly, is paying it off in devalued dollars. Your
• 10:37
  Speaker 1: grandchildren and great-grandchildren are going to be paying off this
• 10:40
  Speaker 1: debt in dollars that are worth less than the dollars
• 10:43
  Speaker 1: that we borrowed at the time that I'm alive. In
• 10:45
  Speaker 1: other words, we're basically devaluing our currency. And that's how
• 10:48
  Speaker 1: we're going to pay it off. There's no other way
• 10:50
  Speaker 1: out unless you want to do something dramatic like increase
• 10:54
  Speaker 1: taxes dramatically or cut spending. And people don't want to
• 10:57
  Speaker 1: do that. 85% of the budget is defense spending, interest
• 11:00
  Speaker 1: on the debt, and entitlements. Nobody wants to cut any
• 11:03
  Speaker 1: of that. So it's very difficult to do. And I
• 11:05
  Speaker 1: don't think anything pleasant is going to happen anytime soon.
• 11:09
  Speaker 1: But we can ride it out in the sense that
• 11:11
  Speaker 1: we just basically live with it. And in the end,
• 11:13
  Speaker 1: we devalue our currency and we pay off the debt
• 11:16
  Speaker 1: and devalue dollars. That's essentially what we're doing now.
• 11:19
  Speaker 3: You said history repeats itself.
• 11:21
  Speaker 1: I'm sorry?
• 11:22
  Speaker 3: I said you said history repeats itself.
• 11:23
  Speaker 1: It does.
• 11:24
  Speaker 3: It's what we're doing right now.
• 11:26
  Speaker 1: For example, under President Obama, there was a commission appointed
• 11:30
  Speaker 1: to figure out how we could deal with this. But
• 11:32
  Speaker 1: it basically came up with a conclusion that we had
• 11:34
  Speaker 1: to cut Social Security, cut Medicare, Medicaid. It was so
• 11:37
  Speaker 1: unpopular that President Obama didn't even want to have a
• 11:39
  Speaker 1: picture taken with the commission heads. they were very popular
• 11:43
  Speaker 1: people of Senator Simpson and and Bowles. And and but
• 11:47
  Speaker 1: President Trump, President Obama said, I don't want to be
• 11:51
  Speaker 1: photographed with him at the time. And, you know, we
• 11:53
  Speaker 1: didn't really implement any of their recommendations. So nobody has
• 11:56
  Speaker 1: a solution for this that's going to solve the problem.
• 11:59
  Speaker 1: It's just there's no it's politically too difficult.
• 12:02
  Speaker 3: Yeah, I was going to the point of the time
• 12:04
  Speaker 3: that we're in. Right. Like if we look at historically
• 12:07
  Speaker 3: how September's have performed, how the summer months have performed.
• 12:11
  Speaker 3: how the market has performed during midterm years. It feels
• 12:15
  Speaker 3: like there's something different happening this year. Should we follow
• 12:18
  Speaker 3: that trend or say, let's go based on history, how
• 12:21
  Speaker 3: these markets perform during these current times to see where
• 12:23
  Speaker 3: we're headed?
• 12:25
  Speaker 1: During a midterm election year, historically, the stock market, the
• 12:28
  Speaker 1: S & P 500 is up about 5% on average.
• 12:32
  Speaker 1: But the year after a midterm election, the markets are
• 12:35
  Speaker 1: up about 14%. So no matter what happens in the
• 12:38
  Speaker 1: midterm elections, probably the markets will go up because there's
• 12:40
  Speaker 1: less uncertainty. Markets don't like uncertainty. Right now, we don't
• 12:43
  Speaker 1: know who's going to control the Congress. And if we knew,
• 12:46
  Speaker 1: markets would probably go up. Right now, the markets are
• 12:49
  Speaker 1: uncertain about where the future is going to be. And
• 12:51
  Speaker 1: I can't tell you today whether Democrats are going to
• 12:53
  Speaker 1: control the Congress or Republicans are going to control. Nobody
• 12:56
  Speaker 1: really knows, but it's obviously going to be very important
• 12:58
  Speaker 1: what happens. I suspect today that the Republicans are not
• 13:02
  Speaker 1: feeling as good as they were maybe six months ago.
• 13:05
  Speaker 3: Yeah. I wonder how you feel about the idea of
• 13:09
  Speaker 3: circular financing. That's been like a key phrase over the
• 13:12
  Speaker 3: past few years in private equity companies, like anthropic companies,
• 13:16
  Speaker 3: like open AI, still private, but still raising funds, getting
• 13:20
  Speaker 3: money from publicly traded companies that are going to benefit
• 13:23
  Speaker 3: those publicly traded companies in the future. What are your
• 13:25
  Speaker 3: thoughts around that?
• 13:26
  Speaker 1: This is what you're maybe referring to is that NVIDIA,
• 13:31
  Speaker 1: for example, is very profitable.
• 13:32
  Speaker 3: Correct.
• 13:33
  Speaker 1: And what it has cleverly done is it's funded a
• 13:35
  Speaker 1: lot of its customers, right? In other words, ensure that
• 13:39
  Speaker 1: customers can buy things from NVIDIA. NVIDIA invests in those companies.
• 13:44
  Speaker 1: Time will tell whether that's a good thing or not.
• 13:46
  Speaker 1: Nobody really knows. As long as NVIDIA is worth $ 5
• 13:48
  Speaker 1: trillion plus, they can probably afford to do it. Whether
• 13:50
  Speaker 1: that can continue forever, I don't know. What do you
• 13:53
  Speaker 1: call circular financing? It's generally not worked throughout history very
• 13:57
  Speaker 1: well because sometimes these companies at the very top that
• 14:00
  Speaker 1: are paying for everything, ultimately their values go down. If
• 14:02
  Speaker 1: NVIDIA's value went down by half of where it is today,
• 14:06
  Speaker 1: it wouldn't be able to afford to do all this.
• 14:07
  Speaker 1: But we just don't know yet.
• 14:09
  Speaker 2: Um, so I came into business in 2008 and that
• 14:13
  Speaker 2: was obviously the great recession, but we haven't really had
• 14:17
  Speaker 2: a stock market, a bear market since then, almost 18 years.
• 14:21
  Speaker 2: We had one during COVID, but that was a very
• 14:23
  Speaker 2: short lived, one of the shortest that might've been the
• 14:25
  Speaker 2: shortest ever. When do you think another bear market is
• 14:29
  Speaker 2: going to come?
• 14:31
  Speaker 1: Well, if I knew I would be probably shorting the
• 14:34
  Speaker 1: market right now, but I would say this, um, You're correct. Generally,
• 14:38
  Speaker 1: in this country, we've had since in the 20th century
• 14:41
  Speaker 1: and the 21st century recessions every seven years on average.
• 14:45
  Speaker 1: We haven't had one except for a technical recession during COVID.
• 14:49
  Speaker 1: We really haven't had a recession for more than 10 years.
• 14:51
  Speaker 1: And I think there's a concern that eventually history will
• 14:54
  Speaker 1: repeat itself and we'll have another recession. Nobody really knows
• 14:57
  Speaker 1: when a recession is going to come. People always like
• 14:59
  Speaker 1: to say a recession is coming and then they're wrong
• 15:01
  Speaker 1: and they kind of go away. Right now, nobody is
• 15:06
  Speaker 1: predicting a recession anytime soon. Though, if you read newspaper reports,
• 15:09
  Speaker 1: President Trump is worried that if we were to have
• 15:12
  Speaker 1: constraints on AI, which is fueling our economy, that could
• 15:15
  Speaker 1: produce a recession. Apparently, according to newspaper reports, he's worried
• 15:19
  Speaker 1: that if you regulate AI and AI therefore goes down
• 15:22
  Speaker 1: in value, people are less worried, less ebullient about AI,
• 15:26
  Speaker 1: that could produce a recession. It's maybe possible. Right now,
• 15:30
  Speaker 1: what's happening in the Middle East could produce a recession.
• 15:32
  Speaker 1: Oil prices are at record heights. And at some point,
• 15:35
  Speaker 1: it's going to filter into the economy. And I think
• 15:37
  Speaker 1: they're going to slow down the economy. But whether it
• 15:39
  Speaker 1: produces a recession, nobody really knows. And I can't say
• 15:41
  Speaker 1: that it will yet.
• 15:43
  Speaker 3: At this level of your career, and I wonder if
• 15:45
  Speaker 3: maybe it was the same then, I know you are
• 15:48
  Speaker 3: known for rationally looking at investments. How do you go
• 15:52
  Speaker 3: about looking at companies that you're potentially going to invest in? Like,
• 15:56
  Speaker 3: what are the metrics that you guys look at?
• 15:57
  Speaker 1: For an investment for private equity or something? Well, in
• 16:00
  Speaker 1: private equity, what you do is you tend to Look
• 16:03
  Speaker 1: for companies in the areas you have some expertise in.
• 16:06
  Speaker 1: See whether there's a likelihood that if you inject capital
• 16:08
  Speaker 1: into the company, either minority stake or control, you're likely
• 16:12
  Speaker 1: to be able to improve the value of the company
• 16:14
  Speaker 1: to get a rate of return that you want. The
• 16:15
  Speaker 1: investors that invest with us want rates of return, let's say,
• 16:19
  Speaker 1: in the mid-teen rates of return area. So 15%, 16%, 17%.
• 16:24
  Speaker 1: If you think you can improve a company and get
• 16:26
  Speaker 1: those kind of rates of return, then it looks like
• 16:28
  Speaker 1: an attractive investment. Typically, in Carlisle and other communities, Firms
• 16:31
  Speaker 1: like ours, KKR, Blackstone, Apollo, we tend to take six
• 16:35
  Speaker 1: months or more to analyze a company before what's called
• 16:38
  Speaker 1: due diligence. And we analyze the company and say, yes,
• 16:41
  Speaker 1: can we inject money here and get the kind of
• 16:43
  Speaker 1: return our investors want? Sometimes you're right. Sometimes you're wrong.
• 16:46
  Speaker 1: Sometimes you get deals that are much better than you thought.
• 16:48
  Speaker 1: You didn't think they'd be so great. Sometimes deals don't
• 16:50
  Speaker 1: work out. So I would say to analyze a company
• 16:54
  Speaker 1: appropriately in the private equity world probably takes three to
• 16:57
  Speaker 1: six months before you know if you want to do
• 16:58
  Speaker 1: it or not.
• 17:00
  Speaker 3: How.
• 17:01
  Speaker 2: Concerned are you about the Middle East conflict? You mentioned that,
• 17:04
  Speaker 2: but this war in Iran seems to be spiraling out
• 17:06
  Speaker 2: of control. Saudi Arabia and Yemen now. So what do
• 17:11
  Speaker 2: you see as far as the global markets?
• 17:15
  Speaker 1: Well, the global markets are waiting to see how these
• 17:17
  Speaker 1: wars turn out. There are three principal things that people
• 17:21
  Speaker 1: are focused on. One, Russia-Ukraine, when is that going to end?
• 17:24
  Speaker 1: It's gone on now for five years, longer than World
• 17:26
  Speaker 1: War II in many ways. Iran is a war that
• 17:30
  Speaker 1: the market wasn't expecting. Now, we don't know how long
• 17:33
  Speaker 1: it's going on for, but it's clearly not going to
• 17:35
  Speaker 1: be resolved anytime soon based on everything I can see.
• 17:38
  Speaker 1: And then you don't know what's going to happen in China, Taiwan.
• 17:41
  Speaker 1: China's coming to visit the President of the United States
• 17:43
  Speaker 1: this week. People have been worried for a long time
• 17:45
  Speaker 1: that China might invade Taiwan and produce another war. I
• 17:50
  Speaker 1: don't know if that's going to happen. It doesn't appear
• 17:51
  Speaker 1: like it's happening anytime soon. But this uncertainty and these
• 17:55
  Speaker 1: wars are very expensive. And and I think don't help
• 17:58
  Speaker 1: the global economy. Oil prices are at record heights because
• 18:01
  Speaker 1: of what's going on in Russia, Ukraine, and what's going
• 18:03
  Speaker 1: on in the Middle East. So I don't know what
• 18:06
  Speaker 1: will ultimately happen, but I suspect the markets are not
• 18:10
  Speaker 1: happy with what they see right now.
• 18:12
  Speaker 3: I wonder your outlook on a domestic issue that can't
• 18:16
  Speaker 3: span the global, which is energy, specifically when we talk
• 18:18
  Speaker 3: about data centers and how we're going to power them
• 18:21
  Speaker 3: and the political effects that could have on the thoughts
• 18:25
  Speaker 3: around it. How are you viewing data centers in terms
• 18:29
  Speaker 3: of the overall build of the future of AI?
• 18:31
  Speaker 1: Well, as a general rule of thumb, people would say,
• 18:34
  Speaker 1: I need more technology, more technology is good. As a
• 18:37
  Speaker 1: general rule of thumb, some people are not in favor
• 18:40
  Speaker 1: of technological improvements. But data centers have become something where
• 18:44
  Speaker 1: people wanted them for a while in their backyard. They
• 18:47
  Speaker 1: thought they produced jobs. Now people don't want them in
• 18:49
  Speaker 1: their backyards. And in fact, recently there was a survey
• 18:51
  Speaker 1: that said more people are willing to have a nuclear
• 18:54
  Speaker 1: power plant in their backyard than than a data center.
• 18:56
  Speaker 1: And as a result, many politicians are now saying, I
• 18:59
  Speaker 1: don't want any data centers. And then the data centers
• 19:01
  Speaker 1: have to be somewhere if you're going to have all
• 19:03
  Speaker 1: these AI computing power. So at some point, we'll have
• 19:07
  Speaker 1: to find some place where nobody lives and we can
• 19:09
  Speaker 1: build a data center because right now people don't want
• 19:12
  Speaker 1: them because they think it's going to be destructive to
• 19:14
  Speaker 1: the environment. It's going to cost a lot of money.
• 19:16
  Speaker 1: And in the end, they're nervous about it.
• 19:19
  Speaker 2: Okay. Let's talk about sports. So you're the owner of
• 19:22
  Speaker 2: the Baltimore Orioles.
• 19:24
  Speaker 1: I'm the control owner.
• 19:25
  Speaker 3: Yes.
• 19:26
  Speaker 2: What does that mean, control owner?
• 19:28
  Speaker 1: Well, every sports team probably has more than one person
• 19:31
  Speaker 1: who's the owner. And the way that Major League Baseball works,
• 19:34
  Speaker 1: if you own a certain percentage, I think it's more
• 19:36
  Speaker 1: than 15%, you are the control partner, which means if
• 19:40
  Speaker 1: something goes wrong, you're blamed. If something goes right, maybe
• 19:43
  Speaker 1: you get the credit for it. But when you have
• 19:44
  Speaker 1: a Major League Baseball owners meetings, you have control partners
• 19:47
  Speaker 1: typically go to the meetings as the ones who are
• 19:49
  Speaker 1: responsible for it. But I have other partners I brought in.
• 19:52
  Speaker 1: And if I were to drop dead tomorrow, the team
• 19:54
  Speaker 1: will be fine. They'll have other people that can replace me.
• 19:56
  Speaker 3: Okay.
• 19:57
  Speaker 2: Well, you're the control owner.
• 19:58
  Speaker 1: I'm the control owner. Correct.
• 20:02
  Speaker 3: Okay.
• 20:02
  Speaker 2: So $ 1. 7 billion, that's what you purchased?
• 20:04
  Speaker 1: That's correct. We paid $ 1. 7 billion. When the team first
• 20:07
  Speaker 1: came to Baltimore in 1954, the purchase price was $ 2. 2 million.
• 20:11
  Speaker 1: We paid $ 1. 7 billion. And as we've just seen, the
• 20:14
  Speaker 1: New York Yankees are just valued at now, you know, $ 13,
• 20:19
  Speaker 1: $ 14 billion.
• 20:19
  Speaker 2: The Lakers sold for $ 10 billion.
• 20:21
  Speaker 1: They sold and they resold for $ 12. 5 billion.
• 20:24
  Speaker 3: Six months later.
• 20:25
  Speaker 1: So, you know, it's been going up. Now, I don't
• 20:27
  Speaker 1: know how long it's going to continue this way. Smaller
• 20:30
  Speaker 1: cities don't have those kind of price values. We're in Baltimore.
• 20:34
  Speaker 1: Baltimore is a smaller city by baseball standards. And therefore,
• 20:37
  Speaker 1: You know, a price of $ 1. 7 billion from Baltimore is
• 20:40
  Speaker 1: a big price. The team was sold several times before
• 20:42
  Speaker 1: I bought it. Once for, as I mentioned, $ 2. 2 million
• 20:46
  Speaker 1: in 1954. Edward Bennett Williams bought it for $ 12 million
• 20:50
  Speaker 1: in the early 80s. And then later his estate sold
• 20:53
  Speaker 1: it for $ 75 million. Then it was sold in bankruptcy
• 20:56
  Speaker 1: court to Peter Angelos for about $ 155 million. And so
• 21:00
  Speaker 1: I paid $ 1. 7 billion with my partner. So for those
• 21:04
  Speaker 1: people that held on from the original investment, they did
• 21:06
  Speaker 1: pretty well.
• 21:08
  Speaker 3: Talk about Baltimore. This is just not a random team
• 21:12
  Speaker 3: that you said, I want to have this in a portfolio.
• 21:15
  Speaker 3: Baltimore means something to you.
• 21:17
  Speaker 1: I grew up in Baltimore. My parents grew up in Baltimore.
• 21:20
  Speaker 1: I went to public schools there. Many of my relatives
• 21:24
  Speaker 1: still live in Baltimore. So Baltimore is my hometown. And
• 21:27
  Speaker 1: while I've spent much of my career in New York
• 21:30
  Speaker 1: and or Washington, I still feel an affinity for Baltimore.
• 21:33
  Speaker 1: And I have friends from high school, friends from grade
• 21:35
  Speaker 1: school that I'm still in touch with. And so I
• 21:38
  Speaker 1: wanted to do something to make Baltimore better than maybe
• 21:42
  Speaker 1: it had been. I thought if I bought the Orioles,
• 21:45
  Speaker 1: I could re-energize the Orioles and maybe re-energize the downtown Baltimore.
• 21:48
  Speaker 1: And I saw it more as a philanthropic gesture. I've
• 21:51
  Speaker 1: given away a fair amount of money in my life,
• 21:53
  Speaker 1: but a lot of that is to universities that I've
• 21:54
  Speaker 1: been associated with or to things in the Washington area,
• 21:57
  Speaker 1: things I've called patriotic philanthropy. But I could have done
• 22:00
  Speaker 1: more in Washington, in Baltimore perhaps, and I thought this
• 22:03
  Speaker 1: was a way of doing more for Baltimore. So, okay.
• 22:07
  Speaker 2: Why do you think sports franchises have climbed so much
• 22:11
  Speaker 2: over the last 50 years? I mean, you look at NFL,
• 22:14
  Speaker 2: you look at the NBA, you look at the NBL.
• 22:17
  Speaker 2: Why has this increase in sports prices gone up so dramatically?
• 22:21
  Speaker 1: There are many reasons for it. One, the population's gone up.
• 22:24
  Speaker 1: When I was growing up in Baltimore, the population of
• 22:27
  Speaker 1: the United States was under 200 million people. Now it's
• 22:30
  Speaker 1: 340 million people. You have more people, more eyeballs, more
• 22:33
  Speaker 1: people that can buy tickets, more people that will watch. Secondly,
• 22:36
  Speaker 1: we have more franchises. And when 1960, for example, the NHL,
• 22:42
  Speaker 1: the National Hockey League had six teams. That's it. The
• 22:45
  Speaker 1: NBA in 1960 had eight teams. That's it. So now
• 22:48
  Speaker 1: you have 30 or 32 franchises in each of these
• 22:51
  Speaker 1: major sports. So there are more people who are rooting
• 22:53
  Speaker 1: for people and therefore more people buying streaming services or
• 22:58
  Speaker 1: watching on television and buying products that are advertised on television.
• 23:01
  Speaker 1: There's also the international market. More and more of our
• 23:04
  Speaker 1: sports are becoming international. People are watching us overseas in baseball.
• 23:09
  Speaker 1: The Japanese have a big affinity for our baseball. And
• 23:12
  Speaker 1: then we in this country are very interested in sports overseas,
• 23:15
  Speaker 1: like soccer in England. And that's been a big factor.
• 23:18
  Speaker 1: And then you have the whole betting thing going on.
• 23:20
  Speaker 1: People love to bet. It's been going on for thousands
• 23:23
  Speaker 1: of years and probably going on for thousands of years.
• 23:25
  Speaker 1: And now betting is more or less legal with some constraints.
• 23:28
  Speaker 1: And that has attracted more and more people. So all
• 23:31
  Speaker 1: these things have produced more revenue for the sports franchises,
• 23:34
  Speaker 1: more TV revenue, more ticket revenue, and as a result,
• 23:37
  Speaker 1: the franchise values have gone up.
• 23:40
  Speaker 3: Is it a profitable business? Because most people, obviously, we're
• 23:42
  Speaker 3: in New York. Yankees, Dodgers, for sure. The Cubs, for sure.
• 23:48
  Speaker 3: But then you think about smaller markets, you know, Oakland, where,
• 23:51
  Speaker 3: you know, they had to move to Vegas. Florida has
• 23:54
  Speaker 3: a tough time, right? The Marlins have a tough time
• 23:56
  Speaker 3: attracting crowds. Kansas City. From that standpoint, if you're looking
• 24:01
  Speaker 3: at the investment, I think most people think major markets,
• 24:03
  Speaker 3: but the smaller markets, is it a profitable business?
• 24:06
  Speaker 1: Well, it depends on your definition of profitability. So if
• 24:09
  Speaker 1: you say operating profit, very few baseball teams of the
• 24:14
  Speaker 1: 30 baseball teams, very few have operating profits, which means
• 24:17
  Speaker 1: to say the money they take in every year is
• 24:20
  Speaker 1: greater than the money they spend on salaries and other expenses.
• 24:23
  Speaker 1: Very few. The Dodgers are probably on an operating basis
• 24:26
  Speaker 1: profitable because they sell a lot of equipment, and not equipment,
• 24:29
  Speaker 1: but a lot of merchandise in Japan. Mm-hmm. They have
• 24:31
  Speaker 1: a big following in Japan. I don't know if the
• 24:34
  Speaker 1: Yankees are profitable or not, but the teams are all
• 24:37
  Speaker 1: privately owned, so we don't really know the answer. But
• 24:40
  Speaker 1: I would say baseball teams are not on an operating
• 24:42
  Speaker 1: basis all that profitable. NFL teams on an operating basis
• 24:46
  Speaker 1: probably are because NFL is a cash cow unlike anything
• 24:49
  Speaker 1: we've ever seen in professional sports before. And I think
• 24:52
  Speaker 1: the NBA is increasingly moving towards profitability on an operating basis.
• 24:56
  Speaker 1: I don't know about some of the other sports, but
• 24:58
  Speaker 1: we also see now a lot of new sports are
• 25:00
  Speaker 1: coming along. Because everybody says, well, I can't own an
• 25:03
  Speaker 1: NFL franchise, but maybe I can own a pickleball franchise.
• 25:06
  Speaker 1: Or I could buy a Padel franchise. So people are
• 25:10
  Speaker 1: spending more and more time in it. And then women's
• 25:12
  Speaker 1: sports have become a bigger thing. You know, before the
• 25:14
  Speaker 1: Title IX, women were not playing sports in the way
• 25:17
  Speaker 1: they are now. Now you have professional sports leagues that
• 25:20
  Speaker 1: are just for women, and they are doing pretty well financially.
• 25:23
  Speaker 3: I wonder, as you look out, I mean, we grew
• 25:25
  Speaker 3: up in the Steinbrenner era here. Right. Contrary to you
• 25:28
  Speaker 3: in Baltimore, we're Yankee fans. Right. when you look at
• 25:32
  Speaker 3: how Steinbrenner approached ownership, and now I'm looking at how
• 25:36
  Speaker 3: Mark Walters and the Guggenheim Group are, what they're doing
• 25:39
  Speaker 3: with the Dodgers in terms of salaries and deferring it.
• 25:42
  Speaker 3: I wonder, how do you view that approach? Because it
• 25:44
  Speaker 3: feels like they're doing it and it's successful. How come
• 25:47
  Speaker 3: other major markets aren't doing it? Do you think it's sustainable?
• 25:52
  Speaker 1: Well, you know, when you enter into a long-term contract
• 25:56
  Speaker 1: with a player, let's say 10 years or 15 years,
• 26:00
  Speaker 1: You realize that you're overpaying because almost certainly the player
• 26:04
  Speaker 1: at the end of the contract is not going to
• 26:06
  Speaker 1: be as good as the player was in the beginning.
• 26:08
  Speaker 1: But you recognize this will be maybe helpful to your
• 26:11
  Speaker 1: franchise for a time. Right now, I think these long-term
• 26:16
  Speaker 1: contracts have some controversy associated with them. We'll see whether
• 26:19
  Speaker 1: they continue. Sometimes I think shorter ones work out. We
• 26:23
  Speaker 1: entered in one with somebody who came from New York,
• 26:25
  Speaker 1: Pete Alonzo. We have a five-year contract with him. We're
• 26:28
  Speaker 1: very happy with him. He's done a terrific job for us. But,
• 26:30
  Speaker 1: you know, when you get in the 10-year contracts or
• 26:32
  Speaker 1: 20-year contracts, you know, you realize you're paying a lot
• 26:35
  Speaker 1: more for the upfront part of the contract than in
• 26:38
  Speaker 1: the back because in the back you're not likely to
• 26:40
  Speaker 1: get as much value out of it. But I don't
• 26:42
  Speaker 1: think that's a big problem. I think the biggest challenge
• 26:44
  Speaker 1: you have in professional sports right now, I'd say, among
• 26:48
  Speaker 1: other things, is you have to make sure that the
• 26:50
  Speaker 1: smaller cities can compete with the bigger cities. Everybody wants
• 26:54
  Speaker 1: to think that their team has a chance of winning. Otherwise,
• 26:57
  Speaker 1: why would they show up at a game? And if
• 26:58
  Speaker 1: people in Baltimore or Milwaukee or other small cities think
• 27:01
  Speaker 1: they have no chance of beating the Dodgers or the Yankees,
• 27:04
  Speaker 1: they're not going to show up and they're not going
• 27:05
  Speaker 1: to participate in the whole economics of the system isn't
• 27:08
  Speaker 1: going to work. So what we're trying to do in
• 27:10
  Speaker 1: baseball is make sure that everybody has a chance to
• 27:13
  Speaker 1: win and everybody thinks that everybody has a chance to win.
• 27:15
  Speaker 1: And clearly in the last couple of years, a team
• 27:17
  Speaker 1: that had the biggest payroll won the championship twice in
• 27:21
  Speaker 1: a row. And what we want to do is show
• 27:23
  Speaker 1: that just having the biggest payroll doesn't guarantee a success.
• 27:26
  Speaker 3: Do you think?
• 27:27
  Speaker 1: I'm sorry.
• 27:28
  Speaker 3: Do you think a salary cap will ever happen in
• 27:30
  Speaker 3: major league baseball?
• 27:32
  Speaker 1: You know, I've been trained by the commissioner of baseball
• 27:35
  Speaker 1: to say that these are matters working, uh, being worked
• 27:37
  Speaker 1: on by major league baseball and the commissioner. And I'm
• 27:40
  Speaker 1: not really going to comment on that. Well done. Well done.
• 27:42
  Speaker 2: So the NFL and the NBA small markets do thrive
• 27:47
  Speaker 2: because you have OKC, even Kansas city chiefs, right? Kansas
• 27:50
  Speaker 2: city is a relatively small market. Um, And they have
• 27:54
  Speaker 2: salary caps there. But they have rev share. Their collective
• 27:57
  Speaker 2: bargaining agreement is a little different as well, right?
• 28:00
  Speaker 1: That's correct. You know, they have the NFL, the NHL,
• 28:05
  Speaker 1: and the NBA all have some form of revenue sharing
• 28:08
  Speaker 1: and salary caps. Major League Baseball does not, and we'll
• 28:11
  Speaker 1: see what happens. So as far as baseball, right, are
• 28:17
  Speaker 1: you optimistic? I mean, you're obviously optimistic because you purchased
• 28:20
  Speaker 1: a team. But when you look at, the players get
• 28:24
  Speaker 1: paid the most, but they're like number three. The league
• 28:28
  Speaker 1: is number three, right? And a lot of, you could
• 28:32
  Speaker 1: watch a game and it could be completely empty. I
• 28:34
  Speaker 1: watch a Cleveland game and it's like 10 people in
• 28:36
  Speaker 1: the stands. So just from a basic mathematical standpoint, right?
• 28:41
  Speaker 1: Like it doesn't seem like it's sustainable when players are
• 28:44
  Speaker 1: getting billion dollar contracts almost. And I think obviously the
• 28:49
  Speaker 1: major league baseball believes it would be better if we
• 28:52
  Speaker 1: had some changes in the way the system works, for sure.
• 28:56
  Speaker 1: And the NFL and the NBA are much more financially
• 29:00
  Speaker 1: successful because of the things they've done that we haven't done.
• 29:03
  Speaker 1: But Major League Baseball will resolve all that at the
• 29:06
  Speaker 1: end of the season because the contract with the players
• 29:09
  Speaker 1: ends at the end of the season. I think it
• 29:10
  Speaker 1: ends in December. And then there are negotiations before spring training.
• 29:14
  Speaker 1: So we'll see what happens. It's too early to say.
• 29:16
  Speaker 2: Also, the second part to that is, do you think
• 29:18
  Speaker 2: it's a grassroots problem as far as when you growing up,
• 29:21
  Speaker 2: I'm pretty sure kids were playing stickball even, right? Like
• 29:26
  Speaker 2: at a grassroots level, AAU basketball, football, and now soccer,
• 29:33
  Speaker 2: less kids are playing baseball. You have in the Dominican
• 29:37
  Speaker 2: Republic and Japan, you know, a lot but in america
• 29:40
  Speaker 2: do you think it's a grassroots youth problem with kids
• 29:43
  Speaker 2: playing baseball.
• 29:44
  Speaker 1: Well baseball when i was growing up that was the
• 29:47
  Speaker 1: sport that people played in little league baseball was a
• 29:49
  Speaker 1: big thing today you have basketball being a very attractive
• 29:53
  Speaker 1: and then you have soccer being attractive and then football
• 29:56
  Speaker 1: and um you know i would say uh it's changed
• 29:59
  Speaker 1: from what it was. Also, let's say in the African-American community, um,
• 30:04
  Speaker 1: we have relatively smaller percentage of African-American baseball players than
• 30:08
  Speaker 1: we did 20 years ago. And as a result, you
• 30:11
  Speaker 1: have a smaller number of African-American fans than you did
• 30:13
  Speaker 1: 20 years ago. Um, young African-American boys, um, are often
• 30:19
  Speaker 1: want to play basketball. And, um, that's a sport that, uh,
• 30:23
  Speaker 1: you know, has a large percentage of people who succeed
• 30:26
  Speaker 1: in it, who are African-Americans. Um, In baseball, it's different. Therefore,
• 30:30
  Speaker 1: you don't see as many role models for young Afro-American
• 30:33
  Speaker 1: boys in baseball as you do in basketball or even football.
• 30:36
  Speaker 1: So the world has changed. And obviously, we want to
• 30:40
  Speaker 1: reverse it to some extent. We want to appeal more
• 30:42
  Speaker 1: to minorities. We want to appeal more to people that
• 30:45
  Speaker 1: aren't now currently seeing the Major League Baseball as appealing
• 30:48
  Speaker 1: to them. As you mentioned, we have a lot of
• 30:50
  Speaker 1: players in Major League Baseball who are from the Caribbean area.
• 30:54
  Speaker 1: And that's an area where we recruit a lot of people.
• 30:57
  Speaker 1: But the population of the United States isn't as reflective
• 31:01
  Speaker 1: of the population as it is of the players. In
• 31:04
  Speaker 1: other words, you have sometimes higher percentage of Latino players
• 31:08
  Speaker 1: than you have Latino in your population to some extent.
• 31:13
  Speaker 1: We also, you know, we've got things we can do
• 31:15
  Speaker 1: and we're working to do that. Yes, it's a bit
• 31:17
  Speaker 1: of a challenge. You've been extremely successful in private equity.
• 31:23
  Speaker 1: When you took over the team, Well, prior to you
• 31:26
  Speaker 1: taking over, the Orioles had 103 wins. 2025, obviously the
• 31:31
  Speaker 1: wins went down.
• 31:32
  Speaker 3: This year has been a struggle. What have you learned
• 31:34
  Speaker 3: about leadership in this time in sports that you probably
• 31:39
  Speaker 3: brought over or you've had to change from your career
• 31:42
  Speaker 3: in private equity?
• 31:43
  Speaker 1: Well, I've learned it's not as easy as I would
• 31:45
  Speaker 1: like it to be. I've learned that a lot of
• 31:48
  Speaker 1: other owners are smarter than me. It takes a while
• 31:51
  Speaker 1: to build a team and rebuild a team. So you
• 31:54
  Speaker 1: have to be patient. If you're not patient, you shouldn't
• 31:56
  Speaker 1: be in professional sports. Very rarely does somebody buy a
• 32:00
  Speaker 1: sports team and it wins a championship when nobody expected
• 32:03
  Speaker 1: to do so, and that championship tenure continues for some time.
• 32:08
  Speaker 1: You have ups and downs in baseball. There are a
• 32:09
  Speaker 1: lot of very talented owners in baseball who have not
• 32:12
  Speaker 1: won a World Series. There are a lot of very
• 32:13
  Speaker 1: talented managers who haven't won a World Series. So it's
• 32:16
  Speaker 1: not as easy as you would like to think it
• 32:18
  Speaker 1: would be. When I bought the team, they were in
• 32:20
  Speaker 1: first place. Now I've managed a team that's not doing
• 32:24
  Speaker 1: as well. So it's frustrating at times, but life is frustrating.
• 32:29
  Speaker 1: And if you can't take the heat, get out of
• 32:31
  Speaker 1: the kitchen. If you can't take losing and you can't
• 32:33
  Speaker 1: take the fans complaining about you, you shouldn't buy a
• 32:35
  Speaker 1: sports team because fans are not going to praise you.
• 32:38
  Speaker 1: If you're waiting for praise, as Harry Truman once said,
• 32:40
  Speaker 1: you want somebody to praise you, buy a dog. But,
• 32:43
  Speaker 1: you know, you can't expect sports fans to say the
• 32:47
  Speaker 1: owner is wonderful and shouldn't make any changes. He or
• 32:50
  Speaker 1: she is doing a great job. You're not going to
• 32:52
  Speaker 1: get that in professional sports.
• 32:54
  Speaker 3: So.
• 32:55
  Speaker 2: Why the book? And yeah, why now for the book?
• 33:00
  Speaker 1: Well, when I was thinking about do I want to
• 33:03
  Speaker 1: buy a sports team or not, I had avoided the
• 33:05
  Speaker 1: temptation to do so. One of my friends in private
• 33:07
  Speaker 1: equity bought sports teams. I made fun of them saying,
• 33:10
  Speaker 1: you know, you're going to worry about your investors. How
• 33:12
  Speaker 1: do you have time for sports? But it turned out
• 33:14
  Speaker 1: they did pretty well and they made a fair amount
• 33:16
  Speaker 1: of money. Eventually, I decided when the opportunity came along,
• 33:19
  Speaker 1: maybe I should look at it. And then I did.
• 33:22
  Speaker 1: And then I wanted to put a book out. that
• 33:23
  Speaker 1: would explain why people buy sports teams. By interviewing other owners,
• 33:27
  Speaker 1: I think I can do that, and I think I
• 33:29
  Speaker 1: did it. And then I want to explain my own story,
• 33:32
  Speaker 1: why I bought a team. Why did somebody who didn't
• 33:34
  Speaker 1: know much about professional sports decide to come back to
• 33:37
  Speaker 1: his hometown, buy a team, and what has he learned
• 33:40
  Speaker 1: from that? And that's why I did it.
• 33:41
  Speaker 2: Who did you interview? What other owners did you interview?
• 33:43
  Speaker 1: Well, I interviewed a lot of owners, but the ones
• 33:45
  Speaker 1: that you probably would know very well is Bob Kraft,
• 33:47
  Speaker 1: who's the owner of the New England Patriots. I interviewed...
• 33:52
  Speaker 1: the owner of the Tony Ressler, the owner of the
• 33:56
  Speaker 1: Atlanta Hawks. Interviewed Michelle Kang, who's the owner of the
• 34:01
  Speaker 1: Washington Spirit, which is the women's soccer team. I interviewed
• 34:06
  Speaker 1: the owner of the Chicago Cubs. I interviewed people in
• 34:10
  Speaker 1: different sports and interviewed Rick Hendricks, who's a big sports
• 34:13
  Speaker 1: car person in NASCAR. So I interviewed a lot of
• 34:17
  Speaker 1: sports owners, and they all said consistently the same thing.
• 34:20
  Speaker 1: Winning is everything. That's what they really want to do.
• 34:23
  Speaker 1: And they don't focus on the money as much as
• 34:25
  Speaker 1: they'd focus on winning.
• 34:26
  Speaker 3: What type of owner are you? Hands on, right? Like
• 34:30
  Speaker 3: you brought up Peter Lonzo, that deal. That was a
• 34:32
  Speaker 3: big free agent signing for you guys. How hands on
• 34:35
  Speaker 3: are you in the decision making?
• 34:37
  Speaker 1: I would say from reading in the newspapers and so forth,
• 34:40
  Speaker 1: George Steinbrenner was more hands on than I am.
• 34:42
  Speaker 3: Maybe.
• 34:44
  Speaker 1: I would say. You know, I have other things I'm doing.
• 34:47
  Speaker 1: Some owners have nothing else they're doing. This is their
• 34:50
  Speaker 1: only thing they're doing. There's nothing wrong with that. And
• 34:52
  Speaker 1: some owners go to every single game. This is a
• 34:55
  Speaker 1: full-time job. I still have other jobs I'm doing. So
• 34:58
  Speaker 1: I don't go to as many games as some of
• 34:59
  Speaker 1: the owners. And I don't claim to be a baseball expert.
• 35:02
  Speaker 1: I've got people that I think know what they're doing,
• 35:05
  Speaker 1: and I rely on them. So in the Pete Alonzo case,
• 35:09
  Speaker 1: the person who serves effective is a general manager, but
• 35:12
  Speaker 1: really his title is President of Baseball Operations, Mike Elias,
• 35:16
  Speaker 1: he called me about it and we discussed it and
• 35:19
  Speaker 1: we went ahead and did it. But, I mean, I'm
• 35:21
  Speaker 1: not the person negotiating the deals with people like Peter
• 35:26
  Speaker 1: Alonzo's agent, but I was aware of any financial matter,
• 35:29
  Speaker 1: of any contract, of any substance, you know, the owner
• 35:33
  Speaker 1: will get involved and I do get involved. But I'm not,
• 35:36
  Speaker 1: you know, spending eight hours a day on it.
• 35:38
  Speaker 3: I'll bring up two names, Sam Kroenke, Josh Harris. I
• 35:43
  Speaker 3: bring them up because they not only own sports franchises,
• 35:47
  Speaker 3: but they own sports franchises in different leagues. Now that
• 35:50
  Speaker 3: you've seen what it is to be an owner of
• 35:52
  Speaker 3: a baseball team, does that entice you to say, let
• 35:55
  Speaker 3: me explore maybe some other leagues as well?
• 35:58
  Speaker 1: Josh Harris bought a basketball team when he was still
• 36:00
  Speaker 1: a very active person at Apollo. Then he later bought
• 36:03
  Speaker 1: a hockey team. Now he owns a football team. He
• 36:05
  Speaker 1: has a soccer team in England. He's marvelous at what
• 36:10
  Speaker 1: he's been able to do, and teams have done okay
• 36:13
  Speaker 1: under his leadership. And I think he's built a really
• 36:16
  Speaker 1: good organization. I'm older than he was when he got
• 36:19
  Speaker 1: into it. I think baseball is probably what I'm focused
• 36:23
  Speaker 1: on right now. I want to see if I can
• 36:24
  Speaker 1: turn the Orioles around before I decide to do anything else.
• 36:27
  Speaker 2: From a political standpoint, so you're like a lifelong Democrat, right?
• 36:31
  Speaker 1: I'm a registered independent. I worked in the White House
• 36:33
  Speaker 1: for President Carter, but I don't make political contributions anymore.
• 36:37
  Speaker 1: I abstain from that completely because I don't want to
• 36:40
  Speaker 1: be labeled If I give money to a politician, he
• 36:44
  Speaker 1: does something I don't like, I'm going to be blamed
• 36:45
  Speaker 1: for it. So I don't give money to politicians, and
• 36:48
  Speaker 1: I'm registered for many, many years as an independent. But
• 36:50
  Speaker 1: go ahead.
• 36:50
  Speaker 3: Okay.
• 36:51
  Speaker 2: Well, what's your take on the political wave that's happening
• 36:55
  Speaker 2: now with the Democratic Socialists, even in New York City,
• 36:57
  Speaker 2: Mayor Mondani? And across, he's the leader, but there's this
• 37:01
  Speaker 2: movement of Democratic Socialism.
• 37:03
  Speaker 1: I've been surprised at how much success it's had. but remember,
• 37:09
  Speaker 1: we've had a small turnout in some of these elections
• 37:12
  Speaker 1: that have occurred. I think the turnout for some of
• 37:15
  Speaker 1: the primaries was 7% or so. In the United States,
• 37:18
  Speaker 1: in a presidential election, you typically will have 65% of
• 37:21
  Speaker 1: eligible voters voting. If you've got only 7%, you're probably
• 37:24
  Speaker 1: going to have a different outcome than you would have
• 37:26
  Speaker 1: if more people voted. But there's no doubt that the
• 37:29
  Speaker 1: Democrats have to deal with this issue because if the
• 37:31
  Speaker 1: Democrats gain control of the House, it's not clear that
• 37:34
  Speaker 1: Hakeem Jeffries, who will be the Speaker of the House,
• 37:36
  Speaker 1: is going to be able to control his caucus completely
• 37:39
  Speaker 1: if he's got a few members who are members of
• 37:41
  Speaker 1: the Democratic Socialists. And then he's got AOC, who is
• 37:46
  Speaker 1: a kind of power base unto herself. And so it
• 37:50
  Speaker 1: won't be easy to be the Speaker of the House
• 37:52
  Speaker 1: if your Democrats are in control, for sure.
• 37:54
  Speaker 2: But what does it say about America when the wealth
• 37:58
  Speaker 2: disparity has gotten so large. I think that's really fueling
• 38:00
  Speaker 2: a lot of it, right? It's like people can't buy homes.
• 38:03
  Speaker 2: People are struggling to pay rent. And it's speaking to
• 38:06
  Speaker 2: millions of Americans that are fed up with the system
• 38:11
  Speaker 2: that we currently have in place as far as a
• 38:13
  Speaker 2: lot of people think capitalism has run amok.
• 38:15
  Speaker 1: Capitalism is not a perfect system and it has its
• 38:18
  Speaker 1: flaws for sure. Capitalism in Europe is operated much differently.
• 38:22
  Speaker 1: There's a much bigger social safety net than we have here.
• 38:26
  Speaker 1: higher taxes, but higher social safety net. Our country has
• 38:29
  Speaker 1: gone for a different type of capitalism where the social
• 38:32
  Speaker 1: safety net isn't quite as great as it is in
• 38:33
  Speaker 1: Europe or other countries. Clearly, there's a lot of disaffection
• 38:37
  Speaker 1: with people who are very wealthy in our country, but
• 38:39
  Speaker 1: that's been true throughout the ages. No country has had
• 38:43
  Speaker 1: a lot of wealthy people, and people who are not
• 38:45
  Speaker 1: wealthy are in love with those people. It's never happened
• 38:48
  Speaker 1: to be the case. There are a lot of very
• 38:49
  Speaker 1: wealthy people now, and the income disparity in our country
• 38:54
  Speaker 1: is getting greater But another problem that's getting greater is
• 38:57
  Speaker 1: the social mobility. It's one thing to be at the
• 39:00
  Speaker 1: bottom of the social network and fabric and then think
• 39:04
  Speaker 1: you can rise to the top. There's a phenomenon invented
• 39:08
  Speaker 1: or coined the phrase in 1936 called the American Dream,
• 39:11
  Speaker 1: where you believe that if you work hard, you can
• 39:12
  Speaker 1: get to the top. I believe that when I was
• 39:14
  Speaker 1: a boy and I got lucky and I worked hard
• 39:16
  Speaker 1: and I got to the top. But many people don't
• 39:19
  Speaker 1: believe it anymore, particularly in lower socioeconomic classes. Many people
• 39:23
  Speaker 1: do not believe in the American Dream anymore. The people
• 39:25
  Speaker 1: that tend to believe in the American dream now are
• 39:27
  Speaker 1: people who are immigrants to this country. We have 55
• 39:30
  Speaker 1: million immigrants in this country, and they came here because
• 39:32
  Speaker 1: they thought the American dream was realistic. Many of them
• 39:35
  Speaker 1: have been very successful. But people born here, particularly in
• 39:39
  Speaker 1: lower socioeconomic classes, they very often give up, and they
• 39:44
  Speaker 1: don't have a view that they can rise to the top.
• 39:46
  Speaker 1: And we have one of the biggest problems that we
• 39:48
  Speaker 1: don't address is illiteracy. we have roughly 19% of adults
• 39:53
  Speaker 1: in this country can't read.
• 39:54
  Speaker 2: At all.
• 39:54
  Speaker 1: At all. And I don't mean they're immigrants who can't read.
• 39:57
  Speaker 1: They can't read their native language either. They can't read
• 39:59
  Speaker 1: at all. 80% of the people in the juvenile delinquency
• 40:03
  Speaker 1: system in our country are functionally illiterate. And 67% or
• 40:09
  Speaker 1: two-thirds of the people in our federal prison system are
• 40:11
  Speaker 1: functionally illiterate. If you can't read, you have very little
• 40:14
  Speaker 1: chance of succeeding in our society. And one of the
• 40:17
  Speaker 1: ways that children learn how to read is their parents
• 40:19
  Speaker 1: reading to them. And if a parent can't read, how
• 40:22
  Speaker 1: that parent can't read to the child, the child is
• 40:24
  Speaker 1: probably going to continue the cycle of illiteracy. It's a
• 40:27
  Speaker 1: big problem, and it's something that I wish I had
• 40:29
  Speaker 1: a solution for. Did I be in New Hampshire or Iowa?
• 40:33
  Speaker 1: But I don't have the answer for it. It's not
• 40:34
  Speaker 1: easy to solve that problem.
• 40:36
  Speaker 2: It's getting worse because of artificial intelligence.
• 40:38
  Speaker 1: I was going to go there, but go ahead.
• 40:39
  Speaker 2: Artificial intelligence, I saw that it's actually getting worse because
• 40:45
  Speaker 2: people don't even need to read anymore, or they're just—
• 40:49
  Speaker 2: Things that they actually were required to read, now they're
• 40:52
  Speaker 2: not reading. So the literacy rates are actually increasing. And
• 40:57
  Speaker 2: some people say the artificial intelligence is the reason why
• 41:01
  Speaker 2: it's actually increasing.
• 41:02
  Speaker 1: Artificial intelligence, as with the internet, there are one to
• 41:07
  Speaker 1: two billion people on the face of the earth who
• 41:08
  Speaker 1: don't have access to the internet. Those people are being
• 41:11
  Speaker 1: left behind. And if you don't have access to and
• 41:14
  Speaker 1: able to use artificial intelligence, you're going to be left behind.
• 41:17
  Speaker 1: And I'm afraid we're going to have the same phenomenon
• 41:19
  Speaker 1: we have with the Internet, which is some people don't
• 41:21
  Speaker 1: have access to or knowledge of artificial intelligence. They're going
• 41:24
  Speaker 1: to be left way behind. It's a problem.
• 41:26
  Speaker 3: I wanted to just touch on sports really quickly and
• 41:29
  Speaker 3: get your thoughts because private equity has now come into
• 41:35
  Speaker 3: professional sports and ownership specifically. Today, we heard 16% stake
• 41:39
  Speaker 3: from Apollo Management into the Yankees, which is owned by
• 41:42
  Speaker 3: the Steinbrenner family. Here in New York, we have the
• 41:44
  Speaker 3: Morrow family that owns the Giants. There's some talks that
• 41:46
  Speaker 3: private equity might step in there, or they may have.
• 41:50
  Speaker 3: What are your thoughts around that? Because people just think
• 41:52
  Speaker 3: because people own a team that they, you know, obviously
• 41:56
  Speaker 3: when they see the valuation of the team, they assume
• 41:57
  Speaker 3: that the family has made money. But if they never
• 42:00
  Speaker 3: sell shares of the team, you know.
• 42:04
  Speaker 1: Some families bought teams when they were very, very inexpensive.
• 42:09
  Speaker 1: George Hallis' family bought a team, I think, when George Hallis...
• 42:13
  Speaker 1: helped start the NFL for maybe $ 1, 000. And then his family,
• 42:17
  Speaker 1: still 100 years later, still owns a piece of it.
• 42:19
  Speaker 1: But that doesn't mean they're necessarily wealthy unless they were
• 42:21
  Speaker 1: to sell stakes in the team. A lot of people
• 42:25
  Speaker 1: don't have as much cash as you might think. When
• 42:27
  Speaker 1: you have these reports in the Forbes, other places, of
• 42:30
  Speaker 1: people's net worth, it doesn't say what their cash is.
• 42:33
  Speaker 1: And therefore, and it's harder to know that, but a
• 42:35
  Speaker 1: lot of people have high net worths, but they don't
• 42:37
  Speaker 1: have a lot of cash. And so in the case
• 42:39
  Speaker 1: of sports ownerships, Some people have higher values for their
• 42:42
  Speaker 1: ownership of their teams than they thought they'd ever be.
• 42:44
  Speaker 1: And now they'd like to get some cash. They're selling
• 42:46
  Speaker 1: minority stakes. And you're seeing more and more of that.
• 42:48
  Speaker 1: And private equity firms are going to increasingly probably buy
• 42:51
  Speaker 1: stakes in professional sports teams.
• 42:54
  Speaker 3: I was going to say, do we predict that we'll
• 42:56
  Speaker 3: see so many more teams having private equity stakes?
• 42:59
  Speaker 1: Well, if the values get higher and higher, you know,
• 43:02
  Speaker 1: somebody who doesn't have a lot of cash who's an
• 43:04
  Speaker 1: owner would say, maybe I'll take some money off the table.
• 43:07
  Speaker 1: They're not selling control necessarily. Um, interestingly, when George Steinbrenner
• 43:11
  Speaker 1: bought the New York Yankees, he only.
• 43:13
  Speaker 3: Put in $ 250, 000.
• 43:13
  Speaker 1: That was it. The purchase price was 8.8 million, but
• 43:18
  Speaker 1: he didn't have a lot of, he didn't have $ 8. 8 million,
• 43:20
  Speaker 1: I guess. So he put in $ 250, 000 and he syndicated it.
• 43:24
  Speaker 1: Now the value of the team has worked much more,
• 43:26
  Speaker 1: but his family went from time to time when they
• 43:28
  Speaker 1: want to get some liquidity, they sell a piece. And
• 43:30
  Speaker 1: that's exactly what happened with Apollo, the Apollo deal. The family,
• 43:34
  Speaker 1: I guess, is selling up some piece of it, or
• 43:36
  Speaker 1: maybe not the family, but other people who are investors
• 43:38
  Speaker 1: in the Yankees. or selling some pieces to get some liquidity.
• 43:41
  Speaker 2: Speaking of like the Forbes list and how they list billionaires,
• 43:44
  Speaker 2: we recently interviewed John Morgan from Morgan & Morgan. He's
• 43:48
  Speaker 2: a billionaire and you're a billionaire. So he had an
• 43:51
  Speaker 2: interesting perspective. Billion isn't what it used to be, but okay,
• 43:53
  Speaker 2: go on. A billion isn't what it used to be. Well,
• 43:56
  Speaker 2: let's stay there. So what is a billion now?
• 44:00
  Speaker 1: Well, I'm saying that facetiously because obviously when the Forbes
• 44:03
  Speaker 1: list first came out in 19, I think 81, to
• 44:07
  Speaker 1: be on the Forbes 400 list, it took a net
• 44:09
  Speaker 1: worth of $ 125 million. There were hardly any billionaires then. Today,
• 44:14
  Speaker 1: I think to be on the list, you probably need
• 44:15
  Speaker 1: a net worth of three or four billion. So obviously
• 44:18
  Speaker 1: gotten a lot more wealth associated with it. But anyway,
• 44:21
  Speaker 1: your question is?
• 44:22
  Speaker 2: So he said, there's only 20 billionaires in America because
• 44:28
  Speaker 2: in order to be a real billionaire, you have to
• 44:30
  Speaker 2: have a billion dollars of liquid assets. He doesn't count
• 44:34
  Speaker 2: a billionaire as far as your company is worth a
• 44:37
  Speaker 2: billion dollars and that makes you a billionaire. What is
• 44:39
  Speaker 2: your thoughts on that?
• 44:40
  Speaker 1: I hadn't thought about that before, but it's a point
• 44:43
  Speaker 1: that is well worth making. You know, there are very
• 44:47
  Speaker 1: few people who tomorrow can write a check for a
• 44:49
  Speaker 1: billion dollars without having to sell something before they write
• 44:53
  Speaker 1: that check. So there are people who could do it,
• 44:56
  Speaker 1: but even the wealthiest people probably don't keep a billion
• 44:59
  Speaker 1: dollars in cash in their bank account. They probably have
• 45:02
  Speaker 1: it in stocks or in treasury bills or some other things. But,
• 45:05
  Speaker 1: you know, there probably are There probably are very few
• 45:08
  Speaker 1: people can write a billion dollar check tomorrow and without
• 45:11
  Speaker 1: having to call up and say, sell this or sell
• 45:13
  Speaker 1: that for sure.
• 45:14
  Speaker 3: Every December, there's something that we call the winter meetings. Well,
• 45:19
  Speaker 3: in Major League Baseball, they call the winter meetings. Owners
• 45:22
  Speaker 3: meet there. I wonder, as you know, you've probably seen
• 45:25
  Speaker 3: that from the outside. I heard about it from the outside.
• 45:27
  Speaker 3: Now you're inside those meetings. Is it do do guys
• 45:30
  Speaker 3: get along at that level? Like how how does that?
• 45:34
  Speaker 3: feel inside those rooms?
• 45:34
  Speaker 1: Well, there's always a sense that when you're not on
• 45:37
  Speaker 1: the inside of something, something important is happening on the
• 45:39
  Speaker 1: inside that you don't know about. But when you get
• 45:42
  Speaker 1: on the inside, you say, hey, there's nothing happening. That's
• 45:43
  Speaker 1: not interesting.
• 45:44
  Speaker 2: FOMO. FOMO.
• 45:46
  Speaker 1: It's just, you know, so, you know, I'll always, you know,
• 45:50
  Speaker 1: when I said, oh, I want to get invited to
• 45:51
  Speaker 1: this party or that party or that event. And then
• 45:54
  Speaker 1: when I finally get invited to them, I say, wow,
• 45:56
  Speaker 1: what's the big deal? Why did I get invited? That's
• 45:57
  Speaker 1: not that big a deal. So when you're in major
• 45:59
  Speaker 1: league baseball meetings and There are very serious meetings. We
• 46:02
  Speaker 1: have a commissioner that's done it for quite a while.
• 46:04
  Speaker 1: He's very well regarded by the owners. All the owners are,
• 46:08
  Speaker 1: they get along. Yeah, I mean, I don't know that
• 46:09
  Speaker 1: each other's best friends, but you don't see people yelling
• 46:12
  Speaker 1: or screaming or anything like that. They don't have the
• 46:14
  Speaker 1: kind of people in baseball anymore that yell or scream.
• 46:16
  Speaker 1: Maybe they were there a long time ago, but not now.
• 46:19
  Speaker 1: So people tend to have their debates and they argue
• 46:22
  Speaker 1: and we have votes. And generally, it's fairly unanimous when
• 46:25
  Speaker 1: we decide to do something.
• 46:26
  Speaker 3: Not always.
• 46:27
  Speaker 1: But so I think all professional sports are probably that
• 46:30
  Speaker 1: way The owners, the time you get to be an owner,
• 46:33
  Speaker 1: you've made a lot of mistakes. You've learned how to
• 46:35
  Speaker 1: get along with other people. You realize yelling and screaming
• 46:39
  Speaker 1: doesn't probably carry the day. And so people tend not
• 46:41
  Speaker 1: to do that. So you don't see people yelling or screaming.
• 46:44
  Speaker 1: I haven't seen it. If you're going to yell and scream,
• 46:46
  Speaker 1: you probably do it out of sight and people aren't
• 46:48
  Speaker 1: going to see you.
• 46:50
  Speaker 2: I want to go back to something because that billion
• 46:52
  Speaker 2: isn't the same billion. That's an interesting commentary that you
• 46:55
  Speaker 2: made because even if you look at the stock market, right,
• 46:57
  Speaker 2: it took 80 years- to have a first trillion dollar company.
• 47:02
  Speaker 2: And now there's, how many trillion dollar companies is there?
• 47:05
  Speaker 1: Eight? 13? 13?
• 47:07
  Speaker 2: In five years. And as you said, before there was
• 47:10
  Speaker 2: a couple of billionaires, now there's thousands of billionaires.
• 47:13
  Speaker 3: Right.
• 47:15
  Speaker 2: We have a trillion, we had a trillionaire, it kind
• 47:17
  Speaker 2: of fluctuates. The devaluation of money, right? How concerning is
• 47:25
  Speaker 2: this as far as how rapidly it's happening? Like how rapidly-
• 47:29
  Speaker 2: We go from having no trillion-dollar companies to having 13
• 47:31
  Speaker 2: trillion-dollar companies, having a couple of billionaires to having thousands
• 47:35
  Speaker 2: of billionaires. How rapid is the value of money actually decreasing?
• 47:40
  Speaker 1: Well, I think that's not our biggest social problem. It's
• 47:43
  Speaker 1: a problem, but not the biggest problem. The biggest problem
• 47:46
  Speaker 1: is we don't have enough people at the bottom. We
• 47:47
  Speaker 1: have too many people at the bottom who don't have
• 47:50
  Speaker 1: any money at all. That's the bigger social problem, and
• 47:53
  Speaker 1: we have to obviously figure out a way to get
• 47:55
  Speaker 1: more people who have wealth They kind of figure out
• 47:57
  Speaker 1: how they can contribute more to the bottom of society.
• 48:00
  Speaker 1: Societies don't rot because there are too many billionaires. They
• 48:04
  Speaker 1: rot because there aren't enough people who have money and
• 48:09
  Speaker 1: can get along and make the societies thrive. You've never
• 48:12
  Speaker 1: seen a revolution because there are too many billionaires at
• 48:15
  Speaker 1: the top. You see revolutions occur when there's dysfunction in government,
• 48:19
  Speaker 1: when people at the bottom don't feel they're adequately taken
• 48:22
  Speaker 1: care of. And that's the bigger problem in all societies.
• 48:27
  Speaker 3: It's an interesting quote. You said your biggest financial regrets
• 48:29
  Speaker 3: were investments you passed on, including Meta and Amazon. What
• 48:36
  Speaker 3: have those moments taught you?
• 48:39
  Speaker 1: Well, it reminds me how lacking in intelligence I am
• 48:43
  Speaker 1: in judging some things. In the case of Meta now,
• 48:47
  Speaker 1: or it was then Facebook, my now son-in-law was at
• 48:50
  Speaker 1: Harvard and he was a classmate of Mark Zuckerberg's and
• 48:53
  Speaker 1: he was a classmate of his in prep school as well.
• 48:55
  Speaker 1: He told me about this company and he told me
• 48:57
  Speaker 1: they were trying to raise $ 30, 000 or something. And as
• 49:01
  Speaker 1: he described it to me, it was a company that
• 49:03
  Speaker 1: was going to help people get dates at Harvard. And
• 49:06
  Speaker 1: then they were expanded to Yale and Princeton. It was
• 49:08
  Speaker 1: really a dating service for people at elite schools. And
• 49:12
  Speaker 1: I said, look, I've seen that in the 1960s. There
• 49:14
  Speaker 1: were dating companies. They're not going to survive. So I
• 49:17
  Speaker 1: didn't put in the $ 30, 000. One of Mark's Zuckerberg's roommates,
• 49:21
  Speaker 1: Eduardo Saverin, did do it. And I think that $ 30, 000
• 49:24
  Speaker 1: he put in, or maybe it's $ 15, 000 he put in,
• 49:28
  Speaker 1: is now worth about $ 50 billion. So I regret that.
• 49:33
  Speaker 2: What about the Amazon?
• 49:34
  Speaker 1: I didn't do it.
• 49:34
  Speaker 2: What's the Amazon story?
• 49:36
  Speaker 1: When Amazon, what happened was we owned the biggest book
• 49:42
  Speaker 1: distributor in the United States called Baker and Taylor. And
• 49:45
  Speaker 1: it turns out a young guy came to our Baker
• 49:48
  Speaker 1: and Taylor salespeople and said he was going to sell
• 49:50
  Speaker 1: books over the internet, but he needed a bibliography of
• 49:52
  Speaker 1: books on the internet, a bibliography of books in print
• 49:56
  Speaker 1: in order to sell books over the internet. So our
• 49:59
  Speaker 1: salesman said, well, we don't give it out. And they said, well,
• 50:01
  Speaker 1: I'd like to rent it from you. And he said, well,
• 50:04
  Speaker 1: I don't have any cash. And he said, I'll give you,
• 50:06
  Speaker 1: I think it was 20% of the company I'm starting
• 50:09
  Speaker 1: in return for letting me use the bibliography. And our
• 50:12
  Speaker 1: guy turned him down. But eventually our guy said, look,
• 50:15
  Speaker 1: pay us $ 100, 000 a year for five years and we'll
• 50:17
  Speaker 1: rent it to you. And then Jeff Bezos did it. Later,
• 50:22
  Speaker 1: I heard about this and said, geez, maybe we should
• 50:24
  Speaker 1: have taken a piece of the company. So I flew
• 50:26
  Speaker 1: out to see Jeff Bezos when he was starting his company.
• 50:28
  Speaker 1: He was in a little warehouse in Seattle. And I said, look,
• 50:32
  Speaker 1: our guy took $ 100, 000 a year for five years. I'll
• 50:35
  Speaker 1: take the stock deal, 20%. But he said, well, David,
• 50:38
  Speaker 1: that was two years ago. I don't really need you
• 50:40
  Speaker 1: as much, but I'll give you some stock. I think
• 50:42
  Speaker 1: he gave us 1% of the company, which of the
• 50:44
  Speaker 1: IPO we then sold. So if I'd held on to it,
• 50:47
  Speaker 1: it'd be worth many billions of dollars. So I've made
• 50:49
  Speaker 1: a lot of mistakes like that. What can I say?
• 50:53
  Speaker 1: Who would have thought that Amazon, remember Jeff Bezos was
• 50:58
  Speaker 1: only going to sell books over the internet. We ended
• 51:00
  Speaker 1: up selling everything and then doing other things. That was
• 51:02
  Speaker 1: not the original concept, but I wish I was smarter.
• 51:06
  Speaker 2: What's the best investment that you made or some of
• 51:08
  Speaker 2: the best investments that you actually made?
• 51:09
  Speaker 1: The best investment was putting in money into getting Carlisle
• 51:12
  Speaker 1: off the ground because it turned out to be pretty
• 51:15
  Speaker 1: good and I'm pretty happy with it. Hopefully my best
• 51:17
  Speaker 1: investment will be the Baltimore Orioles. There you have it.
• 51:21
  Speaker 3: Yes, despite us being Yankee fans. My last question is this.
• 51:26
  Speaker 3: Obviously you have a network of people that have high
• 51:30
  Speaker 3: net worth. Would you advise them to look into investing
• 51:34
  Speaker 3: in sports franchises?
• 51:36
  Speaker 1: I would say if you know what you're doing, if
• 51:39
  Speaker 1: you do it because you enjoy the sport and you
• 51:45
  Speaker 1: do it at a reasonable valuation and you kind of
• 51:48
  Speaker 1: recognize you're not going to necessarily get your money back
• 51:50
  Speaker 1: with a profit in the short term, yeah, I'd say
• 51:53
  Speaker 1: it's an interesting thing to do. But remember, if you're
• 51:55
  Speaker 1: buying a minority stake in a team, it's different than
• 51:57
  Speaker 1: you're buying the control. A minority stake in the team,
• 52:00
  Speaker 1: sometimes you're a very expensive season ticket holder, but you're
• 52:03
  Speaker 1: not really controlling the players or anything. But if you
• 52:06
  Speaker 1: really want to buy control of something, that's a more
• 52:08
  Speaker 1: complicated issue. I would say to most people, you know,
• 52:12
  Speaker 1: if you really love sports, you really want to make
• 52:14
  Speaker 1: a contribution to society, it's a good way to do so.
• 52:17
  Speaker 1: But if you don't love sports and you're not really
• 52:19
  Speaker 1: interested in some philanthropic gesture to your community, probably it's
• 52:22
  Speaker 1: not for you.
• 52:23
  Speaker 2: Before we leave, a couple more just geopolitical questions. China.
• 52:27
  Speaker 2: How do you view China in this AI race as
• 52:31
  Speaker 2: a political force, as a military force? Like, what is
• 52:34
  Speaker 2: your thoughts on China?
• 52:36
  Speaker 1: Well, China was a country that we largely ignored in
• 52:42
  Speaker 1: the West after Mao Zedong took over China and made
• 52:47
  Speaker 1: it communist. Not until Richard Nixon went there, after Henry
• 52:50
  Speaker 1: Kissinger had previously gone there, that we kind of reopened
• 52:53
  Speaker 1: China to the world. And then under President Clinton, we
• 52:56
  Speaker 1: allowed them to become members of the WTO. Now China
• 52:59
  Speaker 1: is the United States' biggest rival in almost everything, technology, economy,
• 53:04
  Speaker 1: all kinds of things. I think China is a country
• 53:07
  Speaker 1: that is probably going to, you know, it's a bigger,
• 53:10
  Speaker 1: more population than we have. It has a bigger economy
• 53:13
  Speaker 1: than we do if you measure by purchase price parity
• 53:16
  Speaker 1: as opposed to GDP. I think it's a mistake to
• 53:19
  Speaker 1: think that we can ignore what China is doing. China
• 53:23
  Speaker 1: is our biggest rival. When Russia was our biggest rival many,
• 53:26
  Speaker 1: many years ago, there was a rival on geopolitical issues
• 53:29
  Speaker 1: and military issues. But China is a rival on economic issues.
• 53:33
  Speaker 1: It's a rival on technological issues, much more complicated rival
• 53:37
  Speaker 1: and more significant rival than Russia was. So I think
• 53:40
  Speaker 1: China will be, for the next 50 years or so,
• 53:43
  Speaker 1: are the main rival of the United States in almost everything.
• 53:46
  Speaker 3: Does that make Taiwan probably the most important geopolitical risk
• 53:52
  Speaker 3: going forward? Obviously, from a tech standpoint, what they produce?
• 53:55
  Speaker 1: Well, you know, leaders of the Communist Party in China
• 53:59
  Speaker 1: want to be significant. The most significant was Mao Zedong,
• 54:02
  Speaker 1: and he recapture China for the communist party. And then, uh,
• 54:07
  Speaker 1: Deng Xiaoping made it the most, uh, much more significant economy.
• 54:11
  Speaker 1: I think Xi Jinping would like to be a significant
• 54:14
  Speaker 1: great leader. And generally under the communist party charter, um,
• 54:17
  Speaker 1: Taiwan is part of China. So he would like to
• 54:19
  Speaker 1: recapture it at some point, but he may not have
• 54:21
  Speaker 1: to do it militarily. He may do it for economic
• 54:24
  Speaker 1: or other reasons, but I think right now Xi Jinping's
• 54:26
  Speaker 1: view is I can't speak for him. I've met him,
• 54:29
  Speaker 1: but I can't speak for him. Um, I would say,
• 54:31
  Speaker 1: you know, one time I met him and I made
• 54:34
  Speaker 1: a little joke. I said, there's an old saying in
• 54:38
  Speaker 1: China that a trip of a thousand miles begins with
• 54:41
  Speaker 1: a fortune cookie. And he said, no, that's an American fortune.
• 54:46
  Speaker 1: I'm sorry, I got it wrong. The trip of a
• 54:47
  Speaker 1: thousand miles begins with a first step. And he said, no, no, no,
• 54:52
  Speaker 1: that's not an old Chinese saying. That's an American fortune
• 54:55
  Speaker 1: cookie saying. But I would say Xi Jinping is now
• 54:59
  Speaker 1: among the most respected leaders in the world because he
• 55:02
  Speaker 1: hasn't invaded any country. His economy is doing reasonably well.
• 55:07
  Speaker 1: He's pretty well respected. He's touring the world now. He's
• 55:09
  Speaker 1: in the United States soon. And I think he's a
• 55:12
  Speaker 1: very well-respected person. There are some issues now about his health,
• 55:15
  Speaker 1: but I think China is a country that the United
• 55:18
  Speaker 1: States is going to have to deal with for quite
• 55:19
  Speaker 1: some time.
• 55:20
  Speaker 2: What are you most optimistic about as far as investments
• 55:24
  Speaker 2: in the next 20 years? Is it AI?
• 55:26
  Speaker 1: Is it crypto?
• 55:27
  Speaker 3: Is it?
• 55:28
  Speaker 2: What are you, international?
• 55:29
  Speaker 1: Well, it's hard to say. In 20 years down the road,
• 55:32
  Speaker 1: it's so hard to predict. I would say, I would
• 55:34
  Speaker 1: think technology will continue to be a very important thing
• 55:38
  Speaker 1: for the United States to be a leader in. Among
• 55:40
  Speaker 1: the things I think will be important in the future
• 55:42
  Speaker 1: will be something like CRISPR technology, things that can enable
• 55:49
  Speaker 1: you to make genetic changes. I think that will be
• 55:52
  Speaker 1: very important. I think fusion will be very important, which
• 55:55
  Speaker 1: is enable you to have energy that's let's say, cleaner
• 55:59
  Speaker 1: and in many ways safer than what we have now
• 56:02
  Speaker 1: in some areas and without some of the problems that
• 56:04
  Speaker 1: we currently have with energy. And then I would say
• 56:07
  Speaker 1: also certain types of computers, new types of computer technology
• 56:13
  Speaker 1: will probably advance over the kind of computer technology we
• 56:17
  Speaker 1: have now.
• 56:19
  Speaker 3: In terms of retail investing, I know in December, the
• 56:23
  Speaker 3: NASDAQ is going to be, you're going to be able
• 56:25
  Speaker 3: to trade for 23 hours a day tokenized equities. What's
• 56:30
  Speaker 3: your thoughts around all this new craze around retail?
• 56:34
  Speaker 1: Well, there's an old saying, money never sleeps, right?
• 56:38
  Speaker 3: No, it doesn't.
• 56:39
  Speaker 1: And so I guess right now markets, we have to
• 56:42
  Speaker 1: get used to markets basically being open all the time
• 56:44
  Speaker 1: and you have to get used to it. So I
• 56:47
  Speaker 1: suspect that we'll get used to it. It won't be
• 56:49
  Speaker 1: that big a change in the end, but people can
• 56:51
  Speaker 1: get in and out of markets whenever they want to.
• 56:53
  Speaker 1: That's probably a good idea. What's your thoughts on crypto?
• 56:56
  Speaker 1: I'm sorry?
• 56:56
  Speaker 3: Cryptocurrency.
• 56:58
  Speaker 1: I missed that. When crypto came along, I didn't think
• 57:01
  Speaker 1: it would be taken seriously, but I was wrong, as
• 57:05
  Speaker 1: I often am. And now crypto, I think with the
• 57:08
  Speaker 1: current administration, has been very, very supportive of crypto. If
• 57:12
  Speaker 1: the Democrats were to regain control of the government, I
• 57:15
  Speaker 1: think crypto might be more challenged because I think they're
• 57:17
  Speaker 1: not as supportive of crypto as maybe the current administration
• 57:21
  Speaker 1: has been, which has its own cryptocurrency, I think, or
• 57:24
  Speaker 1: something like it. So I would say crypto... you have
• 57:28
  Speaker 1: to really be certain of what you're doing and make
• 57:30
  Speaker 1: sure that you prepare to lose a fair bit of
• 57:33
  Speaker 1: what you have in crypto because it can change very quickly.
• 57:36
  Speaker 1: But right now, I've been wrong on crypto. I didn't
• 57:39
  Speaker 1: think Bitcoin would get as high as it has been,
• 57:42
  Speaker 1: but a lot of my friends who bought Bitcoin are
• 57:44
  Speaker 1: doing quite well.
• 57:47
  Speaker 3: Inside the owner's box, I'll leave you on a baseball question.
• 57:51
  Speaker 3: The greatest non-Oreo player that you've seen?
• 57:55
  Speaker 1: There's no doubt. The greatest baseball player I've ever seen
• 57:58
  Speaker 1: was Willie Mays. Now, when I grew up in Baltimore,
• 58:00
  Speaker 1: you couldn't see him except in World Series and or
• 58:03
  Speaker 1: All-Star games. And as Ted Williams said, Willie Mays was
• 58:06
  Speaker 1: made for All-Star games. He used to have two All-Star
• 58:09
  Speaker 1: games a year for a couple of years. And he
• 58:11
  Speaker 1: was the greatest player ever I ever saw. I'd say
• 58:15
  Speaker 1: right after him, probably Hank Aaron was the second greatest
• 58:18
  Speaker 1: player I ever saw. Not counting any Orioles, of course.
• 58:22
  Speaker 1: But I would say.
• 58:25
  Speaker 1: Willie Mays was worth the price of admission to see him,
• 58:27
  Speaker 1: in my view. Just an incredible athlete in his peak. Okay.
• 58:31
  Speaker 2: Well, thank you for your time. And who should get
• 58:35
  Speaker 2: the book? Who is the book designed for?
• 58:36
  Speaker 1: The book is designed for people that want to understand
• 58:40
  Speaker 1: why people buy sports teams and what the owners of
• 58:43
  Speaker 1: sports teams are like and kind of gives them their
• 58:45
  Speaker 1: personality and talks a little bit about why I bought
• 58:48
  Speaker 1: a team and maybe people care about why people buy
• 58:51
  Speaker 1: sports teams might enjoy the book. It's Kind of an
• 58:53
  Speaker 1: easy read, and I think you don't need to have
• 58:56
  Speaker 1: artificial intelligence to be able to read this book.
• 59:00
  Speaker 2: We got to promote literacy. That's very important.
• 59:02
  Speaker 1: Okay. Well, thank you all very much. Appreciate it.
• 59:04
  Speaker 3: We appreciate you.
• 59:05
  Speaker 1: Thank you.
• 59:06
  Speaker 2: All right. There you have it, guys.