[REPLAY] Ian Charles & Doc O'Connor – Investing in Sports Teams at Arctos Sports Partners (Capital Allocators, EP.225)

Ian Charles and Doc O'Connor are the Co-Founders and Managing Partners of Arctos Sports Partners, a private equity firm dedicated to buying minority stakes in professional sports franchises. From its founding just two years ago, Arctos quickly has become the market leader in the space, raising a $2.1 billion first-time fund and a SPAC alongside Executive-in-Residence Theo Epstein, and buying stakes in MLB teams including the Boston Red Sox, the Golden State Warriors and Sacramento Kings in the NBA, and a compliment of other sports assets. Our conversation covers their backgrounds and the formation of Arctos, the investment opportunity in sports franchises, and the underlying business and ownership structure. We then turn to the unique characteristics look of the asset, investment process, and growth strategy. Full disclosure, I am a personal investor in Arctos' fund and am a fan of their strategy and team, pun intended. I hope you'll enjoy this conversation with Doc O'Connor and Ian Charles as much as I did. Learn More Follow Ted on Twitter at @tseides https://twitter.com/tseides?lang=en or LinkedIn https://www.linkedin.com/in/tedseides/ Subscribe to the mailing list https://capitalallocators.com/ Access Transcript with Premium Membership https://capitalallocators.com/signup Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com https://thepodcastconsultant.com/)

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Ted Seides?

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• 3:32Ted Seides?

  Hello, I'm Ted Seides and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capitalallocators.com.

• 3:59Ted Seides?

  My guests on today's show are Ian Charles and Doc O'Connor, the co-founders and managing partners of ArcTOS Sports Partners, a private equity firm dedicated to buying minority stakes in professional sports franchises. From its founding just two years ago, ArcTOS quickly has become the market leader in this space, raising a $2.1 billion first-time fund, a SPAC alongside executive in residence Theo Epstein, and Buying stakes in Major League Baseball teams, including the Boston Red Sox, the Golden State Warriors and Sacramento Kings in the NBA, and a complement of other sports assets. Our conversation covers their backgrounds and the formation of ArcTOS, the investment opportunity in sports franchises,

• 4:43Ted Seides?

  and the underlying business and ownership structure. We then turn to the unique characteristics of the asset, investment process, and growth strategy. Full disclosure, I'm a personal investor in ArcTOS's fund, and I'm a fan of their strategy and team, pun intended. I hope you'll enjoy this conversation with Doc O'Connor and Ian Charles as much as I did.

• 5:08Ted Seides?

  All right, Doc, Ian, great to see you guys.

• 5:10Speaker 01

  See you. Thanks for having us, Ted.

• 5:13Ted Seides?

  I know you both have different and really interesting backgrounds that came together for what you're doing. So, Doc, why don't you kick it off? Love to hear some about your background.

• 5:21Speaker 01

  So, I began my career at Creative Artists Agency. I was there for 32 years, the last 20 of which I was one of the managing partners and owners of the business. I started out in the movie and television businesses, representing talent. When we took over the company, we really saw a lot of headwinds coming in the entertainment business, and we realized pretty quickly that we needed to diversify our business, strengthen our platform. So, we started to think about adjacencies, and the most logical and biggest adjacency, clearly to us, was sports. So, I was instrumental in building the sports business from ground zero,

• 6:05Speaker 01

  starting around 2005. And we started in the representation business, and we built out a real diversified sports platform, which very quickly became The most profitable division in the company, the biggest division in the company, and really was the was the growth engine for CAA, which attracted the interest of outside investors like TPG, who ultimately bought control. In about 2015, after 20 years of being a managing partner there and running and building the business, I felt like I had done just about everything I could possibly do in the agency business, and I really began to thirst for getting my hands on real hard assets.

• 6:49Speaker 01

  And about that time, Jim Dolan came calling. MSG was a big client of CAA in the sports side, and he came calling with the role of CEO, public company CEO, real autonomy in the business. And it came at a point in time when I was really looking for a change and looking for a new challenge. So I jumped at it, moved my family across country. I spent close to three years at MSG. Jim is a famously difficult and demanding boss, and I had a great experience for the nearly three years that I was there, but it was time for me to go when I left.

• 7:26Ted Seides?

  Ian, how about you?

• 7:28Speaker 02

  I started my career at a fund of funds, just doing primary, secondary, and co-investment grunt work. I was the analyst, the youngest member of the team, but after only about 12 to 18 months on the job, having worked on a few secondary opportunities, it just didn't seem like you should be able to buy assets from limited partners at the prices we were able to do it. It seemed like an inefficiency that shouldn't exist.

• 8:04Speaker 02

  And being pretty naive, my boss and I wrote a business plan for the very first sell-side advisor. The two of us worked with a couple of other colleagues, and four of us left that fund of funds platform to start the world's first secondary advisory platform. It was called Cogent Partners. It's now, most LPs know it as Green Hill's secondary advisory practice.

• 8:36Speaker 02

  But that business, we grew it from four founders to almost 40 people when I left. Offices in London, New York, Dallas, Tokyo. We had some of the most sophisticated limited partners as clients on both our sell-side advisory practice and on our research business that helped limited partners monitor and understand the assets they didn't sell better.

• 9:08Speaker 02

  And when I left that firm to join Landmark Partners, I picked up my young family, moved across the country to Connecticut. And really, my job when I joined Landmark was to help that firm think about how to react to the growing competition and commoditization that was happening in the secondaries business. The very first thing that I did was start to build tools and systems to help LPs understand their portfolio better. We hired a legitimate rocket scientist to help me with that, and the two of us really built, in hindsight, it was the first data science business in private equity.

• 9:51Speaker 02

  And we just built software and tools and outputs to help LPs and GPs understand their programs better.

• 9:58Speaker 02

  And that became an origination engine for the firm. It allowed the firm to avoid the very competitive auction channel in secondaries. And it also put me in a position to help the firm evaluate new business opportunities and start new businesses. So I helped create the real assets and infrastructure secondaries business at Landmark, the preferred equity business that kind of spans across all of the investment products there. We did some minority stakes investing, and I spent the bulk of my time helping lead the private equity practice and helping lead the firm. I was there for 15 years, and I left Landmark to start Arctos with Doc and the rest of the founding group.

• 10:40Ted Seides?

  How did the two of you come together?

• 10:42Speaker 02

  So our origin story actually starts in 2011. During my time at Landmark, I looked at a lot of really exotic strategies and really unique assets. We were approached by a number of different sellers of minority stakes and sports teams.

• 11:04Speaker 02

  And a small group of us looked at those opportunities to try to figure out, is this an asset that could fit our mandate? And if not, is this an asset that we could build a business around? So we spent a lot of time with the data science team at Landmark evaluating the sector. And I personally fell in love with the attributes of the asset. It had a lack of correlation that was really hard to find. It had attributes that looked a little bit like a blend of core infrastructure, core real estate, but also growth equity. That's a really strange mix.

• 11:45Speaker 02

  What we couldn't figure out is would the leagues let us do it? Because institutional ownership has been prohibited by the North American sports leagues for a long time. I'm sure we'll talk more later about why that is. But if we couldn't build a scale business around it, it just kind of wasn't worth our time. So we just went on our way and looked for other assets. But you would share good ideas with other investors and basically eight years later, I had an LP come to me and say, hey, I don't know if you know this, but that sports thing that you told us about a long time ago, did you know the leagues are starting to change their rules and make this an investable asset class for funds?

• 12:29Speaker 02

  It would take a really unique kind of fund and we don't really know what that looks like, but they knew I had a history of entrepreneurship in private markets, that I had built a lot of really successful products in private markets. And the opportunity to be the first at anything in alternatives today is really rare, increasingly rare. And so a small group of us started to hone a hypothesis and try to test that hypothesis with different market participants. And one of the things that was obvious to me was this wasn't going to work unless our

• 13:13Speaker 02

  founding team included well-known senior members of this community, because it really is a community. It's a closed walled garden. They're really not into the Wall Street private equity mentality. They kind of put their arms around each other and I knew that

• 13:34Speaker 02

  To be accepted and have a shot here, I needed to find someone who had a background that was equivalent to mine, but focused in the sector. And Doc and I have a mutual friend in Sam Kennedy, who's the CEO of the Boston Red Sox, senior member of the Fenway Sports Group team. And I was talking to Sam about how I really needed a partner to try to pursue this. And he said, there's one guy, there's one guy you gotta meet, it's my friend Doc. Doc, I don't know if you want to share your history with Sam and the guys there, but that's the history.

• 14:11Speaker 01

  So I know your audience can't see us Ted, but it'd probably be a big shock to you that I'm significantly older than Ian. And despite our, despite our appearances, I look so much younger than he does, but the fact is I'm older. And when I left MSG, I certainly had the opportunity to do anything I wanted to, including retire. And I refer to it as my gap year, but I was bouncing around the house and my wife said, you know, you're driving yourself crazy and you're driving me crazy. You gotta get the hell out of the house. Do something. So I realized that I very much miss the engagement of work and I miss the community of work. I enjoy being part of the game. And so I began exploring

• 14:56Speaker 01

  various opportunities in the entertainment business, in the sports business. I just happened to be up in Boston and seeing my old friend Sam. And Sam said, you gotta meet Ian. There's this incredible idea that is floating around Major League Baseball and other leagues in terms of creating funds to invest in minority stakes as a new asset class. I don't have a lot of marketable skills, but one of my skills is two things. Number one, when I hear a good idea, seizing on it. And the second is surrounding myself with people that are a lot more talented than I am and a lot smarter. And I was introduced

• 15:38Speaker 01

  to Ian, funny enough, we both, we both had the same reaction about going to our Our first dinner, which was in New York, I'm walking to dinner and I'm talking to my wife on the phone. And I'm saying to her, I really don't like a lot of private equity, guys. I have no idea why I'm meeting with this private equity asshole right now. And similarly, Ian, just at the, probably at the exact same moment, was talking to his wife, saying, why am I meeting with this Ari Gold ass? It's like, what am I doing here? But we met in this first dinner and I think,

• 16:13Speaker 01

  aside from whatever specifics we talked about with respect to this new initiative that we were contemplating, the thing I remember most clearly was connecting with Ian as a human being and connecting to his story of growing up in Alaska and what life looked like from his vantage point and the values that he espoused. I just really connected to him as a human and I wanted him to be part of my life.

• 16:42Ted Seides?

  So you've alluded to this idea. What is this investment opportunity you've been pursuing?

• 16:49Speaker 02

  It's going to take a while to unpack, but the market opportunity that our firm and our fund is focused on are minority stakes in professional sports franchises and all of their related assets in the big five North American sports leagues. So those are Major League Baseball, the National Basketball Association, National Football League, Major League Soccer, National Hockey League, plus the premier global sports platforms in rest of world. That is a total addressable market today of about $400 billion.

• 17:30Speaker 02

  There are really three kinds of transactions that we're pursuing. One is liquidity to both minority owners and control owners of these assets.

• 17:46Speaker 02

  Growth capital or operating capital to help these businesses achieve their growth targets and operating objectives. And then the third category is acquisition financing. Helping these platforms acquire more assets and become platforms, helping them acquire other franchises to capture revenue and cost synergies, or helping a new control owner acquire their first platform asset. Those are the three kinds of transactions that we are implementing across that TAM. Our fund is the very first fund designed to provide institutional investors with diversified

• 18:24Speaker 02

  exposure to each of those leagues, diversified exposure across markets, ownership groups, and deliver an uncorrelated, low leverage, private equity return in an asset class that today has very little, if any, institutional competition, which is very, very hard to find.

• 18:47Ted Seides?

  A bunch to unpack in that. Let's start with the asset itself. And maybe you think of owning a professional sports team as a vanity buy in the past. I'd love to hear more about the history of the underlying business.

• 19:04Speaker 01

  Well, from its earliest days, I think Major League Baseball is probably the oldest league, followed, if I'm not mistaken, by the NHL, NFL, and NBA, but I might have my history screwed up there. And going back to the early days of European football, it was solely a live event business. And all the revenue was spun off from that live event. They were basically ticketing revenue and hospitality businesses back in the day. But over, over time, media, as these sports gained in popularity, media became more and more important. First, radio, and then television. Media both

• 19:43Speaker 01

  Locally and nationally is the single largest revenue stream in sports today. Ticketing, game day revenue, the second most important revenue stream of all. And as media has grown in value, so has the platform that these assets represent for marketing and advertising, that that value has grown as well. And then off of that foundation, a number of other ancillary businesses have grown to create this massive TAM.

• 20:17Ted Seides?

  And what's happened as these businesses have grown with the ownership structure that now allows you to come in as minority owners in these franchises?

• 20:27Speaker 01

  Going way back, these were largely sole owners. They were, it was more of a hobby or a side hustle. Many of these were family-owned assets. They were rarely full-time pursuits by any of these owners. But again, as popularity grew, as value grew, these became more syndicates. There's more multiple ownership stakes in each of these individual franchises, but it was mostly still driven by local affinity, by civic duty and leadership and whatnot. Over time, actually, and one thing that's important to note is that these were assets that at one point in time institutional ownership was allowed.

• 21:12Speaker 01

  So if you recall, newspapers owned these assets. Disney owned the Angels and the Ducks, and Fox owned the Dodgers. But what happened was those institutions, by their own governance, were forced to sell. And as forced sellers, the leagues perceived those values to be diminished in the marketplace. So they disallowed institutional ownership for the better part of a decade or more. And it became, as the NFL says, the two-legged rule, which is all owners had to have two legs. But there's been this steady transformation in the business.

• 21:53Speaker 01

  Over time, towards more and more professionalized and sophisticated ownership, which has grown asset value tremendously. And at the same time, it's been driven largely by revenue growth and by the fact that more rational collective bargaining agreements have brought the the general cost of talent, which is the single largest cost center for any sports enterprise, down over time.

• 22:23Speaker 02

  I just want to piggyback one thing on Doc's comment. He talked about the increasing sophistication of the controlling owners in this space, but I want to double click on that and provide data around it. So if you look at control ownership transactions over the last decade, I think something like 60, 65% of the new control owners in North American pro sports have either come from the technology sector or finance. Names like Qualtrics, Microsoft, Tibco, Blackstone, Appaloosa, Apollo, Fortress, Ares, Bain,

• 23:08Speaker 02

  really sophisticated people who see the historical return that these assets have provided and the opportunity to play about eight to 12 very strong growth trends in an uncorrelated way. Increasing profitability, increasing revenue, and tons of opportunity for operational improvement is driving sophisticated capital into the control positions of these assets when they become available. That's really exciting.

• 23:41Ted Seides?

  So Doc, when you go in to look at acquiring a minority interest, what is it that you are owning? There's an interest in a team. You mentioned there's a bunch of other assets around it. What is the lump sum of what you're purchasing?

• 23:55Speaker 01

  Well, I guess the simplest answer is to say we're investing in the platform.

• 24:03Speaker 01

  It's not simply the sports franchise because in most cases, these franchises own a number of ancillary businesses. These are legal monopolies that exist inside and have geographic exclusivity in most cases, except those cities where there's more than one franchise in a given league. But they're given very clear geographic parameters within which to operate. And it gives an owner essentially a call option on a host of ancillary businesses, from media to real estate to hospitality and so forth.

• 24:46Speaker 01

  So consequently, you're investing in the entire platform. The question of what is the actual asset is more of a philosophical conversation and an argument that Ian and I frequently have.

• 25:00Ted Seides?

  What are the two sides of that argument?

• 25:02Speaker 01

  Ultimately, I believe this is all a content business. We are investing in the content that is generated by these teams and leagues, franchises, and all that derives from that content, including hard assets like venues, like marks and logos, media content, et cetera. So I think this is, more than anything else, a very sophisticated content play.

• 25:29Ted Seides?

  Ian, what's the other side of that?

• 25:30Speaker 02

  I think you're buying a portfolio of assets, right? But I bring my lens, Mr. Content Guy from CAA, you know, representing actors and all this kind of stuff, right?

• 25:42Speaker 02

  I'm an asset underwriter. I'm a illiquid asset investor, right? So I look at this as a basket of assets. So when you buy a stake in a pro sports team in North America, you're actually buying a piece of three different things.

• 25:58Speaker 02

  The first is each team, depending on the league, each team owns 1/30th, 1/31st, 1/32nd of the league business.

• 26:08Speaker 02

  The league generated revenue, sponsorship, the assets that the league builds, these leagues by themselves should be valued anywhere between 25 and 150 billion dollars, by themselves, just as standalone IP, content, live entertainment juggernauts. And you get your pro rider share. Doesn't matter what city you're in, you've got the same shares as everybody else. That's piece number one. The second piece is you have a protected geographic monopoly

• 26:50Speaker 02

  to operate in one of the 30 best markets in North America, this live entertainment business. The third prong is all of the assets at the local level that you've been able to build around that brand. You might own the arena. You might own all the real estate around the arena, the parking lots. You might have gone vertical with an office complex and hotels and apartments. You might have an esports team. You might have invested in another franchise in your town or in another town. If you're an NFL club, you might have just put your hand up to expand your geographic ring fence to international markets where you can start to build local assets. We call that third prong the platform or the platformization,

• 27:35Speaker 02

  which is typically at the local level, but it can include multiple local markets for some of the bigger platforms. And when you buy into one of these businesses, you are buying into the IP and the content, to Doc's point, but you're buying into so much more in each of those three layers. It really is an unbelievable asset because you get this portfolio effect with just one investment.

• 27:59Ted Seides?

  Ian, you mentioned that you got the call from one of your investors in 2019 that said, hey, the leagues are now allowing institutions to come in. Why did the leagues decide to do that?

• 28:10Speaker 02

  It's really a multifaceted answer. The first part of that answer is I think the average valuation for one of the teams in Major League Baseball, National Basketball Association, NFL, NHL, I think it's about $2 billion, $2.2 billion, something like that.

• 28:31Speaker 02

  There aren't a lot of people that can pay 2.2, 2.5, 3, 4 billion dollars to buy one of these teams when they come up for control. There certainly are people, David Tepper bought the Carolina Panthers, Ballmer bought the LA Clippers. And so, providing the opportunity for a control owner to partner with a fund to tap into that capital as effectively a co-investor is one reason. The second is, it's hard to find minority partners in these deals if there's not a source of liquidity you can point to.

• 29:14Speaker 02

  One of the things that doesn't get talked about enough in private equity is the impact that the secondary market has had on institutional capital narrowing its view of the illiquidity premium that's required because of the depth and complexity and sophistication of the secondary market that has emerged over the last 20 years. That has allowed private equity to tap into more and more investors with larger and larger allocations to drive AUM growth over the last 20 years. The same thing is starting to become a need in professional sports equity. You need a little bit of liquidity in the system to allow more people to want to participate

• 29:59Speaker 02

  in ownership and write bigger checks in ownership if they feel more comfortable that there are multiple ways that they can eventually get the liquidity if they need it. That's number two. The third is, these assets are not allowed to have a lot of leverage. And 95% of these businesses have positive operating income. But any business, whether you make widgets, software, or professional sports experience, any business's actual growth can be a lot lower than its potential growth if it doesn't have access to the capital it needs to achieve its full potential. That's why there is a venture capital industry and a growth capital industry.

• 30:46Speaker 02

  But in professional sports, you're not allowed to tap into debt. You're not allowed to take on institutional capital directly.

• 30:54Speaker 02

  And so if you have a high ROI pipeline of opportunities in your business, historically, the only way you could fund that potential growth was through operating cash flow

• 31:09Speaker 02

  or by new equity injections from your shareholders. But right now, there's about a dozen really high-growth changes happening across the sports and live entertainment industries.

• 31:22Speaker 02

  And these businesses have an opportunity to go through a step function in growth if they have access to capital. So each of the leagues is getting there in their own way on their own timeline.

• 31:37Speaker 02

  But all of the leagues identified the need for more capital to support control owner transactions, the need for more capital to provide liquidity, and the need for more capital to fund growth potential.

• 31:53Speaker 02

  And that's why the leagues are creating these very unique definitions of approved funds.

• 31:58Ted Seides?

  How do you get your hands around how these assets have performed historically?

• 32:05Speaker 02

  That's a great question. One of the most powerful statistics that I've come across in this market

• 32:13Speaker 02

  is that over the last, I think it's 115 years, US inflation

• 32:22Speaker 02

  has run at an annualized rate of around, I think it's 3.1%. US public equities have compounded at around a 5.9%. And equity in the New York Yankees has compounded at 9.7% per year for 115 years. There is a unusual predictability and durability to these assets.

• 32:51Speaker 02

  That is unlike anything I've ever been a part of underwriting across alternatives. I, I used to have a portfolio that comprised over 20,000 private companies, properties, and projects. I don't know what SaaS businesses are going to be around in five years, 10 years, 15 years, or which airports are going to be critical pieces of infrastructure 20, 30 years from now. But I do know 50 years from now, there will be a World Series in October. The leagues have that kind of longevity and importance, the sort of universal appeal globally, nationally, and locally.

• 33:35Speaker 02

  When you go into the underwrite and you try to understand these businesses, go back to those three layers that I talked about. Once you feel like you understand the league economics and league level assets, that's a beta factor that is shared by all of the teams in that league. And so you really only have to do that underwrite quarterly. At the local level, you're underwriting the ownership group, the management team, the local assets, the local contracts, sponsorship, ticketing, local media rights, all of the related assets that are part of the platform. But that's just a normal investment underwriting.

• 34:18Speaker 02

  It's a ton of diligence time with ownership and management, third-party consultants. It's a lot of math, it's a lot of contract review. But there's nothing that complicated about it, once you have access to the information and the people and the decision-makers to do your work. You've just got to do the work. Getting access to those deals and that information is really, really difficult. It's one of the moats around this strategy. This is not an easy sector to get approved to invest in.

• 34:49Speaker 01

  I would just add to that, aside from all of the performance aspects that Ian just talked about, the protected and defensible moats, the long-term recurring, visible, predictable revenue streams, the scarcity of the assets, because in the big five leagues, there's only 150 of them or so. Underlying all of that, and I apologize in advance for getting on my soapbox, but underlying all of it is the fact that sports matter in our culture, in our world.

• 35:28Speaker 01

  As content, it's the most important and valuable content across all of media. Sports is simply great storytelling, great narratives, hundreds of unique stories that go out 365 days a year, winners, losers, triumphs, tragedies, all of it. And like any great content, has superstars and celebrities and great brands. And probably most importantly, they have incredibly passionate customers. They're called fans, fanatics. You're talking about people that have this passionate and engaged connection that exists through generations and have massive LTV.

• 36:13Speaker 01

  My father was a New York Giants fan. I am a New York Giants fan. My son, even though he grew up in Los Angeles, California, is a New York Giants fan. Being a sports fan is part of identity. On top of all of these performance characteristics, you have an asset class that has an unusual connection to human beings.

• 36:35Ted Seides?

  I'm curious, when you think about this as an investment, there are a couple of things that you had said about the risk return profile that feel different from private equity. One of those is the lack of ability to lever. How do you think about the absence of financial leverage in terms of the risk reward characteristics of what you're trying to do?

• 37:00Speaker 02

  Let me explain why, or some of the reasons why that leverage constraint exists. And then I can talk about how we view it as an investor. So. Doc talked about why direct investments from institutional investors was prohibited in each of the leagues because historically institutional investors either deemed sports to be no longer strategic or they got into trouble and had to sell the sports assets. And forced selling is one of the ways you impair long-term returns. If you go through a phase of forced selling, you get bad prints and it suppresses price appreciation until

• 37:43Speaker 02

  you can get inertia back in a positive direction. Leverage can have the same outcome, and it has historically. There have been periods of selling in pro sports that were driven by highly levered owners or highly levered structures. And so the leagues proactively put up leverage restrictions, both on the assets directly and as collateral. So an owner is not allowed to use their team as a piece of collateral on a loan. And the

• 38:21Speaker 02

  leagues regulate maximum leverage at the franchise level to the point at which, across the big four North American leagues, the average loan to value is about 13%, 14%, which is nothing when you look at the private equity landscape generally, right? I came from a world where 40% of everything was levered healthcare, 40% was some kind of levered tech, and the other 20% was highly levered industrial exposure. And all of those

• 38:59Speaker 02

  betas were highly correlated and levered. This sector doesn't have leverage. It has a correlation to traditional asset classes in the US of between negative .2% and positive .3%.

• 39:16Speaker 02

  And over the last 20 years has generated compounded returns of 12 to 14% per year, which is about a 500 basis point premium to the S and P 500. So you've been getting higher compounded returns with significantly less leverage, with negative or low correlation. This is a risk reducer and a return enhancer for most institutional investor portfolios. And our thesis is we can identify the best assets, the best management teams that have incredible visions for growth. We can build a portfolio of exposure across leagues, across metro markets, across ownership

• 40:01Speaker 02

  groups, diversify away that idiosyncratic risk and generate an enhanced return profile for our investors.

• 40:10Ted Seides?

  Doc, you'd mentioned that there are only, say, in the big five in North America, 150 or so franchises. So there's a limited supply of these available. You also alluded to the leagues having an onerous approval process. So it gives you a sense, maybe there's also a limited pool of buyers. Can you give a sense of what that process is like and perhaps why it isn't easier for more people to become, say, a minority owner?

• 40:38Speaker 01

  The leagues have become very, very diligent about researching and diligencing the background of every single owner in the league, right down to minority stakeholders. They do so out of need for protection, for reputation protection. So the risk for the leagues is very high for bad owners coming in. And so they've placed the bar very, very high to gain entry into this very exclusive club.

• 41:12Ted Seides?

  I'd love to dive in a bit on your investment process because such a unique asset and space, particularly with the minority ownership. How do you go about finding the opportunities? It's probably not hard to be able to define, hey, there's 150 teams. But that feels quite different from figuring out where you can purchase stakes.

• 41:33Speaker 02

  I want to go back to the three kinds of deals that we do. There's liquidity to the limited partners or minority shareholders. There's also liquidity, partial liquidity, to the control owners. So that's category one.

• 41:47Speaker 02

  Category two is acquisition financing. And category three is growth capital or operating capital. Across all three of those transaction types,

• 41:57Speaker 02

  we've originated in the last 22 months, almost $25 billion worth of deal flow. There's a tremendous amount of deal flow in this space. If you go category by category, in the 180 platforms, we have built out as one part of a very large data platform that we've built. We have a database of over 1,200 limited partners in these pro sports platforms.

• 42:29Speaker 02

  And I always draw an analogy to the early days of the private equity secondaries market. There used to be a book called The Alternative Investor's Directory. And that was the golden Glenn Gary leads for the secondaries market. Like, if you had that book, you knew who to call.

• 42:51Speaker 02

  And so for that part of our strategy, it's like we've gone in a time machine back into 1998 to 2001, and we've got the only copy of that directory. We have this proactive origination campaign to put our team, our firm, and the insights that it has to offer, the resources that it has to offer, in front of the control owners and the executives of these platforms. That whole process, that business unit, was modeled in many ways after the data science business that Barry Griffiths and I built at Landmark.

• 43:30Speaker 02

  It's called ArcTos Insights. And ArcTos Insights' job is to provide content, tools, ideas and resources to owners and executives at these pro sports teams on a very regular basis. That allows us to have a regular dialogue with all of these decision makers. It allows us to tell them what we're doing for other owners across the leagues. It allows us to identify opportunities of untapped growth in their market or in their platform and position ourselves to be the partner of choice when there's an opportunity to partner.

• 44:13Ted Seides?

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• 44:51Speaker 03

  This is not an offer to sell or investment advice. Investing involves risk, including the loss of capital.

• 44:56Ted Seides?

  And now, back to the show.

• 45:00Ted Seides?

  So when you go into sourcing all of these, let's say, hard to find assets in some sense or who the owners are, how do you then go through the due diligence process to confirm that there are these stakes that you'd like to get a hold of?

• 45:17Speaker 02

  So the diligence process for us starts once we've identified a potential partner or a potential counterparty. And we've had some reasonable discussion around their expectations around terms. Remember, there's three layers to each of these assets. There's the league, there's the club, and then there's the platform assets that the club owns. We've done all the work at the league level. And depending on the league, 40 to 80% of the economics for each team are generated at the league level. So even if it's a club we've never seen before, from a diligence perspective...

• 45:57Speaker 02

  We probably have a very strong view on 40 to 80% of the value that that club has at the league level. At the local level, our process looks just like any direct investment underwrite. Line by line, every piece of revenue, every cost, decades worth of underwriting. We think about everything probabilistically, not static case. So we have wide variations in outcomes for each of those variables, especially the longer the horizon. So our due diligence process, there are parts of it that look a lot like a normal private equity underwrite, but then there are parts of it that look very statistical in their output.

• 46:41Speaker 01

  I would add that our diligence extends also to diligencing the owner and the ownership group. It extends to the management and the operating group of the platform or franchise, and it extends to the likelihood of a controlled transaction in the next, say, five to 20 years.

• 47:08Speaker 02

  The other thing that we have, we have a huge roster of senior advisors. I think today we have 17 senior advisors, and each of them specializes in decade-plus of deep operational experience and leadership around the areas that impact revenue and value creation, whether it's sponsorship, ticketing, media rights, real estate, legalized gambling, diversity and inclusion. We have this full roster of resources that are available, not only to our team during the due diligence process, but also to our owner partners on an ongoing basis.

• 47:55Speaker 02

  As resources and advisors as they think about growth.

• 47:57Speaker 01

  So it all adds up Ted to ArcTOS being the any kind of partner that an owner would want. We can be a partner that's purely passive that gets our quarterly financial statements and that's that, or we can be a partner that is truly value add depending on the control owner's needs or desires.

• 48:20Ted Seides?

  Once you're in the ownership group, I'm kind of curious, on the field, on the court, on the ice, these teams are competing against each other. And if you're a minority owner in multiple franchises, say in Major League Baseball, how does that nature of, call it, competition, cooperation, co-opetition work? And where can you try to add value and where does it cross competitive lines?

• 48:47Speaker 02

  So it's really simple. Anything that touches players, drafts, free agency, farm system, anything that has to do with players, coaches, we can't be involved, we can't have any information, we can't have any dialogue, we actually are prohibited from receiving any information on those topics in each of our agreements with the clubs. We've also built a proprietary compliance system. It's very much like a MNPI compliance system to detect and quarantine any sensitive competitive information about players that we might accidentally

• 49:29Speaker 02

  be exposed to. Where we can have some value add is on the business side. Revenue generation, value creation, platform building. So M and A, deal flow, technology, those are huge areas of value add for us. Shared services, sponsorship, analytics, know your customer, all of these areas that touch the venue, touch the ticketing, the revenue side. We can be involved if the owner wants our help. And so what we do with each of our owners, when our partnership is formalized, is we put together our value-added operating plan.

• 50:13Speaker 02

  And in each of the four verticals where we believe we have value to add, we work through with the owner what they want to tap into, which of our senior advisors they want access to, and how we can help them achieve their vision faster or make their vision bigger.

• 50:29Speaker 01

  But remember, Ted, in addition to being intense competitors on the field, on the court, on the ice, whatever it is, more importantly, they're all partners. So if Arctos or any entity for that matter can bring value to the league, it's a value to all 30 or 32 teams.

• 50:49Ted Seides?

  How much does winning on the field of play matter to the economics of these businesses? Clearly, the league sharing, it doesn't matter at all. But how about on the local side and the platform?

• 51:01Speaker 01

  It's very specific to league and geography. It's really hard to quantify what winning really means. In European football, it's much more of a direct corollary to winning and revenue because so much of the revenue is tied to on-field performance. In the U.S., it really depends on the league. It's less important in the NFL and the NBA, given the high percentage of national revenues that each of those leagues generates. So market matters less.

• 51:40Speaker 01

  In baseball, in hockey, and in Major League Soccer, winning is probably more important. But even in those circumstances, winning and losing is less important, I believe, than the customer experience. If you create a great experience of going out to the ballpark or going to the rink, you will make for a memorable experience and winning becomes less and less important. But

• 52:10Speaker 01

  Markets matter. Actually, what you own matters as well. If you own your arena, if you own your venue, if you own a bunch of the ancillary assets, winning and losing becomes less important. You'd have to look no further than my own experience with the New York Knicks. During my tenure there, we were terrible. I think one year, we had a 17-win season. We were awful. I believe, if I'm not mistaken, that the Knicks are the worst-performing NBA franchise in the 2000s. So 21 years of some of the worst performance in all of the NBA.

• 52:48Speaker 01

  Yet, night after night after night, the Garden was at capacity, or certainly near-capacity. And we sat atop the revenue food chain for the entire time, until the Golden State Warriors came along and beat us in many revenue categories with their new arena. But that speaks to the market, for sure, and for the fact that the Garden sits in Midtown Manhattan atop the largest transit hub in North America. But it also speaks to the LTV of the Knicks fan, and for the value of the NBA experience in Midtown New York.

• 53:27Ted Seides?

  So you mentioned earlier that the last time the leagues allowed institutions in, there were a bunch of incidents of for-selling. And while not optimal, private equity fund structures generally have an end of life. Maybe that's evolving now, but many of them do. How have you thought about your own exit strategy down the road?

• 53:47Speaker 02

  So our exit at the fund level and the deal level, and frankly, in the due diligence process and the data science platform that we're building, we do consider all of that stuff to sort of be part of our secret sauce and intellectual properties. We don't talk a lot about our own structuring and architecture. What we do talk about is the limitations of traditional private equity architecture, and what that means for investing in these leagues. So some of the leagues require that a fund have at least 10 years left in its term to be considered for approval.

• 54:30Speaker 02

  So if you're in a traditional 10 plus 2 architecture, unless you're trying to do a deal in one of these leagues during your fundraising period, you don't qualify. Some of the leagues require that you have at least 500 or 700 million of capital dedicated to their league. Well, again, that's pretty hard for a traditional fund architecture to comply with. You're not allowed to use leverage. You're not allowed to use the assets as collateral in a backlevering package. You're not allowed to have formal governance control.

• 55:07Speaker 02

  So if you're a control buyer, if you're a control LBO fund, well, the L doesn't work and the B doesn't work. And if you've got like your four pillars of plower or your flywheel of excellence or whatever bullshit's on slide through your fund deck, it doesn't work here. You have to be prepared to be a passive partner over a long horizon with no leverage. And that's hard for traditional fund architectures to get comfortable with. Then you have all sorts of other constraints around portfolio contamination by owning prohibited

• 55:45Speaker 02

  assets, conflicts with leadership within your firm who might own stakes in teams. It creates this labyrinth of restrictions that make it really hard for a traditional private equity firm to get approval to move forward, both from the leagues and from their own investors, based on how they marketed the fund.

• 56:10Ted Seides?

  So the other side of the absence of leverage you alluded to earlier was this sort of private equity with growth opportunity. And I'd love to hear you alluded to eight to 12 different areas of growth for these assets going forward.

• 56:24Speaker 01

  The first that comes to mind is sports betting. It's been. The most publicized, the most talked about. And sports betting is a huge tailwind for all of sports, particularly in North America, given sports betting has been allowed globally elsewhere for quite some time now. Sports betting enhances the whole sports value chain. It increases fan engagement, which increases and translates into higher media values and higher LTV. It increases sponsorship. In fact, sports betting has become an entirely new category that didn't exist five years ago.

• 57:06Speaker 01

  It increases tech integration with sports. So as an example, the data business, which has created all sorts of investment and equity opportunities for leagues and teams. So sports betting is a big growth opportunity and tailwind. Media growth. Media growth is going to continue for sure. As I said before, it's the most valuable content in all of media. That trend will continue and sports will be on the leading edge of this transformation from our legacy media ecosystem to what comes next, which is likely a much more direct-to-consumer

• 57:51Speaker 01

  and streaming landscape. And that road will be a little bit bumpy here and there, but ultimately because it will lead to a direct-to-consumer type of offering, without middlemen, the value to leagues and teams will only grow. There's international expansion, which all leagues are definitely focused on. They're all expanding their footprints internationally. The NBA is probably leading the way for most US leagues in that regard. Growth exists, what we've alluded to before with respect to platformization. This horizontal consolidation as well as vertical integration across other sports, media properties, real estate, live entertainment, hospitality.

• 58:39Speaker 01

  You're seeing a lot more of that and transforming the landscape. And then I think overall, this trend that's happening in our world and all forms of content, this trend towards direct consumer and really owning the fan will only benefit leagues and teams more greatly in the future.

• 58:59Speaker 02

  Only things I would add to that on the growth side. You've got next generation venues. You have new venues to be built and you have a ton of technology upgrade coming to a venue near you. Frictionless checkout, self-checkout, robotics, parking. Then you've got all of the real estate around the venue. It's a massive 20 to 50 billion dollar opportunity over the next five to 10 years. The digital assets and crypto, all the NFT craze, that's being driven by the intellectual property that's coming out of these leagues.

• 59:42Speaker 02

  It's a tremendous portfolio of growth options that all require capital, perspective, a plan, and execution.

• 59:54Ted Seides?

  What do you see as the biggest risks to the strategy?

• 59:57Speaker 02

  There's a couple of risks in this ecosystem that are very unique. I don't worry about the same risks that impact every asset class, but this asset class does have some unique risks. One is the long-term league-level media contracts. Those are a big part of the revenue stream for each of these leagues. For us, a big part of that risk has been taken out of the system for the next seven to 12 years because Major League Baseball, the National Hockey League, and the NFL, and a couple of the European soccer leagues have all repriced their national and international rights deals in the last 18 months. Major League Soccer and the NBA will be doing that soon.

• 1:00:39Speaker 02

  So I think that risk has actually come down since we started the firm.

• 1:00:47Speaker 02

  I mean, look, the the obvious risk that we weren't smart enough or creative enough to think about when we started the firm was a global pandemic. No one, no league, no team, no vendor, no insurer had ever envisioned a scenario where you might actually play games without fans. And in fact, that's exactly what happened after the first six months of the COVID-19 pandemic abated and the leagues had confidence that they could put their players on the ice, on the court, on the field, in a safe environment and provide content to their partners and their fans and the consumers. That was a risk that we never really envisioned.

• 1:01:31Speaker 02

  So I think big, unique risks are venue safety, long-term meteorites, and then the collective bargaining agreements with the players. Those are the three big unknowns that are unique to this strategy.

• 1:01:46Speaker 01

  All I would add to that is that in the last 100 years, these leagues and teams have have survived many global pandemics, global depressions, world wars, nuclear war, a whole host of environmental and physical catastrophes, and yet they persist and they're durable and they go on.

• 1:02:10Ted Seides?

  In a relatively short period of time, you've raised a large institutional fund, you've been implementing on the strategy, you raised a SPAC. I'm really curious, what do the next couple of years hold for Arctos?

• 1:02:22Speaker 02

  I think when we take a step back, we're the first mover in this market, and this is one of very few markets where scale and information compound to create even bigger advantages. And so we're building this intellectual property advantage in this vertical.

• 1:02:48Speaker 02

  We intend to continue to scale and grow the business of partnering with owners of premier sports assets. What we might be able to do is broaden out the definition of partner for those owners. We could use this intellectual property, partner with our institutional investors, and provide solutions around real estate that are anchored by sports assets into the credit market around sports assets and live entertainment. Those are obvious areas where our IP, deal flow, and brand could provide excess return for institutional investors over

• 1:03:31Speaker 02

  and above the expected risk-adjusted return.

• 1:03:35Ted Seides?

  Great. Well, Doc, Ian, I can't let you guys go without asking a couple of closing questions, so let's have at it. What is your favorite hobby or activity outside of work and family? Doc, why don't you start out?

• 1:03:47Speaker 01

  I guess I'd call myself an outdoorsman. I fly fish. I fly fish all over the world. I'm a snowboarder. I like to be in the outdoors. It's my favorite hobby.

• 1:03:57Ted Seides?

  Ian?

• 1:03:58Speaker 02

  Love to exercise every day. That's my thing. If I get to spend time with my family outside of family and work, I gotta get to the gym.

• 1:04:08Ted Seides?

  All right. Well, that might dovetail into the next one. Ian, what's your most important daily habit?

• 1:04:13Speaker 02

  That's what it is. I gotta get my 5:00 AM exercise in. It's where I get my mind right. It's where I do some of my best thinking and reflecting.

• 1:04:23Ted Seides?

  Doc?

• 1:04:24Speaker 01

  So we have four rescued dogs at home. Each was rescued from a kill shelter. My wife is very involved in the animal welfare movement, and my daily habit is walking my dogs. It's, it reminds me to be present. It reminds me how fragile and precious life is, given we saved each of them from a certain death at the hands of the shelters, and it keeps me grounded. It gets my mind right.

• 1:04:54Ted Seides?

  Doc, what's your biggest personal pet peeve?

• 1:04:59Speaker 01

  Ian's gonna love this one.

• 1:05:00Speaker 02

  Oh, yeah.

• 1:05:03Speaker 01

  My pet peeve is practical jokers and my partner here happens to be a really, really talented and creative practical joker. If I can, I'm going to digress for one second and tell a story. It was my birthday. It's in March. During the pandemic, we spent time, most of the time in Jackson Hole, Wyoming. And I went out fishing for the day. I took the day off and my wife calls me and says she just had her vaccine and she was saying she was having a bad reaction to the vaccine. I had to get back home. I come back home and just as I'm walking in the door, I see this group of people at the end of my driveway, about 10, 12, 14 of them.

• 1:05:45Speaker 01

  They're all dressed up in fishing gear and they're walking down my driveway. And I immediately realized this is some practical joke that my partner's pulling on me, given I told him at one point that I don't like people poaching my fishing. So they, they came and said, hey, we hear there's good fishing around here.

• 1:06:06Speaker 02

  They sang happy birthday. They did sing happy birthday.

• 1:06:10Speaker 01

  So it's practical jokers.

• 1:06:12Ted Seides?

  Ian, how about you?

• 1:06:13Speaker 02

  I hate bullies. Full stop. Professional bullies, kid bullies, community bullies. I was bullied when I was a kid, like a lot of people were. It pisses me off. And whenever I see it, it really bugs me. I'll take practical jokers all day. I just can't stand bullies.

• 1:06:36Ted Seides?

  All right. How about on the investment side? What's your biggest investment pet peeve?

• 1:06:39Speaker 01

  I'll start. Since I'm a relative newcomer to the private equity world, it's the sheer volume of jargon and acronyms. And it's as if I was, I was dropped into downtown Tokyo and I don't speak Japanese and I can't read any of the, any of the signs. I assume it's a moat that gets put up by most private equity people to keep others out, but it's this inside language that is taking me a long time to learn.

• 1:07:08Speaker 02

  Yeah. Mine's actually probably pretty similar. My biggest pet peeve in investing is a lack of awareness by the practitioners, professors that kind of study the asset class and try to really tease out alpha versus beta. And if you look at the research, I think it's something like 90% of the managers in alternatives don't create any excess return, net fee and carry. But they talk like they're shaping these industries and molding these businesses and driving these

• 1:07:49Speaker 02

  outcomes, when really they're along for the ride. And so my biggest pet peeve is GPs that don't understand the difference between alpha and beta. That drives me nuts.

• 1:08:02Ted Seides?

  Doc, which two people have had the biggest impact on your professional life?

• 1:08:06Speaker 01

  That's a difficult question to answer. I'd say first that comes to mind is Lorne Michaels. He was my client for more than 20 years and he's an extraordinary human being, more than anything else. But he taught me, I think, two things. Number one is the power of relationships. His entire life and career has been driven by the strength of his relationships. I've never seen anybody better at that than Lorne. And the second thing is, I think he integrates his life and work in a truly seamless fashion. I'm not a believer in this work-life balance idea.

• 1:08:47Speaker 01

  Work is life, life is work. It's all one. And he was probably the best practitioner of that that I've ever seen. The second was Michael Ovitz, who was my first boss and the founder of CAA.

• 1:09:03Speaker 01

  I learned a lot of things not to do with Michael. It was probably just as much as important as what I did learn from him, but he really showed me what hard work looks like. I didn't know it before I arrived in the mailroom at CAA and I saw up close what drive and ambition and hard work looks like. And I think he taught me another thing, which was he knew no limits in his life. He believed that how you spend your time is who you are. And he chose to spend his time very, in a very directed and mission focused way. And he never saw the limitations of being an agent. It was only possibility. Yeah.

• 1:09:44Speaker 02

  My first one is my wife, Jamie. I've known Jamie since I was 17 years old. Actually, I've known her since I was 13 years old. We grew up in the same small town in Alaska. But she's supported me for so long, but in two very important points of my professional career, she was the one that kicked me in the ass and said, you gotta go for it. The first was Colin McGrady and I wrote the business plan for Cogent. My wife was a special ed teacher and she wasn't making any money. I was about to leave my job. We had student loans to pay. We couldn't make rent. And she said, you gotta try this.

• 1:10:29Speaker 02

  You've gotta do this. And that changed our lives forever. And three years ago, she bought me for Christmas, a little crystal bear. Cause she knew that I'd been like sitting on this idea of the name Arctos for a long time. And she just said, I think it's time. I think it's time for you. And that was before any of this had ever really come together. So Jamie's number one. Number two is Howard Marks. Howard Marks is the first GP I ever met at that Fund of Funds. And this is in like the dot com VC heyday. And here's this guy talking about debt and restructuring. I was like, man, this guy doesn't get it.

• 1:11:14Speaker 02

  Like, he's totally missing the opportunity here. Sure enough, tech market melts down and I'm going through some old flip books on my desk. And I was like, oh, man, this guy was right. And like so many of your listeners, I've just consumed his memos and his books and the way that he so clearly articulates the power of cycles and margin of safety and value. But Howard has made time for me personally at several really important inflection points in my career. Even when we were starting Arctos, he was one of a small group of people I reached out to and said, look, here's what I see. Here's the opportunity as we're thinking through it. What am I missing?

• 1:11:59Speaker 02

  And for someone who's had so much success, such an incredible person in this industry to make time for people that are just trying to give it a go and share his perspective and just a couple kernels of encouragement. I don't think he appreciates how powerful those little nudges and those little windows of time that he's given so many people, the impact that it had on their careers. And for me, it was incredible.

• 1:12:25Ted Seides?

  All right, Ian, what's the biggest mistake you've made and what did you learn from it?

• 1:12:29Speaker 02

  Partnering with me. The biggest mistake, not being a very good listener and not realizing when I'm not present for the people that I care about. I didn't even know what the heck that meant. And then people I cared about helped me realize that I was tuning them out. I wasn't showing them how much they meant to me in just the way that I carried myself. And so, learning how to be a better listener has been...

• 1:13:05Speaker 02

  A challenging part of my walk for 10 plus years now, but I hope I'm getting better because it can be costly if you screw it up. That was a big mistake I've made that I have made for big chunks of my career.

• 1:13:16Ted Seides?

  Doc?

• 1:13:17Speaker 01

  Well, what comes to my mind is not necessarily the biggest mistake, but it was the most important mistake. I was just made an agent off of Michael Lovitz's desk and I was thrown into the literary department and it was my first deal and I had absolutely no idea what I was doing, none at all. But I thought that I needed to have all the answers and so I just plowed ahead and I made every mistake imaginable, all in the course of literally like a day. And I guess the learnings from it was that I need to slow down. I have to move deliberately in everything that I do and that I don't have to have all of the answers all of the

• 1:14:02Speaker 01

  time. It was an important learning. I remember it vividly to this day.

• 1:14:07Ted Seides?

  Ian, what teaching from your parents has most stayed with you?

• 1:14:10Speaker 02

  My father was a mechanic. He was a laborer, busted hands, busted back, and best I could tell, he hated his job. He loved the people he worked with, but he just, it was a grind. He would always tell me, anything's possible. If you put your mind to it, anything is possible.

• 1:14:36Speaker 02

  And the contrasting nature of that statement and how hard he had to work always stuck with me. And my mom, my mom taught me to believe in myself, or she tried to. It didn't really stick for a long time, but they were both really good about just constantly saying, if you put your mind to it, anything's possible. Don't give up.

• 1:15:04Speaker 02

  And I'm grateful for that.

• 1:15:05Ted Seides?

  Doc?

• 1:15:06Speaker 01

  I think that most of the things that stick with me come from my father. My father was a World War II veteran. His oldest brother was killed in the war. He was in the infantry in Italy and he often said, right until the day he died, that he was living on borrowed time since the war. So I think I learned a couple of things from my dad. Number one was the fragility of life. But secondly, my father, who went on to have real success in the advertising business, ended up being the CEO and chairman of his advertising agency, a global agency. He treated everybody with respect, no matter who they were.

• 1:15:50Speaker 01

  And if he ever saw us in any way disrespecting any other human being, no matter their walk in life, he had hell to pay. He hated that and he instilled it in all of us in our family.

• 1:16:06Ted Seides?

  All right, guys, one more. What life lesson have you learned that you wish you knew a lot earlier in life?

• 1:16:12Speaker 01

  It goes to some of the previous stuff that I've said. It's about being present in the moment and enjoying everything. The ups and the downs, the wins and losses, and probably most importantly, the struggles. Earlier in my life, I was always so anxious to move on to the next thing and the next thing and the next thing and not to appreciate what was happening in the moment. There's lots of summits and every one of them is a false summit. Work is a continuum and you have to enjoy the day to day of it in all of its entirety.

• 1:16:50Speaker 01

  I think I've, as a result of that, ArcTOS, for a lot of reasons, has been my best professional experience by far for that understanding.

• 1:17:02Ted Seides?

  Ian?

• 1:17:03Speaker 02

  To have courage. Change is hard. Being an entrepreneur is hard. Being an investor, it's hard to do something that nobody else is doing. It's lonely. I wish I'd learned earlier to trust my gut and have courage.

• 1:17:17Ted Seides?

  Doc, Ian, thanks so much for sharing the story and taking the time.

• 1:17:21Speaker 02

  That's just great. Thank you.

• 1:17:23Speaker 01

  Thanks, Ted. Much appreciated.

• 1:17:26Ted Seides?

  Thanks for listening to this episode. I hope you found a nugget or two to take away and apply in your investing and your life. If you liked what you heard, please tell a friend and maybe even write a review on iTunes. You'll help others discover the show and I thank you for it. Have a good one and see you next time.