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

In this powerful conversation, billionaire investor and Baltimore Orioles owner David Rubenstein discusses his journey from working for President Jimmy Carter to co-founding The Carlyle Group just one month before the historic 1987 stock market crash. He shares the hardest parts of building one of the world’s largest investment firms, now managing $485 billion in assets, and explains what he looks for when investing in private companies. Rubenstein also breaks down America’s growing debt, stock market uncertainty, recession cycles, private equity, AI, China, and the devaluation of money. He explains why sports franchise values have skyrocketed, the economics of owning a professional team, and the biggest challenges facing Major League Baseball. Plus, he reveals how he missed the opportunity to own 20% of Amazon and how passing on an early $30,000 investment in Facebook may have cost him more than $100 billion. #EarnYourLeisure #DavidRubenstein #CarlyleGroup #Investing #PrivateEquity #StockMarket #ArtificialIntelligence #BaltimoreOrioles #Business #Economy #Wealth See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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• 2:40Speaker 04

  A country's spending more interest on debt than defense spending. Usually it goes down in terms of its world power, and that's what we're doing now. Currently, we have $40 trillion of debt.

• 2:49Speaker 05

  Is there any way out of it?

• 2:50Speaker 04

  The only way we're gonna get out of this, and honestly, is paying it off in devalued dollars. There's no other way out unless you want to do something dramatic like increase taxes dramatically or a cut spending, and people don't want to do that.

• 3:02Speaker 03

  Have you seen anything like the moment that we're currently living in, in terms of the economy?

• 3:06Speaker 04

  People always like to say this time is different, and those are the most dangerous words in the investment world. Because history repeats itself. In the end, nobody really knew which companies were gonna make it and which companies were not.

• 3:15Speaker 05

  When do you think another bear market is going to come?

• 3:18Speaker 04

  Well, if I knew, I would be probably shorting the market from right now. This uncertainty and these wars are very expensive, and I think don't help the global economy.

• 3:26Speaker 03

  You said your biggest financial regrets were investments you passed on, including Meta and Amazon. What have those moments taught you?

• 3:33Speaker 04

  I mean, the case of Meta, and he told me they were trying to raise $30,000, so I didn't put in the $30,000. One of Mark Zuckerberg's roommates did do it, and I think that $30,000 he put in is now worth about $50 billion. I regret that. Reminds me how lacking in intelligence I am in judging some things.

• 3:49Speaker 03

  What have you learned about leadership in this time in sports that you probably brought over from your career in private equity?

• 3:56Speaker 04

  If you can't take losing, and you can't take the fans complaining about you, you shouldn't buy a sports team. Because fans are not gonna praise you. If you want somebody to praise you, buy a dog.

• 4:04Speaker 05

  All right, guys, welcome back. EYL special episode. We have David Rubenstein. Thank you for joining us.

• 4:09Speaker 04

  My pleasure to be here. Thanks for having me.

• 4:11Speaker 05

  Co-founder of Carlyle Group, one of the largest private investment firms. 485 billion assets under management.

• 4:17Speaker 04

  That's correct.

• 4:19Speaker 05

  Yes, and you are also the owner of the Baltimore Orioles.

• 4:23Speaker 04

  That's correct.

• 4:24Speaker 05

  That's what we're gonna talk about today.

• 4:26Speaker 04

  Happy to talk about that.

• 4:28Speaker 03

  He's gonna be New York Times bestselling author as well.

• 4:31Speaker 05

  He's already a New York Times.

• 4:32Speaker 03

  Again.

• 4:32Speaker 05

  He's already a bestselling author. And you have the, you got the President Medal of Freedom Award.

• 4:38Speaker 04

  Presidential Medal of Freedom was given to me by President Biden, yes.

• 4:42Speaker 05

  Congratulations.

• 4:43Speaker 04

  Thank you.

• 4:44Speaker 03

  That's a first for us.

• 4:45Speaker 04

  Well, it's nice to get. I mean, it's the highest civilian honor you can theoretically get, but happy to get it. But I'm sure there are other people who deserved it more than me that didn't get it yet.

• 4:55Speaker 05

  Yes. So we're gonna talk about you owning the Orioles. We're gonna talk about the book, but before, let's just give some background for the audience. So you started, you were in the Carter White House.

• 5:08Speaker 04

  Correct.

• 5:08Speaker 05

  Right? That was 1970?

• 5:11Speaker 04

  77. Carter started January 20th, 77. I was the Deputy Domestic Policy Advisor to the President. I was only 27. I didn't know what I was doing, but in some ways, nobody else knew what they were doing either.

• 5:22Speaker 05

  So when you went from working in government to starting the Carlyle Group, how did that transition happen? And what was the early days of starting the Carlyle Group?

• 5:33Speaker 04

  Okay, well, I worked in the White House for four years for President Carter. We lost the election overwhelmingly to Ronald Reagan. So people used to tell me how great and smart I was when they wanted something from me when I was in the White House. All of a sudden, they wouldn't call me back when I needed a job after we lost the election.

• 5:48Speaker 05

  What was your position in the White House?

• 5:49Speaker 04

  I was the Deputy Domestic Policy Advisor.

• 5:52Speaker 05

  And what exactly does that?

• 5:53Speaker 04

  Well, my boss was the Domestic Policy Advisor in charge of all domestic policy, non-farm policy things, and I was his deputy. We had a big staff, and we drastically advised Carter on everything from agriculture to civil rights to anything else that was not foreign policy. When we lost the election, I had to go back and practice law, which is the only skill I really had. I'm a lawyer by training. I wasn't that great a lawyer. If I was a good lawyer, I would be practicing law. But I wasn't that good, and my clients reminded me of that. And so I decided to start a investment firm in 1987, and it grew to be one of the larger private equity firms in the world.

• 6:30Speaker 03

  That's an interesting year. When did you start in 87? Because most people know 87 for being Black Monday in September.

• 6:38Speaker 04

  That's correct.

• 6:38Speaker 03

  How did?

• 6:39Speaker 04

  We started about a month before.

• 6:41Speaker 03

  Talk about that for us.

• 6:42Speaker 04

  Well, in October of 1987, the stock market crashed by a large amount. At the time, it was the biggest crash since the Great Depression, and it really depressed the markets. I think the markets went down, what, 500 points or so, which was a big amount then in those days.

• 7:01Speaker 04

  You know, we said maybe we started the wrong time. It wasn't good. But we did start it, and we overcame it, and ultimately, the market came back. But it was a little disconcerting when you're a month into your business, and all of a sudden, you have the biggest stock market crash in 50 years.

• 7:15Speaker 03

  I wonder, as you look at the space now, obviously going through that to start the tech boom of the 90s, pullbacks, obviously in 01, with September 11th, and the housing crisis, now the AI revolution. Have you seen anything like the moment that we're currently living in, in terms of the economy?

• 7:33Speaker 04

  Well, people always like to say this time is different, and those are the most dangerous words in the investment world when somebody says this time is different, because history repeats itself. Right now, we are in a complicated situation where the United States is going through a transition in many ways from a non-AI economy to an AI economy. AI is gonna revolutionize the way we live and think and do everything else. Right now, we don't know what the full impact of AI is gonna be. Some people are saying it's gonna end humanity as we know it. Other people are saying it's gonna make life better for everybody. Who knows? Nobody really knows. Just like when the internet came along, nobody really knew what the impact would be. And some people were right when they said it would be transformative of our lives, and it has been. But in the end, nobody really knew which companies were gonna make it and which companies were not.

• 8:18Speaker 04

  AI is in the same situation. AI will change our lives, but nobody really knows whether it's gonna make it better or worse, or how it's gonna impact us directly.

• 8:27Speaker 05

  When building the Carlyle Group, what was the hardest part? Was it client acquisition? Was it navigating from different investments to know the trends that's coming?

• 8:37Speaker 04

  Well, the hardest part was I was based in Washington, DC, and most of the firms that were in the private equity world were in New York, so we weren't taken seriously because we're in Washington. Secondly, I didn't have an investment background. I was a lawyer. So I had to get people convinced I actually knew what I was doing. And then my partners and I had not worked together before. We kind of assembled to build this firm, but we didn't have a track record. And in the investment world, everybody wants a track record. And we didn't have a track record, so we had to do deals one at a time and just kind of get some credibility after the deals worked out, and then we could go out and raise more capital. It took a while. The firm is now, you know, almost 40 years old. It took a long time to get to be credible. We were one of the largest firms in the private equity world for a long time.

• 9:20Speaker 04

  Now we're one of the, still one of the biggest ones, managing just about $500 billion.

• 9:23Speaker 05

  Did you use your relationships from the White House and from government to as your early initial first clients?

• 9:32Speaker 04

  Well, of course, Carter was out of the White House then, so my relationships were not that valuable. But I had contacts on Capitol Hill. I had contacts around the country that I'd made while I worked in the White House, but they were not really that valuable. I had to start all over again. And when you start your career all over again, you just have to make fresh contacts. So if you've ever started your career all over again, you were in the financial world before, and when you started this, you just had to start all over again. Sometimes your contacts are useful, sometimes they're not.

• 9:59Speaker 05

  Do you think that Jimmy Carter has had gotten a bad rap in history as far as how people remember his presidency?

• 10:06Speaker 04

  Well, I do. Obviously, I'm biased. Jimmy Carter won in an upset. Nobody really took him seriously when he started running for president. Nobody ever heard of him. They called him Jimmy Who. And then he won, and he beat an incumbent president, Gerald Ford. In four years, though, inflation became very high. Gas lines were very long, and we had the hostages in Iran. So Carter lost unceremoniously to Ronald Reagan, a gigantic loss. And then he kind of went back and rebuilt his life, and he became a Nobel Peace Prize winner as a result of some of the things he did after the presidency. I think Jimmy Carter is not considered to be a great president by historians, but I think many of the things he did post-presidency are greatly admired.

• 10:48Speaker 04

  And now people are seeing that some of the things he did as president were probably better than people gave him credit for.

• 10:54Speaker 03

  You brought up track record, which is, I mean, it's vital, especially in private equity. Everybody remembers the ones that changed the trajectory of the company. Can you think back to the companies that you were investing at that time that really changed and created a belief system around what you guys were building?

• 11:11Speaker 04

  Well, at the time, what we were trying to do is we're trying to say that private equity investments can make companies better, and that was a novelty at the time. Today, most people would say that private equity firms do have a big impact. Now, some people still don't like private equity, but in the end, you have to admit that the United States economy has been fairly transformative over the last 20, 30, 40 years. We're the envy of the world. We have the biggest GDP in the world. We have the greatest productivity of major economies. To some extent, I think that's by because of the techniques that private equity firms have used to make their companies more valuable. And many of these private equity techniques are now used by public companies. They see what private equity firms have done to make companies more valuable, and they've used some of the same techniques, even though they're not involved with private equity.

• 11:55Speaker 04

  So I think private equity has gotten a bad rap in some respects. In the end, I think it's been very good for the US economy.

• 12:01Speaker 05

  Speaking of the US economy, how, what is your view on the national debt? And are you extremely concerned that this is something that is going to be a hindrance for us in the future?

• 12:12Speaker 04

  Currently, we have $40 trillion of debt. $40 trillion is, you know, about 125% of our GDP, which is a number that makes us comparable to companies, countries like Lebanon or Italy, which is not necessarily role models. But that's really modest compared to the real debt. The real debt is the unfunded Medicare, Medicaid, and Social Security liabilities. If you were to take that into account, we would have much more than $40 trillion of debt. So it's a serious problem. If you go through history and you take a look at other countries that have had this kind of problem, generally, they have not survived as well as they would like. And particularly when you pay more interest on your debt than you're spending on your defense spending. When a country is spending more interest on debt than defense spending, it usually

• 12:55Speaker 04

  goes down in terms of its world power, and that's what we're doing now. Right now, we're spending more interest on our debt than we are spending on defense spending, and we have a big defense budget. So I think it's a serious problem, and it's not going to be addressed anytime soon because nobody wants to raise taxes, nobody wants to cut spending.

• 13:11Speaker 05

  Is there any way out of it?

• 13:12Speaker 04

  The only way we're going to get out of this, and honestly, is paying it off in devalued dollars. Your grandchildren and great grandchildren are going to be paying off this debt in dollars that are worth less than the dollars that we borrowed at the time that I'm alive. In other words, we're basically devaluing our currency, and that's how we're going to pay it off. There's no other way out unless you, you want to do something dramatic like, like increase taxes dramatically or, or cut spending, and people don't want to do that. 85% of the budget is defense spending, interest on the debt, and entitlements. Nobody wants to cut any of that, so it's very difficult to do. And I don't think anything pleasant is going to happen anytime soon. But we can ride it out in the sense that we just basically live with it, and in the

• 13:54Speaker 04

  end, we devalue our currency and we pay off the debt in devalued dollars. That's essentially what we're doing now.

• 14:00Speaker 03

  You said history repeats itself.

• 14:02Speaker 04

  I'm sorry?

• 14:02Speaker 03

  I said, you said, "The history repeats itself."

• 14:04Speaker 04

  It does. It's what we're doing right now. For example, there were, under President Obama, there was a commission appointed to figure out how we could deal with this, but it was basically, it came up with a conclusion that we had to cut Social Security, cut Medicare, Medicaid. It was so unpopular that President Obama didn't even want to have a picture taken with the commission heads. They were very popular people, Senator Simpson and, and Bowles, and, and, but President Trump, President Obama said, "I don't want to be photographed with them," at the time. And, you know, we didn't really implement any of their recommendations. So nobody has a solution for this that's going to solve the problem. It just, there's no, it's politically too difficult.

• 14:43Speaker 03

  Yeah, I was going to the point of the time that we're in, right? Like, if we look at historically, how Septembers have performed, how the summer months have performed, how the market has performed during midterm years, it feels like there's something different happening this year. Should we follow that trend or say, "Let's go based on history, how these markets performed during these current times, to see where we're headed?"

• 15:06Speaker 04

  During a midterm election year, historically, the stock market, the S and P 500 is up about 5% on average. But the year after a midterm election, the markets are up about 14%. So no matter what happens in the midterm elections, probably the markets will go up because there's less uncertainty. Markets don't like uncertainty. Right now, we don't know who's going to control the Congress. And if, if we knew, markets would probably go up. Right now, the markets are uncertain about where the future is going to be. And, and I can't tell you today whether Democrats are going to control the Congress or Republicans are going to control. Nobody really knows, but it's obviously going to be very important, what happens. I suspect today that the Republicans are not feeling as good as they, they were maybe six months ago.

• 15:46Speaker 03

  Yeah. I, I wonder how you feel about the idea of circular financing. That's been like a key phrase over the past few years in private equity, companies like Anthropic, companies like OpenAI, still private, but still raising funds, getting money from publicly traded companies that are going to benefit those publicly traded companies in the future. What are your thoughts around that?

• 16:07Speaker 04

  This is what you're maybe referring to is that Nvidia, for example, is very profitable.

• 16:13Speaker 03

  Correct.

• 16:14Speaker 04

  And what it has cleverly done is it's funded a lot of its customers. In other words, ensure that customers can buy things from Nvidia, Nvidia invests in those companies. You know, time will tell whether that's a good thing or not. Nobody really knows. As long as Nvidia is worth $5 trillion plus, they can probably afford to do it. Whether that can continue forever, I don't know. What you call circular financing, it's, it's generally not worked throughout history very, very well, because sometimes these companies at the very top that are paying for everything, ultimately, their values go down. If Nvidia's value went down by half of where it is today, it wouldn't be able to afford to do all this, but we just don't know yet.

• 16:50Speaker 05

  So I came in the business in 2008, and that was obviously the Great Recession. But we haven't really had a stock market, a bear market since then, almost 18 years. We had one during COVID, but that was a very short-lived, one of the shortest, it might have been the shortest ever. When do you think another bear market is going to come?

• 17:12Speaker 04

  Well, if I knew, I would be probably shorting the market than right now, but I would say this. You're correct. Generally, in this country, we've had since in the 20th century and the 21st century, recessions every seven years on average. We haven't had one except for a technical recession during COVID. We really haven't had a recession for more than 10 years. And I think there's a concern that eventually history will repeat itself and we'll have another recession. Nobody really knows when a recession is going to come. People always like to say a recession is coming, and, and then they're wrong and they, they, they kind of go away. Right now, nobody is predicting a recession anytime soon, though if you read newspaper reports, President Trump is worried that if we were to have constraints on AI, which is fueling our economy, that could produce a recession.

• 17:57Speaker 04

  Apparently, according to newspaper reports, he's worried that if you regulate AI, and AI therefore goes down in value, and people are less worried, less buoyant about AI, that could produce a recession. It's maybe possible. You know, right now, what's happening in the Middle East could produce a recession. Oil prices are at record heights, and at some point, it's going to filter into the economy, and I think it's going to slow down the economy. But whether it produces a recession, nobody really knows, and I can't say that it will yet.

• 18:24Speaker 03

  At this level of your career, and I wonder if maybe it was the same then, I know you are known for rationally looking at investments. Is, how, how do you go about looking at companies that you're potentially going to invest in? Like, what are the metrics that you guys look at?

• 18:38Speaker 04

  What, for an investment, for private equity or something?

• 18:40Speaker 03

  Yeah.

• 18:41Speaker 04

  Well, in private equity, what you do is you tend to look for companies in the areas you have some expertise in, see whether there's a likelihood that if you inject capital into the company, either minority stake or control, you're likely to be able to improve the value of the company to get a rate of return that you want. The investors that invest with us want rates of return, let's say, in the mid-teen rates of return area. So 15, 16%, 17%. If you think you can improve a company and get those kind of rates of return, then it looks like an attractive investment. Typically, in Carlyle and other firms like ours, KKR, Blackstone, Apollo, we tend to take six months or more to analyze a company before we, what's called due diligence, and we analyze the company and say, "Yes, can we inject money here and get the kind of return our investors want?" Sometimes you're right, sometimes you're wrong.

• 19:27Speaker 04

  Sometimes you get deals that are much better than you thought, you didn't think they'd be so great, and sometimes deals don't work out. So I would say, to analyze a company appropriately in the private equity world, probably takes three to six months before you know if you want to do it or not.

• 19:41Speaker 05

  How concerned are you about the Middle East conflict? You, you mentioned that, but this one, Iran, seems to be spiraling out of control, Saudi Arabia and Yemen now, that's, so what do you see as far as like the global markets?

• 19:56Speaker 04

  Well, the global markets are waiting to see how these wars turn out. There are three principal things that people are focused on. One, Russia-Ukraine, when is that going to end? It's going on now for five years, longer than World War II in many ways. Iran is a war that wasn't, the market wasn't expecting. It now, we don't know how long it's going on for, but it's clearly not going to be resolved anytime soon, based on everything I can see. And then you don't know what's going to happen in China-Taiwan. President, China's coming to visit the President of the United States this week. People have been worried for a long time that China might invade Taiwan and produce another war. I don't know if that's going to happen. It doesn't appear like it's happening anytime soon. But this uncertainty and these, these wars are very expensive and, and I think don't help the global economy.

• 20:40Speaker 04

  Oil prices are at record heights because of what's going on in, in Russia-Ukraine and what's going on in the Middle East. So I, I don't know what will ultimately happen, but I suspect, you know, the markets are not happy with what they see right now.

• 20:53Speaker 03

  I wonder your outlook on a domestic issue that, I mean, can span the global, which is energy, specifically when we talk about data centers and how we're going to power them, and, you know, political effects that could have on the thoughts around it. How, how are you, how are you viewing data centers in terms of the, the overall build of the future there?

• 21:13Speaker 04

  Well, as a general rule of thumb, people would say, "I need more technology, more technology is good." As a general rule of thumb, some people are, are not in favor of technological improvements, but data centers have become something where people wanted them for a while in their backyard. They thought they produced jobs. Now, people don't want them in their backyards. And in fact, recently, there was a survey that said more people were willing to have a nuclear power plant in their backyard than a data center. And as a result...

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  Many politicians are now saying, I don't want any data centers. And then the data centers have to be somewhere if you're going to have all these AI computing power. So at some point, we'll have to find some place where nobody lives and we can build a data center. Because right now, people don't want them because they think it's going to be destructive to the environment. It's going to cost a lot of money, and in the end, they're nervous about it.

• 26:46Speaker 05

  Um, okay, let's talk about sports. So you're the owner of the Baltimore Orioles?

• 26:51Speaker 04

  I'm the control owner, yes.

• 26:53Speaker 05

  What does that mean, control owner?

• 26:54Speaker 04

  Well, you have, every sports team probably has more than one person who's the owner. And the way that Major League Baseball works, if you own a certain percentage, I think it's more than 15%, you are the control partner, which means if something goes wrong, you're blamed. If something goes right, maybe you get the credit for it. But when you have a Major League Baseball owners' meetings, you have control partners typically go to the meetings as the ones who are responsible for it. But I have other partners I brought in, and if I were to drop dead tomorrow, the team will be fine. They'll have other people that can replace me.

• 27:23Speaker 05

  Okay, well, you're the control owner.

• 27:25Speaker 04

  I'm the control owner, correct.

• 27:27Speaker 05

  Okay, so $1.7 billion, that's what you, that's what?

• 27:31Speaker 04

  That's correct. We paid $1.7 billion. When the team first came to Baltimore in 1954, the purchase price was 2.2 million. We paid $1.7 billion. And as we've just seen, the New York Yankees are just valued at now, you know, 13, 14 billion dollars.

• 27:46Speaker 05

  The Lakers sold for $10 billion?

• 27:48Speaker 04

  They sold, and they resold for 12 and a half billion.

• 27:50Speaker 05

  Six months later.

• 27:52Speaker 04

  So, you know, it's been going up now. I don't know how long it's going to continue this way. Smaller cities don't have those kind of price values. We're in Baltimore. Baltimore is a smaller city by baseball standards, and therefore, you know, pricing $1.7 billion from Baltimore is a big price. The team was sold several times before I bought it. Once for, as I mentioned, 2.2 million in 1954. Edward Bennett Williams sold it, bought it for $12 million in the early 80s. And then later, his estate sold it for 75 million. Then it was sold in bankruptcy court for 200, for, to Peter Angelos for about 155 million. And so I paid $1.7 billion with my partner. So, and for those people that held on from the original investment, they did pretty well.

• 28:34Speaker 03

  Talk, talk about Baltimore. This is just not a random team that you said, I want to have this in the portfolio. Baltimore means something to you.

• 28:44Speaker 04

  I grew up in Baltimore. My parents grew up in Baltimore. I was, went to public schools there. You know, my, many of my relatives still live in Baltimore. So Baltimore is my hometown. And while I've spent much of my career in New York and/or Washington, I still feel an affinity for Baltimore, and I have friends from high school, friends from grade school that I'm still in touch with. And so I wanted to do something to make Baltimore better than maybe it had been. I thought if I bought the Orioles, I could re-energize the Orioles and maybe re-energize the downtown Baltimore. And I saw it more as a philanthropic gesture. I've given away a fair amount of money in my life, but a lot of that is to universities that I've been associated with or to things in the Washington area, things I've called patriotic philanthropy. But I could have done more in Washington, in Baltimore perhaps.

• 29:29Speaker 04

  And I thought this was a way of doing more for Baltimore.

• 29:32Speaker 05

  So, okay. Why do you think sports franchises have climbed so much over the last 50 years? I mean, you look at NFL, you look at the NBA, you look at the NBA. Why has this increase in sports prices gone up so dramatically?

• 29:48Speaker 04

  There are many reasons for it. One, the population's gone up. When I was growing up in Baltimore, the population of the United States was under 200 million people. Now it's 340 million people. You have more people, more eyeballs, more people that can buy tickets, more people that watch. Secondly, we have more franchises. And, and, and when, 1960, for example, the NHL, the National Hockey League had six teams. That's it. The NBA in 1960 had eight teams. That's it. So now you have 30 or 32 franchises in each of these major sports. So there are more people who are rooting for people, and therefore more people, you know, buying, streaming services or watching on television and buying products that are advertised on television. There's also the international market. More and more of our sports are becoming international.

• 30:33Speaker 04

  People are watching us in overseas in baseball. The Japanese have a big affinity for our baseball. And then we, in this country, are very interested in sports overseas, like soccer in England. And that's been a big factor. And then you have the whole betting thing going on. People love to bet. It's been going on for thousands of years and probably going for thousands of years. And now betting is more or less legal with some constraints, and that has attracted more and more people. So all these things have produced more revenue for the sports franchises, more TV revenue, more ticket revenue. And as a result, the franchise values have gone up.

• 31:06Speaker 03

  Is it a profitable business? Because most people, obviously, were in New York. Yankees, Dodgers for sure, the Cubs for sure. But then you think about smaller markets. You know, Oakland, where, you know, they had to move to Vegas. Florida has a tough time, right? The Marlins have a tough time attracting crowds. Kansas City. From that standpoint, if you're looking at the investment, I think most people think major markets, but the smaller markets, is it a profitable business?

• 31:33Speaker 04

  Well, it depends on your definition of profitability. So if you say operating profit, very few baseball teams of the 30 baseball teams, very few have operating profits, which means to say the money they take in every year is greater than the money they spend on salaries and other expenses. Very few. The Dodgers are probably on an operating basis profitable because they sell a lot of equipment and a lot of equipment, but a lot of merchandise in Japan. They have a big following in Japan. I don't know if the Yankees are profitable or not, but the teams are all privately owned, so we don't really know the answer. But I would say baseball teams are not on an operating basis all that profitable. NFL teams on an operating basis probably are because NFL is a cash cow, unlike anything

• 32:16Speaker 04

  we've ever seen in professional sports before. And I think the NBA is increasingly moving towards profitability on an operating basis. I don't know about some of the other sports, but we also see now a lot of new sports are coming along because everybody says, well, I can't own an NFL franchise, but maybe I can own a pickleball franchise, or I could buy a Padilla franchise. So people are spending more and more time in it. And then in women's sports have become a bigger thing. You know, before the Title IX, women were not playing sports in the way they are now. Now you have professional sports leagues that are just for women and they are doing pretty well financially.

• 32:50Speaker 03

  I wonder, as you look out, I mean, we grew up in a Steinbrenner era here.

• 32:53Speaker 04

  Right.

• 32:54Speaker 03

  Contrary to you in Baltimore, well, Yankee fans. When you look at how Steinbrenner approached ownership, and now I'm looking at how Mark Walters and the Guggenheim group are, what they're doing with the Dodgers in terms of salaries and deferring it. I wonder, how do you view that approach? Because it feels like they're doing it and it's successful. How come other major markets aren't doing it? Do you think it's sustainable?

• 33:19Speaker 04

  Well, you know, when you enter into a long-term contract with a player, let's say 10 or 10 years or 15 years, you realize that you're overpaying because almost certainly the player at the end of the contract is not going to be as good as the player was in the beginning. But you recognize this will be maybe helpful to your franchise for a time. Right now, I think these long-term contracts have some controversy associated with them. We'll see whether they continue. Sometimes I think shorter ones work out. We entered in one with somebody who came from New York, Pete Alonso. We have a five-year contract with him. We're very happy with him. He's done a terrific job for us. But, you know, when you get into 10-year contracts or 20-year contracts, you know, you realize

• 34:01Speaker 04

  you're paying a lot more for the upfront part of the contract than in the back, because in the back, you're not likely to get as much value out of it. But I don't think that's a big problem. I think the biggest challenge you have in professional sports right now, I'd say, among other things, is you have to make sure that the smaller cities can compete with the bigger cities. Everybody wants to think that their team has a chance of winning. Otherwise, why would they show up at a game? And if people in Baltimore, Milwaukee, or other small cities think they have no chance of beating the Dodgers or the Yankees, they're not going to show up and they're not going to, you know, participate in it. The whole economics of the system isn't going to work. So what we're trying to do in baseball is make sure that everybody has a chance to win. Everybody thinks that everybody has a chance to win. Clearly, in the last couple of years, a team that had

• 34:44Speaker 04

  the biggest payroll won the championship twice in a row. And what we want to do is show that just having the biggest payroll doesn't guarantee a success.

• 34:53Speaker 03

  Do you think?

• 34:54Speaker 04

  I'm sorry?

• 34:55Speaker 03

  Do you think a salary cap will ever happen in Major League Baseball?

• 34:59Speaker 04

  You know, I've been trained by the commissioner of baseball to say that these are matters working, being worked on by Major League Baseball and the commissioner, and I'm not really going to comment on that.

• 35:08Speaker 03

  Well done. Well done.

• 35:09Speaker 05

  So the NFL and the NBA, small markets do thrive because you have OKC, even Kansas City Chiefs, right? Kansas City is a relatively small market.

• 35:20Speaker 04

  And they have, they have salary caps there.

• 35:22Speaker 05

  And, but they have rev share, their collective bargaining agreement is different as well, right?

• 35:27Speaker 04

  That's correct. You know, they have, the NFL, the NHL, and the NBA all have some form of revenue sharing and salary caps. Major League Baseball does not, and we'll see what happens.

• 35:39Speaker 05

  So as far as baseball, right, are you optimistic? I mean, you're obviously optimistic because you purchased a team. But when you look at, they get, the players get paid the most, but they're like number three, the league is number three, right? And a lot of, you could watch a game and it could be completely empty. I watched a Cleveland game and it's like 10 people in the stands. So just from a basic mathematical standpoint, right? Like, it doesn't seem like it's sustainable when players are getting billion-dollar contracts almost. And...

• 36:14Speaker 04

  I think, obviously, the Major League Baseball believes it would be better if we had some changes in the way the system works, for sure. And the NFL and the NBA are much more financially successful because of the things they've done that we haven't done. But Major League Baseball will resolve all that at the end of the season because the contract with the players ends at the end of the season. I think it ends in December, and then their negotiations before spring training. So we'll see what happens. It's too early to say.

• 36:43Speaker 05

  Also, the second part to that is, do you think it's a grassroots problem as far as, when you growing up, I'm pretty sure kids were playing stickball even, right? Like, at a grassroots level, AAU basketball, football, and now soccer, less kids are playing baseball. You have in the Dominican Republic and Japan, you know, a lot of, but in America, do you think it's a grassroots youth problem with kids playing baseball?

• 37:11Speaker 04

  Well, baseball, when I was growing up, that was the sport that people played. And Little League Baseball was a big thing. Today, you have basketball being very attractive, and then you have soccer being attractive, and then football. And, you know, I would say it's changed from what it was. Also, let's say in the African-American community, we have relatively smaller percentage of African-American baseball players than we did 20 years ago. And as a result, you have a smaller number of African-American fans than you did 20 years ago. Young African-American boys are often want to play basketball. And that's a sport that, you know, has a large percentage of people who succeed in it who

• 37:53Speaker 04

  are African-Americans. In baseball, it's different, therefore, you don't see as many role models for young African-American boys in baseball as you do in basketball or even football. So the world has changed, and obviously, we want to reverse it to some extent. We want to appeal more to minorities. We want to appeal more to people that aren't now currently seeing the Major League Baseball as appealing to them. As you mentioned, we have a lot of players in Major League Baseball who are from the Caribbean area, and that's an area where we recruit a lot of people. But the population of the United States isn't as reflective of the population as it is of the players. In other words, you have sometimes higher percentage of Latino players than you have Latino in your, in your population

• 38:38Speaker 04

  to some extent. We also, you know, we've got things we can do, and we're working to do that. Yes, it's a bit of a challenge.

• 38:45Speaker 03

  You've been extremely successful in private equity. When you took over the team, well, prior to you taking over, the Orioles had 103 wins. 2025, obviously, the wins went down. This year has been a struggle. What have you learned about leadership in this time in sports that you've probably brought over or you've learned, had to change from your career in private equity?

• 39:10Speaker 04

  Well, I've learned it's not as easy as I would like it to be. I've learned that a lot of other owners are smarter than me. It takes a while to build a team and rebuild a team. So you have to be patient. If you're not patient, you shouldn't be in professional sports. Very rarely does somebody buy a sports team and it wins a championship when nobody expected to do so, and that championship tenure continues for some time. You know, you have ups and downs in baseball. There are a lot of very talented owners in baseball who have not won a World Series. There are a lot of very talented managers who haven't won a World Series. So it's not as easy as you would like to think it would be. You know, when I bought the team, they were in first place. And now I've managed that team that's, you know, not doing as well. So it's, you know, it's frustrating at times, but

• 39:55Speaker 04

  life is frustrating. And if you can't take the heat, get out of the kitchen. If you can't take losing and you can't take the fans complaining about you, you shouldn't buy a sports team. Because fans are not going to praise you. If you're waiting for praise, as Harry Truman once said, you want somebody to praise you, buy a dog. But, you know, you can't expect sports fans to say, the owner is wonderful and shouldn't make any changes. He or she is doing a great job. You're not going to get that in professional sports.

• 40:21Speaker 05

  So why, why the book? And, yeah, why now?

• 40:26Speaker 04

  For the book? Well, when I was thinking about, do I want to buy a sports team or not? I had avoided the temptation to do so. A lot of my friends in private equity bought sports teams. I made fun of them, saying, you know, you're going to worry about your investors. How do you have time for sports? But it turned out they did pretty well, and they made a fair amount of money. Eventually, I decided when an opportunity came along, maybe I should look at it. And then I did. And then I wanted to put a book out that would explain why people buy sports teams by interviewing other owners. I think I can do that. And I think I did it. And then I want to explain my own story, why I bought a team. Why did somebody didn't know much about professional sports decide to come back to his hometown, buy a team, and what has he learned from that? And that's why I did it.

• 41:08Speaker 05

  Who, who did you interview? Well, the owners that you interviewed?

• 41:10Speaker 04

  Well, I interviewed a lot of owners, but the ones that you probably would know very well is Bob Kraft, who's the owner of the New England Patriots. I interviewed the owner of the, Tony Restler, the owner of the Atlanta Hawks. Interviewed Michelle Kang, who's owner of the Washington Spirit, which is the women's soccer team. I interviewed the owner of the Chicago Cubs. Interviewed, you know, people in different sports and interviewed Rick Hendricks, who's a big sports car person in NASCAR. So I interviewed a lot of sports owners, and they all said, consistent in the same thing. Winning is everything. That's what they really want to do, and they don't focus on the money as much as they'd focus on winning.

• 41:53Speaker 03

  What type of owner are you? Hands-on, right? Like, you brought up Pete Alonso, that deal, that was a big free agent signing for you guys. How hands-on are you in the decision-making?

• 42:03Speaker 04

  I would say from reading in the newspapers and so forth, George Steinbrenner was more hands-on than I am.

• 42:09Speaker 03

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• 46:05Speaker 04

  I would say, you know, I have other things I'm doing. If some owners have nothing else they're doing, this is their only thing they're doing. There's nothing wrong with that. And some owners go to every single game. This is a full time job. I still have other jobs I'm doing, so I don't go to as many games as some of the owner owners. And I don't claim to be a baseball expert. I've got people that I think know what they're doing and I rely on them. So in the Pete Alonso case, um, the, the person who serves effectively as a general manager, but really his title is president of baseball operations. Um, Mike Elias, he called me about it and we discussed it and we went ahead and did it. But I mean, I'm not, um, the person negotiating the deals with people like, um, um, Pete Alonso's agent.

• 46:48Speaker 04

  But I was aware of any financial matter, of any contract, of any substance. You know, the owner will get involved and I do get involved, but I'm not, um, you know, spending eight hours a day on it.

• 46:59Speaker 05

  I'll bring up two names, uh, Sam Cronkite, uh, Josh Harris. I bring them up because they not only own sports franchises, but they own sports franchises in different leagues.

• 47:10Speaker 04

  Correct.

• 47:11Speaker 05

  Now that you've seen what it is to be an owner of a baseball team. Does that entice you to say, let me explore some, maybe some other leagues as well?

• 47:18Speaker 04

  Josh Harris bought a basketball team when he was still a very active person in Apollo. Then he later bought a hockey team. Now he owns a football team. He has a soccer, a soccer team in England. Um, he's, uh, you know, marvelous in what he's been able to do. And they've been, uh, teams have done, you know, okay, under his leadership. Um, and I think he's built a really good organization. I'm older than he was when he got into it. I think I'm, baseball is probably what I'm focused on right now. I want to see if I can turn the Orioles around before I decide to do anything else.

• 47:48Speaker 05

  From a political standpoint, so you're like a lifelong Democrat, right?

• 47:52Speaker 04

  I'm a registered independent. I worked in the White House for President Carter, but I don't make political contributions anymore. I abstain from that completely because I don't want to be, uh, labeled, um, that, that, uh, give money to a politician. He does something I don't like, I'm going to be blamed for it. So I don't give money to politicians and I'm registered for many, many years as an independent, but go ahead.

• 48:11Speaker 05

  Okay. Well, you're, what's your take on the political wave that's happening now with the democratic socialist? Even in New York City, Mayor Mondani and across, he's the leader, but there's, there's a movement of democratic socialism.

• 48:24Speaker 04

  I've been surprised at how, uh, much success it's had. Uh, but remember we had a small turnout in some of these elections that have occurred. Um, I think the turnout for some of the primaries was seven percent or so. Uh, in the United States, in a presidential election, you typically will have 65% of eligible voters voting. If you've got only seven percent, you're probably going to have a different outcome than you would have if more people voted. Uh, but there's no doubt that the Democrats have to deal with this issue because if the Democrats gain control of the house, it's not clear that Hakeem Jeffries will be the speaker of the house is going to be able to control his caucus completely. If he's got a few members who are a member of the democratic socialist.

• 49:03Speaker 04

  Um, uh, so, and then he's got, you know, AOC who is, you know, a kind of power base unto herself. And, uh, so it won't be easy to be the speaker of the house if your Democrats are, are in control for sure.

• 49:15Speaker 05

  But what does it say about America when the wealth disparity has gotten so large? I think that's really fueling a lot of it, right? It's like, people can't buy homes. People are struggling to pay rent and it's, it's speaking to millions of Americans that are fed up with the, the system that we currently have in place as far as a lot of people think capitalism has run amok.

• 49:36Speaker 04

  Capitalism is not a perfect system and it has its flaws for sure. Capitalism in Europe is operated much differently. It's there as a much bigger social safety net than, than we have here. Uh, higher taxes, but higher social safety net. Our country has gone for a different type of capitalism where the social safety net isn't quite as great as it is in Europe or other countries. Um, clearly there's a lot of disaffection with, uh, people who are very wealthy in our country, but that's been true. Uh, throughout the ages, no country has had a lot of wealthy people and people who are not wealthy are, are in love with those people. It's never happened to be the case. There are a lot of very wealthy people now and the, the income, in income disparity in our country is getting greater. But another problem that's getting greater is the social mobility.

• 50:19Speaker 04

  It's one thing to be at the bottom of the social, um, network and, and some fabric and then think you can rise to the top. There's a fun phenomenon invented or coined the phrase in 1936 called the American dream. Where you believe that if you work hard, you can get to the top. I believe that when I was a boy and I got lucky and I worked hard and I got to the top. Uh, but many people don't believe it anymore, particularly in lower socio economic classes. Many people do not believe in the American dream anymore. The people that tend to believe in the American dream now are people who are immigrants to this country. We have 55 million immigrants in this country and they came here because they thought the American dream was realistic. Many of them have, have been very successful, but people born here, particularly, um, in lower, lower socio economic classes.

• 51:02Speaker 04

  They very often give up, uh, and they don't have a, uh, a view that they can rise to the top. And we have one of the biggest problems that we don't address is illiteracy. Uh, we have, uh, roughly 19% of adults in this country can't read.

• 51:15Speaker 05

  At all.

• 51:15Speaker 04

  At all. And I don't mean they're immigrants who can't read, they can't read their native language either. They can't read at all. Uh, 80% of the people in the juvenile delinquency system in our country are functionally illiterate. And, uh, uh, 67% or two thirds of the people in our federal prison system are functionally illiterate. If you can't read, you have very little chance of succeeding in our society. And one of the ways that children learn how to read is their parents reading to them. And if a parent can't read, how that parent can't read to the child, the child is probably going to continue the cycle of illiteracy. Now it's a big problem and it's, uh, something that, you know, I wish I had a solution for it. If I, what did I be in New Hampshire or Iowa, but I don't have the answer for it. It's not easy to solve that problem.

• 51:57Speaker 05

  It's getting worse because artificial intelligence.

• 51:59Speaker 03

  I was gonna go there, but go ahead.

• 52:00Speaker 05

  Artificial intelligence that I saw that it's actually getting worse because people don't even need to read anymore. Or they're just things that they actually were required to read now they don't, or they're not reading. So the literacy rates are actually increasing. And some people say the artificial intelligence is, is the reason why there's actually increasing.

• 52:23Speaker 04

  Artificial intelligence, the, as with the internet, um, you know, there are what? One to two billion people on the face of the earth who don't have access to internet. Those people are being left behind. And if you don't have access to and able to use artificial intelligence, you're going to be left behind. And I, I'm afraid we're going to have the same phenomenon we have with the internet, which is some people don't have access to or knowledge of, you know, artificial intelligence are going to be left way behind. It's a problem.

• 52:47Speaker 03

  I wanted to just touch on, on sports really quickly and get your thoughts because private equity is now come into, uh, professional sports and ownership specifically. Today we heard 16% stake from Apollo management into the Yankees, which is owned by the Steinbrenner family. Here in New York, we have the Marv family that owns the Giants. There's some talks that private equity might step in there or they may have. What are your thoughts around that? Because it's, people just think because people own a team that they, you know, obviously what they see the valuation of the team. They were assumed that the family has made money, but if they never sell shares of the, of the, the, the team, you know?

• 53:25Speaker 04

  Some families bought teams when they were very, very inexpensive.

• 53:30Speaker 03

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• 54:14Speaker 03

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• 55:42Speaker 03

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• 56:16Speaker 01

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• 56:47Speaker 03

  earners, what's up? Look, building wealth isn't just about making money. It's about knowing where your money is working for you. That's why we partnered with Empower. Empower is all about helping you invest well so you can go out and live a little. Their free Empower personal dashboard gives you a complete view of your financial life in one place. Track your net worth, monitor your budget, analyze your investments, set retirement goals and more. You've worked hard for your money. Now make sure it's working hard for you. Download the Empower personal dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 57:24Speaker 04

  George Halas's family bought a team, I think when George Halas helped start the NFL for maybe a thousand dollars. And then his family still 100 years later still owns a piece of it. But that doesn't mean they're necessarily wealthy unless they were to sell stakes in the team.

• 57:37Speaker 03

  Exactly.

• 57:38Speaker 04

  A lot of people, you know, don't have as much cash as you might think. When they have these reports in the Forbes, other places of people's net worth. It doesn't say what their cash is and therefore, and it's harder to know that. But a lot of people have high net worth, but they don't have a lot of cash. And so in the case of sports ownership, some people have higher values for their ownership of their teams than they thought they'd ever be. And now they'd like to get some cash to the selling minority stakes. And you're seeing more and more of that. And private equity firms are going to increasingly probably buy stakes in professional sports teams.

• 58:08Speaker 03

  Yeah, I was gonna say, do we predict that we'll see so many more teams having private equity stakes?

• 58:14Speaker 04

  Well, if the values get higher and higher, you know, somebody doesn't have a lot of cash who's an owner. Would say, maybe I'll take some money off the table. They're not selling control necessarily. Interestingly, when George Steinbrenner bought the New York Yankees, he only put in $250,000. That was it. The purchase price was 8.8 million, but he didn't have a lot of, he didn't have $8.8 million, I guess. So he put in $250,000 and he syndicated it. Now the value of the team has worked much more, but his family went from time to time when they want to get some liquidity. They sell a piece and that's exactly what happened with Apollo. Apollo deal that the family, I guess, is selling up some piece of it. Or maybe not the family, but other people who are investors in the Yankees are selling some pieces to get some liquidity.

• 58:56Speaker 05

  Speaking of like the Forbes list and how they list billionaires. We recently interviewed John Morgan from Morgan and Morgan. He's a billionaire and you're a billionaire. So he had an interesting perspective.

• 59:06Speaker 04

  Billion isn't what it used to be, but okay, go on.

• 59:09Speaker 05

  A billion isn't what it used to be. Well, let's stay there. What is the, what is a billion now?

• 59:14Speaker 04

  Well, I'm saying that facetiously because obviously when the Forbes list first came out in 19, I think 81. To be on the Forbes 400 list, it took a net worth of $125 million. There were hardly any billionaires then. Today, I think to be on the list, you probably need a net worth of three or four billion. So obviously gotten a lot more wealth associated with it. But anyway, your question is.

• 59:37Speaker 05

  So he said, there's only 20 billionaires in America. Because in order to be a real billionaire, you have to have a billion dollars of liquid assets. He doesn't count a billionaire as far as your company is worth a billion dollars and that makes you a billionaire. What is your thoughts on that?

• 59:55Speaker 04

  I hadn't thought about that before, but it's a point that is well worth making. You know, there are very few people who tomorrow can write a check for a billion dollars. Without having to sell something before they write that check. So there are people who could do it, but even the wealthiest people probably don't keep a billion dollars in cash in their bank account. They probably have it in stocks or in treasury bills or some other things. But yeah, they're probably, they're probably a very few people can write a billion dollar check tomorrow. And without having to call up and say, sell this or sell that for sure.

• 1:00:31Speaker 03

  Every December, there's something that we call the winter meetings. Well, in Major League Baseball, they call the winter meetings. Owners meet there. I wonder, as you know, you've probably seen that from the outside or heard about it from the outside. Now you're inside those meetings. Is it, do guys get along at that level? Like, how, how does that feel inside those rooms?

• 1:00:49Speaker 04

  There's always a sense that when you're not on the inside of something, something important is happening on the inside that you, you don't know about. When you get on the inside, you say, hey, there's nothing happening that's that interesting.

• 1:00:59Speaker 05

  FOMO, FOMO.

• 1:01:00Speaker 04

  You're right. It's just, you know, so, you know, I always, you know, when I said, oh, I want to get invited to this party or that party or that event. And then when I finally get invited to them, I say, well, what's the big deal? Why did I get invited to that's not that big a deal? So when you're in Major League Baseball meetings, there are very serious meetings. They have a commissioner that's done it for quite a while. He's very well regarded by the owners. All the owners are, they get along, you know, I mean, I don't know that each other's best friends. But you don't see people yelling or screaming or anything like that. They don't have the kind of people in baseball anymore that yell or scream. Maybe they were, they were there a long time ago, but not now. So they, people tend to have their debates and they argue and we have votes and generally it's fairly unanimous and will be decided to do something. Not always, but so I think it's all, all professional sports are probably that way.

• 1:01:45Speaker 04

  The owners, the time you get to be an owner, you've made a lot of mistakes. You've learned how to get along with other people. You don't, you realize yelling and screaming doesn't probably carry the day. And so people tend not to do that. So you don't, you don't see people yelling or screaming. I haven't seen it. If you're going to yell and scream, you probably do it out of sight and people aren't going to see you.

• 1:02:05Speaker 05

  I want to go back to something because that, that billion is, isn't it saying billion? That's the interesting commentary that you made because even if you look at the stock market, right? It took 80 years to have a first trillion dollar company. And now there's, how many trillion dollar companies is there?

• 1:02:19Speaker 03

  13?

• 1:02:20Speaker 05

  13? In five years. And as you said before, there was a couple of billionaires. Now there's thousands of billionaires.

• 1:02:28Speaker 04

  Right.

• 1:02:30Speaker 05

  We have a trillion, we had a trillion, it kind of fluctuates. The devaluation of money, right? How, how concerning is this as far as how rapidly it's happening? Like how rapidly we go from having no trillion dollar companies to having 13 trillion dollar companies? Having a couple of billionaires to having thousands of billionaires? Like how, how rapid is the value of money actually decreasing?

• 1:02:55Speaker 04

  Well, I, I think that's not our biggest social problem. It's a problem, but not the biggest problem. The biggest problem is we don't have enough people at the bottom. We have too many people at the bottom who, who don't have any money at all. That's the bigger social problem. And we have to obviously figure out a way to get more people who have wealth. They kind of figure out how they can contribute more to the bottom of society. Societies don't rot because there are too many billionaires. They rot because there aren't enough people who have money and, and, and can get along and make the societies thrive. Now, you've never seen a revolution because there are too many billionaires at the top. You see revolutions occur when, and when there's dysfunction in government. When, when people at the bottom, they'll feel they're adequately taken care of. And that's the bigger problem in all societies.

• 1:03:41Speaker 03

  It's an interesting quote. You said your biggest financial regrets were investments you passed on, including Meta and Amazon. What have those moments taught you?

• 1:03:53Speaker 04

  Well, it reminds me how lacking in intelligence I am in judging some things. In the case of Meta now, or was then Facebook, my now son-in-law was at Harvard, and he was a classmate of Mark Zuckerberg's, and he was a classmate of his in prep school as well. He told me about this company, and he told me they were trying to raise thirty thousand dollars or something. And as he described it to me, it was a company that was gonna help people get dates at Harvard. And then they were gonna expand it to Yale and Princeton. It was really a dating service for people at elite schools. And I said, "Look, I've seen that in the 1960s. There were dating companies. They're not gonna survive," so I didn't put in the thirty thousand dollars. One of Mark Zuckerberg's roommates, Eduardo Severin, did do it.

• 1:04:38Speaker 04

  And I think that thirty thousand he put in, or maybe it's fifteen thousand he put in, is now worth about fifty billion dollars.

• 1:04:45Speaker 03

  Yeah.

• 1:04:45Speaker 04

  So I regret that.

• 1:04:47Speaker 03

  What about the Amazon?

• 1:04:48Speaker 04

  I regret that I didn't do it.

• 1:04:49Speaker 03

  What's the Amazon story?

• 1:04:50Speaker 04

  When Amazon, what happened was, we owned the biggest, Carlisle owned the biggest, or second biggest book distributor in the United States called Baker & Taylor. And it turns out, a young guy came to our Baker & Taylor salespeople and said he was gonna sell books over the internet, but he needed a bibliography of books in the, on the internet, a bibliography of books in print, in order to sell books over the internet. So our salesman said, "Well, we don't give it out." And he said, "Well, I'd like to rent it from you." And he said, "Well, I don't have any lot of cash." And he said, "I'll give you," I think it was twenty percent of the company I'm starting as a, in return for letting me use the bibliography." And our guy turned him down. But eventually, our guy said, "Look, pay us a hundred thousand dollars a year for five years, and we'll rent it to you."

• 1:05:33Speaker 04

  And Mark, and then Jeff Bezos did it. Later, I heard about this and said, "Jeez, maybe we should have taken a piece of the company." So I flew out to see Jeff Bezos when he was just starting his company. He was in a little warehouse in Seattle. And I said, "Look, our guy took a hundred thousand a year for five years. I'll take the stock deal, twenty percent." But he said, "Well, David, that was two years ago. I don't really need you as much, but I'll give you some stock." I think he gave us one percent of the company, which of the IPO we then sold. So if I'd held on to it, it'd be worth many billions of dollars. So I've made a lot of mistakes like that. What can I say? You know, who would have thought that, that Amazon, remember Jeff Bezos was only gonna sell books over the internet? We wound up selling everything and then doing other things.

• 1:06:17Speaker 04

  That was not the original concept, but I wish I was smarter.

• 1:06:20Speaker 03

  What's the best investment that you made, or some of the best investments that you actually made?

• 1:06:24Speaker 04

  The best investment was putting in money into getting Carlisle off the ground, because it turned out to be pretty good, and I'm pretty happy with it. Hopefully, my best investment will be the Baltimore Orioles.

• 1:06:35Speaker 03

  Yeah, you have it. Yes, despite us being Yankee fans. I, my last question is this. Obviously, you have a network of people that have high, you know, net worth. Would you advise them to look into investing in sports franchises?

• 1:06:51Speaker 04

  I would say if you know what you're doing, if you do it because you enjoy the sport, and you, you know, do it at a reasonable valuation, and you kind of recognize you're not gonna necessarily get your money back with a profit in the short term. Yeah, I'd say it's, it's an interesting thing to do. But remember, if you're buying a minority stake in a team, it's different than you're buying the control. And minority stake in the team, sometimes, you know, you're a very expensive season ticket holder, but you're not really controlling the players or anything. But if you really wanna buy control of something, that's a more complicated issue. I would say to most people, you know, if you really love sports, you really wanna make a contribution to society, it's a good way to do so. But if you don't love sports, and you're not really interested in some philanthropic gesture to your community,

• 1:07:36Speaker 04

  probably it's not for you.

• 1:07:37Speaker 03

  Before we leave, a couple more just geopolitical questions. China, how do you view China in this AI race as a political force, as a military force? Like, what is your thoughts on China?

• 1:07:50Speaker 04

  Well, China was a country that we largely ignored in the West after Mao Zedong took over, the communist, took over China and made a communist. Not until Richard Nixon went there, after Henry Kissinger had previously gone there, that we kind of reopened China to the world. And then, under President Clinton, we allowed them to become members of the WTO. Now, China is the United States' biggest rival in almost everything. Technology, economy, all kinds of things. I think China is a country that is probably gonna, you know, it's a bigger, more population than we have. It has a bigger economy than we do if you measure by purchase price parity, as opposed to GDP.

• 1:08:32Speaker 04

  I think it's a mistake to think that, that we can ignore what China's doing. China's our biggest rival. When Russia was our biggest rival many, many years ago, there was a rival on geopolitical issues and military issues. But China's a rival on economic issues. It's a rival on technological issues. Much more complicated rival and more significant rival than Russia was. So I think China will be, for the next fifty years or so, are the main rival of the United States in almost everything.

• 1:09:00Speaker 03

  Does that make Taiwan probably the most important geopolitical risk going forward? Obviously, from a tech standpoint, with what they produce?

• 1:09:10Speaker 04

  Well, you know, leaders of the Communist Party in China wanted to be significant. The most significant was Mao Zedong, and he recaptured China for the Communist Party. And then Deng Xiaoping made it the most, much more significant economy. I think Xi Jinping would like to be a significant, great leader. And generally, under the Communist Party Charter, Taiwan is part of China, so he would like to recapture it at some point. But he may not have to do it militarily. He may do it for economic or other reasons. But I think right now, Xi Jinping's view is, I can't speak for him. I've met him, but I can't speak for him. I would say, you know, one time I met him, and I made a little joke. I said, "This is, there's an old saying in China

• 1:09:53Speaker 04

  that a trip of a thousand miles begins with a fortune cookie." And he said, "No, that's an American fortune," I'm sorry, I got it wrong. "The trip of a thousand miles begins with a first step." And he said, "No, no, no, that's not an old Chinese saying. That's an American fortune cookie saying." But I would say Xi Jinping is now among the most respected leaders in the world, because he hasn't invaded any country. His economy is doing reasonably well. He's pretty well-respected. He's touring the world now. He's in the United States soon. And I think he's a very well-respected person. There are some issues now about his health. But I think China is a country that the United States is gonna have to deal with for quite some time.

• 1:10:35Speaker 03

  What are, what are you most optimistic about as far as investments in the next twenty years? Is it AI? Is it crypto? Is it, what are you, international?

• 1:10:44Speaker 04

  Well, it's hard to say. Twenty years down the road, it's too hard to predict. I would say, I would think technology will continue to be a very important thing for the United States to be a leader in. Among the things I think will be important in the future will be something, you know, that, like CRISPR technology, things that can enable you to make genetic changes. I think, well, that will be very important. I think fusion will be very important, which will enable you to have energy that's, that's, let's say, cleaner and in many ways safer than what we have now in some areas and without some of the problems that we currently have with, with energy. And then I would say also, certain types of computers will, computer, new types of computer technology

• 1:11:28Speaker 04

  will probably advance over the kind of computer technology we have now.

• 1:11:33Speaker 03

  In terms of retail investing, there's, I know in December, the NASDAQ is gonna be, you're gonna be able to trade for twenty-three hours a day, tokenized equities.

• 1:11:43Speaker 04

  Right.

• 1:11:44Speaker 03

  What's your thoughts around all this, this new craze around retail?

• 1:11:49Speaker 04

  Well, there's an old saying, money never sleeps, right?

• 1:11:52Speaker 03

  No, it doesn't.

• 1:11:53Speaker 04

  And so I guess, right now, markets, we have to get used to markets basically being open all the time. And, you know, you have to get used to it. So I suspect that's, you know, we'll get used to it. It won't be that big a change in the end. But people can get in and out of markets whenever they want to. That's probably a good idea.

• 1:12:09Speaker 03

  What's your thoughts on crypto?

• 1:12:10Speaker 04

  I'm sorry?

• 1:12:11Speaker 03

  Cryptocurrency.

• 1:12:12Speaker 04

  I missed that. When crypto came along, I didn't think it would be taken seriously. And, but I was wrong, and as I often am. And now crypto, I think with the current administration, has been very, very supportive of crypto. If the Democrats were to regain control of the government, I think crypto might be in more challenge, because I think they're not as supportive of, of crypto as maybe the current administration has been, which has its own cryptocurrency, I think, or something like it. So I would say crypto, you have to really be certain of what you're doing and make sure that you prepare to lose a fair bit of what you have in crypto, because it can change very quickly. But right now, I've been wrong on crypto. I didn't think it would get as, I didn't think Bitcoin would get as high as it has been.

• 1:12:57Speaker 04

  But a lot of my friends who bought Bitcoin are doing quite well.

• 1:13:02Speaker 05

  Inside the owner's box. I'll leave you on a baseball question. The, the greatest non Oriole player that you've seen?

• 1:13:10Speaker 04

  Uh, there's no doubt. The greatest baseball player I've ever seen, uh, was Willie Mays. Now, when I grew up in Baltimore, you couldn't see him except in World Series and/or All-Star Games. And as Ted Williams said, Willie Mays was made for All-Star Games. He, they used to have two All-Star Games a year, uh, for a couple of years. And he was, he was the greatest player ever I ever saw. I'd say right after him, probably Hank Aaron was the greatest, uh, second, second greatest player I ever saw. Not counting any Orioles, of course, but, um, I would say, uh, um, Willie Mays was worth the price of admission to see him, in my view. Just an incredible athlete and his peak.

• 1:13:46Speaker 05

  Okay. Well, thank you for your time. And who, who, who should get the book? Who is the book designed for?

• 1:13:51Speaker 04

  The book is designed for people that want to understand why people buy sports teams and what the owners of sports teams are like. And kind of gives them their personality and talks a little bit about why I bought a team. And it maybe people care about why people buy sports teams might enjoy the book. It's kind of an easy read and, uh, I think it's, uh, you don't need to have artificial intelligence, uh, to have, to be able to read this book.

• 1:14:14Speaker 05

  We gotta promote literacy. That's very important.

• 1:14:17Speaker 04

  Okay. Well, thank you all very much. Appreciate it.

• 1:14:19Speaker 05

  We appreciate you.

• 1:14:20Speaker 04

  Thank you. All right.

• 1:14:21Speaker 05

  There you have it, guys.

• 1:14:23Speaker 03

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