Hi, everyone. Welcome to the Randall Kaplan show. I'm Randall Kaplan, and I have an awesome guest today. My good friend Strauss is elnec Strauss is the former CEO of 21st Century Fox, the former CEO of BMG entertainment, the former chairman of CBS. He's also the founder and CEO of Zelnick media, a leading private equity firm with over $25 billion in
assets. He's also the chairman and chief executive officer of Take Two Interactive, a publicly traded video game company that has over 5200 employees around the world, which earned more than $3 billion in revenues last year. Strauss is also a fitness fanatic. He's 63. And it looks like he's 40 and in 2018, he graced the cover of Men's Fitness magazine, Straus, welcome to the show.
Thanks, Randy. Great to see you. Thanks for having me.
We have a lot to talk about today. But I want to start off by telling our listeners and viewers how we met, it's actually pretty hard to believe. But our friendship started in 1995 25 years ago. At the time, I was 26 years old and was in my second year practicing law, something I really didn't enjoy and had never wanted to do. For me getting a law degree was a means to an end. My plan was to gain some experience doing something valuable, and then find a way to transition
into a business career. So I came up with this idea. I was going to write letters to CEOs asking for information on job interviews, and then target CEOs who had started their career in law and then transitioned into a successful business career. When I shared this idea with people everyone told me it was really stupid, that it was a total waste of time and that nobody would ever meet with me. I did not agree with them. And in fact, that negativity just fueled my fire. These were cold
letters. And as I thought about the best way to write them, I knew that not only had to be great they had to be the single best letter that any of these CEOs had received, and I came up with three things. First, the letters had to be extremely detailed. And they were, this was pre Google and the law firm where I worked had a subscription to an information database called LexisNexis. When you use that you had to input your name along with a client code. So the firm knew who to
charge it to. I charged my searches to client development. I was the only second year associate in our 800 person Law Firm, I'm sure who is charging anything to that code. And I came up with a list of people I wanted to meet and printed out every article that had ever been
written about them. In some cases, people like Michael Eisner, the CEO of Disney at the time, there are over 100 periodicals and someone like Michael Eisner, who is the CEO of Disney had more than 100 printed, I printed all of them highlighted the details I wanted to use in my letter, including every job I've ever had, I wove all that information into my letters. Second, the letters had to be unique and different than any other letter they had
received in the war. It wasn't just a letter, it was my letter plus my transcripts, plus an article from the Michigan daily about a TV show, I'd help start, I took all of these, separated them by tabs, put them on a shelf, put it on a cellophane cover with a very cool title page, and then put them in a plastic spiral binder. And I sent them, the letters took five hours on average to write, I was a man on a mission, I wanted to do this, this was a second full time job. I wrote 300 letters.
And when you think about it, that's 1500 hours of work, which is really the equivalent of 40 full time work weeks, in addition to my demanding job when I was a lawyer, and it worked, I wrote 300 I got 80 meetings. There's a very slight nuance to our story, which we're going to get to in a bit. But Strauss I wrote you a letter, and here we are today. So I appreciate the good response to the letter.
That's that's such a great story. And I didn't, I didn't know that I had no idea that you devote that much time. And now I vaguely remember the binder. But what strikes me most is that you know the slot long enough, we know that we're writing letters, as opposed to an email.
I tell all my interns as you know, I have a summer program. We have 36 interns every summer. I encourage everyone to write a thank you note on paper rather than an email, it shows thought it shows creativity you want to be it takes more work. It's just a nicer personal touch. We are in a world today where people just can jot out a thank you. Email, I like getting handwritten notes. Do you still get handwritten notes from time to time?
Rarely, but I like you I enjoy when I do get them. I tried to write to myself a little bit harder when you're in captivity and my notepad around anywhere and I'm not at a desk in an office. But yes, I write them and I enjoy receiving them.
You've had an amazing career, someone I really look up to, I want to start by talking about your childhood. We all grow up in a certain environment that makes us who we are today. What were your parents like? And what kind of upbringing did you have? What kind of values do they instill with you then that led the way to where you are today?
Well, I grew up in Massachusetts in New Jersey, my dad was a successful lawyer. My mom was occasionally a bookkeeper for his firm, when he started his own firm, she was the bookkeeper. But usually stay at home and have had five siblings. And we were it was a pretty big rambunctious crowd and you had to take care of yourself and look after your
siblings. And, you know, this, these were the days where parents were not helicopter parents, and you basically especially with six kids, you know, you're kind of, you'd take care of your own after school activities, you have to find ways to get around and have fun, you wanted spending money, I had to earn it, and but it was very loving, very supportive, also, by parents were and very good about not putting any particular
ambition onto me. In other words, whatever I was excited about doing they were supportive of, arguably too supportive at times. So I had to figure out, you know, on my own where I had talent where I didn't have talent, because they never said oh, you know, you're not as good at that you are as good from their point of view. Anything that I was interested in was was good. So I had to be there was definitely a expectation that you know, you would do well in school and be responsible decent
person. But apart from that there really weren't any expectations. So I was I both was expected to and and did chart my own course. Certainly no one in my family thought, Wow, you should go into the entertainment business. For example.
You mentioned if you needed money, you had to earn money. What kind of things did you do to earn money when you were a child?
Well, I as a child, I don't think my much but as soon as I was able, I started babysitting. I was a guitar player. So I gave music lessons. And ultimately ended up entertaining children's birthday parties, because I realized if I could figure out how to do that, then that would make me a lot more money per hour than anything else a teenager could do. And I was somewhat successful at it. I was I was a birthday party clown. And then I got really tired of putting on
the clown makeup. And I decided to just be a birthday party magician. And we both you know, worked out pretty well. I wasn't, I wasn't a great magician, but you don't really have to be I was, I think I was pretty funny. That helped. And I only did birthday parties for five year olds. Because five year olds are the perfect age. They're old enough to enjoy what you're up to. And young enough that they don't feel the need to figure out the trick behind the magic. They were just like, wide
eyed, curious and sweet. As soon as I got into six year olds, and you know, they were they were tearing apart your tricks and trying to find out how they weren't worked. And below five, they couldn't really follow. I also made balloon animals. So apparently great talent for making balloon out animals amazingly enough. I mean, like balloons. So I made enough money to buy my first car doing that. What kind of car wasn't? I was the worst car ever made. But it
was beautiful. It was I love loved and still love sports cars. And it was a triumph Spitfire, which was just tribes were just terrible, terrible cars. And to put in context, it was like six years old when I bought it. And I brought it when I was deciding to buy it to the my local English car mechanic and said, What do you think, and he looked it over. And he said, Whatever you do, don't buy this car. And I did anyway, because I just fell in love with it. And he was right. It was a disaster.
But I loved it. I kept it for I kept her for a couple of years until I ran out of money. And I couldn't support the car anymore, because we constantly need work.
You mentioned being a magician at kids parties, my son, Charlie who's 17. Now he was in a magic for a very long time. And one thing I noticed is, the success of a magician is largely dependent on your delivery of the trick. It's not so much the trick itself, but how you present the trick. And he's very good at public speaking, I think that's where it came from that it also helped
you to be a majority. It also help you to be a magician and learn certain skills at a very young age that you took with you as you made your career and graduated.
Perhaps I mean, I just I had no shortage of self confidence, even if it was misplaced. That was a lousy magician, but the kids seem to have a good time. But again, I had selected the audience. So like there was a perfect audience, they weren't gonna have a bad time no matter what you did.
So you're a great student. Let's talk about when you realize you can succeed in the classroom. Did you always do well at school? You went to Wesleyan, and then you got a JD MBA from Harvard, both incredible schools, you graduated summa cum laude from Wesleyan just incredible. Very hard to do, did that come naturally? Or did you have to work very hard to get good grades and walk walk us through the education? Starting when it became important to you?
Well, I went to public high school in New Jersey wasn't the most demanding school. And I thought of myself as a very good student. But in fact, I was kind of I was kind of not, you know, I certainly wasn't, you know, working as hard as I could possibly work. And I thought I, my family had been going to Harvard College for generations. So I kind of thought that that's where I was gonna go to college. And when I was touring schools, I went, I visited Harvard, I was like,
wow, this is perfect. For me. It's exactly where I belong and where I should go. But it's sort of neglected to note that at our public high school in New Jersey, the top three kids got into Harvard every year. And I was not in the top three, I wasn't close to the top three was sort of top 5%, which isn't horrible, but it's not the same thing was a big school. And so I applied to Harvard, I didn't really pay much attention to anywhere else I applied, because I just made the assumption I was
going. And but I did apply to Wesleyan, which I'd never heard of my mom just said, Why don't you apply there. And I applied to a couple other schools. So psi, I didn't get into Harvard. I didn't get into any other schools I applied to. But I did get into Wesleyan. So the choice was made for me. And I was really, like, that was a huge wake up call. Because I didn't I just didn't understand like, I couldn't I couldn't process
this. So I showed up at Wesleyan with a chip on my shoulder because I thought, you know, why am I here? Not at Harvard on the one hand, and the other hand, I realized that half the class went to prep school, and I they were vastly better prepared than I for college. So I just worked my brains out for the first time I'm in my life, because I really hadn't done that in high school. And lo and behold, I did really well at Wesleyan and I had my first semester I, I think I was
first in my class. And I stayed, I stayed there because I was like, just Well, I can do this, I want to do this. And I graduated second in my class. And it was the first time in my life that I'd actually excelled at anything as opposed to sort of thinking I was great at something or being told by my parents. Wow, you're great at this. It was the first time it actually excelled, like
objectively excelled. So I wasn't a natural student, but as good student and I liked being a student and to this day, I am a good student, I, you know, I get I get lessons when I want to learn things when I learned ski as an adult. And I got lots of lessons you know, I've been fitness I've got trainers, I learned speak German, I had a great teacher, I will enormous respect for teachers. And I'm, I'm when I set my mind something I usually can learn it pretty well. So in that way, yes, I
think I'm a good student. And I ultimately had a great experience at Wesleyan and I had a great experience at Harvard, you know, I went to Harvard, I think primarily because I wanted to show Harvard that not only could I get into one school at Harvard, I'd get into two, I didn't really need to go to either to be in the entertainment business. But I did have a really good experience there.
You always knew you want to be in the entertainment business.
I did ever since I was a little kid, I thought I wanted to be an entertainer. You know, again, my parents were like, oh, yeah, you're really talented. So I played guitar. And I wrote a bunch of music I had, like, I was on a really good day, I was mediocre. But I did not know that. And I only really learned that in college because I was playing like the local coffee houses. And I realized that my friends would come to support
me. But like, when I was 19, I finally had this blinding flash, the obvious, which was, no one really liked what I was doing. And I really wasn't very good. So I actually abandon that. And then I started writing, and I thought maybe I'd be a writer. And I took that really seriously and did better at that I'm more talented at that. But ultimately, I wasn't I didn't love writing enough to make that a profession. And it was at that point that I realized, okay, now I'm really excited about all
things creative. I love, you know, entertainment, I love creative properties. I love books, and music and movies and television shows, this was before the days of video games. And, but I really don't have you know, I really don't have a real creative bone on my body. I seem to have some affinity for business. I was always I had a sense, I was pretty commercial and decided, well, you know, then maybe the best way to approach this is be in the
entertainment business. And I made that decision pretty early on.
Why get a JD MBA, if you knew you wanted to be in the entertainment business, I know lots of people who wouldn't spend money on the grad school, not only are you going to one you're going to to why go at all, and why the law degree and the business degree, why not just the business degree.
Um, I applied. First of all, I only applied to three grad schools. And remarkably enough, I got in, and I thought if you get into the JD MBA program at Harvard, you know, why not go. I also thought, as it turns out correctly, that, you know, it's really, really hard to break into the entertainment business.
And I thought that set of degrees would differentiate me, and what helped me start in the business at a level higher than your standard entry level, because the way to get into the business in those days, and still now, honestly, was to go work, you know, as an assistant, or in an agency training program. And neither of those jobs paid enough to live on, I had no ability to ask my family to help support me. But they also give you, you know, a very long route to upward mobility in
the business. Although it works, it does work. It's where most people start. So I thought if I, if I got a JD MBA, especially from places like Harvard, maybe I could start at a higher level. And indeed, that's that's exactly what happened. And I sort of was able to catapult my career by spending the four years in grad school.
So walk us through it, you graduate Harvard with a JD MBA, you have a blank canvas in front of you, how did you map out what you wanted to do? Where did you apply? What kind of job where you're looking for? And then ultimately, where did you end up?
Wanted to, you know, run a movie studio. And I would say, one of the things that I'm, you know, sort of has defined my career is knowing what I want. And I'm sure you remember from our first meeting, I asked you what is it that you want? You know, because anytime I'm in a coaching and mentoring situation on them, and many of them I have, have hundreds of people I work with in any given time, it's about 25% of my time. The starting point is what do you want? Not tomorrow, but look
mid or long term? And are you working in service of those goals? And I knew I wanted to run a movie studio for better for worse. In fact, I wrote the essay in the Harvard Law School yearbook my first year in grad school, and the essay was about how, despite the fact that I was in law school, I wanted to run a movie studio and I did You'd think that it'd be kind of bizarre to commit that to paper
in front of your peers. But I did it intentionally because I really, you know, I wanted to, I wanted to own that ambition and by telling other people first, I thought it was interesting. Perhaps, in retrospect, highly egotistical, didn't feel that way at the time. Because after all, it wasn't had a movie studios. So maybe it looks silly. But by owning the ambition publicly, it sort of
cemented it. So I started applying to jobs, if they're known recruits in the entertainment business, particularly not at those grad schools, they still don't really recruit. I applied for whatever training programs there were, there were a few NBC had one, then in fact, NBCU still has one now. I didn't get it. And but luckily, I had had my first summer job in grad school was a Viacom, and I met a bunch of people. And I'd stayed in touch
with them. And one of them had left Viacom to go to Columbia Pictures, television, and he needed someone to come work for him to help run the division. And I just met with him regularly until finally a warm down and he offered me the job. So even though he knew and I knew that I wasn't remotely capable, to have the job, I'd actually never worked in my life, right. I've gone directly
from college to grad school. It had just had summer jobs and but he took a chance on me and I became director of international television sales at Columbia Pictures. And that was my first job.
When you were thinking about your first job, a lot of people will look at a variety of factors, look at money, experience, location, responsibility, people that work with the industry seemed like it was the most important thing to you. What are the other factors rank? Did you even inquire about the money? Did it matter to you at all?
Well, matter, but didn't have a choice. It was the only offer I got in the entertainment business than I you know, the standard offers one gets when you're in those programs, which is consulting and investment banking. And I spent a summer doing consulting at McKinsey, and I really loved it. I didn't want to be an investment banker because they work too hard. And I, you know, had this desire not to work that hard. But also again, I wanted
to run a movie studio. So I had offers from three or four investment banks and offers from three or four consulting firms. And they were very prestigious, and they paid a lot of money. And then I managed to eke out the software from Columbia Pictures that paid about half of what the other jobs offered. And
I had student loans to pay. But I looked at and said, if my goal is to be head of a movie studio, even though this job of Columbia Pictures is in television distribution has nothing to do with movies and nothing to do with making movies, aren't I better served to go to Columbia fixtures than to Goldman Sachs
or McKinsey. And if that's truly my goal, and I'm always astonished when, you know, talented people who have options, and I was fortunate to have these options, will say, Well, you know, that pays more, it's like, you really shouldn't be worried about what your first job pays. Like, if that's relevant at all to your later career. It's a you have a bigger problem than the one we're discussing. And it's prestigious, well, who cares
about that? It, you know, it needs to be something that speaks to your greater ambition. And I knew that. And so it was, it was sort of a hard choice, because economically, it was a bit challenging, but I was getting paid enough to live on so I went for it.
You mentioned you applied to the NBC training program, how many jobs did you apply for the entertainment business? Where was it only these two? And then how did you deal with the rejection?
Well, I'd like you I reached out to a lot of people, either through tenuous connections or introductions were cold. And unlike you, I didn't do all the homework you did. And I wasn't as I didn't do a very good job of it, apparently. So I got a handful of meetings with other people. But, you know, the, the meetings were typically pretty short and pretty cursory and not super helpful, and didn't lead to any
other offers. So ultimately, I had the banking and consulting offers and the Columbia fixtures offer that was at one of the reasons that I decided to, you know, have an open door for everyone, yourself included, was because there were no open doors for me and I decided if I'm ever fortunate enough to get into the entertainment business, I'm always gonna have an open door. I'm gonna see anyone who reaches
out and to this day I do. And that's what led to my coaching and mentoring practice, which wasn't intentional, but that's how it occurred.
I share that same philosophy I had so many people along the way that helped me took meetings when they had no business taking meetings. I worked really hard at them. Nonetheless, they're very busy. But I have the same exact philosophy. There isn't a meeting I turned down. For someone who has actually earned the meeting. You can't just call up and say, Hey, Randy, I'm Sheila or John, I'd like to come in and see you. I like them to put a little work into it. But I mean, with 100% of those people.
Funny enough, by the way, you mentioned Columbia. Mark cloud was the first meeting that I got. He was a former lawyer. He was running Columbia TriStar Pictures. I remember I've never been on a movies movie studio a lot before I remember I got this reserved parking space in front. Here's this kid from Detroit
walking in. And lala land, I'm in LA, had goosebumps, go into his office, there's all these movie posters on the wall, of course, and there's a basketball net behind his desk, and the office is big enough where I think you could shoot a few hoops. But it was really, really cool to me. And I targeted mark because he had started his career as a lawyer. And here he was running a studio. So you're
there for a few years. And then you leave to go to a company called vest Tron, which was in a business something called the home video company business. What? What was that? And why did you leave?
So the restaurant was the largest independent home video company in the States. And that was the dawn of new media. And believe it or not, the first to new media for entertainment were paid television, and video set distribution. And restaurant had built this great little business. And they were recruiting a head of corporate development. And I, that point, I was vice president to Columbia Pictures, I was very ambitious.
I knew that if I didn't leave Columbia, because I was doing well in television distribution, I'd stay in television distribution my whole career. And you know, the, in those days, particularly the entertainment business wasn't great. It's sort of saying, What's your ambition? Where do you want to go? You know, I was doing fine. And their attitude was we'll keep paying you more keep doing the same thing. And I had a sense that if I went to a large independent, there might
be great opportunity. I didn't really want to run corporate development. But I was promised that I'd have some line opportunities by the chairman. And nine months after being there, I became the President, Chief Operating Officer of the company, which at that time, was the largest independent public company in the entertainment business, which was quite a small company, but they were different times. And I was suddenly running a movie studio
at the age of age of 30. So it was kind of not what I expected. I mean, I was ambitious, but I didn't think it would happen that quickly. And then I greenlit my first picture, and it turned out to be a massive hit. And there I was off to the races in the movie business.
What was the picture? It was dirty
dancing. So it became the highest grossing independent film of all time, and stayed there for many years until Blair Witch Project eclipsed years later, it also was the highest grossing movie soundtrack of all time for many, many years, I want to say 1520 years. So it's sort of, you know, cemented us the restaurant and certainly helped me personally. And I stayed there
for about three years. And then I was recruited to become president and chief operating officer of what was then called 20th Century Fox.
And now you're at Fox, you're managing 1200 employees. I think Fox at that time was doing $2 billion a year in revenue. You're now the head of a major studio, and you're 32 years old. And I'm going to digress here for another minute, and share something about your story and then fill in a couple of details about our meeting as
well. I've already talked about my letter writing campaign, but one of the people I wrote a letter to was an investment banker named Mikey ageia man who was a managing director at Bear Stearns, who ran their media practice. I'd sent him a letter, we had a meeting. And I made a pretty good impression on when I met with them. And before it ended, I asked for his help getting introduced to CEOs. And it was a huge risk for me, it was a huge risk for him. He didn't know me and he politely
declined. But then he said something that really stuck with me forever. He said, If you want to go hunt, Moose go where the moose are. I had no idea what he was talking about. So I said, What does this mean? And he said, the annual Bear Stearns media and entertainment conference was coming up in a month was being held in Laguna, which is one hour away from Los Angeles where I live, and the CEO of every major entertainment company was going to be there. And he said, Randy, you're
invited. And that was really incredible of him. Always be grateful for that. I'm sure you remember all the people who did every nice thing for you, as you were making your way up. I remember every person who helped me and this was a huge help for me. So I get the invite. And then I went to work, I hit the client development code again, and research, every CEO is going to be there and they're around 30 to 40 at the conference, and 75% of them were on my hit list.
I had made a hit list. And then I printed out the articles and then I was highlighting and putting this letter writing campaign together in the second bedroom of my apartment next to the jack in the box in Westwood. So I had this my list and you are not on the list. The reason you weren't on the list is I was looking for people in LA and you were based in New York. But when I read about you I said to myself, I've got to meet this guy. I was 26 and this guy
Strauss Zelnick. He's running a movie studio when he's 32 years old. So you became number one on the hit list. I wanted to meet you. I wanted to find out, how did you do this, get your advice, maybe even a job. And you're doing basically like a drive by you flew in you spoke, and then you headed back to New York and you're really busy. I could see people around you, when you speak, you get the circle. And if you're a popular speaker, people are waiting for you to die for you to get down.
And then you're leaving the building. And there's three people deep and then two. So I kind of waited my turn, I followed you out the door, I think was at the Ritz Carlton and I introduced myself as you're walking out, and I asked you if you had a few minutes, or you could have blown me off, but you stopped for a second shook my hand. And you told me to call your office in New York to set something up. I sent you my letter first. And then I called, we're going to come back to that
story again. One more time. But you're a 20 Century Fox. You're in your dream job. You dreamt about running a studio now you're running a huge, well known studio. It's incredible. Your dream came true. What were you thinking? And when you got there? What did you actually do running a studio?
Oh, my What I mostly thought was I have no business doing this job. Because I said to my friends, I'm definitely not capable to do this now. But I'm certainly glad I have the opportunity. And, you know, it was a turnaround Fox was at last place in the box office when I joined. And within a year, we were first at the box office and stayed there for the remaining three years that I was there. You know, the job was to turn around the business. And it was pretty moribund, old fashion
business. And we updated it and, you know, updated the team and upgraded the international group and upgraded the deal making the creative part of the business was run by my boss, Joe Roth, I ran the business side of the equation until Joe left, and then I was responsible for both when Peter Chernin became my boss. And I stayed under Peter, who is a great boss, really great Boston, very generous person, very kind person, until the opportunity to go become an entrepreneur came along six
months later, I recorded it. And the deal with Peter was he was like, I don't want you to leave. But you can leave if you replay wrote, get your own replacement. So I had to replace myself, I thought pretty highly of the job I was doing. So I said, there's really only one person in the business who I think would do as good or better job than I in this. And that was Bill mechanic who was at Disney in a very, very happily. So I didn't know Bill very well. But I knew he
was happy in his job. And took me about six weeks to recruit bill. But I did. And Bill and Peter went on to do just great work at at Fox and build the studio significantly from where we left to and innovate in any number of areas. So that was that was kind of the Fox experience.
But you were there three to four years. Let's talk a little bit about the time that you were there. Because you're you indicated you wanted at some point to be a entrepreneur and you laughed. But when you took the fox job, were you thinking this is going to be the last job I ever have. I'm going to work my way up at Fox and Peter's your boss, but at some point, you're going to replace Peter and report to Rupert Murdoch. What What was the picture like when you got
there? And were you thinking this whole time I'm just training for something else.
I was always ambitious. The truth is my first goal had been to run a movie studio. And while I wasn't the chairman of the studio, because Peter gave me responsibility for both creative and business at that point, I had the job effectively had the job Peter was responsible for a lot of other areas as well. And I'd been running movie businesses for now seven years between restaurant and and, and Fox. And so sure other things being equal, my ambition would have been to be chairman of the
studio. And had I been given that opportunity when Joe left, I definitely would have stuck around longer, perhaps much longer. But I was passed over in favor of Peter. And at that point, you know, I looked at and said okay, realistically, I'd have to do this job for four or five years before Peter gets bumped up again, which, incidentally, is what happened. I think Peter was in that role as chairman for about four or five years before he was promoted inside the
organization. And I even if I were really optimistic about my chances, I looked at and said, you know, that job is not coming any different than the job I have now, really because Peter gave me a lot of latitude. And I had begun to think about what came next and I sort of redefined my goals from running a movie studio to running a diversified media business and within with an entrepreneurial slant, which is to say I wanted
a piece of the action. So now to start thinking about thinking about what does that look like? Like How can I gain the experience that would enable me to run a diversified media company? And how can I do it?
You know, while being an entrepreneur Med, what became clear to me as I had to get experiences in other creative enterprises, and when video games sort of came along, and they were just coming along, then I looked at and thought, Wow, this could be like, a huge entertainment business, this sort of feels like the movie business in the early days. And if I get in now, not only will I get that experience, but I could probably do it as an entrepreneur, get a piece of the
action. So I actually went to Rupert, and said, you know, video games are the are the entertainment business of the future? I'd like to start a video game company. How about if I do it here at Fox, and continue to run the movie business. And I'll do that also, we'll start another division because I had numerous divisions reporting to me at Fox, not just motion picture, production and distribution outside Television Distribution and home video, distribution, pay television
distribution, I had it all. So to me, it wasn't burdensome to start another division. And Rupert said, That's a great idea if you want to start a video game company, and I'll support that. I said, Well, here's the thing, I want a piece of the action. He was like, none of them that doesn't really work around here, like, you can work here, we pay you well. But you know, it's part of the business.
And so I had an opportunity to go to, you know, a very early stage startup that hadn't released the first title in Silicon Valley called Crystal Dynamics. And I'm probably the only living person or dead person who has ever voluntarily left the job of presidents of 20th Century Fox or any other major studio to take a 95% pay cut and move to Silicon Valley.
For a company that was less than a year old. Less than a year old, no revenue. So how did you find out about Crystal Dynamics? There's someone just for you reading. I mean, there were no publications even to read at that point. I assume no video game publications, maybe? Magazine. So how did this come about? How did you learn about
a recruiter named Bob fell, who was a friend of mine reached out, and he was doing the search, and said, I know you're I know you want to do something entrepreneurial. And I know you want to broaden your base. When he come look at this.
He said Krause I said, Strauss. I know this is crazy. But I have this company that's less than a year old that is perhaps doing something pretty cool. Exactly. So let's talk about what happened at Crystal Dynamics. And where was the video game industry at that point, in terms of where it is today? Where was it? Then? What did it look like on the map? I know, obviously, you could play board games or console games like Pac Man, you go to a bowling alley, you play Pac Man.
Asteroids was a big thing. But where was the industry as a whole back then what did it look like? And obviously, it's very different today.
Well, it is already sort of established a similar structure. In those days, the big so called first parties were Sega and Nintendo. Sony was just entering the business with PlayStation. Microsoft was not in the business yet didn't say there was no Xbox. But the hardware really was Sega and Nintendo that was the meaningful hardware. And then on the independent side. Electronic Arts was relatively young, but it existed. Activision was very
young, but it existed. In fact, Lowry Pope's was CEO of Electronic Arts, he's still the chairman Bobby Kotek, was the CEO of Activision, he still is. There were other players that are not around like THQ. There were computer titles and CD ROM titles, those businesses obviously no longer exist. And then there were smaller independence and the technology
was rapidly escalating. And Crystal Dynamics was formed initially to make games for a new platform called 3d Oh, which was a 32 bit platform that was going to eclipse technologically the other platforms. And they were they were set up to be a software house to support 3d to, and I was I was recruited there. So the business existed. It was early, but it definitely, you know, was a real business. I don't remember what the aggregate revenue of the business was. It was quite small, but it existed.
You mentioned Bobby codec. Bobby was My stepsisters roommate in college at University of Michigan, greatest place on Earth, and was coming to our house for Jewish holidays. So I met Bob when I was 13 years old. And Bobby actually offered me my first summer job after my freshman year at Michigan. He and Howard Marks had a company it was a different name. It was really the predecessor to what became
Activision. And I needed to make money that summer and he offered me a new Apple Macintosh computer which had just come out it was $1,995 unfortunate I couldn't take the job. Because I needed to make money that summer I ultimately dug ditches in a piece of land that became the weightwatchers world headquarters in Southfield, Michigan. So I've known Bobby a very long time. And what a what an interesting career and similar trajectory that he's had in the video game business as as
have you. You went to BMG after working at Crystal Dynamics. They came calling as well did Bob fell call you up again and said, Hey, I've got this great opportunity for you second time around here you go.
No, it was a strange situation actually was another recruiter named Bill Simon, who's also a friend to this day, who was at Korn Ferry, but Bill called on behalf of BMG before I'd left Fox. So I told everyone I was leaving. And it was about to be announced it
hadn't been announced yet. And Bill called and said, you know, we'd like to talk to you about being CEO of a big record company, one of the majors and, and it was very tempting, because again, I wanted to get to experience some other credit businesses, and it wouldn't involve a pay cut. And to the contrary, it was a high paying
job. And I thought it'd be super interesting and a great opportunity, and they had an interest in other businesses, and were willing to invest in other businesses, if that's what I wanted to do. But I had to say to build, look, I've just accepted a job. And it's about to be announced. And I've got to pursue that. And I wanted to pursue it as well. But I hadn't put it in the context of wow, what if there were competing opportunity at a big, really
huge business? I mean, BMG was a $5 billion business in those days. So I declined and went to Crystal Mecca announced and about a month after I got there, I got a call from the head of HR. Oh, before I had I'm sorry, it's so long ago, before I declined, he said, Why don't you just have dinner with Michael Dornan, who headed the entire entertainment company, for Bertelsmann, which was television and recorded music, and I said, Sure, I will and had dinner with him. And I explained
that I wasn't available. And I made sure that that Bill told him I wouldn't be available. But we had a really nice dinner. And, and about a month later, the head of HR from BMG called me and said, Look, Michael really thinks you'd be perfect for this. And he's willing to wait for you. And I was like, Well, I just started a new gig, I'm building this business from scratch. Like, that's really flattering, but he can't wait because it's going to take this is not like short term
situation. And he and the the, the HR person from BMG said, That's okay, we're willing to wait, we believe this is going to be the right thing for you to do. So, we stayed in touch. Ultimately, they asked me to do some consulting work for them on the movie business, which I obviously knew, and they were thinking about getting into. So I did some consulting work on the side, which obviously was disclosed to the folks at Crystal. And but that got, you know, introduced us to one
another. And two years later, when Crystal was very much on its feet had already launched, hit properties and was exceedingly well financed, and had about 250 people. I decided to leave and become CEO BMG North America, which was at that point about also about a $2 billion business. It was the North American Division, but was with a path towards becoming the CEO of the whole thing. And I did become the CEO of the whole thing couple years later.
So you're learning the music business, which is new to you. And you'll also while you're there, you took some of the video game knowledge and excitement, and you brought it to BMG, and you created BMG, interactive in in house, what was that? And ultimately, in the interest of time, there's a whole bunch of things I'd love to talk about. But let's let's talk about what that became and how that led into what you're doing today. Ultimately, in the video game business,
I'll try to compress it. You know, I got to BMG and they said, What do you think about the movie business? And I said, it's terrible asset class, which was, let's not do that. But let's start a video game business. It's still early days. We have built in distribution capacity. We'll bring an independent developers and will publish their works. And we'll distribute it to our worldwide system. And it was, I thought, a pretty clever plan. And we did just that and built
up an array of products. We were developing 40 properties. And right before we were going to launch our first our first game, the new CEO of Bertelsmann, which was a parent of all of BMG and other businesses came to me and said, I don't understand this business. I don't know why you're here. it. Meanwhile, you've wasted all this money and that I want you to divest
business. So I said, Listen, we've already invested in 40 titles, they're all ready to go, we've already built the overhead on, it's already here and in place, the only thing left for us to do is distribute the
products and bring money in. And even if we're horrible at it, even if we mostly don't have hits, the structure, the business in those days was we probably would have gotten our capital out or close to it, and said, on the other hand, if you want me to divest a business with unreleased titles, it has almost no value to someone else. I mean, I'll get cents on the dollar. And he said, I don't care. That's what you should do. So I did, because I'm a good soldier, and I was employed, and
I knew what my job was. So I sold, I sold BMG interactive to Take Two Interactive, which was a tiny little public company, for nine or $10 million of stock. There's actually quite a bit of stock and take two because take two was so tiny. And then I went to my boss and said, Let's hold the stock minimally that way, if they do well with it, you know, we'll benefit otherwise, I'm going to sell it and get like nine or 10 million bucks. And he said, no, no. And remember, we were $5
billion business. So this was a rounding error. said no, no, get the cash. So sold the stock took the cash. month later, Take Two Interactive released the first title that came to market that we have developed, which was called Grand Theft Auto. And so take two, you know, grew on the back of Grand Theft Auto and Rockstar Games. And you know that that was the juggernaut that grew take two, and led to all the other things that ultimately, you know what
happened there. I stayed at BMG for six years, brought the company to second place, had the number one or two players not merged, we would have been in first place, we had a bunch of great hits, I had a great experience. And I felt at that point, I knew the video game business, I knew the movie business, I knew the television business, I knew the home entertainment business. I've
gotten a lot of experience. And I thought, probably time start my own business, and build a diversified media company, you know that I can have, you know, an entrepreneurial stake, and did so by founding CMC. And totally serendipitously and a long story. We don't have enough time for seven years later. XBMC took over take two. And we've been building it up ever since.
I want to come back to the last piece of our meeting. You were actually at BMG. At the time. We did sit down for face to face for another few months until you were back in Los Angeles. And I by then I had been writing all these letters, it was going very, very well. I've had about 20 to 30 meetings, which meant I'd sat in 2030 lobbies, and most of them, I waited quite a bit quite a long time, in one case more than an hour. Of course, I was the least important person on the calendar
that day. So if something came up, I was going to wait. I had studied a long time for each meeting. I coached people prepare for the meetings like it's a final exam. And that's what I did. I made an outline and memorize facts, questions from footnotes with public companies. So I started bringing my outline to these meetings to study while I waited the same way that I looked at my materials in college right before a test, you look at it, then you put it away and then
you begin your test. I always arrived every meeting one hour before I'd wait outside and then I would come up 15 minutes before first impressions matter. Wanted to make sure they knew I was there. Well before on time I left. I was there one hour before because in Los Angeles, there could be traffic jams a whole bunch of other things. So I go out 15 minutes before and the office manager. I still remember her name Liz Ramirez brought me out a glass of water and said Straus will be out
shortly. And that was the first thing that I noticed she said Straus not Mr. Zelnick, which was very unusual and different than any meeting that I had had, which said something to me about the culture in the way that you treated people. So I'm sitting in this really nice lobby, and you walk out with one of these headsets on the old kind of wrapped around, like an air traffic controller, and you put your hand in front of the mics, whoever you're talking to,
couldn't hear. And you said to me, I really apologize, I'm running late. I'm on a call, and I can't get off. I'll be back in a few minutes. And you walk away. And I'm thinking to myself, Wow, you're running three minutes late. And you walk out yourself, not Liz and apologize to me. It really says a lot about you and the respect you have for people regardless of where they are in stature or position. And I've been in the business world now for 30 years. I've never seen anyone else do
that. I learned that from you, by the way. So it's something else that I've copied and borrowed from you. As an aside when I went in there you were talking to Clive Davis. In the interest of time, we don't need to go into that. But would you say that he's one of the most influential people in the history of the music business?
Absolutely. I'm one of those creative. Had a great guy had a great relationship working with him and was very fortunate to work with so many talented people and to this day, I work with so many talented people, but you know At the risk of turning around I love I love the first of all, your memory is extraordinary. Randy. But secondly, really extraordinary. But I knew that already. But I, you know, I think you're you briefly described that you dug ditches
for a living. And I think your story is that you do whatever it takes to get to the right answer and to get ahead, and whether that involves digging ditches or arriving an hour early or doing five hours of research for one letter, whatever it took for you to get to the next step. That was work that you put in. And the reason you've had the success you've had is ultimately because you have wonderful attributes, that you're smart and charming, and nice, but you also put in the work and there's
no substitute for hard work. So it's it's, you know, you said as as as an aside, but it's really compelling. And a great reminder that, you know, we all start from nowhere, everyone, everyone starts from nowhere, no one gets anything handed to them, even if they have connections. And I started from nowhere as well. You started from nowhere, but being resilient and friendly and kind and incredibly hard working, will open doors, always
open stores. And then of course, you have to go through the door and do the work and do well. But I love the reminder that you actually dug ditches.
I'm a grinder. And I think that in my work ethic are probably the two most important ingredients of my success throughout my career. And I appreciate the compliment. Back to take to its whole I think more than 130 million copies since inception. How much has are sorry, Grand Theft Auto.
How how? What's the total gross, that franchise has brought in to take two which now by the way, I think the value of the sale to take two is around 14 million and I checked it I think your market cap is $23 billion today.
Yeah, they held on to their 20% stake would have worked out really well. For BMG, you're referring to the title Grand Theft Auto, that's that franchise is actually sold in over 250 million units. The average selling price is 60 bucks. So you do the math plus virtual currency. It's It's the it's the highest grossing grossing entertainment franchise of any sort of all kind. It's the number one entertainment property that's ever been
creative created. So it's an incredible story that Rockstar Games has delivered and continues to deliver.
We're gonna switch gears in the interest of time, I want to talk about fitness and physical health and mental health. But I also have to share another Strauss story with you. Well, two quick ones. One of the times where I would always call you when I'm coming to New York. I love spending time with you. I've said this many times. I wish we spend more time together. I really love it when when we have time. And thank you once again for this. But you said to me, Hey, do you
want to work out? While we're meeting? I said, Sure. So meet me at the Harvard Club. And I thought, Okay, I have no idea what that is. That's the closest I that we'll ever get to Harvard. And I told you I had no clothes. I said, Oh, don't worry, they have some there. So we're working out your complete machine. And I'm thinking how, you know, it's kind of hard to have a conversation. I'm huffing and puffing and your guess was 20 years ago, probably 15 or 18 years ago, something like that.
And I could clearly see you're in a fitness. There was another time we worked out and I was thinking man, I need to get my ass in shape. And then there was another time where you want to work out in sports club, Los Angeles, which is a health club there. We get there we meet in the lobby. I'm looking at you you're looking at me. Are you a member? No, you remember? No, we're sort of laughing about it. Of course, she made one simple phone call. We were in in 30 seconds. And then we're in
there. We're working out. Same thing and when we're done, we're hanging out. And the locker room. You know, we have our towels on we're gonna go take a Jacuzzi it was you know, eight to 10 feet, this big pool, and you're talking to some guy in the locker room who's clearly looks a little bit unique and we're hanging out you're talking I realized, Hey, how are you? This is me. Shawn, meet my friend, Randy. Randy. Shawn, nice to meet you. We all go into Whirlpool together. We're in
there for 15 minutes. More conversation clearly the guys in the music business but I have no idea who he is. And we all went we got dressed we showered, we laughed we left before him and he said you know who that is right? I said I have no idea. And it was Sean Combs so no, no. Just says something about how uncool I am and how I'm not with it in the music business but you love fitness. You are in better shape than anybody that I know period regardless of your age. When did this all start and how
important is it to you? We all one thing as well. All that I've noticed, I'm sure a lot of your friends do too. You work really hard, you're successful, you work very long hours, you have family commitments, philanthropy, people will always say, I don't have time to work out, I find myself saying that as well. I'm tired. At the end of the day, he talked about the whole fitness thing when it became important to you and, and give us the whole story, Mr. Men's Fitness?
Well, I was I always got exercise, and I always believed in it, but it sort of picked up as time went on. And I got more and more into fitness and health. And so when you and I first met, I probably worked two or three days a week. And then as time went on, I just decided to do more of it. And as I, as I mentioned, I spent a lot of time mentoring and coaching
people. And I realized that if, you know, if I, if I was in the gym an hour a day or close to it, that'd be a great time to talk to someone because you know, you can relax and talk and I wouldn't be subject phone calls or interruptions in the office. So I would say to people, listen, if you want to get together for a meeting, we can do that in the office, you want to get a cup of coffee, we
can do that. And you'll probably get 20 or 25 minutes or if you interested in working out you can spend an hour, your your call. And so more and more people, including people who worked at my companies would say okay, well, let's get in a workout. And I found that it was a great way to catch up and also sort of remove barriers. Because when you're sweating and working hard, you know, pretty hard to maintain your composure or any
kind of pretense. And so I was able to have, you know, pretty busy work schedule and also work out and to this day, I almost never worked out alone, I always worked out with with friends or groups. And that makes it much more fun. And I, I sort of feel like by training hard and training often with people are a lot younger than I it keeps me feeling young, even though I'm not young. And that allows me to look at the world through
curious Why'd young eyes. And I think that positively influences my investing, but also helps me run entertainment businesses that cater to younger people. So it's been a it's been a great blessing, both in terms of the fact that I don't feel remotely old, and are me aches or pains, and I stand up straight. And I can do do all kinds of sports. And I don't feel compromised at all by age. And I do have friends who do feel that way. They feel compromised by the age already, even though I'm an
adult. I'm 63. But for a lot of people, they're beginning to feel, you know, like they're slowing down. I don't feel that way. And that influences every part of my life. So it's been it's been an incredible blessing, great way to spend time with other people great way to spend time with my kids. And I really I enjoy the results. You know, I get to eat more too, because I'm training all the time.
Well, I remember us having lunch with a at Nate nails in Beverly Hills. And the waitress asked you first. What would you like and you had something super some eggs that were super healthy. And I'm looking at the corned beef sandwich and I said Strauss you're making me feel guilty. And I said, I really want that corned beef, he said, you know, go for the corned beef. So I had a fatty corned beef sandwich. And you had this incredible healthy meal, which didn't
seemed that tasteful to me. But I remember at the time, though, you took it seriously, the fitness was a huge part of your life, and you're talking about longevity. And you could really influence the probability of a longer life, if you eat will take care of yourself. That's part of the motivation as well. I mean, obviously, you feel great, mentally, you feel great, but you're also looking at life expectancy as well in there and being productive while you're alive.
I think it's more about healthspan. And lifespan, I think robust exercise probably can extend your life on average, maybe three to five years. And since you know, the last three to five years may not be so great. I'm not sure that's really why you do it. I think it's more healthspan and mental acuity, and just the ability to walk
around comfortably. So if we don't exercise, you know, we lose bone density, which means if you fall, your bones break, and we lose our balance, which means you're more likely to fall among many other things. There's also evidence that you're much more at risk for Alzheimer's disease or other forms of dementia if you don't get exercise, and that exercise can
offset all of these things. So my bone density is the same as an 18 year old I have great balance and when I go skiing because I'm not a great skier you know i fall i come 14 And I bounce right back up. Nothing breaks nothing even bruises because you know, I'm I'm in reasonably good shape. So it means that I can do activities, you know, at this age that my friends are already dropping out
of. And I expect to be able to do those activities, God willing in 10 or 15 years that a lot of people won't do because your body is strong and resilient. There's no reason you can't you can't do balance related activities or activities that put you at some risk of falling I'm so that there, there are many good reasons, but I don't actually think it's lifespan, I think it's much more quality of life, which is what appeals to
me. Also, there's so many other factors that affect lifespan that you really can't influence, you know, your your gravity, disease. So, I've never thought that the goal is to live as long as possible. I know there are people who believe that for me, that's not the case. I just would like to live like a middle aged person, and then die. You know, I, that's my goal.
We're almost at the end of the show. And I want to ask about your advice. What's the best piece of advice you would give to anyone, regardless of age on how to have a better life? How to have a better career? That's the first part of the question. The second part is, what to you are the three to five most important ingredients of someone's success?
Well, the first piece of advice, which we talked about is know what you want. Really think about what you want, not what is wanted for you, not? What you, you know, see on television, not what your friends are doing, what is it that you want in terms of your life long term, both personally and professionally, and work for that goal. So many people try to pursue other people's ambitions,
you need to pursue your own. And the advice that I give with regard to a career and I think also, personally, is the advice I got when I was when I was in grad school. And, you know, in vastly less well organized way, I would ask CEOs who came to visit school, you know, their, their top advice for a great career and a great life. And I realized after asking 50 of them, or so they all gave the same advice, essentially, and
fell into three buckets. So that's the advice that I give, which is the first is listen, most people don't listen, most people learn how to talk, they don't truly learn how to listen, listening, makes you smarter, makes you more effective, and, and makes you kinder, and it's way to develop relationships with people. The second is work hard, there's no substitute for hard work, we talked about that
earlier. You know, get up early, get to work early, stay late, especially in the beginning of a career, the only thing that is going to distinguish you from the person next to you is harder work. As you gain some experience, and maybe some wisdom, you probably don't have to work quite as hard. But even now, I run three enterprises simultaneously, I work pretty hard, you know, I'm pretty much always on. And finally, never compromise your integrity. It's ultimately the only thing you
have. And I've tried really hard to pursue that advice, all three of those recommendations, imperfectly. And I've made mistakes with regard to all three. But I have always known what I wanted. And if I didn't I stop and took timeout, think about it and re establish long term goals. I've done that again recently. And it served me well, honestly, I wouldn't say that I've, you know, I've ever reached a point of achieving all of my goals. And I doubt that I
will. But by writing them down and establishing them and owning them emotionally, I'm probably gonna get closer than if I didn't do that.
Can you share one of your goals that you haven't achieved yet that you want to achieve?
Oh, I think you know, one of my goals was to have the, you know, one of the biggest media and entertainment companies on Earth. And we haven't a very significant enterprise, and I'm really proud of it. But it's not one of the biggest on Earth.
It's getting there.
It's growing. For sure.
I think I want to conclude as well on, we talked about time management as well. And one of the things that we hear about in which I do a lot of mentoring as well, and people, people say, I'll ask them, Well, why didn't you do that? Why didn't you do that? I didn't have time. And that phrase should not be part of the English English language, if you want to get ahead. Or if you want to be a friend to someone as well, it comes up a lot in
the personal context too. Well, why don't you do why don't you do that? Well, I didn't have time. Well, as you know, I've been working on sandy or a Yelp for beaches for last seven years. It's my full time job. And Businessweek wanted to write a piece on me. And I thought all right, who do I know? Who has some credibility has a lot of credibility, who people name would recognize who I could put Business Week in touch with to see if they'd be interested in talking to them. So I thought of
you and I texted you. And you always text back very fast. You're very fast responder no matter where you were. You're actually about to border red eye back from Europe on a family vacation. And you said when do you need this? by and I told you, the reporter wants to finish the story tomorrow. So you told me you were landing? And I said, Well, do you want to wait? It's okay, if you can't do
so No, I'll do it. So the reporter called you, I think after an overnight flight, you had been on the ground, maybe 15 minutes, you're in the car, going back to your house. It just really speaks again, to the kind of person you are the kind of friend you are. So that's something I want to leave our listeners and our viewers with. We've had a lot of great lessons today, being a friend, being time making time for people that you care about giving back. Very important to you, Strauss, I
know and to me, as well. So thank you so much for being a great role model and a friend, and for doing our podcast today. I really appreciate it.
Well, thanks for having me. I hope I was coherent when I spoke to the reporter. I probably wasn't but I appreciate your including me and again, your memories extraordinary. Give you a great credit for that. And it's such an optimistic memory to which is kind of you and kindness is kind of the whole shootin match. So thank you. Thanks for having me.
You're welcome. Everybody have a wonderful rest of the day. Thank you so much.