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Hi everyone, welcome to the Deal. I'm your host Jason Kelly.
Hello, I'm Alex Rodriguez.
We're here in New York and this episode. David Rubinstein. He is the co chairman of the Carlo Group, which he founded back in nineteen eighty seven. He is a television host. You've been on his television show on Bloomberg Television, but that's not why we're talking to him today. He is also the relatively new owner of the Baltimore Orioles, a franchise you're very familiar with.
Yeah, and David Rubinstein, he's a renaissance man. I mean he's Masterdard of building a private equity giant. He's also donated tens of millions of dollars to philanthropy and now he's the latest challenges the Baltimo Oriioals, which is one of the true five or six iconic franchises in sports. They have the number one farm system. Camden Yards is one of my favorite parks, not only to watch a game, but more importing to play a game. But it is
one of the great sports venues around the world. Jason, I still remember in nineteen eighty three when the Baltimore Orioles beat the Phillies and my hero Kyle Ripken caught a line drive for the last out of the Baltimore Oriols Championship. And I can't wait to see more base on that stadium.
David has talked about this deal as being unique for him because it's essentially half investment, half philanthropy. He's going to talk a lot about the community building aspect of what it means to be an owner with something you certainly can understand from a lot of different perspectives. So much to get into with the great David Rubenstein that's coming up on the deal, all right. So we like to start every one of these shows by having the guests introduce themselves and what they do.
I'm David Rubinstein.
I am the chairman of Carlisle Group, a firm I started in nineteen eighty seven with a few other people, and I do some other things, but I guess that's probably what I do mostly.
You also have recently gotten involved in the game of baseball.
That's correct.
Despite my appearance as a Little League All Star shortstop, didn't think it would go very far, but I had now regained my baseball acumen and interest, and I am now the principal owner of the control partner they call it in baseball of the Baltimore Orioles Baseball team. I grew up in Baltimore, and after fifty years of not really focusing on Baltimore and the Orioles, I'm now refocusing on it.
And boy are you ever. Let's just dive into this deal. How does this come to you? What's the process by which you end up owning this team?
A little convoluted, like everything in the big world of sports. The team has been owned for thirty years by the Angelos family. They bought it out of bankruptcy in nineteen ninety one or nineteen eighty two. And let me just clain what happened. Saint Louis Brown's were a team in Saint Louis. They weren't doing well there. They went to Baltimore, and Baltimore group of people bought up for two million dollars.
Two million dollars that's in nineteen fifty four. Edward Bennett Williams bought it when the family wanted to sell that owned the Hofburger family. He bought it nineteen eighty one
for roughly twelve million dollars. When he passed away, his estate sold it to Eli Jacobs, a buyout person in New York, for roughly seventy five million dollars, and then when that went bankrupt, it went into bankruptcy court and was bought in bankruptcy court for a net price of roughly one hundred and fifty five million dollars by a
lawyer in Baltimore, Nate peter Angelo's. He did have some other Baltimore people come in with him, most famously, I would say Tom Clancy, who was a very author lived in Baltimore, and Pam Shreiver, among others. But he owned it and was the control partner for a long time. His health went south and his son began running it about five years ago, his son John. I don't know exactly why they decided to entertain an offer, but I
had thought they might be interested in selling it. I was told by some people in Baltimore that maybe they'd be recepted to somebody from Baltimore buying it, and so I actually teamed up with Ted de Jonsis, who owns the Washington Caps the Washington Wizards, and he said to me correctly he knows more about sports than I did.
Why don't we team up?
I would invest in Monumental and then Monumental would buy the Oriols. And he'd led the negotiations with John Angelo's about a year before we actually consummated the deal that actually happened, and then it didn't work out. They couldn't reach an agreement and so it fell apart. Last summer, John Angelos, who was renting a house in Nantucket, came to see me at my home in Nantucket and he said, why didn't I buy a minority interest in the team.
If I liked the Oriols and didn't work out through Monumental, I could buy a minority steak. And I went back to him and said, well, maybe if I could buy a steak that would get me to control at some point, I'd be much more interested. He came back and said, okay, but it doesn't have to be over three or four years, which is what I anticipated. He said, maybe we can buy control sooner, and so I decided to move forward
with it. I called somebody who had once said to me he'd like to buy the Ools with me, and it's a guy in New York named Mike Arraghetti, who is really the sea As a very excellent private credit firm private equity as well, and so I called him and said, there may be a chance to buy the Oros. Would you like to come in with me? And he said yes, and then together we negotiated for six or
nine months or so with Johnny Angelo's. I didn't think the deal was going to happen at one point because in Christmas when we were negotiating the deal, it blew up a bit. It wasn't looked like it was going to happen, and I maybe lost my cool and I walked away from the deal saying, this is not going to happen.
I'm not happy.
And then for about a week it kind of was nowhere. But then like deals always come back, it seems, and this one came back and we negotiated the deal and we closed it. The first part of it right at the beginning of the season, right the poor opening day. And then the second part of the deal was we bought forty percent at the beginning and the remaining sixty percent we just closed.
That's incredible. So I mean, you go to Duke undergrad then you get a law degree in Chicago, you run what i'd call the Yankees of private equity in Parlia.
One of the most.
Amazing companies that you started, manage almost half a trillion dollars today. And you say, well, I'm not good enough to make a major lye baseball team, but I'm rich enough not to buy one. How does that conversation go, David, when you're like, all right, I am ready, because this is a big move for you.
It's always complicated to figure out what you want to do with your life when you're past running something. So I gave up at the age of sixty nine. I gave up being the co CEO of Carlisle, and I became the co executive chair and then the co chair. And I have a family office that I invest through called Declaration, and I chair seven nonprofit boards, so like the Kennedy Center or the Library of Congress, Board, the National Gallery of Art Board, Universityago Board and Counselor Correlations
and so forth. So that takes time, and then I try to do one book every two years, and then I try to do TV shows on a place called Bloomberg, So I do a couple of TV shows there and and some on PBS. So I have a lot of things to do. And I'm not sure why I thought, at my current age, an age that I never thought i'd live to be this old, that I would go back and buy a baseball team. But the reason I really did it was not because I thought I'm going to make more money and that's going to make me
a happy person having more money. That wasn't it. I just grew up in Baltimore. I got a public education there, public school education. My parents were born there, they were raised there, they were married there, they lived their whole entire life pretty much there until they retired, and they're buried there. And I realized I won't, no doubt, be buried in Baltimore as well. But I thought I hadn't really done enough for Baltimore compared to what I've done
in other philanthropic areas. And I thought, if the ownership was ready to be sold and the owner, the current owners, were ready to sell it, I would maybe come back and bring in some other people in it and try to infuse some energy into the team.
You come into this at a moment where you've seen a number of your friends and peers, and you and I have talked about this. Over the years, you've seen them get into sports and in various forms and fashions, whether it's Tony Wrestler or Steve pel Huger, Mark Lazri many others. What did you hear from them that made you either initially disinterested or interested? Like, what did you take from those conversations?
Initially I had opportunities to buy sports teams as well. In fact, the Wizards and the Caps owned by Abe poland Abe was a friend of mine. He asked me to consider buying it well before he actually sold it. I didn't do that or buy any other team for this reason. I was running a large private equity firm with my partner who was the co CEO, and I thought, if I say to my investors, who are giving me money to try to get a good rate of return, by the way, I'm not spending that much time on
your investments. I got a sports team I'm spending time on. I thought they would criticize me, and I thought they would say, you're not focused on what we were giving you money for. But as I saw some of my colleagues in private equity who had the same dilema I had by sports teams, the rates of return didn't go down and they actually made money on the sports teams.
I said, maybe I was wrong, Maybe you can do both, And so I maybe regretted that I didn't participate in some of the earlier deals when NBA teams were bought for a lot lower prices than they were bought for it today, and the same with baseball teams. And since I wasn't really running Carlisle day to day any longer, I thought I could afford to do it. But what I learned from others is that you know, you got to put energy into in time, and it takes more
time than I originally thought. I mean, I knew it would take time, but what happens is you get addicted to showing up at the games. So I hadn't been to Oriols games very much, but now I'm going to more Ools games than I ever dreamed of. He was going to because as the owner I feel and the control partner I feel, I should show up as a symbol of the ownership group that I put together. And it can be rewarding but also very time consuming.
Talking about your deal, consensus out there is you got a pretty decent deal for this franchise. Does it feel that way to you, Well.
I think we got a good deal because you know, if they had auctioned it off and said, whoever the highest bidder is, we'll get this, maybe somebody would have come in at a higher price. However, the Angelos family did not want to be seen as putting a company or the team up for sale in a way that might lead to somebody coming in and wanting to move the team from Baltimore. It's very important Baltimore to have the team stay there. And while a lease was signed,
was really a fifteen year lease. It might turn out to be a thirty year lease, but it's a fifteen year lease. And I think Baltimore was always nervous that maybe somebody from a big city would come in and say we're going to buy the team, but ultimately move it. So the fact that I was from Baltimore, I think made the family feel more comfortable in selling to me, maybe at a slightly lower price, but maybe not as much as you think slightly lower price, and maybe others
would have paid. His team was not without its challenges because remember they have not been in the World Series in forty years, and while the team was very good. The year before I bought it with my partners, teams had some real challenges up until the last year, and so it's not a foregone conclusion that it's going to be a home run that buy it at the price we paid.
Well, he's you know, he's already using the you know, the metaphors to you know, talk about his sports team. Talk to us about putting this consortium of investors together. You mentioned Mike Garrighetti, the CEO of ARES. He's a big baseball fan, grew up in Rockland County, you know, really a self made guy. You know, Yale goes to aries, et cetera. You also, I think, in a very savvy way, put together some people who have also relationships to Baltimore. Tell us about that process.
Well, I thought it was important to have people in Baltimore who would show to everybody that is in Baltimore related effort. So Kurt Schmoke, who was a former mayor of Baltimore and I grew up with Kurt, he agreed to come in. He's not a wealthy person by the standards of private equity people, because he'd been in public services whole life. But he came in. I asked cal Ripken if he would come in, and he did come
in as well. And then the number of wealthy Baltimoreans who had not had a chance to invest in the team when Peter Angelos bought it, they were willing now to invest in it. So I mostly was focused on people from Baltimore or that area. There are some from outside. But what I've also found there's a lot of people who left Baltimore have always retained an interest in Baltimore. So there's one person who I won't raim him, but
who has an obsession with Baltimore Orioles. He mentioned to me one time when I was with him in a business meeting, and he said, if you ever buy the Oriols, let me know. I'd like to come in to friends and family. I thought he might be put in a million dollars or something, but he put in, ye' say, well over fifty million dollars and obviously wealthy guy, but he told me that he's not missed a game in twenty years. If he's not physically there, he watches it
on MLB dot com. And he's just got this obsession with the Orioles. And I found there are a lot of people that have this obsession with the ools. For example, the owner's suite income to the New Yarts has fifty five seats more or less. I told the management people, always make sure it's filled with people from Baltimore or season ticket holders or little leaguers or people that are diverse, and we're not just a bunch of old white guys like me sitting there. So they've done a very good job,
and we have it filled every night. That's one of the dangers of actually being an owner. There is filled every night. But there's a lot of food this in the owner's boxes, and I found that you can gain a lot of weight because the food is, you know, like pizza and French fries and so forth.
So I got to be very careful ballpark food.
Yes, I have it filled up.
And there are people who have been season ticket holders for forty years, forty five years, and they said they've never been the owner's box and they just love the ools. And so I'm trying to say to people, look, I'm not criticizing my predecessors. They had a complicated situation, but I'm now trying to say this is part of the revitalization of Baltimore that I'm trying to help with. Baltimore
is a city that has a lot of challenges. When I was growing up, it was the ninth biggest city in the United States, population of roughly nine hundred and thirty thousand people. Today it's about half that size, a little bit more than half that size, and one of the reasons is that there's been white flight to the Baltimore County. Baltimore City is one of the two cities the United States, the other being Saint Louis that is
not in a county. So when you leave Baltimore City and go to Baltimore County, your income taxes and your property taxes don't flow back to Baltimore City. The city therefore has had lots of challenges that you see in urban areas, and it has had, you know, crime problems, It's had STD problems, the illiteracy problems, and so I'm not by myself going to solve all those problems, obviously, but what I'm trying to do is say, let's revitalize Baltimore.
Let's get some corporate headquarters that come back there. Many corporate heaculars have left, and so what I'm trying to do is infuse the team with a sense of energy, and hopefully more people in the city will say this is a great place, we should stay here, and maybe people from outside of Baltimore City might relocate there or move back there. I hope that will happen, but obviously it takes some time.
Before we get too far away from the ownership. We probably should also point out that Mike Bloomberg is part of the ownership group.
So David playing against Baltimore for almost twenty five years, I'll tell you it's one of the greatest iconic blue chip franchise, not don't even baseball, but in all the sports, and for me playing there for so many years, it was my favorite stadium. Canden Yards is just amazing. Kyle Ripken is my favorite player, So I'm very tied to Kyle kinn senior Eddie Murray in the great history of the Orioles.
What kind of.
Owner are you going to be or are you? Are you one that talks to the GM and says, hey, one guy's moved around. Do you tell Gunnar Henderson to get your elbow down, get it up? Are you kind of more just like watching from the stands and hoping for the best.
Well, I have to be very honest, I don't know as much about baseball as as maybe I wish I did. I played Little league baseball, and I peaked at eleven, and then the twelve or thirteen people started getting bigger than me. And I thought, when I was eleven, you know, maybe Jewish Little League All Stars would get to the major leagues. But I found out that doesn't usually happen. So I haven't followed baseball as closely as other people have,
and therefore I'm learning the game right now. We have a general manager who was voted the American League General Manager of the Year last year. His name is Mike Elias, who was a baseball player at Yale. Very smart person from the Washington area, went to high school in Washington. He has what they call sabermetrics down cold. What was described as moneyball years ago is hieroglyphics compared to what it is today, because today it's so much more sophisticated.
And so when he comes to me and Mike arragety and says this player is worth X or Y or Z, I don't really know how I can challenge him, because he knows much more than I do. And he's got about twenty some people on his team that do statistics and do scouting and so forth. So it's hard for me to say, well, you should do this or do that. So I am the type of owner right now says I'd like to be informed. If you want my judgment,
I'm happy to give it to you. But I really don't have enough knowledge to tell you do something different than you want to do. So, for example, when the trading deadline came, everybody's sitting around for a couple of days trading. I really don't have the ability to say you should get this picture versus that picture. I don't have that kind of background. So I can help the team by saying, look, I know the CEO of this company. Maybe they can be an advertiser, or they could buy sponsorships.
I can do that now. If i'd seen Alex Rodriguez, I'd say we should get this guy signed up. But you know, I haven't seen a lot of Alex rodriguez is floating around. But if I see one, say we should sign that person up.
You mentioned that the other owners mean you've been in some interesting consortia of investors before. What's this group been like, well.
It's an interesting phenomenon. I think it's true with the NFL and the NBA. When you own a team, people treat you with much greater respect generally than maybe you would have expected. In other words, if Carlisle owns a company, I don't really have people walking up to me in the streets saying, hey, you bought a great automobile parts company. Yeah, that's great. You're doing a great job for America. I'm
making automobile parts more readily available. Nobody says that, like when you buy a baseball team or a football team, people come up and you say, hey, you should do this, you should do that. People feel more engaged, They're willing to talk about it much more, and I've reconnected with a lot of people. People will call me all the time, you can get me tickets for this, or can I
come to the owner's box. And you know, it's a good feeling because I'm, you know, making people happy because they want to come to the owner's box, and I enjoy it at the time being it's been relatively pleasurable. That's because we're doing reasonably well. If we weren't doing well, I guess I wouldn't be so happy. I can't say that I'll get great air from it because I already have great It's fun. I can see why people who are owners enjoy being owners. You're treated with some respect
in most cases, not always. You're building something, you're doing something to help your local community. And I can see the pleasure that people get out of owning sports. And if I had it before, maybe I would have done it earlier, but I didn't.
Did any of the existing owners, the more senior owners or folks who've been in the game, did they give you any advice when you came in?
Yes, one owner said, you know, I like you, You're a good guy, but you should have paid a higher price. So what do you mean, he says, Well, I think my franchise of is worth more than you think it's worth. In other words, I think baseball franchise are worth more. And so you didn't pay a high enough price, right, you put a comp in the market that he didn't.
Yeah, so I guess that's right.
I won't identify that person, but I'm reasonably happy with where we are today. I hope we continue to do reasonably well.
And what about within your group? You know, I mean, Mike Irraghetty is a really interesting figure, and I mean, I don't think you guys were super close friends.
I did really know him that well.
Mike knows much more about baseball than I do, and did Mike played fantasy baseball for twenty seven years. Wow, I didn't even know what fantasy baseball really was. And he also played baseball in high school, so hees much more background. He really knows the players inside out, upside down, much better than I do, honestly, So I'm really learning it. So like the situation was this, I did follow baseball
until I went to college in nineteen sixty six. My mother then threw away all my baseball cards, threw away all my baseball books, and so I kind of been rip van Winkle for fifty years. I kind of coming back. And now I'm learning that there are statistics that I did never heard of before in nineteen sixty six, so I didn't know what war meant, wins above replacement. I never heard of that really before, and now I'm digging into that, or quality starts. I mean, the old days
was complete games. Now quality starts or ops, so the statistics are a little bit different than the ones I used to know about and focus on. It's amazing how much data you can get now and how much the statistics are so important at analyzing whether players good or not. And then other way is you know, in the free agency situation in baseball, you can get these large contracts.
I don't know if you know anybody ever got a large contract, but these contracts going to be very, very large, and in some cases they work out, some cases maybe not.
But you have to make these big bets.
And then you know, sometimes you can give a person a large contract and they get injured right away, you're on the hook for a long time.
Well, some people know a little bit about being on both sides of a large contract, right, no comment. So I want to go back to this notion of the team as a community asset. You and I have talked a lot over the years about patriotic philanthropy. Your philanthropic portfolio is fascinating to sort of go down the list from documents to pandas what did you learn through those essentially philanthropic almost investments, as I think you might consider them that informed this deal.
Well, clearly, if you buy something like the Declaration of Independence, people feel that you're you know, in fact, contributing something to the country, because all these will be in effect publicly available, and I'm not just courting them and putting in my house to show just my friends. And so when I bought the Magna Carta, I gave it to
the National Archives to put on permit display. And so I realized that people are thanking other people who do things for the country, but people also thank people do something for a city. So if you buy a baseball team and you're thought to be adding value to the city, you're going to do more than just try to make profits. You're going to try to help the city. You're going to re energize the franchise, You're going to help do things that make people in the city.
That's a plus.
In Baltimore, like some of other cities, there aren't as many other outside activities as there might be in New York or Los Angeles. So in Baltimore, the Oriols have been a really important part of the culture for such a long time. And when the Colts left years ago to go to Indianapolis, that also tore away some of the fabric of Baltimore. Now where they do have the Ravens an excellent team, but it's not quite the same as the Cults in many respects. So it's a very
good team and have a very good owner. The Oriols are just part of the fabric of Baltimore. And I remember when I was a little boy, you could get a letter from your mother or father saying I want to be excused to go to opening Day, and every teacher would honor that because going to opening day of the Oriols it's like a patriotic kind of thing. How could you not let your student go to do that? And it is interesting though, when you think about sports teams.
Why is it that somebody lives in Baltimore roots for the Baltimore Oriols, what is it? Or lives in Los Angeles roots for the Dodgers or the Angels.
Why is it?
Because it makes people feel proud of the area they live in. They feel like they're part of something. And so if the Minnesota Timberwolves, for example, is a good example, it's a state name around it, not in Minneapolis, right, So people and throughout the state are probably very proud of the team, as they should be. And some teams are really focused on cities some are states, but people take a pride in that. Just like when our Olympic team goes overseas, all Americans are proud of what the
American Olympic team does. And when your local team does well, you feel kinds of pride in. I guess it's a sense of people feeling that I'm more than my body, myself. I'm just more than just one person. I am part of a larger organization. It makes me feel proud to be part of a larger organization that's doing well. That's why I guess people root for these teams and they feel so passionately.
About them, you know, David, I always find that interesting. When Carlile has a great return on capital and a big investment, your investors don't say we, They just said Carlow. And I'm an investor, right. But when the Oreas win is we won or we lost. In my mood either goes up or down, depending on winds and losses. I find that to be fascinating.
It's true when we go to a game and we win, I feel really happy, I'm really cheering. I'm going out, you know, getting selfies with people who want them, and so forth.
When we lose. I'm so dejected.
It feels like a dagger was in my heart, and sa, how could I have let the fans down? Why didn't we do better? I noticed I get fewer selfie requests after we lose the game. People don't as interested in pictures anymore, and I feel bad for people. The little boys will come up to me, and girls as well, and say, will you autograph my baseball? And I say, look, I'm not, you know, a player, but they, for some reason,
they want my autograph. And so I don't have very good handwriting, and as you know, signing a baseball is not not easy. And I think when handwriting was being taught, I think those were the Jewish holidays. So I wasn't in school, and so I have to write, I do this little print, and then because I'm a lawyer, I write I put the date in. No other person puts the date in when they sign the autograph, but I want to make sure they know it's it actually happen on a certain date.
Do you think you could do some sort of clinic with him signing baseball?
That's about the only thing tease David Rubenstein.
You do raise a really interesting point that I've been thinking about because you make your career, I mean, we'll do a very quick career journey. You know, you start as a lawyer, you work in the White House, you work for some law firms, you start Carlas. I'm going very fast here. Obviously, you're very successful at Carlisle. You're one of the pre eminent fundraisers in the industry in
across Wall Street. Then, as you mentioned, you do a TV show with Bloomberg, and you know, you get a little notoriety from that, and people want to come on your show and talk to you. This feels like an entirely new level of notoriety. Tell us what that's like and how you're responding to it.
Well, in all the years I've been in private equity, nobody ever came up to me in the streets and said, hey, you're doing a great job at private equity.
Nobody ever said that.
They might have said the opposite they maybe they did, but nobody ever paid attention. I run around the world, Nobody ever pay attention. I will walk down the street, nobody know who I am. When I started doing the Bloomberg Show. Bloomberg is all over the world, and so any city I go into now, there's inevitably somebody will come up to me and say, I really like your TV show.
It's great.
That's amazing to me that young people or older people see it all over the world. But baseball is even a higher degree than that. I mean, I am recognized more than I ever have been because I own a sports team, and not because I've only done anything good for the sports team yet day you know, we haven't done anything so you know, to win a World Series. Yet since I've been an owner, I am amazed at
how many people are happy to talk about it. People don't come up to me on the street and say, let's talk about this private equy deal.
You did recently. No one does that. They say, let's talk about the team.
Yeah.
It is amazing, and how I've reconnected with people that I hadn't seen in twenty or thirty or forty years. It's a good way to reconnect. I recognize that, like anybody who's an owner of a team, you're really a temporary custodian because somebody's going to own it after you, and then somebody's going to own it for that person. So you're really representing the city for a relatively finite
period of time. Now there are owners who owned teams for fifty years or so, but generally most owners probably own it for a shorter period of time than that. And it is an interesting phenomenon how the business of sports, as you all have recognized so well, has taken off in a way that didn't exist when I was a little boy. You didn't see owners selling teams all that much.
You didn't read about profits being taken all that much. Today, many people buy these teams and in four or five or six years they go on the next thing, or they sell their team at a big profit. It's a different world. Maybe better, maybe not, but in any way, it's a much different world. And it's not only confined to the United States. Obviously, overseas people are buying sports franchise as well, and people in America are buying sports
franchise all over the world. And then in the old days, it was only males who were sports figures who are on these teams. Now you have women sports that has also done quite well financially for people.
So I'm going to go back to something Jason said, because you know, you talked about being one of the greatest prolific fundraisers. Two things I really admired about you from a long time, even before we've met is ability to capital raise, but not only capital raise, but do it at a time. Well, you were crossing the pond across the globe. When you go to Saudi or you go to London and you go to Paris, people know you and they think you're a celebrity over there like
they're doing Baltimore now. And then also recruiting great talent. But focusing on the first one, what makes you such a great capital raiser one? And two what gave you the idea to be a visionary to go across the pond and raise capital for Carlisle.
Well, you could argue that maybe I couldn't get any investors in the United States, so I had to go overseas. Now what happened was I came up on an idea that wasn't going to win a Nobel prize. But the idea was you could build a private equity firm based in Washington, which was not seen as a capital center, and I could do it by saying, we understand companies heavily affected by the federal government better than the guys in New York. So that was a bit of a
niche that we could exploit. But then the other two things that I tried to do was I would say that we were going to do more than buyouts. Historically buyout firms only did buyouts venture capital and did venture capital.
And so forth.
But when you were in the mutual fund business, for example, you could have mutual fund A or B or C or D under a fidel that you have ninety different opportun I thought I could do the same in private equity, have a buyout fund, a venture fund, a growth capital fund, of real estate fund. And the theory was, if you liked our brand name, you give us a chance, and all these other things. And then I decided to globalize it by setting up partnerships in Europe, Asia, Latin America
and Middle East, Africa and so forth. And that was novel at the time. So building a multi discipline firm and globalizing it was unusual at the time. Others have done it, and some have done it better than we did. But to do that, I had to go around the world to raise money, and so I just made myself into a fundraiser. I wasn't trained that way, and I just basically tried to learn how these investors would react to the kind of things I was selling and try
to follow up. And the key is being polite, knowing what you're talking about. Assistance follow up is always key, and just trying to have a good track record too. If you don't have a good track record, you can't sell almost anything. So it turned out that I spent you know, twenty plus years running around the world raising money for Carlisle and you know, help us build along with a good track record, a very good franchise.
Well you also we're keyed in pretty early to the idea early in the Carli journey, especially to the power of showing up right, I mean to actually getting on the plane right and going and actually asking for money.
You know, people like to say, you've heard this phrase from time to time. I hate to ask you for money, and then they ask you for money. So the way I looked at it, there are three types of fundraising you do. One is for business. You're trying to raise money and you're saying that people give me money, but I'm going to give you more back, so ultimately you're getting something really very tangible. That's not the hardest to do because you're giving money back to people if you're successful.
The second is philanthropic. Philanthropic, you're saying that people you're going to get to heaven more quickly if you give this charitable and that's hard to do because some people say, you know, I like the tax deduction, but I have my money and maybe I don't want your cause. The third is political fundraising, which I've not been involved in. I don't make political contributions. But that's a tricky one too, because you're asking people to make a contribution to a candidate.
You're not getting a TAXI duct for it. With the philanthropic investment or gift, you're getting a tax deduction.
So with political.
Basically you're helping somebody get elected and you have to hope that that person does what you think they should do.
So those are the three different types.
They have different skill sets, and different types of people do well in them. Very few people do well in all three of those.
You certainly did well in the first two, though, So what did you learn from that?
Well, how did you learn to do it?
It's an interesting if you go to Harvard Business School or Stanford Business School and say, you know, I want to be a fundraiser. You know, there's no courses in fundraising by and large, or maybe they have one now, but they used to not do that because fundraising was considered the lowest part of the totem pole in the private equity world. A star is the guy that's doing the deals and the person at the bottom is the
person who is raising the money. It wasn't taking that seriously and it was something that people didn't really want to do. If you had the ability to be a deal maker, that was considered better than being a fundraiser. I made myself and a fundraiser because I really didn't have the skill set the background to be an investor. So while I was sure of the Carlo's investment committees that the other people really day to day doing the
deals and overseeing them. So I made myself into a full time fundraise, which hadn't quite been done before in the private equity world, where a founder of affirm basically was spending most of his time fundraising, and that was novel. Now many others do something similar.
But David, I don't think you're giving me you some enough credit, because there's a lot of people out there were not a lot. But there were some other folks that were doing just as good as Carlisle as return wise, but they weren't raising the capital you were raising. Did you find the key to your sauce was the actual deals to deal flow the returns, or actually that you were connecting with the investor and you were gritty as hell.
Oprah Winfrey said to me she wasn't a great interviewer, she's a great listener. So I think the best way to do it is I've learned over the years, is when you go in to make a presentation to somebody, it's not to say, here's why this fund is great, here's why you should come in. You get in there and listen to what they're interested in. Let them talk first. Let them say here's what they're interested and here's what they're doing, Here's what's going on in their country, here's
what's going in their city. And then you can understand what is making them tick, and then you can pivot what you want to say by blending in with what they like they want to hear. You have to go in and listen to people, and then you all will have to follow up. When you have a good fundraising meeting, and you meet with somebody who wants to give you money as interested in it. The good will lasts about two and a half weeks because in two and a
half weeks they're going to go into something else. If you haven't followed up in two and a half weeks and made another connection with a follow up letter more materials they want, it's probably not going to happen. So you've got to make sure you follow up. That's the key is making certain that you are telling them why what they want to do is something you can help
them with. And you've got to be very polite, and you have to learn how to say no or take no. For example, when Steve Schwartzen and pe Peterson were raising the money for Blackstone, their first fun Steve wrote in his autobiography they only got money three percent of the time.
Three percent of the time. Wow.
So these very well known guys, they were not as well known that as they later became. But they were being turned down by friends and people told them they would give them money and they didn't give them money. I would say probably early on I had a similar percentage. But you can't take it personally. Sometimes people might say to you come and see me, and then you actually go see them and they really don't want to give you money, but they're just trying to be polite. I'm
sure you may have encountered some of that. And sometimes it's hard to read what people are really thinking, and you don't know whether they're really interested or not. I say the most of the money that I raised for Carlisle in the early years came for people I hadn't known before. The people that I knew before I didn't really raise that much money from. Maybe they knew me, they didn't want to give me money, But you just
never know who's going to lead to something. So when I recruited the people for Carlisle, I recruited them in a circuitous way, right the people I didn't know before It led to one thing led to another. For example, the co CEO of Carlisle for many years and the chief investment officer was Bill Conway, and I didn't know him from Adam. He lived in Washington, but I didn't know him. I went to recruit a woman who was just become the treasurer of Gannett and that's a big position.
And this is in nineteen eighty seven and I went to her and said, here's what I'm gonna do. I'm gonna start to pry out firm in Washington. I'd like you to join us, one of the original partners. After I made my presentation, she said, let me see if I got to write. You've never done a buyout before, right, that's right. You're going to bring people together, never worked before, right together before? Yes, you have no money yet, that's right. And you want me to leave my position as treasurer
of Gannett to come do that. I don't think so, but she said. As I was leaving out, she said, Oh, there's a guy named Bill Conway who's the chief financial officer of a company in Washington called MCI.
I heard he might be leaving. Why don't you getim a call? So I called him. I've never known him before. We had lunch in ultimate. He became my partner for forty year old. So you never know where this is going to lead.
You've made some sort of evolutions and pivots along the way, and one sort of concurrent with your success in private equity was being a philanthropist, but a very involved one, especially on a number of boards. And I would say you're more active and more involved and spread across as many as I've ever seen anyone do. What's your thinking behind that? How did you create that playbook?
I have four standards for philanthropy. I want to start something otherwise wouldn't get started, Finish something otherwise wouldn't get finished. Be intellectually involved, so that I'm going to do more than write a check. And and four, I want to
see progress in my lifetime. The third thing, which is to say intellectually involved, which I will go on a board typically if I'm giving money, or very often I will, and for reasons that are not completely clear to me, I've often wound up as the chairman of the board. So I've chaired a lot of organizations in the nonprofit world.
I've chaired all the cultural major culture organizations in watching and I chaired the Smithsonian, still chair the Keunnedy Center, Share the Library Congress Board, and now the National Galley of Art. And it's because I enjoy it and I love learning about it, and I think I'm giving back to the country in that way. So you have to be motivated as well. I chaired my two university boards. I went to Duke, I chaired that board for four years and now I'm the chair of the Universiticago.
You know, it's been fun to watch you, you know, really lean into this role as an interviewer. And I'm not just trying to plug your show, although I'm happy to plug your show at any time. I was there at the inception. What drew you to being on that side of the microphone. You had given many speeches, you had been interviewed. You were probably the most public face of private equity for a long time, and then you turned around and started asking questions.
It isn't like I hired Mackensey and said, tell me what I can do to be more visible. It happens, like most things in life, by happenstance. So what happened was Carlisle had big events, a thousand people, fifteen hundred people. We want to have people come to these events, and so I was hiring people that would be a draw. I wasn't the draw. So I would hire former presidents of the United States, former secretaries of state. You'd pay them
speaking fee and they would come. But they were often boring, and so people were looking at their watches and they didn't couldn't wait tho speeches over. So I said to the speaking agent, you think I could interview these people make a difference, and you know, I think I could live en up and use some humor. And they said, is the fee going to be the same? I said, the fee is the same. So I said, they're.
Happy to do it because they don't have to prepare speech. So I started having these people come. I interviewed.
I made people look funnier than weren't so funny, and made people look charming. And then I became the president of the Economic Club in Washington. Vernon Jordan asked me to succeed him, and I was supposed to get business people to come in and speak, and they were boring. So I finally said, my watch is interview them. And then Bloomberg at her about five years, has heard about it. They saw it and they said, let's make a show out of it. I remember at the kickoff, I said,
what are you going to call the show? They said they're going to call it David Rubinstein Show, Peer to Peer David Rubenstein's Show. I said, you think a long Jewish ethnic name is going to work? And Mike Bloomberg said, no, it's not a problem. So now it's been ten years and we have two shows, Peer to Peer, and then there's one or more financi oriented Wealth with David Rubenstein. I've enjoyed it, and what I like is the intellectual
challenge of talking to other people. But I prepare as you obviously do as well, and preparing gives you an opportunity to learn more about people. And one of the things I'm trying to do is this, when you reach a certain age, you always begin to worry are you losing it? So I'm trying to figure out what I can do to keep me my brain active. And one of the things I can do is interview people, and
we do it regularly. I'm preparing for it. I'm intellectually challenging with these people when I talk to them, and so it keeps me busy. And also a lot of the times I'm interviewing authors and authors I think is a courtey you should read the book when you're interviewing them. So I'm reading a lot of books all the time, and I'm hoping it keeps my brain sharp.
We'll see.
So let's talk a little bit more about the intellectual challenge of baseball. So this is a business that you know. You're obviously familiar as a fan growing up in Baltimore. You're aware of it. You talk to your friends who were team owners. But now you're in it. What have you learned so far that has surprised you about the business of baseball?
Well, first, everybody should remember these are small businesses relative to the businesses that the big buyout firms typically buy. So there's no baseball team that has revenues of a billion dollars or two billion dollars. Earlier today, Carlisle and now is a deal where we're buying a company, a spin out from an automobile supplier. It's about a billion and a half revenue company or something like that. Those
are not considered all that big. We've bought companies in the buyout where we bought a company with Blackstone at the helmet and Freemant for thirty six billion dollars a few years ago. These are big companies and gigantic revenues. When you buy a baseball team, you're buying a team that might have one hundred million, two hundred million.
Dollars in revenue.
So they are small businesses relatively speaking, but their business the get enormous amount attention, So you've got sports writers who are spending all their time to figure out whether you're doing something right or wrong. And the amount of coverage is enormous, So you're under a microscope when you're on a team, and if you say something wrong or do something wrong, everybody's going to criticize you. It's also
hard to please everybody. So what I've learned is people really have a fanatical care for their local team too. You've got to be very careful what you say about the team publicly because everybody's paying attention to everything you say and anything you might do. I also learned that it can be fun. Everybody likes to win in life, and people don't like to lose. And say you win
more than you lose. It's good, but I recognize that the team that my partners and I bought was in pretty good shape when we bought it.
On the ascendancy, how do you think the business of baseball will evolve? You've made a living of very good living investing in things that grow in value. I know that, as you mentioned, this is an asset that is, you know, part of financial purchase and part of philanthropic win, but you do want the overall business to grow. How do you affect that and how do you think it should go?
Well, Baseball was considered the national pasttime for a long time, and then obviously the NFL came along in NBA, and they have taken a lot of TV dollars away from baseball and fans support away from baseball.
Baseball is a.
Sport that has enormous number of ingrained supporters, but it also doesn't have everything you want. For example, right now, probably of the Major League Baseball players, maybe seven or eight percent or African American, and maybe the fan base is four percent African American, so it's relatively small. Because a lot of African American young boys are now playing basketball and football, and that's a sport that is attracting
more people. And one of the ways that baseball has got more African American boys playing is to do things in the youth leagues in parts of cities that they're going to likely have young African American boys playing. But also, as you probably know, in some parts of Latin America, baseball is a religion, and so in the Oriels case, we have a training facility down in the Meinican Republic, and we're not the only ones that do that as well.
So you've got to get people engaged. We have to make sure the fan base is not aging too much. I think the fan base could be younger, and I'd like to try to get the fan base younger in Baltimore. That's all the thing I can focus on. I also want to make sure that people are bringing their children there because they want to educate their young children at baseball and help them kind of feel about baseball as many people my age do because they were brought up
with baseball. Now many young kids are not brought up on baseball as much as they used to be.
It's not easy to do.
Baseball is not as international sport as probably basketball is. The NFL is trying to become a global sport as well, going to Europe and doing other things they're Baseball is played overseas, of course, but it doesn't have the overseas residents yet that I hope it ultimately will have.
David, You've been really good in your career over the last forty years of taking a big idea, hiring a great team, and then executing. If you had that same challenge in baseball, and I think Rob Manford belonged in the Hall of Fame just for the time clock alone. I mean, that was an incredible move for a game. What are two or three things if you were commissioned for a day that you would focus on to make the game livelier.
Well, I'm nervous about answering that question directly because I'm the newest owner in baseball. So for the newest owner of thirty owners to say here's what Baseball should do, it's probably going to get me in trouble. So I only want to say is all the other owners are much more experience, They know much more than I do. It's a diverse group of people in some respects in terms of their backgrounds. I would say Baseball I think wants to appeal to younger people than it does now.
It wants to expand the television audience that it currently has. I think it would like to expand overseas a bit if it can, but that's obviously going to take some time. And I also think it probably like to, you know, find more ways to get the game into people's homes, either through streaming or other kinds of devices that enable people to watch it, even if they don't go to the game.
So, David, I am interested because you've done a fantastic job in identifying great talent again for our audience. It's a very entrepreneur driven. What are some of the qualities you look for when you hire someone young men or women for one of your companies.
Well, you're always looking for somebody who's reasonably intelligent. Don't have to be a geniuses. Genius are hard to manage. Reasonably intelligent, hard working, they have a sense of willing to cooperate with other people. They know how to share the credit. They also people that know how to get along with other people and give orders in a way that isn't offending other people. You want people are ethical as well. You don't want people that are cutting ethical corners.
You want people that other people want to be around. And so I've made a lot of hirings over the years. Some people worked out well, some people didn't work out well. I hired a young man years ago, nice man, and he now is the chairman of the Federal Reserve Board. I didn't realize that Jay Pow would be the chairman of the Federal Reserve Board. I heard another young man one time, and he later became the governor of Virginia, Glenn Younkin. So sometimes you make very good decisions about
young people. Sometimes you know, not everything works out.
You want to hire me future, but I don't know if I could do.
A ten year contract.
You know, when you're hiring people, you really want people that you can work with, that you think that you enjoy talking to and you can listen to them and they will listen to you, and you know you want to have a good working relationship with people.
Is there one particular deal over the last twenty years in sports? They said, boy, if I can have that one back? Which one of that deal?
The greatest sports deal I think financial deal that was ever done was done in the last couple of years when the number of people who were at Guggenheim bought the LA Dodgers. Because they structured in a way where they didn't have to write I think a personal check. I think the purchase price is roughly two point one billion dollars or something like that. They didn't put up that much equity. They put it in a modest amount relative to what it's now worth. So that was one
of the best deals of all time. One of the best deals you could say is also the New York Yankees. I think in nineteen seventy two when CBS sold it for roughly ten million dollars to George Steinbrenner, if I have it correct, I think he put in two hundred and fifty thousand of his own money and he syndicated the rest. And you know, the franchise is probably worth five to seven billion dollars today. And I think, if I got it right, they only put it in two
hundred and fifty thousand initially. Now it's a long time ago, but still it's a pretty good deal. Mm hmm.
Well they've paid some players along the way to a pretty good effect. All right, So we're going to move to the last portion of the interview, which is a rapid fire around, so you can just answer as quickly as when I'll start, and then you can pick up. What would you say is one word to describe your deal making style?
Modest?
What's more important good instincts or data and making big decisions.
Instinct what's the hardest part of deal making the beginning, middle or the clothes?
The clothes for sure.
Who's your dream deal making partner?
Well, the people that bought the Minnesota Timberwolves, they did a pretty good deal, I would say, so I'd like to have those people on my side.
What's the best deal you've ever made?
Best deal I ever made was probably decided to start Carlisle and hiring the people that did the outset. That was the best business thing I ever did.
What's the best piece of advice you've received on deal making?
Always try to remember what the other side needs to do, and so they have to come away with a victory as well. You can't make it to one sided.
What's the worst advice been given?
Trust your own instincts only.
What's your hype song before you go into a big meeting?
My way Frank Sinatra. That's good.
You can only watch one sport for the rest of your life. What sport would it be?
Major League Baseball?
This is a very easy one. What team do you want to see win a championship more than anything?
The Baltimore Orioles Number one, the Duke, Blue Devil's number two.
One fun fact about you that your colleagues will be surprised about hearing about that.
I am a great athlete and that I actually I try not to show this when I played tennis or with other people, but I am actually a spectActor athlete, but I try to hide it from people.
David, it has been our pleasure to have you.
Thank you for congress our success, and thank you for having me.
It's good to be on the same network as you.
Thank you very much. Thank you, dude.
The Deal is a production from Bloomberg Podcasts and Bloomberg Originals. The Deal is hosted by Alex Rodriguez and Jason Kelly. Are producers are Anna Mazarakus, Stacey Wong, and Lizzie Phillip. Original music and engineering by Blake Maples. Our managing editor is David E. Ravella. Our executive producers are Jason Kelly, Brendan Francis Newnham, Jordan Opplinger, Trey Shallowhorn, Kyle Kramer, Andrew Barden,
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