Marc Lasry - Making Bucks in Credit and Sports - [Invest Like the Best, EP.371]

26:58Whether if you were an analyst, you could talk numbers with David and not only could he keep up with you, he'd be better than you. But if you just wanted to talk about how you're going to grow a company, what are we going to do on the marketing side? Here's my vision. You could actually talk to David and you thought you'd be able to communicate with him and he'd understand things. He was one of the first people I ever worked for in this business that was able, in my opinion, to do both. and not only do both at a high level, but at the top. How would you articulate the magic of the Bass family tree?

27:31It seems almost like the Parcells coaching tree or something like this, but in investing, like so many interesting, talented people seem to have emerged in it or from it or can draw lineage back to it. Bonderman, you, Rainwater, lots of others. What made it such a special thing? I think because 30, 35 years ago, when I went to work for them in 1988, they gave me$150 million. I was the largest distress fund in the world. And the reason why you have this lineage from them is there were about four or five families back then who had a lot of capital. so therefore in my opinion they attracted some of the smartest people because they would give you capital and very few people back then had capital i mean imagine if i'm running 150 million i'm the largest fund most people back then were running 50 million 100 million and so you could go to the family.

28:36You could go to a number of other families. And they put a lot of people in business. And because of that, I think that was one of the reasons why they did exceptionally well. If you think about what I'll call the chapter headings of the story of distressed as a style, you were the biggest fund back then. Now it's a much, much bigger asset class. You're one of the big ones. How would you chunk that up into chapters? Just thinking back that whole time, would have been the chapters of distressed investing. Well, I think back then you needed to understand law and you needed to understand numbers because bankruptcies were extremely complicated and bankruptcies would take anywhere between three to six years.

29:19And it was a strict priority. So you were constantly fighting. And then the bankruptcy laws were changed and they were changed to make it better for creditors as opposed to debtors. And that one change ended up making bankruptcies. Instead of being five or six years, you now would have an 18-month to 24-month bankruptcy. Things became more streamlined. And you ended up, I think now you've still got a lot of fighting among different asset classes and different groups, but the timing element has all gotten condensed. I think that's been a big change. Also, the increase in capital has made it worth it for people now to fight.

30:07Whereas back then, because time was an asset that the debtor had, you actually settled a lot more. And even though somebody may have been junior to you, they could hold you up for two years. So it was worth it to work it out. Today, it's not. And so you're litigating more, you're fighting more. It's gotten harder. If I was forcing you to be in the business today of backing new credit firms, what would be the variables that you would care most about in evaluating those new firms? They've got to be really good, obviously, on the credit side. They've got to actually also be very good on the restructuring side so that if there's an issue, you can deal with it.

30:48And I would say you can't be small. You've got to be large. Back then, And people go, well, look, I'm small. I'm nimble. I'm quick. I can do this. I can do that. Today, nimble, quick means nothing. I could destroy you if you're nimble, quick. You need to be large. That's the big difference. What's the funniest story that you can remember from your time with the Clintons in the 90s? Oh, my God. I think it's, I got to meet Putin with President Clinton. And it was at Davos. And I got to meet all these people. and I went, we'll go in the meeting and President Clinton would always introduce me as his economic advisor.

31:29He's meeting with Putin and then I come over and I'm saying hello and so on. And I asked President Clinton, I can do his voice really well. I said to him, sir, is there any way we can get a picture? I don't think I'll ever meet Putin again. And President goes, oh, absolutely. Vladimir, you come over here now. Vladimir, here. We're going to take a picture. Is that all right? And Putin goes, no picture, no picture. And Clinton, without missing a beat, goes, all right, let's hurry up now. It's fascinating to me how people who nobody says no to, they don't really care. They don't really care. And the fact that we're taking this picture with Putin just because I want to have a picture.

32:14And President Clinton is like, yeah, absolutely. We'll do that. You just got to meet, I won't say which country we're in. We're in a country in the Middle East. And President Clinton goes, you see that lamp over there? I go, yes, sir. He goes, I hit that lamp. I think it's one of the ugliest lamps I've ever seen. I was like, okay. Seems okay to me. No, Mark, I'm telling you, it's ugly. I said, okay. We leave. We go to the meeting. I look at him. I'm like, what do you care about the lamp for? He goes, oh, I just want to see if they record everything. And then we come back and the lamp is gone. Right.

32:49So it's just like always, he loved the game. Yeah. He loved the game. He loved meeting everybody. It was always just fascinating being with him. I loved it. I thought for somebody who wasn't born in this country, the fact that I could be with someone who was the ex-president of the United States and travel and do all these things. For me, I just loved it. I loved meeting people. I loved learning from him. He would explain history. He's a brilliant guy. So it was fun. It was a lot of fun. You've had such a varied set of interests and paths and things you've done. You seem very positive and cheery about them all.

33:27What is the through line of the things that tend to get your interest the most? What do they all share in common, if anything? I think part of it, I'm always super curious. I just want to learn. And I think part of that, when I was a kid, my mother, we went, we didn't really have much money. So we had gone to a book fair and my mother bought Funk and Wagnall's encyclopedia, the world encyclopedias. And she said, you need to read this, the whole thing from beginning to end in one year. And you learned a ton of useless information. But it's like all of a sudden you're learning about the world. You're learning about different things, different species.

34:03And I found it fascinating. And so what I love is I actually think in life, and we all see this, people either have the happy gene or they have the miserable gene. No matter what happens in the world, everything's bad or everything's good. To me, everything's good. It's all positive. I just want to keep learning and meeting interesting people and being in interesting situations using my mind, but trying to always learn from somebody. And so I'm always excited to be in new places and try to learn. I'd love to hear a little bit about what you learned of the various trade-offs building a big investing firm.

34:45And I'm curious in lots of dimensions here, like the difference between focus on returns and deals versus assets. Sometimes they go together, sometimes not? And just the trade-offs that you felt coming up against as you built the business over time and why you made the choices that you made. You know, it's a great question. I think when you're going through it for all of us today, these are businesses. They really are. And if I had known what I know today, I probably would have done things differently. It's just back then when you're getting started and you're growing, your focus is really on returns.

35:20It's not on building a firm. It's how do I make someone money? And you're just very, very focused on that. I think in 2012, we were running about$25 billion and I didn't see a lot of distress opportunities. So I ended up returning$12 plus billion to investors. And the reason I did is I said, look, we're not seeing as much on the stress side. We think it'll come back in two or three years. So we're going to return this capital. We're going to sell things. And then we'll come back to you in two or three years to raise money. I was only off by 10 years. Now, would you do that today? Would you return 12 billion of capital and just shrink your firm?

36:06As a business, you wouldn't do that. Back then, focus was, no, I'm just, all I want to do is try to make return. I think you've seen people go down both roads where they've ended up growing their firms and trying to generate returns. And part of the ways they've done that is use more leverage. I think for us, we were always trying to do things on a lever basis. I had a lot of my capital here. In retrospect, should we have tried to grow the firm more? Probably. I think for us, it's fine. We're running about 12, 13 billion. I think we've done it where we were just focused on returns. But the biggest problem I would tell you is we were very focused on, we were a credit shop.

36:45We were distressed. So there wasn't a lot of that for about 10 years. There is now. So we were raising smaller funds because there was less to invest. And we didn't go into other things. Should we have done direct lending? Yes. Should we have done private equity? Yes. There's a lot of things we should have done. At the time, you sort of looked at it and said, yeah, but that's a scale business. I don't want to focus on that. I want to try to generate higher returns. We've done really well, but at the same time, we probably should have grown those other businesses. In the spirit of the period guy taking everyone's picture, say a little bit about team building and culture building in a firm like this, where the product is taking money and giving back more money.

37:32I take the same amount of time in life and with the Bucks. The biggest question you have at your firm and with a team is, do you hire talent or do you hire people who are team players? So here we can hire somebody who's a huge moneymaker, but by doing that, maybe they're not the best team player and causes huge issues within a firm. So what you really want to do is you want to have team players and still, if you're the Bucs, team players who are going to win a championship. Here, you want to have team players who are going to generate good returns. And I think it's hard. I mean, it is. It's a lot easier sometimes to just hire talent and tell everybody deal with it.

38:16I think for us at the firm, we've always made sure that if it's collegial, that we've got to get along, that we work together. So we've got a lot of tenure with the senior folks. if somebody creates issues, they're gone. I always marvel at pension plans and folks who say, well, we see that you've had some turnover and you're like, yes, the reason you have turnover is sometimes you fire people who are not good or sometimes you fire people who are difficult. And somebody will go, yes, but you've had turnover. Go, right. So sometimes you fire people who are not good. Sometimes you fire people who are difficult.

38:54And then next day, So we saw you had turnover. You're like, okay, I give up. It was the same thing with, I would say, the Bucs. The biggest question was, do we go for talent? And you can see that certain teams have tried to do that. Or do you build a team? In sports, somebody's got to be the number one option. Somebody's got to be the number two option. Somebody's number three. You can't have four people who want to be the number one option. It's sort of the same thing in investing. You can't have four people who are deciding what to do. You can have one person who decides what to do, and there's a team and people recommend, but ultimately somebody's got to decide that.

39:35There's got to be a senior portfolio manager, or you can have two if you're running a lot more in assets. But I think for us, we've tried to be more of a team. If you think, not including the bucks, of the most memorable investment you ever made, end to end, can you tell that story? For us, TXU was one of those investments where we started buying the bonds at 40, 50 cents, did a tremendous amount of work. It became a huge position for the firm. We bought a tremendous amount of it. It went all the way up to the 110. and there was one issue that we didn't think was an issue and we should have sold at 110 and we were holding out for 115 and decision came down in the courts and bonds went down from 110 to 50, 60 cents.

40:26And I learned a lot from that, which was try not to always get the last dollar. Our thesis was right in what we were doing and then what ended up happening towards the end is we became an arbitrage firm. And that's not who we are. I think on that, you learn quite a bit from that. You learn quite a bit in 2008. I think 2008 was a great year to learn how to deal with stress, how to deal with things going down, how to understand. We were buying Ford Bank debt. We'd start buying it at 80, 90, and it went all the way down for 30 cents. And we kept buying it all the way down. And part of that, everybody goes, oh yeah, you know, when things go down, double down.

41:10It's not that easy. The reason it's not easy is the market's telling you you're totally wrong. Remember, when you're buying something, somebody's selling it. The person who's selling it thinks it's going lower. As things were going down, the amount of work we kept doing to try to make sure that we were right, is the value of that asset correct? That taught me quite a bit. You had to always refresh what you were thinking and try to look at it in a different way. it's not easy making money, but it's a process. And I think as time goes on, you actually learn how to avoid a lot of mistakes. What do you think of the most important things about building relationships with capital, with the people that give you the money to manage, especially at the multi-billion dollar scale for the big firms out there?

41:54What have you learned about that whole part of the business? It's very much about trust. It's about you constantly telling people who have a lot of capital with you what you think is good, what you think is bad, admitting mistakes when you've done something wrong or you've made a bad investment. I think it becomes really a very strong relationship that you're developing and you're building. And to keep on getting more capital, people have to trust you. People know you're smart. Everyone's smart in the business. Everybody's smart. It's not. I always love, oh, no, he's really smart. Oh, shocking.

42:30oh, let's go give money to the dumb guy. Nobody does that. I've never heard an investor go, I need the dumb guy. That's the guy. That's my guy. Have you ever seen that? No. Everybody's smart. So what separates it? It is trust. It's the fact that you're explaining things to investors. And when you've made a mistake, say, look, we thought this was going to be what it is. It wasn't. And if people trust you, they give you more capital because they believe in what you're doing. So I think that's why you've seen certain firms really grow and others not grow as much. You have a really interesting story in the sense that you started the business with your sister.

43:10You work with your kids. You've made investments with them and on their behalf. I think the Bucks included lots of working with family, which can be beautiful, can be fraught. What have you learned about doing that? Well, because it seems like it's worked very well for you. My partner is my sister. I don't know if that works for everybody. For us, it works extremely well. Sonia and I started this together. And there's just a huge amount of trust. And also, we have different skill sets. So we don't feel like we're competing against each other. And I think when you're partners with a sibling, it's very much about trusting them to do what they do really well and them trusting you to do what you do really well.

43:54and not constantly looking over your shoulder. And I think with Sonia, we've split up the firm in different ways and she's phenomenal what she does. And it's actually worked out very well. But I think part of that is you've got to have a pretty close relationship. We shared a room till we both went to college. I don't think it's because we wanted to. I don't think I was dying to share a room with my sisters, but you do. and you either end up really trusting, liking each other or it goes the other way. You just don't ever want to spend time with each other because of all the difficulties you've gone through.

44:34My daughter works here, but the reason she works here is I think she's, I know I'm biased, but I think she's really talented. My son worked for us when we were with the Bucks and I think he did a phenomenal job. He now works in the commerce department. I think it's hard working with your kids. I think it's hard working with any family member, but you either are able to and there's a level of trust or you're not. When you ask around about you, a common thing you hear over and over is that for the category of people that have achieved the level of financial success, you're amongst the happiest or if not the happiest just by the way you are.

45:09And you said earlier that people are wired optimistic or pessimistic. Is it that simple? Do you think it's just that easy? Because even for optimists, it seems like with lots of financial success can come lots of other maybe problems that are unexpected. Has it always felt easy to you? No, it's not that it's easy. anything intentional you've done? I think I won the lottery. People win the lottery the first day, they're so excited. And then you start hearing about, oh, the only reason somebody wants to be my friend is because I have money. The only reason somebody wants to do this is they want me to help them.

45:40They want me to do this. I always just go back, I won the lottery. What would you rather do? Not win the lottery or win the lottery? And that's actually why I'm happy. I always think back to the fact I won the lottery. And yes, it's complicated by winning the lottery. Yes, it's complicated by having success. And I always try to say to people, you've got a choice. You can either win the lottery or not win. And if you win, you're going to have other issues. But if you don't win the lottery, you also have other issues. So which one do you want? And I think what ends up happening is people forget of how hard you work to try to achieve success.

46:19And then they start focusing on the negatives of that success as opposed to the positives. To me, I started a fund at a time that it was really hard, but then we grew. And I was lucky enough to grow exponentially. And I'm always thankful for that. I think people have too many demons when they do well and are so worried of what is somebody's ulterior motive. To me, it's like, I don't really worry about your motive. I'm happy I'm in that situation. Yes, I get it that at times people wanted to be friends because I owned the basketball team. Better than the alternative. Right. No, but that's exactly it.

47:00But people go, oh, it's so complicated. It's not that complicated. You own a basketball team. Well, we won the championship. President Biden called me. President Obama called me. President Clinton called to congratulate. I thought that was really cool. I mean, I got to go to the White House. We got honored at the White House. And we brought all the players. I thought that was a unique experience. I get excited about the fact every day I won the lottery. What was your favorite moment associated with that championship run? You had to pick a moment. I was lifting the trophy. It's actually funny. Beforehand, the NBA takes you through and says, okay, if you win, the trophy's here.

47:40You're going to lift it up. And here's how we're going to do it. I'm like, okay, great. I don't know how heavy is it. Do you mind if I just practice? It's a little test run. And they go, no, no, no, you can't touch it because then you're going to get your fingerprints on it. And the camera, we don't want to see fingerprints. You're going to do this live. And I'm like, okay, how heavy is it? They're like, well, don't worry about it. I'm like, no, no, it's on national TV. And so you win, you go out there and my whole family's there. And we're so excited because all of a sudden you realize you're going to win and you've got the championship ceremony and you go out.

48:17and I start lifting the trophy really slowly because I have no idea how heavy it is. And finally I'm realized, okay, yeah, I can take it. I can put it over my head because the last thing you ever want to do is drop it. Yes, drop national TV. Oh, look at him. He dropped the trophy. I don't know how people got my phone number. I'm being serious. I mostly got a thousand texts of congratulations. I'm happy for you. I'm like, no, thank you. Who is this? Thank you. Who is this? I'd say a quarter of the text was, who is this? Who is this? and you find it's a friend of yours from 10 years ago or five years ago and you go thank you so much but it was actually a really cool experience to share to be there i remember i went up to a number of the players afterwards and i said let's be honest couldn't have done this without me right and they go no we could have i was like really all right let me try something else See you later.

49:14And then the part that you'll find really funny, because we all see it on TV, is when everybody's popping the champagne. So you've had champagne. Nobody pours champagne on their eyes. It actually is a burning sensation. It really hurts. And that's why you see people with goggles. And I always thought, oh, what wimps. People are going in with goggles. Oh, what, they can't have a little water. Pepper spray. Yeah, but I didn't know it was because it stung. I thought it was just they didn't want to have stuff. And so in the beginning, I don't have my goggles on. I'm like, oh my God, this hurts. Wear the goggles.

49:50What a cool thing to experience. And then you know the part that's funny? So in between the ceremony, they go and they put plastic all over the locker room so that you can go spray. So all of a sudden, there's some professional guy who comes in and tapes up the whole locker room with plastic. Because you walk in, you're like, what the hell just happened here? but that and then as we're going in my daughter we go there's somebody outside who says he wants to come in is he allowed i'm like yeah sure and so we had more people in the locker room than we should have had because people were just asking if they could come in i was like yeah why not it's a great time it was a lot a lot of fun what do you think if you think about a room full of your peers relative to that room your views of the world would be the most divergent or different I think being in a room with NBA owners, people have very, very different views because everybody's made money a different way.

50:47Everybody's got different political beliefs. It's fascinating to be in a room where you've got 30 folks who've done exceptionally well, but in totally different industries. So they view their industry as being the right industry. It's actually very interesting. What would be the most surprising about that NBA room, apart from it just being lots of different ways to make money? No, I think just age is a big factor. You've got three groups of owners. You've got the owners who bought the teams 30 years ago. You've got owners who bought teams 10 years ago, and then you've got owners who bought them today.

51:24And the ones today are much younger, have made money much earlier, much quicker. and then the ones who are much older, who are in their 70s, bought the teams for like$20 million, 15, 50 million, 100 million. So their net worth is actually tied up in the team. And I would say the folks who 10 years ago, teams were expensive, but not stratosphere. Today, a team is three or$4 billion. A football team is six or$7 billion. It's a different level of wealth. It's crazy to think about. No, no, it really is. I couldn't afford a team today. Well, he had a good timing. No, it was good. My kids could. If you think about the pool of money that you've got, and let's say you had to have others manage it, you couldn't do it yourself anymore, as you think through that lineup, do more individual people come to mind that you would want to give it to or firms?

52:19For me, it's people. But that's because - You think that says something interesting? No, it's just being in the business, what you do is you meet a number of people. So to me, someone like David Blitzer is exceptionally talented in what he's doing. Yes, he's at Blackstone. Blackstone's a great firm. But when I think of Blackstone, I think of David. To me, Josh Harris was somebody who, when he was at Apollo, I didn't think of Apollo. I'd give money to Josh. Now, would I give money to Apollo? Yes. But why? Because I think Mark Rowan is super talented. And I think Mark's doing a great job. And then you look at younger individuals, folks that I've given money to.

53:02I've given money to Matt Perlman and his partner, Alex. I think they're the next generation. Folks like Boaz, Weinstein, Jason Mudrick, Steve Ross on the real estate side. And then just different folks that are out there that I think are super talented. I got to meet when we were doing Sculptor. I got to spend more time with Jeff Yass. I thought he was really smart. And would I give his firm money? Yes, because I came away thinking, Jeff is really smart. Ross Stevens at Stonebridge, same thing. I thought he's really smart. Bill Ackman. You bump into people, and it's those people that you want to give money to.

53:50Can you say a word or two more about Matt and Alex and what makes them special in your mind as big up and comers? I think one, they have the ability to do both. And what I mean by that is they're both street smart and book smart. Back to your point. Yeah. It really is. I think Matt and Alex are just really bright guys. Yeah. And you'll never laugh harder. Yeah. But you'll have a great time with Matt and Alex. So they will appeal to both groups of people. You'll be with them and go, wow, really great guys. I want to give them money because I think they're great guys. Or you go, wow, those guys are really freaking smart.

54:28I want to give them money because I think they're freaking smart. The fact that you can do both is why I think they're going to build a great firm. That's why I gave them money. I don't want to just give money to people who I think are just smart. I want to give money to people who I think have both of those qualities because in our business, that's really rare. if you were forced to not be an investor and had to build some other kind of business, what would you build? What would I build? Wow. I'd probably try to build a sports business because I think that's unique and different. I'd like to build a real estate business.

55:00I think things that bring people together is always interesting and try to use the fact that I can deal with people pretty easily. So I'd want to be in a business where you're constantly dealing with folks. Give me a quick more about each of those. So starting with sports, how would you approach sports? Where do you think in the world of sports, there's interesting things to explore today in 2024? I think you want to try to build, where do you think there's going to be growth? So if I was starting out today, I would tell you the biggest growth is going to be probably in women's sports. Why? Because the cost of it is much lower.

55:38And I think you're starting to see that the next generation wants to be more involved in women's sports. So I want to try to buy a bunch of women's teams. You would try to do that in one city if you could. It's just hard to try to do it in the city. I think I love architecture. So I'd love to try to do the real estate side. And I'd love to try to build buildings that I thought are beautiful, but that people would want to either live in or work in. What about international? We talked a lot about the U.S. What do you think is the opportunity or lack thereof outside the U.S.? Oh, I think it's the same thing.

56:17I think Europe is always five, 10 years behind the U.S. I know Europeans hate it when I say that. Look, in Europe right now, the biggest sport is soccer. The biggest thing about European sports is relegation and promotion. So I think it's just hard because there you do have to spend money. And if you don't spend money, you get relegated. So think of that. You don't have a choice of making money. You've got to constantly be spending. So I'd want to be in leagues where you're not doing that, where actually if you spend the money and you spend the time and you create something that you still have that, that it doesn't get relegated.

56:57So I think there's massive opportunities in Europe and in, I would say, in Asia, in sports, because that's very much a sports culture. You tell me, here we have minor league baseball, AA, AAA. How many of those games have you ever gone to? One. No, but in Europe, I mean, in the UK, you've got Premier League, Championship League, League One, League Two. And people are as crazy about the team in League Two as they are about their Premier League team. So it's very, very different. And so because of that, that means people love sports and people are passionate about it. People who have a passion of something, I should be able to create and build something that can take advantage of that.

57:47What does it take to be a good mentor to younger investors? You just have to care. I think part of it is, to me, David Bonderman, I would tell you, is my mentor, that a mentor is somebody who wants you to succeed, whether he succeeds or not. What you find most people are happy for you to succeed as long as it's - With them. Yes. That's not a mentor. That's somebody who's helping you. And that's fine. There's nothing wrong with it. A real mentor is somebody who wants you to do well and is trying to help you do well. That's hard. It's hard for all of us, especially in this business, because this is a zero-sum business.

58:24And if you're lucky enough to find somebody in this business who's doing that, it's rare. If you think about long exposure in credit, equities, sports, what do you think the biggest risks are in the world today for each of those categories? I think it's just geopolitical. It's exogenous events. It's things that you and I can't control. It's bad things happening. and you and I never would have thought we have an airline fund and people would go, what do you think is the worst thing that happens? Like, oh, worst case, maybe it's down 1%, 2%. People are always going to be flying. COVID comes and it drops 95%.

59:06People couldn't go into stadiums. People couldn't do anything. What can happen that will change the way people act? And it's usually negative things. It's not a positive event. It's going to be a negative event. So that's what I worry about. What's the nature of the airline fund? I don't know much about that. Oh, no, we just raised the fund to buy planes. What was the opportunity you saw at the beginning? Well, no, the opportunity is you buy older planes and then you lease them out. And then you're buying a plane at a discount to what it's worth because people really want to just fly on new planes.

59:41and we thought as the airline industry kept on growing, but as travel kept on growing, you were gonna need more planes and people would lease those planes out and we'd make money on that. And if that didn't happen, you could strip the planes out for parts and at the very least, you were gonna make your money on the asset value of the plane and where you made real money was if you could lease them out and then strip it for parts. So it's a great model as long as people are leasing planes when all of a sudden nobody's flying and takes two to three years for things to come back. It had a real impact.

1:00:17I think we were down 75%. We're back up now, but I think that was because of the hard work of the team and what they were able to do, what Sean Foley, who runs that fund, what him and his team were able to do. I mean, it was huge. It's interesting that you had an airline fund, never a private equity fund. what was usually the arbiter between doing something and not doing something at Avenue? What was the framework you would usually apply for yes or no? Well, because in that space, we were always investing in airlines in the distress fund or in planes. So it's, hey, how cheap could you buy an equipment trust certificate?

1:00:59How cheap could you buy this plane? You had people who needed to sell asset and you'd buy that. So So that's sort of why, and then you saw, look, we're seeing huge opportunities there, but we can't do as much in the main fund. Let's go do a specific fund for that. So that's why we would do it. Private equity, you need a team. I mean, it's totally different. What's the fattest pitch that you've ever seen in your life and career in investing? Oh, God. That would be when I was able to buy trade claims. So under bankruptcy, under the old bankruptcy code, there was a convenience class. And a convenience class was, nobody knew what that would be, whether it was claims of 10 ,000 or 25 ,000 or 50 ,000 or 100 ,000 and below.

1:01:45But that convenience class, you always needed a class to vote in favor of a plan. So the way they vote in favor is you gave them 100 cents. So back then, you could buy these claims for 10 cents, 20 cents, 30 cents, 40 cents on a dollar, and you were getting 100 cents. So it was a great, great business. It wasn't scalable, but it was a phenomenal business. How big did it get? It got large. You could invest$25,$50 million,$100 million. And why was no one else doing it? Whenever there's that kind of opportunity, you always wonder. It's too small. It's a lot of work. You make it up in volume. yes, I can go buy a$10 ,000 claim.

1:02:24So, okay, big deal. I bought a 5 ,000. I made 5 ,000. Nobody really cares. But if I go buy a hundred of those, if I go buy 500 of those, yes, but it's a lot of work to go do that. If I could snap any sports franchise in the world into your portfolio, a hundred percent ownership, what would you take? Any sports franchise? Wow. I guess the Knicks. Why? Do you have a fan? No, because I live here in New York. you did the nets yeah it's just it's exhausting it's tiring you got to fly two hours to milwaukee how much would you do that i did it a lot i'd go to probably half the games wow you'd go to la i mean that was actually one of the reasons if i lived in milwaukee i wouldn't have sold but you don't i think if you could own a franchise i think nicks would be great I think Giants or Jets, football teams, actually a great franchise to own.

1:03:19Think about it, you only have 18 games and you're getting paid$10 billion on your media right for that. Pretty good. Yeah, it's pretty good. What do you think the most misunderstood sport is? The business, the game, anything? You've got to be passionate about that. If you're a baseball team owner, there's 81 home games. You should be at those games. Part of what a fan wants to see is that you're involved, that you believe in it. For them to be excited, you need to be excited. So I think it's hard. Baseball is hard just simply because there's so many games. Football is easier because you can go once a week.

1:03:55So it's easier to go to a game. I think hockey is a great sport. You either love it or you don't. I love soccer. I wish there was more scoring. But the purist will tell you, no, a beautiful game is one that's 1-0. I'm like, no, that's a boring game. But you've got all these different things. If you think across all the deals you've done, you've done a lot in lots of different categories. How would you summarize your philosophy of deal making? I would tell you it's always you want to win, but you don't want to hurt the other person. And what I mean by that is I don't think whenever we've negotiated, we've tried to get the last dollar.

1:04:32You want to do a deal that is good for you and ends up being fair. and the simple reason for that is what you find out over time is if you have a really good reputation, it's shocking how many deals come to you. If your reputation is you're just trying to rip somebody's lungs out, yes, you will. You'll be able to do that, but you're not going to have a lot of those deals. It's just hard. In the world of credit, I'm sure you see a lot of lung ripping. No, you do. You do. And you see there's people who do that and you're like, okay, I can't do business with you. You could have made a lot of money in my business by getting control of a company, firing everybody, and liquidating that company for the assets.

1:05:15I never, ever wanted to do that. To me, that had no interest, even though you could make more money. And the reason for that is why do you want to try to do things that are going to hurt others? And yes, you can make more money doing that. But I think in life, if you're smart enough, you can figure out ways where you can make money. It's been such a fun romp through a very interesting and lively career of investing. I always ask the same traditional closing question of everybody. What's the kindest thing that anyone's ever done for you? Oh, that's interesting. I think probably for me, Maybe it was when I went to school being able to get a scholarship because I don't think I could be where I am today without people who helped you get there.

1:06:04The other ones is I want to thank every girl who said yes to me when I was in high school for a date. They were just purely kind. I think people just felt bad. I was not a player or whatever you would describe. I was one of those geeky folks. So for all of you who I was able to take out on a date, thank you. I think that's the first time I've heard that specific answer. I love it. Thanks to all those girls. Oh, it's so true. I was so sad back then. But I think when we look at life, there are people who helped you get to where you are. And I don't even know if you got to meet them. For me to go to Clark on a full scholarship, it was academic.

1:06:48They were the only school who gave me a full scholarship. That's why I went. And it was great. And because of that, I was able to then go to law school and I was able to do what I did. But if I hadn't, I mean, yes, I would have found a way to go to a college or something, but you needed money. I'm not saying it's right or it's fair, but the fact that others helped you do that. There are people who have huge influences on your life that you don't fully appreciate. Well, this has been so much fun. Thank you for your time. No, thank you. If you enjoyed this episode, check out joincolossus.com. There you'll find every episode of this podcast complete with transcripts, show notes, and resources to keep learning.

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1:07:48Thank you.