The Exchanges

Q Um, can I ask you, when we think about, like, Bain itself, when you think about one or two of the elements that made Bain so successful over such a long period of time, what do you think are the one or two elements that made Bain so successful, with reflection?

A Well, I, I think the first element was the idea of taking the consulting skills developed at Bain & Company and applying that to, uh, actually, actually owning the businesses. Bain & Company had been a very successful consulting firm, growing great businesses and great clients globally, and the idea that Bill Bain had was, well, if we could own those companies, we could do that even faster, better, and put, and, and help them with these analytic resources. We're, we're a huge tool for these companies. And it turns out that, you know, that, that philosophy worked really, really well. In fact, most of the industry is adopting that now. They hire Bain and Company McKinsey to do what we do internally at Bain Capital. Um, the second piece, piece, uh, critical piece was alignment with investors. So when Bain Capital was formed, most of the, a lot of the investment came in from the Bain partners and the people themselves. And we've done, we've really held firm to that today. Where, uh, let's say our, our last twelve billion dollar fund over a billion of capital has come from all the people in the company. And that, that is, you know, a hundred times more in terms of percentage than most of the, of the, of the investor firms out there. So, so high alignment with our investors was, was, was a second, a second aspect of it. And then I think, I think a third aspect was, was really, uh, wo…

AI assessment note: “the first element was the idea of taking the consulting skills”

Q know, I'm sitting in the UK, I'm a big Chelsea fan, and Todd is, is getting a lot of scrutiny, um, right now. My question to you is, have you had the similar scrutiny at any point in your ownership of Atlanta, of the Celtics, and, and how did you deal with it, and how would you advise other media, or, sorry, other sports owners, when they are getting slammed?

A Well, that's a great question here, and absolutely, we've had that, uh, uh, it's very, I have a very vivid memory of that, In, I'm trying to go back to what year that was, uh, it was probably three years into our ownership, so, 2006 or 2007, um, one of our star players, Paul Pierce, got hurt, and he was, you know, 30% of the offense, and so we ended up losing, uh, something like over 50 games that year, so we won, like, 30 games out of 82. The media, the fans were calling for us to fire Doc Rivers, to fire Danny Aides, the general manager and the coach, And we had a meeting, and, and we, we looked at the metrics, and, and how the coaches were coaching, and how Danny was doing his job, and we said, these guys are A-plus players, and so they said, there's no way, you know, there's no way we're gonna fire them. Then you look up, a year and a half later, we win the championship. You know, had we, had we fired those guys, we'd be nowhere, um, and those guys went on to be in the, be in the conference finals, and, and they, they're two of the best people in, in the business. So, so I always remember that when there's a big headline, you know, these guys are idiots, fire the coach. Um, and I said to the media, we should, you know, if, if, if we, if we keep losing like this, we should fire the owners, you know, not, not, not the coach and not, not the general manager, because they're, t…

AI assessment note: “absolutely, we've had that, uh, uh, it's very, I have a very vivid memory”

Q So what's the most recommended book? What should I read? What do you love?

A You, you might not love these books, but I, I, I love, my mother was a history teacher and, uh, and so I, I love history books. So one of my favorite ones is John Adams, who was one of the founding fathers of America. And I think he's, he's the unsung, you know, hero of America because He's the guy behind the scenes, a crusty old New England guy that designed the, kind of, the state and democratic system and the constitution. He, he was the brains behind all that. He'd studied all the government civilization things from Greek and, and Locke and, and all the philosophies, and he came up with this checks and balances thing that worked so well for America for so many years. So, so, uh, it's amazing to learn of the intellectual firepower that he had and how he, how he really was fundamental to putting this whole country together.

AI assessment note: “one of my favorite ones is John Adams”

Q You know, growing 40% a year when you're at ten million, in 10 years, that's It's a big, comes out to be a big number. Yeah. It's a big number. On the flip side, we all have made mistakes investing. I certainly have done. Um, tell me, what's been your single biggest, like, investment loss? And, and how did that change your mindset? Because I feel that really changed mine.

A Uh, you, you know, I invested in a company back around the period, maybe a little after Gartner, called PQC. Which was, was physicians quality care. We had done a study and found that there was a market developing where physicians would band together and you could deliver better service and better quality to patients. If you centralize the equipment and the x-ray equipment you needed, if you centralize purchasing, the physicians would do better and the patients would do better and you could schedule that with software use. So the, the, the economy of scale of putting physicians together was, I thought a great, a great idea. We thought a great idea. We did a white paper on it. And we found a group in, uh, in Baltimore to, to invest behind, um, that looked very promising, but it turned out back in the day, whatever that was, 19, not, 92 or 93, they really couldn't work together. They, they, they couldn't, uh, uh, centralize things. The software wasn't there to, to make it happen, and so we, we, it was basically a venture, venture investment gone bad. What I learned from that is, is it was a, it was a great idea, but it was ahead of its time, and it was really hard to execute that idea. In fact, it, 2030, 2030 years later, now there are a large doctor, you know, good collaborates. All, all the things that were in that paper are true. It just took another 20 years, you know, for, f…

AI assessment note: “I invested in a company back around the period, maybe a little after Gartner, called PQC.”

Q and you know, Nirvan Moshe both told me how humble you are, um, and she said it Matt at Bain, but you, you said Bray humbly, you don't know if you're a success yet, um, my question to you is, we will have big breaks in careers, or we hope for them, when you look back at your incredible career, What would you say was your, your really big break?

A Well, clearly my biggest break was, uh, in the summer of, uh, 1981, I applied for a, a summer job at Bain & Company, the consulting firm at the time. There was no Bain Capital at the time, and I did that because I was actually getting it, trying to get a doctorate in economics at Harvard. Uh, I was going to try to be a teacher, so I, but I couldn't afford it, so I, I needed to get a summer job. I looked down the list, and the highest paying job was, was Bain & Company. I didn't even know what it, what it did. Um, So, I did the interviews, and they were, they were great people, and they hired me for the summer, and that was really transformational for me, because I was kind of off the turn of drug. I've been a furniture mover. I've been an accountant, um, and I, I, I, I came to, to, to, to Harvard with, with, with that, um, but the folks at Bain really opened my eyes to business transformation, uh, the latest techniques that back then it was very exciting, the experience curve, gross share matrix, Um, and so I, I, I really had a fantastic summer, and they convinced me, um, to come back and said they would help fund my, my doctoral program later. I could work there for three or four years, and then go back and get a doctorate and just get the MBA, and so I accepted that offer, so that was very transformational for me, and I had two fantastic bosses, uh, who are still mentoring me…

AI assessment note: “clearly my biggest break was, uh, in the summer of, uh, 1981”

Q Okay, so if that's what, like, was critical to the success, if you had a magic wand and you could change a couple of elements that you did, strategic decisions, What would you change that you think negatively impacted the course or trajectory of Bain?

A Oh, I, I, I think course has been, been, uh, uh, a great course. So what I think we maybe could have done is, is apply the model earlier globally. You know, we recognize the value of a global network, and we, and, and I think in, uh, Bain Capital started in 84, and we really didn't take the model globally until 2000 or so, where we opened up in, in, uh, in, in London. So we, we formed an office in London, the whole group over and I, I was involved in that. I got an apartment in London and it was very exciting times. We thought the model of improving companies and building companies would apply to other geographic areas. And it turns out it did. I think we could have done it earlier. And it turns out that that global network is a great competitive advantage because, uh, you can have expertise in, in Europe and industrial chemicals, and we can apply that expertise to a company here in the U S. Or we have our Asian operations, a company in Asia that wants to sell a product in the US. We could, we could help them set up with retailers in the US. So, so the value has been huge of creating a global network. You know, could we have created it earlier? In hindsight, yeah, maybe we could have.

AI assessment note: “So what I think we maybe could have done is, is apply the model earlier globally.”

Q What's the hardest thing about owning a club? What is, like, the single biggest challenge? The politics? The, you name it. The media scrutiny? What's the hardest?

A The, the hardest, the hardest thing is, is, um, you know, your, your duty when you own a club is, is, is, is to try to win a championship. You know, I, I'm a huge fan as well as an owner, and so I love all the players at Atalanta. I love all the players in Celtics, and I get to know these players, you know, personally, and, and, uh, we help each other with various things, and then the general manager comes in and says, look, we can't win the championship unless we have a Uh, a better, a new center, or, uh, you know, we need a striker, and then they have to trade other players or sell other players, and that's very emotional, because these are people, these are people you've been, you've been friends with, and it's, it's hard. Now, the good news is, well, that's a lot in the Southeast, is we take a lot of care in trying to take players' input, and, and, and if they, and we tell them, look, our, our duty is to win here, and, And, and all the players are great, so for example, we traded Al Jefferson, he was a, he was a, uh, a rookie that we drafted, and I really, I love the guy, and I still love him today, but he got traded for Kevin Garnett. Kevin Garnett was one of the best players in the history of the NBA, so we said, we said, Al, you know, we have an opportunity, they want young players, Kevin Garnett wants to come here, so it's an honor for you to be traded for one of the be…

AI assessment note: “they have to trade other players or sell other players, and that's very emotional”

Q high performance teams go above and beyond, when we look at your investing track record, it is one of, you know, the best tracks. Um, and so I wanted to ask, when you think about your investing style today, this could be in sport where it's passion and investment led. It could be purely when you think about investing, but how would you analyze or describe your investing style today?

A Well, investing style today is, it's, it's, it's a, it's always a balancing act between the facts and, you know, coming from, from Bain & Company and Bain Capital, the whole ethos of Bain Capital and Bain & Company is, is fact-based analysis. Out-analyze every, look over every, every style and figure out the markets, figure out the market share, build incredible models. It's just, it's just, it's just a fantastic way of investing, you know, you have really, really deep due diligence, uh, primary customer research. And then the other side of it is, is, is the people side. You know, who were the people running the business? Do you trust them? What, what is their passion? What are they trying to accomplish? You make investment decision, both on the facts, but just as importantly, the people involved that have to drive it forward. And so that's been our style to look at both of those aspects, uh, over time.

AI assessment note: “make investment decision, both on the facts, but just as importantly, the people involved”

Q Yeah, no, I, I totally get that. I, I do have to ask you one final thing, which is like, you know, risk mindset is a tough one that we touched on earlier. How do you analyze your mindset to risk? Having been through all you have done with Bain, with only sports teams, how do you analyze your risk mindset today, and how has it changed over time?

A Well, it's changed, it's changed, it's changed a bit over time. I've always believed in being diversified, and so I'm highly diversified. I don't have a, a large burn rate in my lifestyle, so I have tolerance for more risk because I can feed my family. So where do you spend that risk? I'm looking at things like biotech at this phase of my career. That's highly risky, but that, that can do great things for mankind. So, so our, our family office has done about over 50 biotech investments. And the game there is you, you have to do a diversified portfolio, hopefully two or three of it. My daughter-in-law, fortunately we invested behind her and she formed a company. We're very proud of her. She formed a company that takes stem cells That is, is turning them into pancreatic cells to cure type one diabetes. And at the time when that started, that was a very risky venture six years ago, but it turns out that she's helped develop that product. She was a co-founder of the company and now company Vertex has just bought the company and they're building it up and it looks like it's worked on the first patient. So that's very gratifying to see that you can actually invest and have a good return on your money and then save lives. And so we're skewing our investment towards these riskier areas that can actually be very exciting and Same thing in technology, artificial intelligence, the space w…

AI assessment note: “we're skewing our investment towards these riskier areas that can actually be very exciting”

Q You know, growing 40% a year when you're at ten million, in 10 years, that's It's a big, comes out to be a big number. Yeah. It's a big number. On the flip side, we all have made mistakes investing. I certainly have done. Um, tell me, what's been your single biggest, like, investment loss? And, and how did that change your mindset? Because I feel that really changed mine.

A Uh, you, you know, I invested in a company back around the period, maybe a little after Gartner, called PQC. Which was, was physicians quality care. We had done a study and found that there was a market developing where physicians would band together and you could deliver better service and better quality to patients. If you centralize the equipment and the x-ray equipment you needed, if you centralize purchasing, the physicians would do better and the patients would do better and you could schedule that with software use. So the, the, the economy of scale of putting physicians together was, I thought a great, a great idea. We thought a great idea. We did a white paper on it. And we found a group in, uh, in Baltimore to, to invest behind, um, that looked very promising, but it turned out back in the day, whatever that was, 19, not, 92 or 93, they really couldn't work together. They, they, they couldn't, uh, uh, centralize things. The software wasn't there to, to make it happen, and so we, we, it was basically a venture, venture investment gone bad. What I learned from that is, is it was a, it was a great idea, but it was ahead of its time, and it was really hard to execute that idea. In fact, it, 2030, 2030 years later, now there are a large doctor, you know, good collaborates. All, all the things that were in that paper are true. It just took another 20 years, you know, for, f…

AI assessment note: “What I learned from that is, is it was a, it was a great idea, but it was ahead of its time”

Q heard you say on the GS talk about going from a local business to a mid-market buyout and going global. And, you know, when we look at the scaling to, I think it's a hundred and sixty billion AUM, you'll probably correct me, but Roundabout. Um, a hundred and sixty billion AUM. What are the one or two biggest challenges that one faces in scaling a firm to that proportion?

A It's maintaining the investment discipline and, and the culture of the firm. Um, and the way we've done that, we have an investment committee that, that basically looks at every investment, whether it's an investment in a company in Rhode Island or a company in Malaysia. So we try to maintain that, that discipline and the culture of, of really trying to do good investments and build companies and, and have, have a high performance culture. So that's the thing you've really got to, you know, keep, keep the reins on. You don't want to View yourself as an asset gatherer. Just, you met, if you measure yourself by the amount of money you put out the door, we believe it costs real trouble. You want to measure yourself by the performance and the value that, the value that you create investing that money.

AI assessment note: “It's maintaining the investment discipline and, and the culture of the firm.”

Q Can I ask, with the concentrated power of those ICs, does it not mean that they've become a bottleneck? When you think about the speed of decisions that need to be made, especially in markets today, you'd be meeting every day for your IC, given the size of these vehicles. How do you not be a bottleneck, but have that decision making structure?

A Well, that's a great question. Unfortunately, that involves a lot of late night work and a lot of work at Bain Capital has a huge work ethic. And, uh, and so I, I would honestly say that we've never lost the deal because of an IC bottleneck. We have a culture of being extremely responsive, extremely creative, and if we need to have an IC at, you know, two in the morning on, on, on, uh, Monday morning or Sunday night, we will never have a system. Now, the good news is, Most of those deals that come, they've already been through their own process in Europe or in Asia, so, so they're pretty fully baked, and so it makes it a very efficient process because it's not starting at square one.

AI assessment note: “we've never lost the deal because of an IC bottleneck”

Q What's the hardest thing about owning a club? What is, like, the single biggest challenge? The politics? The, you name it. The media scrutiny? What's the hardest?

A The, the hardest, the hardest thing is, is, um, you know, your, your duty when you own a club is, is, is, is to try to win a championship. You know, I, I'm a huge fan as well as an owner, and so I love all the players at Atalanta. I love all the players in Celtics, and I get to know these players, you know, personally, and, and, uh, we help each other with various things, and then the general manager comes in and says, look, we can't win the championship unless we have a Uh, a better, a new center, or, uh, you know, we need a striker, and then they have to trade other players or sell other players, and that's very emotional, because these are people, these are people you've been, you've been friends with, and it's, it's hard. Now, the good news is, well, that's a lot in the Southeast, is we take a lot of care in trying to take players' input, and, and, and if they, and we tell them, look, our, our duty is to win here, and, And, and all the players are great, so for example, we traded Al Jefferson, he was a, he was a, uh, a rookie that we drafted, and I really, I love the guy, and I still love him today, but he got traded for Kevin Garnett. Kevin Garnett was one of the best players in the history of the NBA, so we said, we said, Al, you know, we have an opportunity, they want young players, Kevin Garnett wants to come here, so it's an honor for you to be traded for one of the be…

AI assessment note: “the hardest part is, you know, having those relationships and then seeing them go”

Q Can I ask, when you look back to, like, those days in your early days, did you, did you always believe that you would be a success? Did you know that, you may not know in how, but did you know that you would be a success?

A Well, it's not, it's not clear that I'm a success yet, so I, I think that's only measured, you know, probably when you're, when you're gone, and it's probably measured by the people who, who, who, who you impacted, but I would say that my, my mother was very fundamental, uh, influence on me, and she always had a, a big belief in me. She, she believed I could do anything, and, and, and that's a great lesson learned. Uh, she gave me a lot of confidence, so I didn't know I'd be successful, but I thought I had a chance, and, and they got me a great education, and, and, uh, And, and she was always supportive to the day she died in everything that I was doing, whether it was Bain Capital or charity events or, or, or anything like that. So it's, it's great to have a mother like that.

AI assessment note: “I didn't know I'd be successful, but I thought I had a chance”

Q I, I love that. Can I ask you, as you, I'm sorry, we'll come back to the performance stuff, um, as you became more and more successful, how did you not Gain an ego. How did you retain humility? I think it's easy to say and difficult to do. It's something I've struggled with over the years. Um, how, how did you do that?

A Well, I, I, you know, look, I have an ego just as anybody else. You can't be successful in this business without an ego. So, so, uh, uh, but, but I would say that my grandfather was a, was a, was a shoemaker. Uh, he made eight dollars a week and, you know, came out and worked on our yard, uh, work with my father. So I grew up in a kind of an Italian family, immigrant family. And I don't, I don't think I've kind of ever left that mentality. They had a depression mentality. The reason I was an accountant was because my father, grandfather said, you have to be an accountant when you go to school, and I didn't like accounting, um, because they were the only people employed during the depression. So every year of my life, uh, probably until they died, they thought the depression was coming. They, they, they thought the depression was right around the corner, but I would be employed because I was an accountant. So When you come from that background, I, I, I think it's, it's, it's, it's hard to, uh, to kind of think you're better than everybody else, and I, I've always viewed the world, it's a world of opportunity, and they're every, every, and Harry told me the same thing. There are so many smart people out there that they're, they're just as smart as we are, but we've just had, we've just had opportunities and serendipity and luck, and I think the Bain culture, the Bain and Company …

AI assessment note: “When you come from that background, I, I, I think it's, it's, it's, it's hard”

Q Steve, what makes an effective IC, and how do you ensure that it feels safe for newer slash younger partners to really share how they feel, to challenge, to champion, to be themselves?

A That's a really great question, and that's something we, we, uh, we really pay a lot of attention to. I think, I think our firm is, is, is really exemplary of that because we foster an active discussion on the key and major issues. The worst thing you can do, uh, in investments is politicize it so that you say, well, I don't want to upset that partner because I want to vote for his investment. So we, we kind of hammer that in, in, in, in the culture. And I, I know one investment that, that I brought to committee that I thought we were going to do, I won't mention the name of it, But, uh, one of the, one of the, uh, actually one of the, one of the principal analysts in the room raised a question about how we were looking at, at the valuation, and that if you looked at it on a cash EPS basis versus the EPS basis, it would be shaky, and he was compelling enough that we, we basically shut the whole investment down, and I thought when I walked into that thing, there was about a 90% chance we were going to do it, and we didn't do it, and then, and that, that upset a few people on the team. I was on that team because it upset me, but, but, uh, But actually, it turned out to be a very good decision, and we use that as an example to say, you know, the, the, the, the, uh, speaking up and, and, and saying the right thing, that's what we want you to do, and we want decision. We, we also do…

AI assessment note: “we use that as an example to say, you know... speaking up... that's what we want”

Q Does that focus not change with macro cycles and sentiment? And what I mean by that is like, now we're seeing a much bigger focus on profitability, capital efficiency within organizations, And less of a concern about your level of growth rate. Does that hold true across market cycles that focus on growth or is it cyclical?

A It does hold true. Uh, so, so I think the trend you're talking about is we're moving, people are moving away for, for companies will require losses of big capital investment losses for, you know, seven or 10 years, Allah, the, the Amazon model, the weight of money model, they're moving away from that. Uh, but Once you move away from that, you still want a company that's going to grow the top line, because that's where the value's created, that you, you, you want a long-term grower. So I think table stakes now are going to be companies have to have a clear plan for profitability. What profitability really communicates is, is that you have a good product that someone is willing to give you a fair profit on. But then within that, the ones that are going to win are the ones that can grow for a long period of time.

AI assessment note: “It does hold true. Uh, so, so I think the trend you're talking about”

Q heard you say on the GS talk about going from a local business to a mid-market buyout and going global. And, you know, when we look at the scaling to, I think it's a hundred and sixty billion AUM, you'll probably correct me, but Roundabout. Um, a hundred and sixty billion AUM. What are the one or two biggest challenges that one faces in scaling a firm to that proportion?

A It's maintaining the investment discipline and, and the culture of the firm. Um, and the way we've done that, we have an investment committee that, that basically looks at every investment, whether it's an investment in a company in Rhode Island or a company in Malaysia. So we try to maintain that, that discipline and the culture of, of really trying to do good investments and build companies and, and have, have a high performance culture. So that's the thing you've really got to, you know, keep, keep the reins on. You don't want to View yourself as an asset gatherer. Just, you met, if you measure yourself by the amount of money you put out the door, we believe it costs real trouble. You want to measure yourself by the performance and the value that, the value that you create investing that money.

AI assessment note: “It's maintaining the investment discipline and, and the culture of the firm.”

Q Speaking of the owners, you know, we've seen over the last few years, this incredible rise of bunny USP firms and just US owners, uh, into European sports organizations and franchises. Can you just help me understand, Stephen? I'm probably very naive here. Why is so much money pouring in from the U.S., both PE firms and individuals, over the last few years?

A I think they recognized, uh, uh, it, it, it's been probably over the last 10 years that they recognized the growth potential. I would call it the globalization of sports. So, so, so the new media, uh, Instagram, Twitter, uh, the ability to stream on demand, anything now with, with streaming covers out there like Delta Tray that we've invested into. It's changed the whole landscape so that a fan can be a global fan. It used to measure fan counts in the hundreds of thousands or millions, and now they can be measured in hundreds of millions. You know, Chelsea has four or five hundred million, Manchester United, four or five hundred million fans out there. And you're especially seeing that in the global sports, like basketball and, and, and you would call it football, slash, slash soccer. And that dynamic, you know, has led to more revenues, giant increases in media contracts. And more value and, and those investment firms have invested behind that successfully. Secondly, there's been a dynamic with so much money coming into the system, all what I'll call, uh, artwork type assets, you know, scarce assets. Many scarce assets have, have really going up in value because, because there's a lot of money out there chasing those scarce assets. So, so component of the value of sports teams have been the great performance and, and the technology that's allowed it to have a bigger fan base. …

AI assessment note: “they recognized the growth potential. I would call it the globalization of sports.”

Q it's like any business, especially at the creator economy of which I'm in, but, like, the top one percent earn 99% of the money. Do we not see that in Sporza, which is, like, the globalization is concentrated fan bases, where Lewis Hamilton left one, Chelsea, Real Madrid, Barcelona, and the wealth really concentrates like never before. Do you think it's like that, or is it a more even distribution?

A I think it's an issue, and what the organizations, the leagues have to do Is really come in with, and they are doing this, come in with a set of rules to, to have competitive balance. So the real issue is competitive balance. Uh, you're, you're, you're gonna get that concentration if you have no competitive balance, and, and eventually that, I think, diminish the value of all the teams. Because, um, you know, no one wants to see one team win everything, you know, every year. Um, so you, so you've gotta have some competitive balance, and so they're putting in financial fair play rules in, in, in football. It's got, that's going the right direction. Uh, the NBA has a fantastic partnership with the players, where the players are, are guaranteed half the revenues, and the owners get half the revenues. Uh, that's been a very successful deal, because, because every, every time we increase revenues, the players benefit by that, so we've had very little strikes, and, and we've had, we've had, uh, uh, pretty good competitive, competitive balance, but that's the key for these leagues, for the long-term value, is to come up with systems that are fair to players, and, and, and, and fair to fans, That can allow every team to compete.

AI assessment note: “I think it's an issue, and what the organizations, the leagues have to do”

Q So what's the most recommended book? What should I read? What do you love?

A You, you might not love these books, but I, I, I love, my mother was a history teacher and, uh, and so I, I love history books. So one of my favorite ones is John Adams, who was one of the founding fathers of America. And I think he's, he's the unsung, you know, hero of America because He's the guy behind the scenes, a crusty old New England guy that designed the, kind of, the state and democratic system and the constitution. He, he was the brains behind all that. He'd studied all the government civilization things from Greek and, and Locke and, and all the philosophies, and he came up with this checks and balances thing that worked so well for America for so many years. So, so, uh, it's amazing to learn of the intellectual firepower that he had and how he, how he really was fundamental to putting this whole country together.

AI assessment note: “I love history books. So one of my favorite ones is John Adams”

Q I love that, and I haven't had that as a suggestion before. It's by McCullough. December, 20, 23. Will we be better or worse, macro-wise, than we are today?

A You know, I'm an optimist, so I think we're gonna be better. Um, I could be wrong, but I think we're gonna be better. Um, uh, hopefully, uh, we'll get through, we've, we've had kind of the tech bubble set in, and people are going back to basics. Employment in the U.S. is, is at a good pace right now. Inflation is down. The big wild card is, is going to be the, the Russia-Ukraine situation. Does that spin out of control? The polarization that's happening between nations, but hopefully we're going to move. We were hearing, we're hearing better news out of China. Hopefully we'll move a better place. So I'd say we're going to be marginally better. Not out of the woods, but marginally better.

AI assessment note: “So I'd say we're going to be marginally better.”

Q I'm ashamed to say I did not know it was a Saatchi and Saatchi business. My mother's first job was at Saatchi and Saatchi, so I hope she's not listening. Um, but, uh, my question to you is how did that shape your, your mindset on investing?

A Well, it really taught me that, uh, um, there's huge value to investing in companies that have a growth path. Our thesis in investing in DeGartner was that Technology was gonna get more and more complicated. The people would need more information before they bought computers and they bought software. And at the time, the company was mainly selling to a few companies in, in, in the New York or, you know, England area. We thought it could expand globally. We thought it should have thousands of Salesforce people instead of the few, few, uh, 25 that they had. And so that, that thesis panned out. There's a misnomer about private equity because I think way back when in this, when it first started in the seventies, it wasn't called private equity. It was called leverage buyouts. Um, a lot of those deals were taking companies that had, ah, generous pension programs and were too, way too, way too fat companies that had jets and cost reducing, and so there was a mental model that, that, that, that, that's what private equity was. Actually, it's, it's really hard to do that because companies are well run today and have been well run, you know, since, since the eighties, and really where you, where you do well in private equities, you identify growth opportunities. So, Bain Capital has been highly focused, you know, for the last three years on, on, can we build and grow companies, and can …

AI assessment note: “it really taught me that, uh, um, there's huge value to investing in companies”

Q love the sports analogy. It takes me brilliantly to, you know, bluntly this very important part of sport in your life. When we think about, you know, owning sports teams, and then obviously, you know, business building, as we've discussed with Bain, how does it compare when you think about building a sports team in a franchise? And compare that to building a business. Like what's the same? What's different?

A There's a lot of similarities. One of the similarities is we went into the Celtics. We had a strategic plan and it had three components as, as you pointed out before, there's always three components in consulting. And the first component was fundamental to build a championship team because Boston wants championships and that's how you, how you drive engagement. The second was to be, it was a community asset and it was to be the best community asset Uh, that it could be, and so we formed the Boston Celtic Shamrock Foundation and, uh, used the power of sports to actually give millions of dollars to charities and, and kids things, and that, that's created a virtuous, uh, circle because our fans love the fact that we're supporting, uh, kids, kids that need support, and, uh, and the, and the players go out and go to the hospitals and go to the educational institutions and put in technology centers so they get highly involved. And then the third component of, of the plan Was to make it a better fan experience. When we, uh, purchased the, the club, they really didn't have even emails, you know, fan engagement, uh, there was no internet to speak of at that point, but, uh, they weren't engaged with the fans, so we, we wanted to make it a much better fan experience, so we brought in music, we brought in, uh, uh, dancing teams, all those kinds of things to make it a better experience for …

AI assessment note: “that's very similar to the investment process where you say there's, there's two or three things”

Q Did she impact how you think about parenting with your children?

A Yeah, absolutely. Both my parents did. And, and, uh, uh, you know, it's a crazy business of investing, as you know, as an investor, things don't always don't go to plan and you have to be certain places and be all over the place. But I think the major thing I try to do is, is, is get back on the weekends at least. And, and I'm, I'm most proud of the fact that I think I've been to almost every 99% of, uh, my, my children, four children's basketball games. Soccer games, hockey games, school plays. Um, I've, I've a great track record of that, and I've actually coached over a hundred teams that they've been on. So, so you really have to make it, you know, a priority and be there. I think I could have done better looking back because you get wrapped up in this crazy deal world, but, uh, but, but I've tried very hard.

AI assessment note: “Yeah, absolutely. Both my parents did.”

Q love the sports analogy. It takes me brilliantly to, you know, bluntly this very important part of sport in your life. When we think about, you know, owning sports teams, and then obviously, you know, business building, as we've discussed with Bain, how does it compare when you think about building a sports team in a franchise? And compare that to building a business. Like what's the same? What's different?

A There's a lot of similarities. One of the similarities is we went into the Celtics. We had a strategic plan and it had three components as, as you pointed out before, there's always three components in consulting. And the first component was fundamental to build a championship team because Boston wants championships and that's how you, how you drive engagement. The second was to be, it was a community asset and it was to be the best community asset Uh, that it could be, and so we formed the Boston Celtic Shamrock Foundation and, uh, used the power of sports to actually give millions of dollars to charities and, and kids things, and that, that's created a virtuous, uh, circle because our fans love the fact that we're supporting, uh, kids, kids that need support, and, uh, and the, and the players go out and go to the hospitals and go to the educational institutions and put in technology centers so they get highly involved. And then the third component of, of the plan Was to make it a better fan experience. When we, uh, purchased the, the club, they really didn't have even emails, you know, fan engagement, uh, there was no internet to speak of at that point, but, uh, they weren't engaged with the fans, so we, we wanted to make it a much better fan experience, so we brought in music, we brought in, uh, uh, dancing teams, all those kinds of things to make it a better experience for …

AI assessment note: “There's a lot of similarities. One of the similarities is we went into the Celtics.”

Q I love that, and I haven't had that as a suggestion before. It's by McCullough. December, 20, 23. Will we be better or worse, macro-wise, than we are today?

A You know, I'm an optimist, so I think we're gonna be better. Um, I could be wrong, but I think we're gonna be better. Um, uh, hopefully, uh, we'll get through, we've, we've had kind of the tech bubble set in, and people are going back to basics. Employment in the U.S. is, is at a good pace right now. Inflation is down. The big wild card is, is going to be the, the Russia-Ukraine situation. Does that spin out of control? The polarization that's happening between nations, but hopefully we're going to move. We were hearing, we're hearing better news out of China. Hopefully we'll move a better place. So I'd say we're going to be marginally better. Not out of the woods, but marginally better.

AI assessment note: “I'm an optimist, so I think we're gonna be better.”

Q You look in fine shape, my friend. Honestly, for a five-year plan, what would you like?

A I'll always be affiliated in some way with, with, with Bain Capital, helping Bain Capital. Uh, I'm going to continue to build the, the sports group, which I, which I love, and then, uh, continue to invest in these areas like biotech and artificial intelligence and, and, and space, um, on a venture basis. Where we can create great companies, but also, you know, leave, leave a lasting impact. So, I, I don't think there's ever a real point where, where I'm gonna, um, I wish I was better at golf, but, but I'm not gonna become a golf pro anytime soon. So, so I, I really am curious about all these areas and love working with the people and developing the next generation. Um, there's a concept that Doc Rivers pioneered that the Celtics called, I don't know if you've heard of it, it's called Ubuntu. And we won the championship with the Ubuntu culture in 2008. Ubuntu is, is an African word that means that you, you are only here because other people have helped you get there. And so you need to help other people to get there. So we, we are all part of a system and we only succeed or fail based on how others help us. And so, and so I, I think our investing, we can have a win-win. Our investing can, can actually help a lot of people. It can be fun. To matter those people and leave something of lasting impact. And that's what we want to do at bank capital. And that's what I'd like to do wit…

AI assessment note: “continue to build the, the sports group... continue to invest in these areas”

Q ring true? And what I mean by that is like, you know, one of my mentors is a man called Mark Evans. He once told me, you're never wrong to do the right thing. So whenever I have a decision, I always think, what's the right thing? And even if it's hard, I'll do it. Are there any one or two takeaways that you really remember from Harry and Mike?

A The main thing I remember from both of them is, is, is they were, they were, um, critical, but not judgmental. So they had that same quality of, I knew they wanted me to succeed. And even when I, uh, messed some things up, you know, they would, they would, they would kind of, kind of criticize in the right way, saying, you know, you meant to do this, but you did this and, And, ah, just their, the way about them, Mike D'Amato always used to say, well, you could be perceived as, as being too aggressive of a certain thing. So, it wasn't that you really were too aggressive, you were perceived. Ah, he used the word perceived a lot. Um, so, so it was more their, their, their, their kind of confidence in you and the way they, they handled, ah, making you a better person and, and, and, and really giving you that constructive feedback.

AI assessment note: “they were, um, critical, but not judgmental.”

Q it's like any business, especially at the creator economy of which I'm in, but, like, the top one percent earn 99% of the money. Do we not see that in Sporza, which is, like, the globalization is concentrated fan bases, where Lewis Hamilton left one, Chelsea, Real Madrid, Barcelona, and the wealth really concentrates like never before. Do you think it's like that, or is it a more even distribution?

A I think it's an issue, and what the organizations, the leagues have to do Is really come in with, and they are doing this, come in with a set of rules to, to have competitive balance. So the real issue is competitive balance. Uh, you're, you're, you're gonna get that concentration if you have no competitive balance, and, and eventually that, I think, diminish the value of all the teams. Because, um, you know, no one wants to see one team win everything, you know, every year. Um, so you, so you've gotta have some competitive balance, and so they're putting in financial fair play rules in, in, in football. It's got, that's going the right direction. Uh, the NBA has a fantastic partnership with the players, where the players are, are guaranteed half the revenues, and the owners get half the revenues. Uh, that's been a very successful deal, because, because every, every time we increase revenues, the players benefit by that, so we've had very little strikes, and, and we've had, we've had, uh, uh, pretty good competitive, competitive balance, but that's the key for these leagues, for the long-term value, is to come up with systems that are fair to players, and, and, and, and fair to fans, That can allow every team to compete.

AI assessment note: “you're gonna get that concentration if you have no competitive balance”