Nov 22, 2021 · 56m · capital-allocators
Todd Boehly - The Next Berkshire Hathaway at Eldridge (Capital Allocators, EP. 223)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Capital Allocators, host Ted Seides interviews Todd Boehly, Co-Founder, Chairman, and CEO of Eldridge, exploring his career evolution from structured credit at Guggenheim to building a multi-billion-dollar permanent capital holding company across sports, media, real estate, and technology.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 15.7% of the talking time here. How this is scored →
Ted as informed peer 4.4 Guest teaching 5.6 Guest disagreement 0.2 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 29:45 Critique of MLB local broadcast fragmentation
Boehly forcefully dismisses the fragmented local media rights structure of MLB teams, pointing out that small markets negotiate without leverage against media conglomerates.
Hardest push from Ted ▶ 49:42 Challenging binary capital allocationTed presses Boehly on how he manages capital reallocation across middle-tier ongoing holdings rather than just feeding winners and cutting losers.
Biggest teaching moment ▶ 25:00 Media rights valuation breakdownBoehly explains the financial mechanics of media rights, demonstrating how long-term broadcast contracts function as investment-grade debt with superior repossession rights.
Ted holds their own ▶ 31:29 Synthesizing cross-sector strategy to credit rootsTed demonstrates deep allocator expertise by instantly synthesizing Boehly's diverse media and gaming investments into a unified structured credit framework.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Early Career: Whitney, CS First Boston, and CBOs | 4 | 5 | 0 | 0 | Ted opens with personal history from 20 years prior and invites Boehly to trace his early career. Boehly details how he transitioned from CS First Boston to Whitney, restructuring distressed CBOs for Mark Walter at Guggenheim. | |
| Lessons from Structured Credit and Guggenheim Transition | 5 | 6 | 0 | 0 | Ted displays technical knowledge of structured credit evolution from CBOs to CDOs. Boehly educates the audience on viewing CLOs as limited-life banks and the low-risk advantages of senior debt. | |
| The Enron Call and Building Institutional Credibility | 3 | 6 | 1 | 0 | Ted asks for key milestones at Guggenheim. Boehly recounts in depth the pivotal 2001 Enron debt analysis that earned Guggenheim full credibility with Sammons and Midland. | |
| Expanding Guggenheim Credit, Mike Milken, and Asset Management | 4 | 5 | 0 | 0 | Boehly outlines how partnering with Mike Milken and pulling back ahead of 2008 covenant-lite debt enabled massive post-crisis buying and growth past $50B in AUM. Ted prompts for scale context. | |
| Founding Eldridge and the Permanent Capital Philosophy | 4 | 5 | 0 | 0 | Ted inquires about the founding vision behind Eldridge. Boehly explains building a permanent capital holding company that shifts between starting and buying businesses based on market valuations. | |
| The Insurance Flywheel, CBAM, and Real Estate | 5 | 6 | 0 | 0 | Ted asks how much of Eldridge centers on asset management tied to Security Benefit's balance sheet. Boehly explains the symbiotic flywheel where insurance liabilities fund asset management strategies like CBAM. | |
| Media Rights, Dodgers Acquisition, and Digital Brand Transition | 4 | 7 | 0 | 0 | Ted asks about the media asset strategy. Boehly delivers a detailed masterclass on treating media rights and live sports as synthetic investment-grade bonds with built-in repossession power. | |
| Sports Betting Evolution, Audience Engagement, and Rights Unbundling | 4 | 7 | 1 | 0 | Ted probes into gaming and sports betting. Boehly contrasts the NFL's unified national rights model against MLB's fragmented, disadvantaged local RSN model. | |
| Technology Investments: Using Portfolio Companies as Test Laboratories | 6 | 5 | 0 | 0 | Ted ties Boehly's tech approach back to his structured credit roots. Boehly describes using operating portfolio companies like Dodger Stadium as testing laboratories for technologies like Truebill and 360-degree replay. | |
| Sourcing Special Situations, Structuring Seniority, and Active Listening | 4 | 5 | 0 | 0 | Ted asks how Eldridge sources uncompetitive, tangential opportunities. Boehly explains being structured without funds or formal committees, acting as neutral capital that trades control for structural seniority. | |
| Balance Sheet Flexibility and Executive Leadership Lessons | 4 | 5 | 0 | 0 | Ted asks about funding structure advantages and leadership lessons. Boehly highlights flexibility on exit horizons, prioritizing the left side of the balance sheet, and maintaining emotional calm during volatility. | |
| Investment Thesis on CAIS and Alternative Asset Distribution | 5 | 6 | 0 | 0 | Ted references a recent conversation with CAIS CEO Matt Brown to frame Boehly's thesis. Boehly breaks down the RIA community's structural need for alternative yield given compressed bond spreads. | |
| Eldridge's Growth Strategy, Capital Allocation, and Digital Infrastructure | 5 | 5 | 1 | 1 | Ted pushes on how Eldridge reallocates between thriving and underperforming holdings. Boehly discusses redeploying over a billion dollars in annual earnings while maintaining geographic discipline. |
Statements from this episode (23)
Boehly: J.H. Whitney operated like Blackstone before Blackstone achieved scale
“I think we were Blackstone before Blackstone became Blackstone. We had private equity, we had hedge funds, we had credit, we had private mezzanine debt, so we had the asset classes covered, and I think we were there in a really interesting time.”
Boehly: J.H. Whitney turned a $2M Kana investment into $170M
“They started at a mid-market buyout shop, and remember they made that investment in Kana Communications, and they put two million dollars into Kana and it became a 170.”
Boehly and Mark Walter restructured $1.3B in distressed Guggenheim CBOs
“So basically we turned three CBOs that represented about a 1,000,000,003 Into trading vehicles that were financed with low cost debt.”
Boehly: CLOs, CBOs, and CDOs are essentially limited-life banks
“And to me, a CLO or a CBO or a CDO Is really a bank with a limited life.”
Boehly: Lending offers a lower-risk look at businesses than equity
“When you're lending money, it's almost like dating. You can break up easily when you get paid off, but you also have a front row seat to understanding businesses, industries, management teams in a lower risk way than if you're at the bottom of the capital stru…”
Boehly: Team advised selling Enron bonds at 90 cents before collapse
“And at the time the Enron bonds were trading right around 88, 90 cents on the dollar, depending on the bond. And we basically made the recommendation to sell the Enron debt, and the CEO of Salmon's at the time said, you guys are wrong.”
Boehly: Freescale buyout introduced covenant-lite debt at seven times leverage
“I remember seeing Freescale get bought out, and that was a big acquisition that was done with a lot of debt, and that was the first time Covenant Lite debt started really creeping into the market. And I think the free scale debt was LIBOR plus two 25, and it w…”
Boehly: Guggenheim bought senior bank debt at 50 cents in 2008
“We ended up buying senior bank debt at 50, 60 cents on the dollar, and literally within Four months, it was back at 85, 90 cents on the dollar.”
Boehly: Eldridge launched by acquiring media and real estate assets from Guggenheim
“But that gave me the opportunity to acquire the media assets, to acquire the real estate businesses, all the stuff that I had been building at Guggenheim that was in its infancy, frankly, because that was not what they wanted and I understood it.”
Boehly: Start businesses when asset prices are high, buy when low
“And to me, starting businesses from scratch, growing them on the ground floor, when prices are really high, it's cheaper to start a business. And from prices are less high, it might be cheaper and less timely to buy a business. So you have to continuously be l…”
Boehly: Eldridge provided financing to assist ARK Invest's equity buyout
“We helped ARK buy out their equity, so we have a financing relationship with ARK.”
Boehly: Dodgers' $2B valuation was justified by investment-grade media rights
“And ultimately, we came to a conclusion that we were very able to pay two billion dollars, because those media rights were effectively an investment grade bond, because you're going to get the offtake from an example, CBS, Fox, Time Warner, all of those partie…”
Boehly: Media rights defaults allow immediate resale without foreclosure delays
“And what I always love about media rights, if you don't get paid, you don't have to foreclose. You just take your rights back and you go distribute them again and you have to worry about the noise over here. But if you're lending money to a company and you don…”
Boehly predicted in 2021 that all states will allow sports gambling
“Is obviously not all the states allow gambling yet, but I think in 10 years time, that will be the case.”
Boehly: Sports broadcasting will shift entirely direct-to-consumer
“And ultimately, it's going to be direct to consumer, because there's no reason to go through MVPDs in order to get to your customer.”
Boehly: Eldridge tested Replay Technologies at Dodger Stadium before Intel sale
“The very first tech investment we made was something called replay technologies. And replay technologies, it's, if you watch home plate, or if you watch the basketball, or if you watch now football, and they give you 360 degree views, that was a technology tha…”
Boehly: Eldridge operates without investment committees or closed-end fund structures
“Not investing out of funds, and we don't have investment committees, and we don't have complexity.”
Boehly requires preferred equity when deal counterparties retain operating control
“And I don't need control as long as I have structural seniority. So I tell everyone, if you want control, all I want is then a preferred. If I have control, then I don't need a preferred, but I don't want to give someone else control and not have structural pr…”
Boehly: Eldridge's model avoids selling winning assets to prove returns
“Our model is such that as long as it's compounding and growing, I don't need to sell my winners in order to prove a point.”
Boehly: Eldridge avoids investing in China without local presence and edge
“And if you don't have a real local presence, it's why, you know, anyone has said, well, why don't you go buy into China right now? China's depressed, or China's stock prices are down. And it's just like, I don't have any edge. And if I don't have an edge, then…”
Boehly: Film risk is eliminated by pre-selling international distribution rights
“Well, the way we started making movies was we would sell off the Foreign rights market by market. So you could go to Germany and you could get a million dollars for Germany and you can get two million for the UK. So if we sold the rights, we knew we could get …”
Boehly: Eldridge generated over $1 billion in earnings in 2020
“Last year we made over a billion dollars.”
Boehly: Evaluate a business's underlying value before its capital structure
“I really get frustrated when people talk about capitalization and cap structure before they talk about the business, right? I really want to understand the business. I want to understand why it's valuable. I want to understand why it's going to continue to be …”