The Exchanges

Q So you go, you're playing pro baseball, you're playing pro football. How do you get from there to finance?

A I was a voracious reader. That's the introversion part of me is I would just bring books everywhere. In minor league baseball, I'd read books upon books upon books. I remember reading Michael Lewis Liar's Poker and going, oh my gosh, this is what I want to do. I was playing minor league baseball and I said, I love math. I love complex problems. I love the competitive aspect of the trading floor. And so I always would read books. I'd educate myself. When I was in Chicago playing for the bears, my neighbor worked on the Merc, Mercantile Exchange. So I'd go down there with him. And then he started high frequency trading, spread trading, orange juice futures. And so I'd sit there with him. I began to just read everything. I took classes. I was like, I'm going to be a hedge fund manager. And I didn't really know what that was. I always had this feeling that this was something in my soul that was percolating that I wanted to go do. Dallas Cowboys, two years. Chicago Bears, two years. I was still on the sidelines. I got a couple calls. I just felt this calling. I'm 28. I know if I'm 32 going to be an analyst, that's too late. I feel like twenty-eight's probably too late, but maybe I have a chance of getting an analyst job for one of these big private equity firms. And so when I left sports, I just interviewed my butt off, networked, and I ended up getting an analyst job. I was NFL qua…

AI assessment note: “when I left sports, I just interviewed my butt off, networked, and I ended up”

Q You're starting with teams, and there are these adjacencies that could become some type of vertical. Where's your mind today on building that out?

A My mind today is we have a right to win in these core North American sports teams, and we're going to continue to build on that. That is first and foremost, NBA, MLB, MLS, NHL, cross my fingers, NFL. We have a right to win. We have the right capital. We have 17 operating advisors. We built an operating platform. We have a playbook that we can roll out and diagnose the business of sport for these teams to say, here's where you're lacking or here's where you're spiking. Here's how you need to start to think about your digital. TJ Adashola, we have Theo Epstein, who's one of our operating partners. We've built the infrastructure to help these teams grow and build their businesses. So that's our right to win. I spend 80% of my time there. As a firm, that's where we spend 80% of our time. The other bucket, I do think that there's a growth equity business that we can roll off on the side of this, but you know, it's going to take some time here. If we do three to four really solid category killer deals a year in this innovation sector, You wake up in three or four years, and you got a real portfolio there. Most of my time is realizing where you have that right to win and attacking it.

AI assessment note: “The other bucket, I do think that there's a growth equity business”

Q So your sports life has to start back then. How did that take shape through high school and into college?

A When I was five years old, I remember reading about Mickey Mantle and these baseball players, and I had this vision that I wanted to be a professional baseball player. That's when that started. And I have no idea why. It was just something I was like, this is cool. This is what I want to go do. We played organized sports, but we were not in club sports. We were in go survive sports. If it wasn't easy to get to, we didn't do it. And so my brother and I spent all day throwing, we used to wrap up socks with tape and play tape ball. And for me, sports was very much just this go have fun and just play pickup. I was a late bloomer. And so I was always a decent size, but then kids started to pass me up and I was like, oh my gosh, I'm not going to grow. I really devoted myself to school because I just said, I love sports, but I don't know if I'm going to have a shot to do anything in sports. And my sophomore year in high school, I broke my hand and I went from six foot to six, five in a period of six months. I went from 160 pounds to 200 pounds. And I had this big cast on my arm. And so during baseball season, I would throw batting practice with this cast on my left arm. And I got used to like just using my left side to Help my arm come through, and when I got my cast off, I pitched a whole lot. I was always a shortstop, and I remember I hit 90 miles an hour as a sophomore on the radar…

AI assessment note: “my sophomore year in high school, I broke my hand and I went from six foot to six, five”

Q And you go back to the Cardinals. So what was that experience like?

A Amazing highs and lows all wrapped into one year. I get drafted. I sign the liberty of having some money. I think the first thing I did was I went and bought all the socks and underwear that I could ever imagine. That was the coolest thing. I know that sounds weird, but, and my very first full year in pros, I still had this chip on my shoulder mindset of, I will prove everybody wrong. And I ended up Double A, triple A, get called up to the big leagues my very first year, and I hadn't pitched a whole lot. I would show up and pitch at Stanford, and I would just go compete. Didn't have enough time to work on the mechanics. I wasn't a pitcher. I was a thrower. I just was competitive, and I get up to the big leagues, and I can remember the very first moment up there, and I absolutely cracked. Had a full anxiety attack. I'm sitting there, Mark McGuire, Willie McGee, Eric Davis, Bobby Bonilla. These are the guys that idolized growing up and I'm on the same field with them. And I was not prepared for it. Not whatsoever. So it was like this amazing high and low all within one year.

AI assessment note: “Amazing highs and lows all wrapped into one year.”

Q After your baseball career, didn't quite have the success you wanted. At what point in time do you then say, oh, I'll just go play pro football?

A Every year while I was playing pro baseball, Jerry Angelo, who was the GM of the Chicago Bears, would call me. He'd always say, Chad, are you ready to come back to the sport that you love? It's every year. And I'd be like, no, I'm committed to baseball. No, I'm committed to baseball. And I get done with my third full year. So technically four years of baseball, nine, 11 happened. And I remember sitting there going, life is so short. If I were to die tomorrow, what would I regret? And one of my regrets was football. I wanted to play football. I actually couldn't walk into the stadium when I left Stanford. I couldn't walk in and actually go to a game because it just hurt my soul so bad because I just loved it that much. And so that's what's triggered it. I reached out to Scott Boris, who's my agent. I said, I want to go to football. And he said, you're crazy. He said, I'm renegotiating your contract with the St. Louis Cardinals. This is a guaranteed contract. You'll be set up for the rest of your life. You want to do what? He basically said, no way. So I eventually picked up the phone, called some teams. 30 days later, I held the workout. I had 25 teams out at this workout. So it was my own combine. Next day, it was on the ESPN ticker on the bottom line. It says Chad Hutchinson holds a workout. I get a call from Scott Boris. I was like, oh, I guess you're serious. He's like, good…

AI assessment note: “And I get done with my third full year. So technically four years of baseball, nine, 11 happened.”

Q So you go from sourcing all these thousands of small loans to Sixth Street. How'd you spend your time in your year, sir?

A So when I got there, the beauty of what Alan has built is he gives you a ton of freedom because their motto is, and Brian Darcy will appreciate this. They're an omnivorous vehicle that can price any risk. That's how they pitch it. And that's what they've built. They built a business that is mimicking the balance sheet of the special situations group at Goldman Sachs. Pricing any risk up and down the capital structure. Now, obviously with a mindset, but we'll price Through control equity. I was still working on some of these small balance loan deals, but that was starting to dry up. Spreads were compressing considerably. We chased some distress credit down to Puerto Rico. We did some stuff in Italy, but I sat back and was like, oh boy, what am I going to do here? It's not like you're spoon fed. Oh, here's a good business unit. I'd like to say my time at Sixth Street was about just being commercial and realizing that there's a ton of white space out there and we had very flexible capital and I just had to go create thematics that were interesting. And price the risk accordingly. And so I was able to work on a lot of stuff. I worked on 2016 oil and gas cracks. And we went and set up a drill code JV with the legacy down in the Permian Basin. I didn't know anything, but I had connections at the family office there. We ended up building a business within six street. It was an agricul…

AI assessment note: “I worked on 2016 oil and gas cracks. And we went and set up a drill code JV”

Q So you bring in this unique experience of the athlete in professional sports, and then a couple decades in the trenches in finance. How did you plug in to figure out what your role is going to be at Arctos?

A I learned at Sixth Street, you get in where you fit in. Sometimes you just create your own narrative. And so day one, I just said, I had confidence in the foundation that I had built at Sixth Street to know that I can go build themes and invest really well around those themes and build a real business here. I had a network in the sports ecosystem. That was one of the benefits. I actually didn't have to go create a network like I did in agriculture. I knew no farmers, but in sports, I could walk into the DeWitts and St. Louis. Had this pretty robust network already, which was nice, and then I just said, okay, where is the white space? Where can we be helpful? What are the other things, and hearkening back to the Sixth Street, there's a growth equity platform, there's an ag platform, there's an infrastructure platform, there's a BDC. They've built businesses that are just on the adjacencies. Part of what my vision is here is we own the IP The very first time institutions can own the IP of these teams, and there's so many adjacencies that we can go add value to and invest alongside. I'm spending a ton of time there. Last three deals we've done. It's category killer deals where we can bring our teams alongside us, invest in the business to help the flywheel of that business and these teams. It's a perpetuating flywheel here, so it's a business like SeatGeek, ticketing business. The…

AI assessment note: “Sometimes you just create your own narrative. And so day one, I just said”

Q To what extent do you think in this nature versus nurture experience, how much of your ability to get to the pros was tied to your natural talent? And how much of it was coaching along the way and learning the game, learning how to play?

A It's such a great question. So I am six, five to 10, and my father was an amazing athlete. He played basketball and baseball at CU Boulder, and he played for the Philadelphia Phillies. So he was a really good athlete. And so there is a big piece of that, that is just, I was born this way, but I also feel like from The earliest that I can remember this drive to go succeed. Every minute of the day, I would go work on sports. I would just work, work, work. There was part of me that was like, I will outwork everybody here. And so I think it was a unique blend. And there was a lot of naysayers. Everybody said in high school, you can't play three varsity sports. You can't play two sports in college. And then in pros, you can't play two sports in the pros. You can't do it. And so I always felt there's this huge chip on my shoulder that I will prove people wrong.

AI assessment note: “there is a big piece of that, that is just, I was born this way”

Q How do you think about that mentally? I mean, you described earlier this drive and persistence to be great, outwork everybody, and the confidence you get to Stanford barely having played these games that you could go do it. How did you deal with that mental challenge?

A I have built a framework of dealing with it over the last 20 years that I wish I had when I was 1617, 1819, 20. The knowledge around how you actually prepare mentally Is so much more pronounced now than it ever was. My agent hired a guy named Harvey Dorfman who wrote the mental game of baseball. Harvey was on my speed dial. I could call him at any hour that he would pick up. I was already behind. I hadn't set the framework and the rigor around that to actually be mentally trained to go at that level and compete. And so for him, he could only help me so much. Since in my life, I've realized there's a framework That you follow physically, mentally, spiritually, the rigor of that daily that I do now that I wish I did back then.

AI assessment note: “My agent hired a guy named Harvey Dorfman who wrote the mental game of baseball.”

Q What do you think you learned from your experience in baseball that translated over to football?

A I learned just to take the next step forward. Football was very different. It wasn't so mental. It was very reactionary, but I just learned, okay, I got to go every day and just take the next step forward. And what is that next step? Sometimes that is just, I need to go into the weight room and do these lifts. Instead of boiling the ocean in one day and say, oh, I got to be a starting quarterback and do all this. Just take the next step. I think that was the biggest thing I brought to football. And so when I showed up at the Dallas Cowboys, I said, And this is a little bit of my personality is I'm going to start this first year. It's been four years since I played football. And I said, I will start this first year. I just was that focused on it. And it was probably the worst thing that ever happened to me was I ended up starting most of my first year in the NFL, which I should have just held the clipboard for three years. And we would talk about build a foundation before you ready to go. Once again, I hadn't learned enough from baseball to be like, no, no, no. Let me just set the foundation. Let me just learn. I was in the weight room. I didn't leave. I would sleep there. I just said, I will be the starting quarterback. And so that was the drive that sometimes I would say works against me a little bit.

AI assessment note: “I learned just to take the next step forward.”

Q So after some period of time there, you make a move, or a move comes to you. Why don't you describe your thinking in exiting Sixth Street?

A Somewhat professional and somewhat personal here. And middle of COVID, I had been commuting up to the San Francisco, and I have three kids, and I take being a father very seriously. And I realized I was not present. I was working. A lot. I'd have to drive three hours a day, and so COVID happens, and I'm sitting there every day with my kids. I realized I needed to be a better dad. The first part was I wanted to be present with my kids, and commuting every day and doing what I was doing, just, I couldn't do it. When you pick your head up to that and be like, all right, then what's the solution? And it's amazing what life brings back to you when you start asking the questions. And so in the middle of that, saying, all right, well, maybe I need to start looking at something else. You know, what is the next Adventure. What's the next growth time period for me? There was a number of things came up. In the midst of that, one of my good friends buys an NBA team, and he asked me to come run their holding company, because he's like, we want to build this into what Fenway Sports Group has done. We want to build this huge platform. We need you to come help us do that. I started putting together a business plan, started looking at who's in the ecosystem of sport right now, and this was right as Institutional capital is being allowed into the major sports leagues. Well, I'm introduced to Ian…

AI assessment note: “Somewhat professional and somewhat personal here. And middle of COVID, I had been commuting”

Q So as you look out over the next couple of years, what do you have in store?

A I am so fired up at what we're building here on the sports side. I'm confident we'll have another 20 teams in that portfolio. But the thing that I, I'm most proud of and most excited about is just, I am seeing the tangible efforts of the value that we're creating for our teams. That's just business. When you think about sports, sports is hope, sports is community, sports is all these other things that are meaningful to me. That's what sport is. So I can sit in my seat and go, if I can help this be an everlasting infinite enterprise, they'd Is really a thriving business. Ultimately, that impacts everybody in that community. It impacts all those people that are wanting to be professional athletes. Some of these organizations have 500 people. That impacts so many people, and so if I feel like I can make that impact, pay it forward, serve others, obviously great returns for our investors, that's where we're gonna go. So I think what we built here is this amazing sports investment franchise.

AI assessment note: “I'm confident we'll have another 20 teams in that portfolio.”