This fascinating discussion features a conversation between Jason Kelly, Alex Rodriguez, and David Rubenstein, focusing on Rubenstein's acquisition of the Baltimore Orioles. Known as a Renaissance man, Rubenstein is the co-founder of The Carlyle Group and has made significant impacts in private equity and philanthropy. Now, he takes on the challenge of owning and revitalizing the Baltimore Orioles, a franchise rich in history and significance to Baltimore city.

The dialogue explores Rubenstein's motivations behind purchasing the Orioles and how he plans to integrate community building with business acumen. Despite a convoluted purchasing journey, Rubenstein shares insight into the positive reception from the Baltimore community and the responsibilities of owning a major sports team. His approaches to investing in the city's vibrancy reflect his broader philanthropic endeavors in America.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. philanthropy [fɪˈlænθrəpi] - (noun) - The act of donating money, goods, time, or effort to support a charitable cause. - Synonyms: (charity, benevolence, generosity)

He's also donated tens of millions of dollars to philanthropy.

2. acumen [ˈækjʊmən] - (noun) - The ability to make good judgments and quick decisions, typically in a particular domain. - Synonyms: (shrewdness, astuteness, discernment)

But I had now regained my baseball acumen and interest, and I am now the principal owner of the control partner, they call it in baseball, of the Baltimore Orioles baseball team.

3. convoluted [ˈkɒnvəˌluːtɪd] - (adjective) - Extremely complex and difficult to follow. - Synonyms: (complicated, intricate, tangled)

Let's just dive into this deal. How does this come to you? What's the process by which you end up owning this team? A little convoluted.

4. consortium [kənˈsɔːrtiəm] - (noun) - An association, typically of several companies or groups, for a shared purpose. - Synonyms: (association, consortium, alliance)

Talk to us about putting this consortium of investors together

5. ascendancy [əˈsendənsi] - (noun) - Occupation of a position of dominant power or influence. - Synonyms: (dominance, superiority, primacy)

But I recognize that the team that my partners and I bought was in pretty good shape when we bought it on the ascendancy.

6. revitalize [riːˈvaɪtəlaɪz] - (verb) - To imbue something with new life and vitality. - Synonyms: (renew, rejuvenate, revivify)

But what I'm trying to do is say, let's revitalize Baltimore

7. hieroglyphics [ˌhaɪərəˈɡlɪfɪks] - (noun) - A system of writing using ancient symbols, often used metaphorically to describe complex or difficult to understand writing. - Synonyms: (symbols, scripts, cuneiform)

He has what they call saber metrics down cold. What was described as moneyball years ago is hieroglyphics compared to what it is today.

8. custodian [kʌˈstoʊdiən] - (noun) - A person who has responsibility for or looks after something. - Synonyms: (guardian, caretaker, steward)

I recognize that, like anyone who's an owner of a team, you're really a temporary custodian because somebody's going to own it after you.

9. fabric [ˈfæbrɪk] - (noun) - The underlying structure or framework of something. - Synonyms: (structure, framework, foundation)

And when the Colts left years ago to go to Indianapolis, that also tore away some of the fabric of Baltimore.

10. pivotal [ˈpɪvətl] - (adjective) - Of crucial importance in relation to the development or success of something else. - Synonyms: (crucial, critical, essential)

Well, you also were keyed in pretty early to the idea, early in the Carlyle journey, especially to the power of showing up.

Why Wall Street Giant David Rubenstein Bought the Baltimore Orioles

I'm Jason Kelly. You're Alex Rodriguez. We're here in New York and this episode. David Rubenstein, he is the co chairman of the Carlo group, which he founded back in 1987. He is a television host. You've been on his television show on Bloomberg television, but that's not why we're talking to him today. He is also the relatively new owner of the Baltimore Orioles, a franchise you're very familiar with. Yeah, David Rubenstein, he's a Renaissance man. I mean, he's master dart of building a private equity giant. He's also donated tens of millions of dollars to philanthropy. And now his latest challenge, the Baltimores, which is one of the true five or six iconic franchises in sports. They have the number one farm system. Camden Yard is one of my favorite parks, not only to watch a game, but more importantly, to play a game, but it's one of the great sports venues around the world. Jason, I still remember in 1983 when the Baltimore Orioles beat the Phillies and my hero, Kyle Ripken, caught a line drive for the last out of the Baltimores championship. And I can't wait to see more baseball in that stadium.

David has talked about this deal as being unique for him because it's essentially half investment, half philanthropy. He's going to talk a lot about the community building aspect of what it means to be an owner, something you certainly can understand from a lot of different perspectives. So much to get into with the great David Rubenstein that's coming up on the deal.

All right, so we like to start every one of these shows by having the guests introduce themselves and what they do. I'm David Rubenstein. I am the chairman of Carlisle Group, a firm I started in 1987 with a few other people. And I do some other things. Things. But I guess that's probably what I do mostly.

You also have recently gotten involved in the game of baseball. That's correct. Despite my appearance as a little league all star shortstop. Didn't think it would go very far. But I had now regained my baseball acumen and interest, and I am now the principal owner of the control partner, they call it in baseball, of the Baltimore Orioles baseball team. I grew up in Baltimore, and after 50 years of not really focusing on Baltimore and the Orioles, I'm now refocusing on it. And boy, are you ever.

Let's just dive into this deal. How does this come to you? What's the process by which you end up owning this team? A little convoluted. Like everything in the big world of sports, the team has been owned for 30 years by the Angelos family. They bought it out of bankruptcy in 1991 or 1992. And let me just explain what happened. St. Louis Browns, where a team in St. Louis, they weren't doing well there. They went to Baltimore, and Baltimore group of people bought it for $2 million. $2 million. That's in 1954. Edward Bennett Williams bought it when the family wanted to sell it, that owned it, the Huffburger family. He bought it in 1981 for roughly $12 million. When he passed away, his estate sold it to Eli Jacobs, a buyout person in New York, for roughly $75 million. And then when that went bankrupt, they went into bankruptcy court and was bought in bankruptcy court for a net price of roughly $155 million by a lawyer in Baltimore named Peter Angelos. He did have some other Baltimore people come in with him. Most famously, I would say Tom Clancy, who was a very author, lived in Baltimore, and Pam Shriver, among others. But he owned it and was the control partner for a long time.

His health went south, and his son began running it about five years ago, his son John. I don't know exactly why they decided to entertain an offer, but I had thought they might be interested in selling it. I was told by some people in Baltimore that maybe they'd be receptive to somebody from Baltimore buying it.

And so I actually teamed up with Ted, the Oensis, who owns the Washington caps and Washington Wizards. And he said to me correctly, he knows more about sports than I did, but why don't we team up? I would invest in monumental, and then monumental would buy the Orioles. And he led the negotiations with John Angelos about a year before we actually consummated the deal. That actually happened, and then it didn't work out. They couldn't reach an agreement, and so it fell apart. Last summer, John Angelos, who was renting a house in Nantucket, came to see me in my home in Antarget, and he said, why didn't I buy a minority interest in the team if I liked the Orioles and didn't work out through monumental, I can buy a minority stake. And I went back to him and said, well, maybe if I could buy a stake that would get me to control at some point I'd be much more interested.

He came back and said, okay, but it doesn't have to be over three or four years, which is what I anticipated. He said, maybe we can buy control sooner. And so I decided to move forward with it. I called somebody who had once said to me, he'd like to buy the oils with me, and it's a guy in New York named Mike Arrighetti, who is really the CEO of Aries, a very excellent private credit firm, private equity as well. I called him and said there may be a chance to buy the euros. Would you like to come in with me? And he said yes. And then together we negotiated for six or nine months or so with John Angelos.

I didnt think the deal was going to happen at one point because in Christmas when we were negotiating the deal, it blew up a bit. It wasnt looked like it was going to happen. I maybe lost my coup and I walked away from the deal saying, this is not going to happen. Im not happy. Then for about a week it was nowhere. But then deals always come back, it seems. And this one came back and we negotiated the deal and we closed it, the first part of it right at the beginning of the season, right before opening day. And then the second part of the deal was we bought 40% at the beginning and the remaining 60% we just closed on it.

That's incredible. So, I mean, you go to Duke undergrad, then you get your law degree of Chicago, you run what I call the Yankees of private equity in Carlisle, one of the most amazing companies that you started, manage almost half a trillion dollars today, and you say, well, I'm not good enough to make a major league baseball team, but I'm rich enough now to buy one. How does that conversation go, David, when you're like, all right, I am ready, because this is a big move for you.

It's always complicated to figure out what you want to do with your life when you're past running something. So I gave up at the age of 69. I gave up being the co CEO of Carlisle and I became the co executive chair, then the co chair. And I have a family office that I invest through called declaration, and I chair seven nonprofit boards. So like the Kennedy center or the Library of Congress Board, National Gallery of Art Board, University Chicago Board and council and foreign Relations and so forth. So that takes time. And then I have, I try to do one book every two years, and then I try to do tv shows on a place called Bloomberg. So I do a couple of tv shows there and some on PBS. So I have a lot of things to do. And I'm not sure why I thought at my current age, an age that I never thought I'd live to be this old, that I would go back and buy a baseball team.

But the reason I really did it was not because I thought, I'm going to make more money. And it's going to make me a happier person. I having more money. That wasn't it. I just grew up in Baltimore. I got a public education there, public school education. My parents were born there, they were raised there, they were married there. They lived their whole entire life pretty much there until they retired and they're buried there. And I realized I won't no doubt be buried in Baltimore as well. But I thought I hadn't really done enough for Baltimore compared to what I've done in other philanthropic areas. And I thought if the ownership was ready to be sold and the current owners were ready to sell it, I would maybe come back and bring in some other people in it and try to infuse some energy into this, into the team.

You come into this at a moment where you've seen a number of your friends and peers, and you and I have talked about this over the years. You've seen them get into sports in various forms and fashions, whether it's Tony Ressler, Steve Paliuca or Mark Lazari, many others. What did you hear from them that made you either initially disinterested or interested? Like, what did you take from those conversations?

Initially, I had opportunities to buy sports teams as well. In fact, the Wizards and the Caps owned by Abe Poland. Abe was a friend of mine. He asked me to consider buying it well before he actually sold it. I didn't do that or by any other team for this reason. I was running a large private equity firm with my partner, who was the co CEO, and I thought, if I say to my investors who are giving me money to try to get a good rate of return, by the way, I'm not spending that much time on your investments. I got a sports team I'm spending time on. I thought they would criticize me and I thought they would say, you're not focused on what we're giving you money for. But as I saw some of my colleagues in private equity who had the same dilemma I had, buy sports teams, the rates of return didn't go down and they actually made money on the sports teams. I said, maybe I was wrong. Maybe you can do both. And so I maybe regretted that I didn't participate in some of the earlier deals when NBA teams were brought to for a lot lower prices than they were bought for today. And the same with baseball teams. And since I wasn't really running Carlisle day to day any longer, I thought I could afford to do it. But what I learned from others is that you got to put energy into it in time and it takes more time than I originally thought. I mean, I knew it would take time, but what happens is you get addicted to showing up at the games. So I hadn't been to Orioles games very much, but now I'm going to more Orioles games than I ever dreamed I was going to, because as the owner, I feel, and the control partner, I feel I should show up as a symbol of the ownership group that I put together. And it can be rewarding, but also very time consuming.

Talking about your deal, consensus out there is you got a pretty decent deal for this franchise. Does it feel that way to you? Well, I think we got a good deal because if they had auctioned it off and said whoever the highest bidder is will get this, maybe somebody would have come in at a higher price. However, the Angelos family did not want to be seen as putting the company or the team up for sale in a way that might lead to somebody coming in and wanting to move the team from Baltimore. Right. It's very important in Baltimore to have the team stay there. And while a lease was signed, it was really a 15 year lease. It might turn out to be a 30 year lease, but it's a 15 year lease. And I think Baltimore was always nervous that maybe somebody from a big city would come in and say, we're going to buy the team, but ultimately move it. So the fact that I was from Baltimore, I think, made the family feel more comfortable in selling to me, maybe at a slightly lower price, but maybe not as much as you think. Slightly lower price than maybe others would have paid. His team was not without its challenges because, remember, they have not been in the World Series in 40 years.

While the team was very good the year before, I bought it with my partners, teams had some real challenges up until last year, and so it's not a foregone conclusion that it's going to be a home run to buy it at the price we paid. Well, he's already using the metaphors to talk about his sports team. Talk to us about putting this consortium of investors together.

You mentioned Mike Garaghetti, the CEO of Aries. He's a big baseball fan, grew up in Rockland county, really a self made guy. Yale goes to Aries, et cetera. You also, I think, in a very savvy way, put together some people who have also relationships to Baltimore. Tell us about that process. I thought it was important to have people in Baltimore who would show to everybody that it's a Baltimore related effort. So Kurt Schmoke, who was a former mayor of Baltimore. And I grew up with Kurt. He agreed to come in. Hes not a wealthy person by the standards of private equity people, because hed been in public service his whole life. But he came in.

I asked Cal Ripken if he would come in, and he did come in as well. And then a number of wealthy Baltimoreans who had not had a chance to invest in the team when Peter Angelos bought it, they were willing now to invest in it. So I mostly was focused on people from Baltimore or that area. There are some from outside, but what ive also found is a lot of people who left Baltimore have always retained an interest in Baltimore. So theres one person who, I wont name him, but who has an obsession with Baltimore Orioles. He mentioned to me one time when I was with him in a business meeting, and he said, if you ever buy the Orioles, let me know. Id like to come in friends and family. I thought he might be put in a million dollars or something, but he put in, say, well over $50 million and obviously wealthy guy.

But he told me that hes not missed a game in 20 years if he's not physically there, he watches it on MLB.com. and he's just got this obsession with the Orioles. And I found there are a lot of people that have this obsession with the Orioles. For example, the owner's suite in the Camden yards has 55 seats, more or less. I told the management, people always make sure it's filled with people from Baltimore or seasoned ticket holders or little leaguers or people that are diverse. And we're not just a bunch of old white guys like me sitting there. So they've done a very good job and we have it filled every night. That's one of the dangers of actually being an owner. There is filled every night, but there's a lot of food in this, in the owner's boxes. And I found that you can gain a lot of weight because the food is, you know, like pizza and french fries and so forth. So I got to be very careful. It's ballpark food.

Yes, I have have it filled up. And there are people who have been seasoned ticket holders for 40 years, 45 years, and they said they've never been the owner's box, and they just love the Orioles. And so I'm trying to say to people, look, I'm not criticizing my predecessors. They had a complicated situation. But I'm now trying to say this is part of the revitalization of Baltimore that I'm trying to help with. Baltimore is a city that has a lot of challenges. When I was growing up, it was the 9th biggest city in the United States, population of roughly 930,000 people. Today, it's about half that size, a little bit more than half that size. And one of the reasons is that there's been white flight to the Baltimore county. Baltimore City is one of the two cities in the United States, the other being St.

Louis, that is not in a county. So when you leave Baltimore City and go to Baltimore county, your income taxes and your property taxes don't flow back to Baltimore City. The city, therefore, has had lots of challenges that you see in urban areas. And it has had, you know, crime problems, it's had STd problems, illiteracy problems. And so I'm not by myself going to solve all those problems, obviously. But what I'm trying to do is say, let's revitalize Baltimore. Let's get some corporate headquarters to come back there. Many corporate headquarters left. And so what I'm trying to do is infuse the team with a sense of energy, and hopefully more people in the city will say, this is a great place, we should stay here. And maybe people from outside of Baltimore City might relocate there or move back there. I hope that will happen, but obviously it takes some time before we get too far away from the ownership.

We probably should also point out that Mike Bloomberg is part of the ownership group. So, David, playing against Baltimore for almost 25 years, I'll tell you, is one of the greatest iconic blue chip franchise, not only in baseball, but in all the sports. And for me, playing there for so many years, it was my favorite stadium. Camden Yards is just amazing. Kyle Ripken is my favorite player. So I'm very tied to Kyle Ripkin Sr. Eddie Murray, and the great history of the Orioles. What kind of owner are you going to be? Or are you, are you one that talks to the GM and says, hey, one guy's moved around. Do you tell Gunnar Henderson, get your elbow down, get it up, or you kind of more just like watching from the stands and I, and hoping for the best?

Well, I have to be very honest, I don't know as much about baseball as maybe I wish I did. I played little league baseball and I peaked at eleven. And then at twelve or 13, people started getting bigger than me. And I thought when I was eleven, maybe Jewish Little League all stars would get to the major leagues. But I found out that doesn't usually happen. So I haven't followed baseball as closely as other people have, and therefore I'm learning the game right now. We have a general manager who was voted the American League general manager of the year last year. His name is Mike Elias, who was a baseball player at Yale. Very smart person from the Washington area. He went to high school in Washington. He has what they call saber metrics down cold. What was described as moneyball years ago is hieroglyphics compared to what it is today, because today it's so much more sophisticated.

And so when he comes to me and Mike arrighedian says, this player is worth x or y or z, I don't really know how I can challenge him because he knows much more than I do. And he's got about 20 some people on his team that do statistics and do scouting and so forth. So it's hard for me to say, well, you should do this or do that. So I am the type of owner right now that says, I'd like to be informed. If you want my judgment, I'm happy to give it to you, but I really don't have enough knowledge to tell you, do something different than you want to do.

So, for example, when the trading deadline came and everybody's sitting around for a couple of days trading, I really don't have the ability to say, you should get this picture versus that picture. I don't have that kind of background. So I can help the team by saying, look, I know the CEO of this company. Maybe they can be an advertiser or they could buy sponsorships. I can do that. Now, if I'd seen Alex Rodriguez, I'd say, we should get this guy signed up. But I haven't seen a lot of Alex Rodriguez floating around. But if I see one, I'll say, we should sign that person up.

You mentioned that the other owners, I mean, you've been in some interesting consortia of investors before. What's this group been like? Well, it's an interesting phenomenon. I think it's true with the NFL and the NBA. When you own a team, people treat you with much greater respect generally than maybe you would have expected. In other words, if Carlyle owns a company, I don't really have people walking up to me in the street saying, hey, you bought a great automobile parts company. That's great. You're doing a great job for America by making automobile parts more readily available. Nobody says that. Like when you buy a baseball team or a football team, people come up and you say, hey, you should do this, you should do that.

People feel more engaged, and they're willing to talk about it much more. And I've reconnected with a lot of people, people call me all the time, get me tickets for this, or can I come to the owner's box? And, you know, it's a good feeling because I'm, you know, making people happy because they want to come to the owner's box. And I enjoy it. The time being, it's been relatively pleasurable. That's because we're doing reasonably well. If we weren't doing well, I guess I wouldn't be so happy.

I can't say that I'll get gray hair from it because I already have gray hair. It's fun. I can see why people who are owners enjoy being owners. You're treated with some respect in most cases, not always. You're building something, you're doing something to help your local community. And I can see the pleasure that people get out of owning sports. And if I'd had it before, maybe I would have done it earlier, but I didn't.

Did any of the existing owners, the more senior owners or folks who've been in the game, did they give you any advice when you came in? Yes. One owner said, you know, I like you. You're a good guy, but you should have paid a higher price. I said, what do you mean? I think my franchise is worth more than you think it's worth. In other words, I think baseball franchise are worth more. And so you didn't pay a high enough price. Right. You put a comp in the market that he didn't like.

So I guess that's right. I won't identify that person, but I'm reasonably happy with where we are today. I hope we continue to do reasonably well. And what about within your group? I mean, Mike Garaghetti is a really interesting figure. And, I mean, I don't think you guys were super close friends. I didn't really know him that well. Mike knows much more about baseball than I do and did. Mike played fantasy baseball for 27 years. Wow. I didn't even know what fantasy baseball really was, but, and he also played baseball in high school, and so he has much more background. He really knows the players inside out, upside down, much better than I do, honestly. So I'm really learning.

The situation was this. I did follow baseball until I went to college in 1966. My mother then threw away all my baseball cards, threw away all my baseball books. And so I kind of been Rip Van Winkle for 50 years. I kind of coming back, and now I'm learning that there are statistics that I didn't ever heard of before in 1966. So I didn't know what war meant. Wins above replacement. I never heard of that really before. And now I'm digging into that, where quality starts. In the old days, it was complete games. Now it's quality starts or ops. So the statistics are a little bit different than the ones I used to know about and focus on.

It's amazing how much data you can get now and how much the statistics are so important of analyzing whether players good or not. And the way is, you know, in the free agency situation in baseball, you can get these large contracts. I don't know if, you know, anybody ever got a large contract, but these contracts can be very, very large. In some cases, they work out, in some cases, maybe not. But you have to make these big bets. And then sometimes if you give a person a large contract and they get injured right away, you're on the hook for a long time.

Well, some people know a little bit about being on both sides of a large contract, right?

No comment. So I want to go back to this notion of the team is a community asset. You and I have talked a lot over the years about patriotic philanthropy. Youre philanthropic portfolio is fascinating to sort of go down the list from documents to pandas. What did you learn through those essentially philanthropic almost investments, as I think you might consider them, that informed this deal? Well, clearly, if you buy something like the Declaration of Independence, people feel that you're, in fact, contributing something to the country, because all these will be, in effect, publicly available. And I'm not just hoarding them and putting in my house to show just my friends. And so when I bought the Magna Carta, I gave it to the national archives to put on permanent display. And so I realized that people are thanking others, people who do things for the country, but people also thank people who do something for a city.

So if you buy a baseball team and you're thought to be adding value to the city, you're going to do more than just try to make profits. You're going to try to help the city. You're going to re energize the franchise. You're going to help do things that make people happy in the city. That's a plus. So in Baltimore, like some other cities, there aren't as many other outside activities as there might be in New York or Los Angeles. So in Baltimore, the Orioles have been a really important part of the culture for such a long time. And when the Colts left years ago to go to Indianapolis, that also tore away some of the fabric of Baltimore. Now they do have the Ravens, an excellent team but it's not quite the same as the Colts in many respects. So it's a very good team and a very good owner. The Orioles are just part of the fabric of Baltimore.

And I remember when I was a little boy, you could get a letter from your mother or father saying, I want to be excused to go to opening day. And every teacher would honor that, because going to opening day of the Orioles was like a patriotic kind of thing. How could you not let your student go to do that? And it is interesting that when you think about sports teams, why is it that somebody lives in Baltimore roots for the Baltimores? What is it? Or lives in Los Angeles roots for the Dodgers or the angels? Why is it because I get, makes people feel proud of the area they live in. They feel like they're part of something going forward. And so if the Minnesota Timberwolves, for example, is a good example, it's a state name around it, not in Minneapolis. Right? Right. So people and throughout the state are probably very proud of the team, as they should be. And some teams are really focused on cities, some are states, but people take a pride in it. Just like when our Olympic team goes overseas, all Americans are proud of what the american Olympic team does.

And when your local team does well, you feel a sense of pride in it. I guess it's a sense of people feeling that I'm more than my body, myself. I'm just more than just one person. I am part of a larger organization that makes me feel proud to be part of a larger organization that's doing well. That's why, I guess, people root for these teams and they feel so passionately about them.

You know, David, I always find it interesting when Carlisle has a great, you know, return on capital on a big investment. Your investors don't say we, they just said Carlisle. And I'm an investor. Right. But when the Orioles win is we won or we lost, and my mood either goes up or down, depending on wins and losses. I find that to be fascinating. It's true.

When we go to a game and we win, I feel really happy. I'm really cheering. I'm going out, you know, getting selfies with people who want them or so forth. When we lose, I'm so dejected. It feels like a dagger was in my heart and say, how could I have let the fans down? Why didn't we do better? I notice I get fewer selfie requests after we lose again. People aren't as interested in pictures anymore, and I feel bad for people that little boys will come up to me and girls as well, and say, will you autograph my baseball? And I say, look, I'm not, you know, a player, but they, for some reason, they want my autograph. And so I don't have very good handwriting. And as you know, signing a baseball is not easy. And I think when handwriting was being taught, I think those were the jewish holidays. So I wasn't in school. And so I have to write, I do this little print, and then because I'm a lawyer, I write, I put the date in. No other person puts the date in when they sign the autograph, but I want to make sure they know it would actually happen on a certain date.

Do you think you could do some sort of clinic with him for signing baseball? That's about the only thing I think you can teach David Rubenstein. Well, you do raise a really interesting point that I've been thinking about, because you make your career, I mean, we'll do a very quick career journey. You know, you start as a lawyer, you work in the White House, you work for some law firms, you start. Carla, I'm going very fast here.

Obviously, you're very successful at Carlisle. You're one of the preeminent fundraisers in, in the industry and across Wall street. Then, as you mentioned, you do a tv show with Bloomberg, and, you know, you get a little notoriety from that, and people want to come on your show and talk to you. This feels like an entirely new level of notoriety. Tell us what that's like and how you're responding to it.

Well, in all the years I've been in private equity, nobody ever came up to me in the streets and said, hey, you're doing a great job in private equity. Nobody ever said that. They might have said the opposite. They might have there, maybe they did, but nobody ever paid attention. I run around the world, nobody ever paid attention. I walked down the street, nobody knew who I am.

When I started doing the Bloomberg show, Bloomberg is all over the world. And so any city I go into now, just inevitably somebody will come up to me and say, I really like your tv show. Great. That's amazing to me that young people or older people see it all over the world. But baseball is even a higher degree than that. I mean, I am recognized more than I ever been because I own a sports team. And it's not because I've only done anything good for the sports team yet. We haven't done anything.

So to win a World Series yet. Since I've been an owner, I am amazed at how many people are happy to talk about it. People don't come up to me on the street and say, let's talk about this private equity deal you did recently. No one does that. They say, let's talk about the team. It is amazing how I've reconnected with people that I hadn't seen in 20 or 30 or 40 years. It's a good way to reconnect.

I recognize that, like anybody who's an owner of a team, you're really a temporary custodian because somebody's going to own it after you, and then somebody's going to own it after that person. So you're really representing the city for a relatively finite period of time. Now, there are owners who own teams for 50 years or so, but generally most owners probably own it for a shorter period of time than that. And it is an interesting phenomenon how the business of sports, as you all have recognized so well, has taken off in a way that didn't exist when I was a little boy. You didn't see owners selling teams all that much. You didn't read about profits being taken all that much. Today, many people buy these teams, and in four, five or six years, they go on the next thing or they sell their team at a big profit. It's a different world. Maybe better, maybe, maybe not.

But in any way, it's a much different world. And it's not only confined to the United States, obviously overseas people are buying sports franchises as well, and people in America are buying sports franchises all over the world. And then in the old days, it was only males who were in the sports figures who were on these teams. Now you have women sports that has also done quite well financially for people.

So I want to go back to something Jason said, because, you know, you talked about being one of the greatest prolific fundraisers. Two things I really admired about you from a long time, even before we've met, is your ability to capital raise. But not only capital raise, but do it at a time when you were crossing the pond across the globe. When you go to Saudi or you go to London or you go to Paris, people know you and they think you're a celebrity over there, like they're doing Baltimore now and then. Also recruiting great talent, but focusing on the first one, what makes you such a great capital raiser? One and two, what gave you the idea to be a visionary, to go across the pond and raise capital for Carlyle?

Well, you could argue that maybe I couldn't get any investors in the United States. What happened was I came up with an idea that wasn't going to win a Nobel prize. But the idea was we could build a private equity firm based in Washington, which was not seen as a capital center. And I could do it by saying, we understand companies heavily affected by the federal government better than the guys in New York. So that was a bit of a niche that we could exploit. But then the other two things that I tried to do was, I would say that we were going to do more than buyouts. Historically, buyout firms only did buyouts, venture capital and did venture capital and so forth. But if you were in the mutual fund business, for example, you could have mutual fund a or b or c or D under fidelity. You have many different opportunities. I thought I could do the same in private equity. Have a buyout fund, a venture fund, a growth capital fund, a real estate fund. And the theory was, if you like that brand name, you give us a chance and all these other things.

And then I decided to globalize it by setting up partnerships in Europe, Asia, Latin America, Middle East, Africa, and so forth. And that was novel at the time. So building a multidiscipline firm and globalizing it was unusual at the time. Others have done it, and some have done it better than we did.

But to do that, I had to go around the world to raise money. And so I just made myself into a fundraiser. I wasn't trained that way, and I just basically tried to learn how these investors would react to the kind of things I was selling and. And try to follow up. And the key is being polite, knowing what you're talking about, persistence, follow up is always key. And just trying to have a good track record, too. If you don't have a good track record, you can't sell almost anything. So it turned out that I spent 20 plus years running around the world raising money for Carlyle and helped us build, along with a good track record, a very good franchise.

Well, you also were keyed in pretty early to the idea, early in the Carlyle journey, especially to the power of showing up. Right. I mean, to actually getting on the plane and going and actually asking for money. You know, people like to say, you've heard this phrase from time to time, I hate to ask you for money, and then they ask you for money. So the way I looked at it, there are three types of fundraising you do.

One is for business. You're trying to raise money, and you're saying to people, give me money, but I'm going to give you more back. So ultimately, you're getting something really tangible. That's not the hardest to do, because you're giving money back to people if you're successful. The second is philanthropic. Philanthropic. You're saying to people, you're going to get to heaven more quickly if you give this charitable. And that's hard to do because some people say, I like the tax deduction, but I have my money, and maybe I don't want your cause. The third is political fundraising, which I've not been involved in. I don't make political contributions, but that's a tricky one, too, because you're asking people to make a contribution to a candidate, you're not getting a tax deduction for it. With the philanthropic investment or gift, you're getting a tax deduction. So with political, you're basically, you're helping somebody get elected, and you have to hope that that person does what you think they should do.

So those are the three different types. They have different skill sets, and different types of people do well in them. Very few people do well in all three of those. You certainly did well in the first two, though. So what did you learn from that well, or how did you learn to do it? It's an interesting.

If you go to Harvard Business School or Stanford business school and say, you know, I want to be a fundraiser. There's no courses in fundraising, by and large. Or maybe they have one now, but they used to not do that because fundraising was considered the lowest part of the totem pole in the private equity world. So star is the guy that's doing the deals, and the person at the bottom is the person who is raising the money. It wasn't taken that seriously, and it was something that people didn't really want to do. If you had the ability to be a deal maker, that was considered better than being a fundraiser. And I made myself a fundraiser because I really didn't have the. The skill set, the background to be an investor. So while I was serving on Carlisle's investment committees, the other people were really day to day doing the deals and overseeing them. So I made myself into a full time fundraiser, which hadn't quite been done before in the private equity world, where a founder of a firm basically was spending most of his time fundraising. And that was novel.

Now, many others do something similar, but, David, I don't think you're giving yourself enough credit, because there's a lot of people out there. Well, not a lot, but there were some other folks that were doing just as good as Carlyle, return wise, but then weren't raising the capital you were raising. Did you find the key to your sauce was the actual deals, the deal flow, the returns, or actually that you were connecting with the investor, and you were gritty as hell. Oprah Winfrey said to me, she wasn't a great interviewer. She was a great listener. So I think the best way to do it, as I've learned over the years, is when you go in there and make a presentation to somebody, it's not to say, here's why this fun is great. Here's why you should come in, get in there and listen to what they're interested in. Let them talk first. Let them say, here's what they're interested in. Here's what they're doing, here's what's going on in their country, here's what's going on in their city. And then you can understand what is making them tick, and then you can pivot what you want to say by blending in with what they likely want to hear.

You have to go in and listen to people, and then you also have to follow up when you have a good fundraising meeting and you meet with somebody that wants to give you money that's interested in it. The goodwill lasts about two and a half weeks, because in two and a half weeks, they're going to go on to something else. If you haven't followed up in two and a half weeks and made another connection with a follow up letter, more materials they want, it's probably not going to happen. So you've got to make sure you follow up. That's the key, is making certain that you are telling them why what they want to do is something you can help them with. And you've got to be very polite, and you have to learn how to say no.

You have to learn how to say no. Or take no. For example, when Steve Schwartzman and Pete Peterson were raising the money for Blackstone, their first fund, Steve wrote in his autobiography, they only got money 3% of the time. 3% of the time. So these very well known guys, they were, you know, not as well known then as they later became, but they were being turned down by friends, and people told them they would give them money, and they didn't give them money. I would say probably early on I had a similar percentage, but you can't take it personally. Sometimes people might say to you, come and see me, and then you actually go see them, and they really don't want to give you money, but they're just trying to be polite.

I'm sure you may have encountered some of that, and sometimes it's hard to read what people are really thinking, and you don't know whether they're really interested or not. I say that most of the money that I raised for Carlyle in the early years came from people I hadn't known before, people that I knew before. I didn't really raise that much money from. Maybe they knew me. They didn't want to give me money. But you just never know who's going to lead to something. So when I recruited the people for Carlyle, I recruited them in a circuitous way where people I didn't know before, it led to one thing, led to another. For example, the co CEO of Carlisle for many years, and the chief investment officer was Bill Conway.

And I didn't know him from Adam. He lived in Washington, but I didn't know him. I went to recruit a woman who was just become the treasurer of Gannett. And that's a big position. And this was 1987. And I went to her and said, here's what I'm going to do. I'm going to start a buyout firm in Washington. I'd like you to join us. We'll be one of the original partners. And she said, after I made my presentation, she said, let me see if I got it right. You've never done a buyout before, right? That's right. You're going to bring people together. Never worked before, right?

Together before, yes. You have no money yet. That's right. And you want me to leave my position as treasurer of Gannett to come do that? I don't think so. But she said, as I was leaving out, she said, oh, there's a guy named Bill Conway, who's the chief financial officer of a company in Washington called MCI. I heard he might be leaving. Why don't you give him a call? So I called him. I'd never known him before. We had lunch, and ultimately, he became my partner for 40 years. So you never know where this is going to lead.

You've made some sort of evolutions and pivots along the way. And one sort of concurrent with your success in private equity was being a philanthropist, but a very involved one, especially on a number of boards. And I would say you are more active and more involved and spread across as many as I've ever seen anyone do. What's your thinking behind that? How did you create that playbook? I have four standards for philanthropy. I want to start something otherwise wouldn't get started. Finish something that otherwise wouldn't get finished. Be intellectually involved so that I'm going to do more than write a check. And then four, I want to see progress in my lifetime.

The third thing, which is to say, be intellectually involved, which I will go on a board. Typically, if I'm giving money, or very often I will. And for reasons that are not completely clear to me, I've often wound up as the chairman of the board. So I've chaired a lot of organizations in the nonprofit world. I've chaired all the cultural, major cultural organizations in Washington. I chaired this Smithsonian, still chair of the Kennedy center, chair of the Library of Congress board, and now the National Gallery of Art. And it's because I enjoy it and I love learning about it. And I think I'm giving back to the country in that way. So you have to be motivated as well. I chaired my two university boards. I went to Duke. I chaired that board for four years, and now I'm the chair of the University of Chicago.

You know, it's been fun to watch you, you know, really lean into this role as an interviewer. And I'm not just trying to plug your show, although I'm happy to plug your show at any time. I was there at the, the inception. What drew you to being on that side of the microphone? You had given many speeches. You had been interviewed. You were probably the most public face of private equity for a long time. And then you turned around and started asking questions. It isn't like McKinsey. I hired McKinsey and said, tell me what I can do to be more visible. It happens, like most things in life, by happenstance. So what happened was Carlyle had big events, 1000 people, 1500 people. We want to have people come to these events. And so I was hiring people. That would be a draw. I wasn't the draw. So I would hire former presidents of the United States, former secretary of state. You pay them a speaking fee and they would come, but they were often boring.

And so people were looking at their watches and they didn't, couldn't wait till the speech is over. So I said to the speaking agent, you think I could interview these people? Would it make a difference? And, you know, I think I could liven up and use some humor. And they said, is the fee going to be the same? I said, the fee is the same. So I said, they're happy to do it because they don't have to prepare a speech. So I started having these people come. I interviewed them. I made people look funnier than weren't so funny and make people look charming. And then I became the president of the economic Club. Of Washington, Vernon Jordan, asked me to succeed him, and I was supposed to get business people to come in and speak, and they were boring. So I finally said, why just interview them?

And then Bloomberg, after about five years of this, heard about it, they saw it, and they said, let's make a show out of it. I remember at the kickoff, I said, what are you going to call the show? They said, they're going to call it the David Rubenstein show, peer to peer. David Rubenstein Show. I said, you think a long jewish ethnic name is going to work? And Mike Bloomberg said, no, it's not a problem. So now it's been ten years, and we have two shows, peer to peer, and then there's one more, finance oriented wealth with David Rubenstein. I've enjoyed it, and what I like is the intellectual challenge of talking to other people. But I prepare, as you obviously do as well. And preparing gives you an opportunity to learn more about people. And one of the things I'm trying to do is this, when you reach a certain age, you always begin to worry, are you losing it? So I'm trying to figure out what I can do to keep my brain active, and one of the things I can do is interview people, and we do it regularly.

I'm preparing for it. I'm intellectually challenging with these people when I talk to them, and so it keeps me busy. And also, a lot of the times I'm interviewing authors and authors. I think, as a courtesy, should read the book when you're interviewing them. So I'm reading a lot of books all the time, and I'm hoping it keeps my brain sharp. We'll see. So let's talk a little bit more about the intellectual challenge of baseball.

So this is a business that you're obviously familiar as a fan growing up in Baltimore. You're aware of it. You talk to your friends who are team owners, but now you're in it. What have you learned so far that has surprised you about the business of baseball? Well, first, everybody should remember these are small businesses relative to the businesses that the big buyout firms typically buy. So there's no baseball team that has revenues of a billion dollars or $2 billion. Earlier today, Carlisle announced a deal where we're buying a company, a spin out from an automobile supplier. It's about a billion and a half revenue company or something like that. Those are not considered all that big.

We bought companies in the buyout world. We bought a company with Blackstone and the Hellman and Freeman for $36 billion a few years ago. These are big companies and gigantic revenues. When you buy a baseball team, you're buying a team that might have $100 million, $200 million of revenue. So they're small businesses, relatively speaking, but their business, they get enormous amount of attention. So you've got sports writers who are spending all their time trying to figure out whether you're doing something right or wrong, and the amount of coverage is enormous. So you're under a microscope when you're on a team, and if you say something wrong or do something wrong, everybody's going to criticize you. It's also hard to please everybody.

So what I've learned is people really have a fanatical care for their local team. Two, you got to be very careful what you say about the team publicly, because everybody's paying attention to everything you say and anything you might do. I also learned that it can be fun. Everybody likes to win in life, and people don't like to lose. And so if you win more than you lose, it's good. But I recognize that the team that my partners and I bought was in pretty good shape when we bought it on the ascendancy.

How do you think the business of baseball will evolve? You've made a living, a very good living, investing in things that grow in value. I know that, as you mentioned, this is an asset that is part of financial purchase and part of philanthropic win, but you do want the overall business to grow. How do you affect that, and how do you think it should go? Well, baseball was considered the national pastime for a long time, and then obviously, the NFL came along at NBA, and they have taken a lot of tv dollars away from baseball and fan support away from baseball. Baseball is a sport that has enormous number of ingrained supporters, but it also doesn't have everything you want.

For example, right now, probably of the Major League baseball players, maybe seven or 8% are african american, and maybe the fan base is 4% african american. So it's relatively small because a lot of african american young boys are now playing basketball and football, and that's a sport that is attracting more people. One of the ways that baseball has got more african american boys playing is to do things in the youth leagues, in parts of cities that they're going to likely have young african american boys trying.

But also, as you probably know, in some parts of Latin America, baseball is a religion. And so in the Orioles case, we have a training facility down in Dominican Republic, and we're not the only ones that do that as well. So you've got to get people engaged. We have to make sure the fan base is not aging too much. I think the fan base could be younger, and I'd like to try to get the fan base younger in Baltimore. That's all that thing I can focus on. I also want to make sure that people are bringing their children there because they want to educate their young children at baseball and help them kind of feel about baseball, as many people my age do because they were brought up with baseball. Now, many young kids are not brought up on baseball as much as they used to be. It's not easy to do. Baseball is not as international sport as probably basketball is. The NFL is trying to become a global sport as well, going to Europe and doing other things there.

Baseball is played overseas, of course, but it doesn't have the overseas resonance yet that I hope it ultimately will have. David, you've been really good in your career over the last 40 years of taking a big idea, hiring a great team, and then executing. If you had that same challenge in baseball, and I think Rob Manford belongs in the hall of Fame just for the time clock alone. I mean, that was an incredible move for a game.

What are two or three things, if you were commissioner for a day, that you would focus on to make the game livelier? Well, I nervous about answering that question directly because I'm the newest owner in baseball. So for the newest owner of 30 owners to say, here's what baseball should do, it's probably going to get me in trouble. So all I want to say is all the other owners are much more experienced. They know much more than I do. It's a diverse group of people in some respects, in terms of their backgrounds, I would say baseball, I think, wants to appeal to younger people than it does now. It wants to expand the television audience that it currently has. I think it would like to expand overseas a bit, if it can, but that's obviously going to take some time.

And I also think it would probably like to, you know, find more ways to get the game into people's homes, either through streaming or other kinds of devices that enable people to watch it, even if they don't go to the game. So, David, I am interested because you've done a fantastic job in identifying great talent, again, for our audience, is very entrepreneur driven. What are some of the qualities you look for when you hire someone, young man or woman, for one of your companies? Well, you're always looking for somebody who's reasonably intelligent. Don't have to be a geniuses. Geniuses are hard to manage, reasonably intelligent, hardworking. They have a sense of willing to cooperate with other people.

They know how to share the credit. They also people that know how to get along with other people and give orders in a way that isn't offending other people. You want people who are ethical as well. You don't want people that are cutting ethical corners. You want people that other people want to be around. And so I've made a lot of hirings over the years. Some people worked out well. Some people didn't work out well. I hired a young man years ago, nice man, and he now is the chairman of the Federal Reserve Board, realized that Jay Powell would be the chairman of the Federal Reserve Board. I heard another young man one time, and he later became the governor of Virginia, Glenn Youngkin.

So sometimes you make very good decisions about young people. Sometimes, you know, not everything works out. You want to hire me. Of course, I have no future. I don't know if I could do a ten year contract. When you're hiring people, you really want people that you can work with, that you think that you enjoy talking to, and you can listen to them and they will listen to you, and you want to have a good working relationship with people.

Was there one particular deal over the last 20 years in sports that you said, boy, if I can have that one back. Which one is that deal? The greatest sports deal, I think, financial deal that was ever done was done in the last couple of years when a number of people who were at Guggenheim bought the LA Dodgers because they structured in a way where they didn't have to write, I think, a personal check. I think the purchase price was roughly $2.1 billion or something like that. They didn't put up that much equity. They put in a modest amount relative to what it's now worth. So that was one of the best deals of all time. One of the best deals, you could say, is all.

Also the New York Yankees, I think, in 1972, when CB's sold it for roughly $10 million to George Steinbrenner, if I have it correct, I think he put in 250,000 of his own money and he syndicated the rest. And the franchise is probably worth five to $7 billion today. And I think if I got it right, they only put in 250,000 initially. Now, it's a long time ago, but still it's a pretty good deal. Well, they've paid some players along the way to pretty good effect. All right, so we're going to move to the last portion of the interview, which is a rapid fire round so you can just answer as quickly as when I'll start and then you can pick up.

What would you say is one word to describe your deal making style? Modest. What's more important, your gut instincts or data and making big decisions? Instinct. What's the hardest part of deal making? The beginning, middle or the close? The close, for sure. Who's your dream deal making partner? Well, the people that bought the Minnesota Timberwolves, they did a pretty good deal, I would say, but. So I'd like to have those people on my side. What's the best deal you've ever made? Best deal I ever made was probably deciding to start Carlisle and hiring the people that did at the outset. That was the best business thing I ever did.

What's the best piece of advice you've received on deal making? Always try to remember what the other side needs to do. They have to come away with a victory as well. Make it too one sided. What's the worst advice you've been given? Trust your own instincts only. What's your hype? Song. Before you go into a big meeting? My way. Frank Sinatra. That's good. You can only watch one sport for the rest of your life. What sport would it be? Major league Baseball. This is a very easy one. What team do you want to see win a championship? More than anything, the Baltimore Orioles, number one. The Duke blue Devils, number two.

One fun fact about you that your colleagues would be surprised about hearing about, that I am a great athlete and that I actually. I try not to show this when I play tennis or with other people, but I am actually a spectacular athlete, but I try to hide it from people. David, it has been our pleasure to have you. Thank you for sitting on this side of the microphone. Thank you for your success and thank you for having me. It's good to be on the same network as you. Thank you very much. Thank you, David.

Entrepreneurship, Philanthropy, Baltimore Orioles, Community Building, Leadership, Inspiration, Bloomberg Originals