Making the Bucks: The Road to an NBA Title with Marc Lasry, Chairman, Chief Executive Officer & Co-Founder, Avenue Capital and Co-Owner of the NBA's Milwaukee Bucks.
Moderated by Anthony Scaramucci, Founder & Managing Partner, SkyBridge.
MODERATOR
SPEAKER
Marc Lasry
Chairman, Chief Executive Officer & Co-Founder
Avenue Capital
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
TIMESTAMPS
EPISODE TRANSCRIPT
Anthony Scaramucci: (00:07)
I got to go right to the Milwaukee Bucks, and I want you to set the scene for us seven and a half, eight years ago, you're buying the team. Why are you buying the team? What thoughts are going in your mind about the team? Take us there.
Marc Lasry: (00:27)
So the reason we initially... I'd always wanted to buy a team. The problem was a lack of money.
Anthony Scaramucci: (00:35)
Was it any team? A Major League team, baseball, football.
Marc Lasry: (00:39)
No. It was basketball.
Anthony Scaramucci: (00:40)
Basketball team. Always wanted to buy a basketball.
Marc Lasry: (00:41)
Always basketball. As you can tell, I used to play basketball.
Anthony Scaramucci: (00:46)
Yes. I could tell. You could tell. You could play center on the [inaudible 00:00:49].
Marc Lasry: (00:52)
So originally I had been an investor in the Brooklyn Nets.
Anthony Scaramucci: (00:55)
Right.
Marc Lasry: (00:55)
And then when the Bucks became available, part of it was that when we did the analysis on it, you have one 30th of the league. So whether you were buying in Milwaukee or you're buying in LA, you have one 30th of the TV contract.
Anthony Scaramucci: (01:13)
Right.
Marc Lasry: (01:13)
So we thought at the time, Milwaukee was a great market in the sense that it was the worst team in league. So all you could do was go up. I think there were out of 30 teams, they were 29th or 30th in almost every category, except for [inaudible 00:01:31] sales.
Anthony Scaramucci: (01:32)
It's an important to understand. I didn't understand that. I bought a small piece of the New York Mets in 2011, sold it to Steve Cohen. But we were getting revenues from mlb.com from the, not mlb.com, MLB which included .com and TV other revenue sources from the whole league. What about the jerseys a marker, are they also a one 30th-
Marc Lasry: (01:54)
You get a piece of everything.
Anthony Scaramucci: (01:56)
Everybody's jersey.
Marc Lasry: (01:57)
But for us, the biggest thing we thought at the time was the TV contract was about 900 million and it was coming due you in two years.
Marc Lasry: (02:07)
So we thought it was going to be about double. So we thought the revenue, the team, the national TV contract ends up being about sort of 35%, 40% of your revenue. So we thought that's great, that's going to double, it should be great, and in two years, this will turn out to be a really good deal. The problem was we were paying at the time the most for any NBA franchise. So it was about 550 million. And what we thought went in two years, it should be worth like 700 million.
Anthony Scaramucci: (02:43)
Mm-hmm (affirmative).
Marc Lasry: (02:43)
And the TV contract turned out to be three times what the original one was. So, that's how it turned out to be a great deal.
Anthony Scaramucci: (02:52)
But you also, at that time, correct me if I'm wrong, you were at an older arena.
Marc Lasry: (02:57)
We did.
Anthony Scaramucci: (02:58)
There was some speculation about whether or not you were going to be able to build a new arena in Milwaukee.
Marc Lasry: (03:04)
Yeah. If you had seen it, there was this training facility, which was at a nunnery, they had a basketball court and that was the training facility for the Bucks, and when it rained, you had to put buckets on the court. It was horrible, it really was. So first we had to build a new training facility and then we had to get a land and we had to raise money to build that arena. So we were willing to put up half the money and we wanted to be partners with the state and the city that they would do the other half, and that's what ended up ultimately happening. But we were able to build a new arena within two years and,
Anthony Scaramucci: (03:45)
And the arena, because I've been there, it's a world-class arena.
Marc Lasry: (03:50)
It is.
Anthony Scaramucci: (03:50)
It's probably one of the nicer arenas in the country.
Marc Lasry: (03:52)
Yeah, it is.
Anthony Scaramucci: (03:53)
Because of the design and the location in the city.
Marc Lasry: (03:55)
Yeah, it's been fabulous. So I think we've gotten exceptionally lucky in that we were able to do everything in a pretty short amount of time, and then obviously the two years done extremely well.
Anthony Scaramucci: (04:07)
Seven years. We've had other sports manager, owners appear, Lou Lamoriello. I don't know if you ever know Lou, but he's GM now at the Islanders. He once said that it's nine months for a baby, it's 11 months for an elephant, it's seven years for a championship. Meaning, from the point of ownership to the ability to get it, you hit it literally right on the number. How'd you do it?
Marc Lasry: (04:34)
Well, first we were really lucky in that when we bought the team, Giannis was already on the team.
Anthony Scaramucci: (04:40)
Some people may not know who Giannis is, I obviously do. Obviously an MVP world-class player who's on the team already. So somebody had drafted him.
Marc Lasry: (04:50)
Yep.
Anthony Scaramucci: (04:51)
Then you had him on the team, but he was up for free agency.
Marc Lasry: (04:54)
He was up for free agency last year.
Anthony Scaramucci: (04:57)
Yes.
Marc Lasry: (04:58)
So really all we did was just try to convince him to stay and hope that he was going to stay. And Giannis being the individual that he is, loves Milwaukee and wanted to try to win a championship with the team that we had. I think a lot of that is we're extremely lucky in the person that he is, that he really feels he wants to do it.
Marc Lasry: (05:21)
He didn't want to go to a super team, he felt an obligation to Milwaukee, and that's one of the reasons he stayed. That and the 240 million we gave him.
Anthony Scaramucci: (05:36)
I did assault or we last year, and obviously you were in negotiations at the time, so we finished the assault. And then I, I budged you on the cell phone. And I said, okay, give me the number that you think you're going to have to pay him to keep them kept the private, of course you told me the number I sell down, but you pay them that number.
Marc Lasry: (05:54)
Yeah.
Anthony Scaramucci: (05:54)
Why?
Marc Lasry: (05:55)
Less than max you could pay. So it was literally because the way the NBA works, if somebody is on your team, you have the ability to give them an extra year. So the most any team could offer you on us was four years. We could give him five years.
Marc Lasry: (06:11)
And those five years it ends up being about 230, 240. So you give him the max you're allowed under the rules, which is 35% of the cap. So it was great for him, it's great for us, and then obviously by him staying and sort of us and the GM actually doing a fabulous job, we were able to win a championship.
Anthony Scaramucci: (06:34)
So we're both sports enthusiasts, so we both watched the owner and then the operational dilemma. What's the owner-operational dilemma? The owner wants to be the operator. So they think they know more about XYZ, baseball, hockey. They know more about basketball than the operational people, but it seems like the people that lay off and let the real pros handle it, do the best, is that true?
Marc Lasry: (07:03)
It depends. I think for us, we're pretty involved. You're spending quite a bit of money on players, so the general manager will pick who he thinks is really good and then comes to us to say, here's what I'd like to do. Are you okay with me spending X? Sometimes we are, and sometimes we're not. Some guys will go, let me see your analysis. Let's go through it. Why do you think this player deserves it? The thing about the NBA that's actually fascinating is the two biggest values in the NBA are rookie contracts. Right? I mean, think about it for the first four years we paid Giannis, I would say three million Euros or something like that. And then your max.
Anthony Scaramucci: (07:50)
So they're valuable because you're getting the player in a real price.
Marc Lasry: (07:54)
For four years.
Anthony Scaramucci: (07:55)
Until they go into free agency. And so those are valuable getting them early on.
Marc Lasry: (07:59)
Yeah. And then the max contract, obviously you're going to give someone like Giannis a max contract. Where you get hurt in the MBA is where you'll pay somebody between 10 and 20 million and for whatever reason, they're not worth what you pay. So there's the contract is just, if you're paying somebody 10, you hope he's performing at 20. And what you don't want is, you're paying somebody 20 and he's performing as if it's a $5 million dollar player we do. So there's a lot of analytics involved, and we have to sign off on a lot of these things. And so, you're going to sign off on trades, you're going to sign off on things when you give the GM a lot of discretion, but alternate, at the end day, you've got to say yes or no.
Anthony Scaramucci: (08:47)
You built a great business. How old your business now? [inaudible 00:08:52]
Marc Lasry: (08:52)
How old is it?
Anthony Scaramucci: (08:53)
Avenue Capital
Marc Lasry: (08:55)
We started in 95. So I guess 26, 27 years.
Anthony Scaramucci: (09:01)
And you built a great culture. Tell us about the culture at the Milwaukee Bucks when you got a hold of it and tell us, what are some changes that you made to the culture.
Marc Lasry: (09:11)
So it's a great question. The first challenge you have when you buy a team or you're on a team, is what's the culture you want. And what I mean by that is, if you think about a time when we bought the Bucks, we had the number two draft picks. So we could have picked either Jabari Parker or Joel Embiid, and Joel Embiid is a perennial all-star, could be an MVP KAT player. And the only reason we picked Jabari was because Joel had a broken foot. So part of what we wanted to do was on day one say to everybody, we're here to try and win.
Marc Lasry: (09:48)
We're not here to try to keep moving up on the lottery and try to get better draft picks. The goal is we're here to win. We're here to get to the playoffs and build a culture around winning. And, it's hard because you've got to do that. Whereas I think some teams who are looking at it and say, well, I'm going to keep on trying to get a lottery picks and I'll get better, but I'll get better in five years. We want it to get better right away and you have to get lucky. And we did, but I think we built a culture and everybody knew from day one that the goal was, we're going to try to win a championship. We're going to try to do everything we can, and we're going to try to bring it, bring in all the best GM, the coach, and do things that are going to help you get there.
Anthony Scaramucci: (10:37)
Okay, so you grew up modestly. Your life story, you are to me the American dream in so many different ways, you built a business, raised a family and now won an NBA championship. So that was a little bit of the outlier there, but you done all these great things, but there you were as a kid and you're idealizing your life. Did you ever buy the sports illustrated posters as a kid. Cause I had one,
Marc Lasry: (11:02)
Yeah.
Anthony Scaramucci: (11:02)
I had one of them at one of Lew Alcindor with the Milwaukee Bucks Jersey on, he was making the hoop shot, you have that one?
Marc Lasry: (11:09)
Yeah, we do.
Anthony Scaramucci: (11:12)
It was on my mother's Carol Brady 1971 paneling, the Walnut paneling, the sheet rock.
Marc Lasry: (11:20)
The fake wood?
Anthony Scaramucci: (11:22)
And I taped it up with scotch tape. Who else did you have in the bedroom?
Marc Lasry: (11:27)
Oh God, for me, I loved, you thought you were a great guard. So I loved Jerry West.
Anthony Scaramucci: (11:36)
Maravich.
Marc Lasry: (11:37)
Maravich, he just thought he was fabulous because he could pass, do everything. I just loved basketball, I lived it, I practiced every day. You got to play in school. I think like everybody else, you dream one day you'd play in the NBA, other than you quickly find out you're six feet tall and you have no talent. Other than those little details, it gets kind of hard. But it was fun, it was a lot of fun.
Anthony Scaramucci: (12:08)
How'd you get Jrue Holiday?
Marc Lasry: (12:10)
So I think our general manager had been talking to The Pelicans for quite some time. At the time Jrue was probably, everybody wanted him. You knew the Pelicans were going to train them. So the question was, what are you willing to give up for them? And I think we gave him a lot or we did. For Jrue, we gave up five draft picks and we decided to go all in. So we gave three first round draft picks, and you do every other year, cause the NBA doesn't allow you to do it for a year. And then we gave two swaps, which meant that if, out of 30 teams, we were the 12th worst and The Pelicans were the 18th worse, they would have our pick if they were 12 and we were 18, they would have their pick.
Marc Lasry: (13:05)
Right? So we [inaudible 00:13:07]
Anthony Scaramucci: (13:06)
That's an interesting trait, I like that.
Marc Lasry: (13:08)
Yeah. So did we give up a lot? Yes. And the hope was, Jrue was going to bring us over the top and that with Jrue, we should be able to win. It was a big decision because the GM recommended it, we spent a lot of time on it. The problem was if, if it didn't work, you had just given up your future.
Anthony Scaramucci: (13:30)
Right.
Marc Lasry: (13:31)
Which is the future of the NBA, or of your team, is your draft picks. So we wouldn't be able to draft anybody. And if it worked, it was great. The fact that it worked was a brilliant move, but that's how everything is.
Anthony Scaramucci: (13:47)
Well, that's it, they're always brilliant. After the fact, they don't know that, or it's a disaster after the fact, you get tarred and feathered the fans, the Milwaukee fans. I love these fans by the way, because it reminded me of Met fans. They're super passionate, they're locked into the team. You go to Milwaukee, they watch every minute of the game.
Marc Lasry: (14:06)
They do.
Anthony Scaramucci: (14:06)
And they'll tell you every play and every foul and the bad ref call and so forth.
Marc Lasry: (14:12)
Yeah, they're fabulous. The part that's funny is, when you buy a team, you're in Milwaukee, so imagine you're just in the stadium and people literally will come up to me and go, listen, I got a great idea, here's who you got to trade for. And people will come up to you and talk to you. I remember one fan comes up to me and goes, listen, if you want to win this league, here's the trade you got to do. I'm like, sure, what do you think we should do? He goes, you got to get LeBron and you got to get Steph Curry. Get those two guys, we're going to be good. Wow, whoa, you think so? And he goes yeah, absolutely, no, trust me on this one. I'm like, okay, let me tell my GM. That's a great idea. It's amazing the stuff you hear, it really is.
Anthony Scaramucci: (15:05)
You have a Twitter account?
Marc Lasry: (15:09)
No, I do not have a Twitter account.
Anthony Scaramucci: (15:11)
Our mutual friend, Steve Cohen, confirmed yesterday that that's him on Twitter. So you don't tweet.
Marc Lasry: (15:18)
I don't tweet. I don't do anything. I'm so scared of tweeting. So I don't go on Twitter. I feel it's easier people text me.
Anthony Scaramucci: (15:27)
Right.
Marc Lasry: (15:27)
Yeah. I don't want the world knowing everything I'm doing, but I know you have one.
Anthony Scaramucci: (15:32)
I do have a Twitter down on somewhat, somewhat, somewhat, and use it a lot. During elections, I use it more actually.
Marc Lasry: (15:40)
I know. Who doesn't?
Anthony Scaramucci: (15:42)
So let me ask you this. David Star, went to school with one of his sons. I knew David, the late great David Star. I knew him for many, many years. And when I was at Tufts, I went to see him at his office. I actually interviewed him for the Tufts sports spectrum. I was probably 20 years old and he talked about the NBA and he looked me straight in the face. It was 1983. He said, they'll never be gambling in this sport.
Anthony Scaramucci: (16:09)
We will never have a franchise in Las Vegas, and we don't want people betting on these games in the United States. And here we are today, it's 2021. And tell us about that evolution and tell us how it's impacting the sport, if at all. Is it good for the sport? Is it bad for the sport?
Marc Lasry: (16:27)
I think it's great for the sport. I mean, people love to gamble.
Anthony Scaramucci: (16:31)
They do.
Marc Lasry: (16:33)
Right. The fear was, that in essence you'd have issues with players.
Anthony Scaramucci: (16:39)
Meaning that God forbid the player got hooked into a bad crowd and they threw a game or something like that. All the coaches got that.
Marc Lasry: (16:48)
And I think that fear has gone away. I'm not saying it's not fully gone, but you can bet now the over-under on a quarter, you could bet while the person's at the free-throw line, is he going to make it? There's all these different things you can bet on. It's part of the game. I mean, people do it. So I think part of what we want to do is get involved in more and, and get a benefit from that. I think that'll happen. Do I think a franchise will be in Vegas? I wouldn't see why not.
Anthony Scaramucci: (17:24)
The NFL also said they wouldn't have read as a Vegas and there we go. So there's been an explosion in franchise value and there're companies like Guile Capital that are trying to find ways to factionalize and to allow people to have an owner experience in a smaller way,
Marc Lasry: (17:44)
Right.
Anthony Scaramucci: (17:44)
Which will probably lead to higher evaluations and franchises.
Marc Lasry: (17:46)
I hope so.
Anthony Scaramucci: (17:47)
Yeah, me too, but more so for you, obviously. What really happens five years from now, or 10 years from now?
Marc Lasry: (17:58)
I think evaluations keep moving up because sports is one of the few things you can't record, I mean, you can record it, we all have a phone. Some of you have two phones, you may have three phones. So imagine you record and you say I want to see the game later on. Well, you got to put your phone away, because you get automatic updates. So I think that recording a sporting event is really hard. I'm not saying people don't do it, but it's got to be less than 1%. So is the one that you have to see live, is the one thing you want to see live. It's a huge content that people want, and I would tell you our new contract comes up or a new media contract comes up. I assume it'll be higher than the previous one. I think you're just going to find valuations continuing to grow, it should be good.
Anthony Scaramucci: (18:59)
So, the feeling of being handed the trophy, describe that feeling. I was watching you on TV when you accepted that trophy, how was the feeling?
Marc Lasry: (19:15)
I would tell you, in the beginning, it's actually funny. There's this massive amount of relief because it takes you so long to get there and then you finally get there and then you've got jubilation. You're thrilled. The hard part for you probably wouldn't have been as big a deal for me. They give you the trophy and they tell you, you can only speak for 10 seconds. And they're like, oh, I have so much to say
Anthony Scaramucci: (19:43)
I'd like to thank the academy and my mom and dad
Marc Lasry: (19:45)
You're on national TV, so you actually would like to say more than 10 or 15 seconds, but they're pretty strict about that. And then they go and we're going to give you the trophy, I'm like, great. And I've never lifted it or I've never taken it and you go and it's in this box and you go to lift and you realize, oh my God, it's heavy.
Anthony Scaramucci: (20:04)
I saw it in your office.
Marc Lasry: (20:05)
Yeah, it's really heavy. And now you got to lift it over your head, but you realize you haven't really worked out. The one thing you don't want to ever do is,
Anthony Scaramucci: (20:16)
Oh my God.
Marc Lasry: (20:17)
Could you imagine if I lift it up and it's like [inaudible 00:20:20] and then you drop it on national TV. It's kind of embarrassing, as I was lifting it, I'm like, oh wow. So now you're going slow. And literally, I get friends of mine texting me.
Anthony Scaramucci: (20:36)
This is going crazy.
Marc Lasry: (20:37)
And they're going, Hey, look like you were having a hard time lifting that thing off. I was like, yeah, it was fine. It was just heavy. The funny part is after the game, after we win, Giannis takes the trophy and he's got the MVP trophy and he's doing all the media things. So I go up to him, I'm like, Hey, y'all I just want the trophy to take a couple pictures. He goes, my trophy. He goes no. And so it's actually been a bit surreal. It was actually the first time. Imagine, it's how many people watch this. Within a, I would say a 24 hour period I got a call from president Clinton saying congratulations, president Obama saying congratulations, and president Biden calling and saying congrats and we want you to come to the White House to celebrate. It's very surreal, you get all these unknown numbers, you don't know whether to pick it up punk.
Marc Lasry: (21:36)
It was good.
Anthony Scaramucci: (21:38)
That's an apex moment. We all know that, but you're such a good guy, Mark. There had to be an apex moment for you with a person or a place or a charity over this Odyssey of ownership that you just walked out of there and felt great. What was that?
Marc Lasry: (21:58)
Oh, I would tell you. A lot of is, you're doing all these engagements in Milwaukee where you're speaking and you quickly find out, you're talking about owning a team, you don't really own it. I think you're custodian because you quickly find out the passion and the love that people have. We bring a bunch of the players to one of the hospitals in Milwaukee to help kids who have cancer. And you see that you're able to bring about a lot of change and you're trying to do things for the community.
Marc Lasry: (22:37)
And it's really, really cool. I know that's probably an overused word, but you find out that you can actually really effectuate change and how passionate people are about sports. If you come with any of the players, it is amazing, the impact, and you can see the impact we had on the city. You had literally 60, 70,000 people outside. It really unified the city, brought people together. I think it's been an incredible experience.
Anthony Scaramucci: (23:12)
And congratulations again, you were future. I watched the Michael Jordan, ESPN doc. I know you watched it, probably watched it twice. And it's very hard to repeat. It's very hard to put the chemistry. They were both statistics, bumps. We know the averages. So what are we doing to get back there?
Marc Lasry: (23:36)
You're going to do everything that you can, I think. What you quickly find out. And I think it's the same in life. You got to do a tremendous amount of hard work to get there. I think we're there. Then you got to stay healthy. That's big. I think the chemistry on our team is pretty unique. I think all the players know their roles. They know what they're doing and everybody gets along exceptionally. Well, we just had a team trip where we all went to Greece, the vast majority of the players went. I think we'll, if we stay healthy, we should hopefully get to the Eastern conference finals, and then we'll see what happens. I think the teams we've got are obviously worried about Brooklyn. Brooklyn is exceptionally talented and then we'll see on the west, they'll probably be the Lakers or the other teams, but I think we have as good a shot as anybody, but it's hard. You're absolutely right, it's very hard.
Anthony Scaramucci: (24:37)
Ladies and gentlemen, Marc Lasry, Avenue Capital, NBA championship owner of the Milwaukee Bucks. Thank you so much.