The World According To Boyar: Podcast

The World According To Boyar: Episode 12: Mellody Hobson


About Mellody Hobson

As Co-CEO, Mellody is responsible for all firm-wide management, including strategic planning and growth as well as every aspect of Ariel’s business beyond research and portfolio management. Prior to her formal appointment to Co-CEO, Mellody served as Ariel’s President for nearly two decades and functions as chairman of the board of trustees for Ariel Investment Trust.

Ariel Investments is headquartered in Chicago, Illinois, and has offices in New York City and Sydney, Australia.  The firm manages assets of retirement plans, college saving accounts, and personal investment accounts.  With strong ties to the community, Ariel is focused on making investing accessible for everyone.  Individuals are able to invest $1000 in the firm’s mutual funds.

She is Vice Chair of the Board of Starbucks Corporation, and also serves as a director of JPMorgan Chase and Quibi, a short-form video content company. Mellody is former Chair of the Board of DreamWorks Animation.  As a Chicago-native, Mellody is involved in numerous organizations that focus on improving the city.  She serves as Chair of After School Matters, a non-profit that provides Chicago teens with high-quality, out-of-school time programs.  In 2017, Mellody became the first African-American woman to become Chair of the Economic Club of Chicago in its 90-year history, a two-year term which ended in 2019.


The interview discusses:

  • Why having a diverse workforce is a competitive advantage;
  • The changing media landscape;
  • Why the business of content curation will be critical in the future;
  • The reason why movie theatre companies will survive;
  • A behind the scenes look of when Mellody’s husband George Lucas’s company, Lucas Films was sold to Disney;
  • The sale of DreamWorks (Ms. Hobson what Chair of the Board) to Comcast;
  • Characteristics of George Lucas that would surprise most people;
  • How Ms. Hobson was selected to join the board of Starbucks;
  • Why Mellody believes her board service has made her a better investor;
  • And much more…

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Transcript of Interview with Mellody Hobson

Jonathan Boyar: 00:10
Welcome to The World According to Boyar, I am your host Jonathan Boyar. In today’s interview we talk with Mellody Hobson, co-CEO of Ariel Investments. Ever since Mellody gave a Ted talk in 2014 that now has over 3.8 million views, I have followed her career with interest. She’s had a fascinating journey that I wanted to share with you. She was one of six children raised by a single mother in Chicago. As a child, her phone was shut off, her car was repossessed and she was evicted from her home. Despite this, Mellody was able to get into Princeton, secured a job at Ariel investments where she’s now not only co-CEO but also the firms largest shareholder.

Jonathan Boyar: 00:59
As if this was not enough, she’s also on the board of JPMorgan Chase and vice chair of Starbucks. Mellody is also married to Star Wars creator George Lucas. Mellody, welcome to the show.

Mellody Hobson: 01:12
I’m delighted to join you.

Jonathan Boyar: 01:15
Well first, I’m really excited to have you on the show. Your day job is being co-CEO of Ariel investments. Can you briefly describe Ariel to everyone?

Mellody Hobson: 01:25
Sure. Well, we’re a Chicago based investment management firm. We specialize in equities only. We’re a long only equity manager. Yes, we still exist and we focus on value investing, so companies that are undervalued but show a strong potential for growth and we have two real sweet spots. We focus on US stocks that are in the small and mid-size asset classes and then we have a team in New York that focuses on global investing.

Mellody Hobson: 01:57
So global and international stocks around the world, all cap sizes when we do our international and global investing. So across all the cap ranges. And we’ve been doing this since 1983 and one of the areas of distinction for us, our longest running portfolio, our small cap value strategy has had the same portfolio manager since inception, which is almost 37 years. That’s unheard of these days in the investment world and he’s done that and added tremendous value to our clients, outperforming the benchmark by over a couple 100 basis points per annum since inception.

Jonathan Boyar: 02:34
In a previous interviews, you’ve stated the diversity of your firm is really the secret sauce. Can you elaborate a little bit on that?

Mellody Hobson: 02:42
I think that it’s a competitive advantage and it’s one of the things that’s unfortunately lacking in the investment management industry because we have a very very diverse group of people. I think we were able to look at investment decisions and really ponder questions from all sorts of angles that leads to a better outcome and ultimately has driven the results that we have. I often quote Scott Page who wrote the book The Difference. He’s a professor at the University of Michigan and he came up with the first mathematical formula for diversity and in this book he talks about the fact that if you’re trying to solve a really hard problem, hard, you want diverse perspectives, even diverse intellects.

Mellody Hobson: 03:28
And the example that he gives that I think is so great is he talks about the smallpox epidemic and when it was ravaging Europe, all of the greatest scientific minds were stumped and the person who ultimately let them to the breakthrough solution was a dairy farmer who noticed the milkmaids were not getting smallpox. And to this day, the smallpox vaccination is bovine based because of the observations of that dairy farmer. And we really believe in that idea at Ariel when we think about diversity being a competitive advantage, we start to think about when we’re trying to sit around a table and solve the really hard problems that are natural to value investing. Some say value investors catch a falling knife. How do we make sure we catch the right side? It’s all of these diverse perspectives and opinions that allow us to poke holes at an argument and ultimately we think come to a better solution. In fact, we would say if we all agree there’s a problem.

Jonathan Boyar: 04:25
You have a research driven firm. You obviously spend a great amount of time analyzing each investment opportunity. Where in the process do you start to think about the diversity of the company you were thinking of investing in?

Mellody Hobson: 04:39
Early in the process because we want to be invested in 21st century companies and a 21st century company in our mind is diverse. At the top of the organization, throughout the organization and certainly board executives and the like. And that is the only way we believe that you can ultimately understand all the potential customers you may have, be it a business to consumer company or business to business company. We think all of those opinions shed light on the ultimate way that you sell the product or service.

Mellody Hobson: 05:09
And so at the end of the day when we think about owning 21st century companies, we think about diversity and if they don’t have it, we’re certainly going to agitate in that regard. Often because we own large positions, especially for our US stocks and we can really impress upon them the importance of having all of those voices around a table.

Jonathan Boyar: 05:30
Having a variety of viewpoints is critical. I certainly agree. What type of input do you have on the investments Ariel makes?

Mellody Hobson: 05:40
So what I would say is I’m not a person who is second guessing decisions and I’m there cheering them on in terms of what they do and how they do it. Because I recognize just right off the top, stock picking is very very hard and outperforming is even harder and we’ve been able to do that over time. And so it’s not about second guessing someone’s decision. What I do contribute is my Rolodex. And so the team often comes to me with specific requests or general requests and ways that I can help through the relationships that I have. Shed light on a stock or an idea. I’m actually doing that today for John with someone specifically.

Mellody Hobson: 06:19
So it might be this person you know, this person sits on a board with you, this person is a good friend. Can we do a call with them to vet this idea? And we do that a lot. And so, I’m brought into the conversation as a way of enhancing our decision making through relationships that I have. And we’re not trying to get any nonpublic information or anything like that. We’re looking for insights that will allow us to make better decisions.

Jonathan Boyar: 06:47
I’m really interested in your insights on the media landscape. You were chair of Dreamworks. You certainly know the space well. How do you see it changing?

Mellody Hobson: 06:58
Well, I think the world has changed in a major major way. We’ve obviously seen a media consolidation in our lifetime that is probably the most significant happenings in the world of media since the invention of the camera. I think that when you look at the fact that it’s very hard to be a standalone, just let’s talk about film companies. Dreamworks was bought by Comcast. You had Pixar that was bought by Disney. Lucasfilm that was bought by Disney. Even though those businesses and the content that they produced were outstanding. It became harder and harder for those businesses to compete as standalone companies against the media giants.

Mellody Hobson: 07:38
And so we’ve seen those giants consolidate and actually expand their content in such a way that has made them even more formidable in a way that I think actually serves the consumer very well in terms of what they continue to produce. The other thing we’ve seen is the streaming wars, and I think this is a real thing. I see it from the perspective of Quibi and I think our customers and just individuals in general have decided they want to get information when they want it, where they want it, how they want it, and the media companies have absolutely adjusted it to that. And so we’ve seen that take place in a way that I think is fundamentally changed how we take in content. But at the end of the day, I still believe the old idea that content is king and if you have great content, people will watch it, they will find it, they will consume it.

Mellody Hobson: 08:28
The one problem I think we have now is that because there’s so much content and all of it is not good, I think that at some point there will be organizations and my husband is the one who’s really convinced me of this, that we’ll curate that for you so that you can find your way through all of it that exists and so much does it exist today. So I think the future does have some form of curation attached to it. I think the future of streaming real and permanent, and I think we will see it in various iterations like Quibi that are doing short form content or obviously you have others who are coming in and new ways. Disney targeting children with Disney plus or clearly Netflix in terms of how they disrupted the whole industry with streaming to start with.

Jonathan Boyar: 09:15
The curation angle is really really interesting. How do you see that evolving? Is it artificial intelligence? How does this go and who’s the winner overall 10 15 years from now?

Mellody Hobson: 09:26
Well, first of all, I don’t know if there is a company yet doing this and the question is will the existing services, create some form of curation. I think the issue with that is that stays as a closed system and ultimately the question is will there be a curator that will look across all these platforms and help you navigate them? So I’m not sure exactly what form it will take. One would imagine that some form of machine learning or artificial intelligence will be involved and we see that already. Obviously Amazon does that very well. You buy a book and it says if you like this, you probably will like this. We’ve seen it with Apple, with music, so that’s not hard to imagine.

Mellody Hobson: 10:04
I just think that the question is who, what, when, where, we don’t know any of that yet. I don’t think that’s taken any form at all. The one other thing I’ll say about media that I think is important is I do think that there will still be, and again, my husband has really convinced me of this. We will still go to the movies. We will go to theaters because it’s a social event. Certainly at all levels of incomes now people have flat screens, they have big flat screens, but there’s something social about going out.

Mellody Hobson: 10:35
We can listen to a CD in almost perfect form of a song, but nothing competes with a live concert. And so this idea of media only being in your home, certainly we have a lot of opportunity to watch in the way that we wanted our home or on the phone or on an iPad or what have you. But there will still be a world of going to the movies and the question will be, can you uplift the movie experience like we’ve seen in some of the stadium seating and the movies that have the movie theaters that now have food at your table. All of those things, I think we’ll see more of that, more expensive but a better experience.

Jonathan Boyar: 11:15
This interview is about you and your amazing career, but if someone who grew up watching Star Wars, I have to ask at least one or two George Lucas questions. I mean, can you tell us something about him that most people would be surprised to know?

Mellody Hobson: 11:27
Gosh, people know so much about him because he’s been out there for so long. I think for me, the thing that I think was just the most amazing discovery very early on is just he has a really incredible sense of humor and it doesn’t come across, and I joke with him because he never smiles in pictures. And so when you see him in a picture, he has the straight face. And so people don’t really know. He’s just really really funny. Very very clever. And maybe that’s just the nature of being a writer. I don’t know. But that would be my number one thing that I would say that most people would not know about him. But I think the other thing is he literally watches television every day, every single day. I come home and he’s like, I’ve been watching a Fred Astaire marathon. I’m like, what! I mean, he’s a cinephile file. So he television or movies or when he worked on the Clone Wars, he literally watched the Sopranos every season from beginning to end cause he wanted to see how a really strong television show could work.

Mellody Hobson: 12:30
And he literally just sat for weeks and weeks and all he did was hour after hour, watch the Sopranos, he’ll do things like that as a form of research. And last last but not least as he’s learned. So he researched his subjects and he goes very, very deep and it’s something like I never would expect it, he’s like books on tape about string theory and I’m like, “What!” You never know how I might use that one day. And that was something I just had not expected. Super, super, super learned.

Jonathan Boyar: 12:59
Well yeah, I was recently reading Bob Iger’s book, which I highly recommend. And while reading it, I was really excited to see your name mentioned as you were present during some of the negotiations when Lucasfilm was sold to Disney. I guess it was back in 2011 2012 or so. Can you tell us a little bit of behind the scenes of what went on?

Mellody Hobson: 13:20
Well, I would say I wasn’t front and center in those negotiations, but I was on the periphery. I was there for the very first breakfast or lunch. No, it was breakfast that we had at Disney World where the subject was broached. It was funny, we went to the Brown Derby restaurant and it was closed and it was just the three of us and an entire restaurant, which I was like, this is strange, but ultimately Bob Iger brought up the subject of, what are you planning to do with your company? So then, it made sense that no one else was around as we were having this conversation. And then along the way, I was obviously there for everything as it was occurring. I remember when George went to sign the papers in Los Angeles.

Mellody Hobson: 14:01
I was in Chicago that day and I kept saying to him, are you okay? Are you okay? Because I thought, that’s very, very, very hard, and ultimately everything worked out. And Bob was very very kind and thoughtful. Every step along the way. I have a lot of respect for him and not only how he’s run that company and the tremendous success that they’ve had there and the vision that he has, but just how he dealt with George and how he included me in the conversation.

Jonathan Boyar: 14:30
And he kept his word on how the franchise would be treated.

Mellody Hobson: 14:35
Yeah. He’s a pro. He knows what he’s doing and as I said, certainly, they’ve been very fortunate to have him as a leader and we remain a shareholder, a large shareholder of Disney. And a lot of that is because we know that Bob is such an excellent steward for the shareholder.

Jonathan Boyar: 14:58
I hope you’re enjoying the interview with Mellody Hobson. To be sure you never miss another World According to Boyar interview, please follow us on Twitter @boyarvalue.

Jonathan Boyar: 15:06
So I would imagine in many meetings you attend outside of Ariel, you’re both the only woman and the only person of color. Does that add a tremendous amount of pressure on you? Do you feel kind of a weight that you always have to be on your game and great?

Mellody Hobson: 15:30
I’ve always felt that, but it’s not a weight, it just is. So when you’re black and you have a mom like mine, she made it very clear what you’re up against. She made it very clear what I was up against at a very young age and she conditioned me and so I don’t walk in thinking about it. It just is. I have a friend, Holden Lee who used to be the head of HR at Pepsi. He was on the Starbucks board with me, is so smart and Holden once I was talking to him about these issues and he said, “Mellody, how long have you been black? How long have you been a woman?” It was just such a funny comment and it really perfectly crystallized it for me. It just is. So no, do I walk in carrying a weight or something on my shoulders or burden. No.

Mellody Hobson: 16:13
I walk in knowing this is just life and me and situations that I’m in are often very unique and hoping to do a good job so that the next version of Mellody that comes through is received very very well.

Jonathan Boyar: 16:27
Well, your Ted talk, which has been viewed 3.8 million times and counting was certainly received well. The title of the talk was colorblind or color brave. I highly encourage people to watch it and it’s entirety. But if you had to pick one or two takeaways for people to have, what would they be?

Mellody Hobson: 16:48
The number one thing is what the title of the talk was about. And so I said, color blind or color brave. I was really speaking to the countless number of times that people have told me over and over again that they’re colorblind and I really decided I wanted to challenge that because those who often said it to me were the ones who are in the most homogeneous environments. And so I said, you know what, if you actually could, instead of not seeing race, see it. Because if you saw it, you would see that it was missing in your life. And so I am asking people instead of being color blind to actually embrace the idea of race, embrace the idea of speaking about it, noticing it, talking with others about it, and ultimately, as I called it, being color brave.

Jonathan Boyar: 17:29
So in the speech you describe an incident involving yourself and Harold Ford, would you mind retelling it?

Mellody Hobson: 17:35
It’s a funny story, but it’s also sad at the same time. You have to keep a certain sense of humor about these things in life or else you’d be a little bitter. But Harold had called me, he was running for US Senate and he was, a very well known Congressman from Tennessee who came from a family of political leaders and Harold a young, black guy running for US Senate. He called and he said, Mellody, we’re early in our careers and he says, I need help finding and getting some national press. Can you help me at all?” I called a friend that was a big deal at one of the biggest media organizations in the country. And I went to her and I said, is there anything you can do to help? And she said, let’s do an editorial board lunch for him with a bunch of people.

Mellody Hobson: 18:26
She says, but you come to New York with him. So we both fly to New York, we’re in our best suits, we look like shiny new pennies as I described it in my Ted talk. And we get to the building and we’re directed upstairs and we see the receptionist and we said, we’re here for the lunch. The reception has us follow her through this long meandering hallway. And Harold and I are not paying much attention because we’re talking to each other because we haven’t seen each other, and we’re very excited. We’re excited for the whole experience. So we finally ended up in this room and we get to this room and it’s barren. And she turns to us and she says, where are your uniforms? And we look at each other and we’re like, wow.

Mellody Hobson: 19:07
And just as it was happening, my friend runs in recognizing that we’ve been detoured not to the lunch but to the service area and she’s just red in the face. And so I joke with her, I say, this is exactly why we need more than one black person in the US Senate, because at the time we had only had one and I did it in a joking and funny way, but it was just to suggest, the situation underscored who see people, particularly people of color through a certain lens, can’t see us in all the ways that are possible. And so, it was a stark moment but it certainly put a finer point on the reason for the lunch.

Jonathan Boyar: 19:48
So you certainly have an extremely demanding day job, being co-CEO of Ariel. And I guess in your spare time you’re on a bunch of for profit boards. Why did you join a board?

Mellody Hobson: 20:02
Because it’s an area of interest. I feel like I can contribute and learn and those things are exciting to me and they’ve often been companies with leaders who are well known for their excellence and I want to be around excellence.

Jonathan Boyar: 20:20
You were formally chairperson of the board of Dreamworks. You were young when you initially joined the board and other members of the board were David Geffen and Jeffrey Katzenberg. How were you able to get appointed to such a prestigious board so early in your career?

Mellody Hobson: 20:35
Well, it’s a more interesting story that doesn’t start with Dreamworks. It actually starts with Starbucks. And I received a call one day from Bill Bradley who I had worked with very very very closely when he was running for president. And it didn’t work out obviously. And he called me one day and he said, “Mellody, I’m going on the board of Starbucks and I’m taking you with me. And I said, what? And he said, you don’t know this, but there’ve been a number of times you’ve been on the phone with Howard Schultz and I’ve told them how diligent and hardworking and smart you are and that they really should think about you for the board and now he wants to meet you.

Mellody Hobson: 21:15
And so through a series of interviews that took place over a couple of years, I ultimately was selected to join the board. And from there, Howard called me one day and he said, “Mellody, I’m going on the board of Dreamworks and I’m taking you with me”. I was like, “What!” I mean, it was one of those crazy calls and he said, “Dreamworks is going to IPO and Jeffrey Katzenberg is looking for board members and I told them you would be great. And so, it’s interesting, part of it was just doing a good job where I was. So with Bill Bradley when he was running for president, I work so hard on that presidential campaign and I was very very very focused while working at Ariel. And I would split my day into two parts and work six, seven hour days at both organizations for a couple of years, seven days a week.

Mellody Hobson: 22:05
But I’ve worked as if it was a job, it was not a job. And ultimately that commitment and that devotion was the reason that Bill recommended me at Starbucks. And then when being on the Starbucks board, once I was there, I poured my heart into it. And that led Howard to recommend me. So the big takeaway that I tell people all the time is whatever you’re going to do, you want to be a team player and you want to do it very very well. I had no idea that volunteering for Bill Bradley would lead to being on the board of Starbucks and ultimately vice chair of the board. But it was because I just put my head down and did the work and it was all about being a good teammate to Bill. And this idea of being a good teammate was something that John Rogers had always stressed to me. John Rogers is the person who founded Ariel. He had always stressed to me from the very very beginning of working at Ariel. He always said, the more you help your teammates, the more you help yourself. And the way that the Bill Bradley relationship and Dreamworks and Starbucks all played out is a testament to that statement.

Jonathan Boyar: 23:06
And that’s an amazing story. And basically you had two or three full-time jobs at once and did a great job for each of them. I mean, you must have extraordinary time management skills. I mean, how do you organize your day?

Mellody Hobson: 23:22
Well, that’s a really great question because, I spend a lot of time asking people how they organize themselves because I’m always looking for an edge in a way to be better. I can’t quite get to Jeffrey Katzenberg point where he only needs four hours of sleep. He’s one of those like 10% of people on the planet can live on four hours. But he basically jokes, he gets an extra day every week, which he does because I worked with him for a long long time and I know it to be true, but I can’t do that. But what I do spend a lot of time thinking about is how to be efficient. So everything from one of the things I do at Ariel is I have office hours, which I learned in college.

Mellody Hobson: 24:00
I said, why don’t we do this at work where there was a stated time every day that you could go and see a professor without making an appointment. And there’d be a line outside their door, but they were their office hours. I do that at Ariel and we set that time up on my calendar for people to know when they can communicate with me on small issues that … Actually, it’s 15 minutes or less. It’s not a meeting but it’s not a phone call or it could be a phone call if it’s office hours when I’m outside of the office. And so that’s one way to organize your time so that you don’t have people coming at you all day long because we have a very open door policy at our firm. And so we want to be approachable and accessible to all of our teammates. But the downside of that is just being interrupted constantly. So by coalescing everyone around the office hours, that helps make me more efficient as one of many examples.

Jonathan Boyar: 24:55
Just switching topics a bit. You serve on a bunch of corporate boards. What do you think the biggest responsibility of a board member is? Also you were chair when Dreamworks was sold to Comcast. Can you discuss how a sales process like that works?

Mellody Hobson: 25:11
I think the most important role of a board member is to understand the leadership of the company, succession and capital allocation. To me those are top top top of the list. In terms of the sale of Dreamworks, it was a fascinating process. It was a once in a lifetime experience. It was fun and grueling at the same time and it started with a phone call that I got one day from Brian Roberts. He started by calling Jeffrey Katzenberg first and Jeffrey had super voting shares of Dreamworks and for that reason could not in any way negotiate anything related to the company because he had this special class of shares and all shareholders in that kind of transaction must be treated equally.

Mellody Hobson: 25:52
So Jeffrey said, I can’t talk to you but you can call our board chair. So it’s 6:00 AM in the morning on a weekday, it’s actually a Thursday I remember. And the funniest thing about it is that when he called my husband answered the phone, he called the home phone and I had already come back from my workout and I was actually literally taking a bath and my husband made the joke, you want to take a bath with my wife, which was just completely inappropriate, of course. I told you about that sense of humor. And so he hands me the phone and Brian Roberts, whom I met but didn’t know really well, said, we have an interest in the company. And so it just sort of started there. And that immediately went to an in person meeting in Los Angeles that Saturday. And then it just played out over the next couple of weeks. I mean, all day negotiations an back and forth and up in the middle of the night.

Mellody Hobson: 26:47
And during that period my baby was a baby. And so because I was doing calls throughout the night for about a couple of weeks, this went on for about two weeks and we did a deal very fairly quickly because I was doing these calls in the middle of the night. I slept on the sofa in the family room because my guest room was my baby’s room. So I slept on the sofa. And the big joke that I had that the people who worked in my house must’ve thought that I had a bad marriage because every morning they’d come and see this pillow and this blanket. But I slept on the sofa so I didn’t wake everyone in the house up because I was doing these calls all night. So it was crazy and it was very very invigorating.

Jonathan Boyar: 27:30
How did your board service made you a better investor?

Mellody Hobson: 27:35
In every way, every way. A better leader, a better investor. I think a better person. And that’s because I’ve had one jobs since I graduated from college. I’ve only worked at Ariel, this is 28 years now. So that could be a very insulated experience. That could have been a very insulated experience, but it hasn’t been because I’ve had these other outlets and by serving on corporate boards, I can tell you in no uncertain terms that it’s led to Ariel being run better because I get to learn everything from internal audit to a whole host of things that you can bring back to your organization and make you better. But you also have experiences in a board room that are not the same but certainly are suggestive in terms of issues that we confront with companies that we own.

Mellody Hobson: 28:26
You can say, I remember this in one of my own experiences and how it might relate to something that we might see with one of the companies in our portfolio. And then also just understanding board dynamics. That’s very enlightening when you think about the issues that companies confront on a day to day basis. What are they thinking? How are they dealing with this? Who’s in charge? All of these things are really informative. So Warren Buffett is the one that said, being involved on boards made him a better investor and a better leader. And I’m 100% in agreement of that point of view. It’s been a gift.

Jonathan Boyar: 29:03
Well, Mellody, you’ve been more than generous with your time. Thank you so much, and it was delight having you on the show and hearing about your fascinating career.

Mellody Hobson: 29:12
Thank you so much for having me and have a happy holiday.

Jonathan Boyar: 29:19
I hope you enjoyed the show. To be sure you never miss another World According to Boyar interview. Please follow us on Twitter @boyarvalue, until next time.

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of November 13,th 2019 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According to Boyar – Episode 11: Kenneth L. Davis, MD

About Kenneth L. Davis, MD.

Kenneth L. Davis, MD, President and Chief Executive Officer of the Mount Sinai Health System, is widely recognized as a visionary leader who has guided the institution on a strong and dramatic growth trajectory. In 2013, the Mount Sinai Health System was formed by the combination of The Mount Sinai Medical Center and Continuum Health Partners, becoming one of the largest nonprofit systems in the country with $8 billion in revenue, 42,000 employees, eight hospitals, and more than 410 ambulatory practices throughout the five boroughs of New York City, Westchester, Long Island, and Florida. Prior to becoming CEO, Dr. Davis spent 15 years as Chair of Mount Sinai’s Department of Psychiatry. He was the first Director for many of the institution’s research entities, including Mount Sinai’s National Institutes of Health (NIH)-funded Alzheimer’s Disease Research Center, the Schizophrenia Biological Research Center at the Bronx Veterans Affairs Medical Center, the Silvio Conte Neuroscience Center to study schizophrenia, and the Seaver Autism Center for Research and Treatment. Additionally, he received one of the first and largest program project grants for Alzheimer’s disease research from the NIH.


The interview discusses:

    • How Dr. Davis led one of the greatest financial turnarounds in medical history;
    • The reasons why healthcare keeps becoming more expensive along with solutions on how to decrease costs without sacrificing care;
    • Why drug pricing should be a trade issue;
    • Why the current patent system discourages pharmaceutical innovation;
    • What “value based” medicine is and why insurance companies and hospitals should consider adopting it;
    • Why the National Institutes of Health is so vital to drug discovery;
    • His thoughts on CVS’s strategy of becoming an integrated health care provider;
    • What serious healthcare problem he sees getting worse which he believes has the potential to bankrupt the entire Medicare system;
    • And much more….

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Transcript of Interview with Kenneth L. Davis, MD. 

Jonathan Boyar: (00:10)

Welcome to the World According to Boyar, I am your host, Jonathan Boyar. Today’s topic is the business of healthcare. Healthcare, by certain measures, is the biggest business in the US. It comprises almost 20% of our GDP and that number seems to be only going in one direction, up. Business owners, both big and small are impacted directly with rising insurance costs. Employees and consumers are seeing increasingly higher deductibles and copay’s. This is one of the major issues of the 2020 U.S. Presidential election where we are seeing some pretty radical ideas being proposed.

Jonathan Boyar (00:50):

So how does an investor profit from this? Is it by purchasing a company like CVS, which Boyar asset management owns, and we have written extensively about in our research service? Are there other ways? I wanted to find an expert to discuss the drivers of healthcare costs. Someone who not only understands the science behind what constitutes delivering quality healthcare at an affordable cost, but also a person who has demonstrated the business savvy of successfully navigating this increasingly complex ecosystem.

Jonathan Boyar (01:21):

To me, the choice was obvious. Dr. Ken Davis is the CEO of the Mount Sinai Healthcare System and led one of the most unbelievable financial turnarounds in medical history. I personally have a special fondness for this institution as my wife completed her residency at Mount Sinai and I have great memories of visiting her at Guggenheim Pavilion. In our wide ranging interview, Dr. Davis discusses why healthcare is so expensive, solutions on how to keep costs down, and countless other valuable insights that will be interesting to not only investors, but people who want more knowledge on this increasingly complex debate. Dr. Davis, welcome to the show.

Dr. Ken Davis (02:03):

Good to be here.

Jonathan Boyar (02:04):

Today Mount Sinai has over 42,000 employees, 8 billion in top line revenue, and an endowment without donor restrictions of around $2 billion. However, when you assumed your current role, the situation was, to put it mildly, dire. I believe you had two weeks of payroll left. Can you explain what you were drafted into?

Dr. Ken Davis (02:22):

Wow. Well, I was the dean and I had been the dean for about two months and the chairman of the board called me into his office and said, “we’re firing the CEO.” They had hired the CEO less than a year earlier, “and we’d like you to do both jobs.” I thought, wow, I’m mostly a scientist. This is not what I was trained to do, but like your wife and perhaps even more so, this institution had meant a great deal to me. When I was seven I came here for emergency surgery on Mother’s Day. I remember it like it was yesterday. Traffic was so heavy, my mother was panicked we wouldn’t get there in time. I was met at the curb by emergency workers who put me on a stretcher and the next thing I knew I was in an OR and they were operating on me.

Dr. Ken Davis (03:11):

I went to medical school here when it was just the second class and there were 40 students in the class. Except for six years that I spent at Stanford, this has been my whole life, I came back after Stanford and for the place to be in such a dire position as it was then and to be entrusted with turning it around seemed to me to be something of which there was really no decision. This is what I was going to do.

Dr. Ken Davis (03:38):

So I’m a scientist, I am data-driven and the first things that I asked was, what are the diagnostic related groups where we have a margin and what are the ones in which we’re losing money? And what I found out, that everybody knows who’s been in this business, is that complex surgeries are where the margin is and pediatrics, psychiatry, basically the inpatient stays that aren’t procedurally related, are where you lose money and that as of today, but it was the same before you lose money on Medicaid, you lose money on Medicare, you’ve got to make that up in commercial insurance. So we had a place that was swarming with consultants and those consultants were telling the management team how we were going to work this out. And their strategy was always expense reduction, expense reduction, expense reduction.

Dr. Ken Davis (04:36):

And they would say things like, “look, you don’t need an A level of cleanliness in the hospital, you could have a B.” And I said, “with the competition in New York, you think we can live with a B level of cleanliness? People will see a floor that looks a little dirty and they’ll say, could you imagine what the ORs look like?” So my conclusion was, no, we were not going to cut our way out of this problem. We had to grow the top line. So I generated a plan and the plan was we had to recruit and we had to recruit those doctors who are doing the complex surgeries that we weren’t doing. We have to recruit major surgeons who have reputations and practices. And I put that plan together and I said, I’ll need to go to the board and get approval to use whatever money is in the endowment that is unrestricted so I could generate the seed packages that would be necessary to attract the doctors and bring them to Mount Sinai.

Dr. Ken Davis (05:43):

And I remember when we had the board meeting, I presented my plan and some members of the board then turned to the consultants and they said, “what do you think of Dr. Davis’s plan?” And they said, as consultants would, they didn’t want to be hypercritical. They said, “well, it’s very interesting we understand it, but frankly we don’t believe in the revenue fairy.” So the board voted and the board voted unanimously to approve my plan and to unlock the money that was unrestricted in the endowment for me to use for recruitment. And as I was leaving, one of the board members turned to me and said, “you better be right because if you’re wrong, you’ll be the last CEO of Mount Sinai.”

Jonathan Boyar (06:33):

You’ve said that being a scientist really was the best preparation of becoming a CEO, what do you mean by that?

Dr. Ken Davis (06:40):

I was a data-driven person. I knew that to solve this problem, I needed facts, I needed data and I immediately went to our group who are in strategic planning, ironically had just been given layoff notices by the consultants and I said, “you’re staying and I need to know the margins on all these DRGs that are common.” And that’s what they gave me. And then we began to look at the data. Where are the expenses, where are the revenues and where are the margins?

Jonathan Boyar (07:12):

Roughly 62% of your patients are Medicare, Medicaid. For each Medicaid patient, you lose about 35 cents on the dollar, for Medicare, I think it’s about 15 cents.

Dr. Ken Davis (07:22):

That’s right.

Jonathan Boyar (07:23):

Clearly this isn’t sustainable, you said that you make some of it up from private insurance, but how did we get here?

Dr. Ken Davis (07:30):

You mean how did healthcare in general get here? No one can afford healthcare. The feds can’t afford their Medicare and their Medicaid, the state can’t afford its Medicaid. The employers can afford their premiums, the employees can’t afford their copays. So everybody wants to shrink what they’re paying to the payers. And when the vast majority of your payers are government, they’re the easiest ones to cut. They get the least push-back and the most voters are, that’s what they’re in favor of. So we have to find ways to survive.

Jonathan Boyar (08:06):

And what’s the biggest driver of costs in the system for you as a hospital? Is it nurses? Is it drugs, litigation?

Dr. Ken Davis (08:13):

It’s labor.

Jonathan Boyar (08:14):

By far and away?

Dr. Ken Davis (08:15):

Sure, labor costs. It’s a labor intensive business. You need the physicians, the specialists are expensive and it’s a very competitive area in New York and the need to staff places where there are very, very sick people, because as care has become more and more ambulatory, the people who come to the hospitals are your sickest people. They need the most staffing. So labor costs are very high.

Jonathan Boyar (08:45):

So now there’s a movement in medicine. If you go to a doctor, you pay for the visit to more of a value based approach and it’s something you’ve been outspoken about. It’s a revolutionary change. How does this get accomplished?

Dr. Ken Davis (08:58):

Well, an insurer or the government says you are taking care of primarily X amount of people and for every X, every one of those people we’re going to give you Y amount of dollars and that’s it. We’re going to give you that ahead of time, that’s what you get for the year. Your job is to manage those patients with that amount of money. So suddenly your incentive is to keep people well instead of fee for service medicine, which your incentive is to do anything you can do because anything you do you get paid for. That just drives up the bill. So this necessitates much more thought about how can I be prudent, how can I keep people well? Of course it has a downside too. And the downside is, you may do too little, but if you do too little, ultimately you pay a price because then they get real sick and you have a much bigger bill. So this changes the way we’re reimbursed, changes the way we conceptualize care and hopefully it can bring savings.

Jonathan Boyar (10:02):

I see how that could work for an insurance company, but for a hospital, how does that model work?

Dr. Ken Davis (10:08):

Well, if we’re paid a fair amount and if we are effective in keeping people out of the hospital or when they need care, doing it in the lowest level that we can and do it well. If we can keep people essentially healthy, we will wind up not having to spend down all that money that we’re given ahead of time.

Jonathan Boyar (10:33):

For this plan to work, basically do all physicians now have to be associated with a hospital?

Dr. Ken Davis (10:40):

No, not for physicians, but the hospital has to be worried about physicians who are not a part of their employee or have some incentive that is aligned with them because if were responsible for say, a particular patient and that patient goes to a doctor who is unaffiliated with us, has no connection to us, can’t read the medical records, they have no incentive to be as efficient as possible nor to find out what has already been done. So you may get redundant medical care, redundant diagnostic tests, unnecessary procedures, or that Dr. may feel he’s still, or she, in a fee for service world. But the difference is that the money that that doctor’s being paid is now coming out of our allotment for care for that patient. So we’re very worried when that patient winds up in an unaffiliated office.

Jonathan Boyar (11:40):

So scale for this must be tremendously important. I mean you’ve merged with hospitals a few times. Do you see more consolidation in this space?

Dr. Ken Davis (11:51):

Well, you’re right, scale critical. Think about this in the context of value based care in Manhattan. Let’s say Mount Sinai, before all its mergers was just this wonderful hospital in the Upper East Side. And one of our patients, who lives South of 34th street gets very ill and winds up in an emergency room of say, and I like them, NYU. Well, they don’t see our records, they don’t know what’s going on and they’re not in our risk pool, so what do they do? They repeat all the tests. They do everything that we’ve already done. They wind up again in fee for service medicine doing procedure after procedure and we couldn’t control it. What we needed was those people had a Mount Sinai facility to go to. So when they get sick with that scale, we lose them. We needed the scale to make sure they stay within our system. And that resulted in some now 400 ambulatory sites and eight big hospitals.

Jonathan Boyar (13:03):

The NIH, there’s a lot of mystery surrounding the organization and you’re an outspoken proponent of the importance of the NIH. Can you just briefly explain why they’re so vital in healthcare?

Dr. Ken Davis (13:15):

Critical. Big pharma has become drug development, not drug discovery houses. So where does the intellectual property come from? Where does the new ideas, the targets for new drug development, understanding fundamental pathophysiology, where does that come from? It comes from the academic medical centers, the large academic medical centers that receive a lot of NIH money. That in turn produces the targets, produces the pathway to new compounds. And at some point, those ideas are then transferred over to the big pharmas who then spend the money to put them in big clinical trials. But big pharma, even if it decided to redirect its money more into drug discovery, doesn’t have the depth of people, the kind of infrastructure of scientists and academics that you need to really come up with the most creative ideas and take the biggest risks.

Jonathan Boyar (14:16):

And the way patent law is, it really incentives big pharma to have is what you’ve called and other people called, me too drugs.

Dr. Ken Davis (14:26):

Absolutely, and here’s why. You would think 20 years is a long time for a patent, but in fact when you figure out how long it takes to develop a truly novel compound for a really bad disease, you suddenly begin to calculate something like this. I want to develop a drug for Alzheimer’s disease. I find a molecule, I patent that molecule, now I’ve got to show that that molecule is working in my laboratory tests, desktop. Working in my animal models, then is not toxic in my animal models, then it’s not toxic in my first group of people. Then I turned to what’s called phase two studies, which is a little proof of concept, but it’s hundreds of patients. Then I moved to my phase three studies, which are the pivotal studies and if it’s for slowing the course of Alzheimer’s disease, then I enroll a lot of people who are potentially high risk for Alzheimer’s disease because of their genetic code, but they don’t have it yet. They’re complaining a little bit about their memory and I wait to see how many convert over into true Alzheimer’s.

Dr. Ken Davis (15:37):

That’s a multi multi year study and I probably don’t want to do though two at the same time because they’re very expensive so I do it sequentially. By the time all that is done and I finally have a drug that may slow the course of Alzheimer’s, I could have easily used 15 years of my 20 years. So then what happens? I’ve got five years left, which is also the amount of market exclusivity that you would get, data exclusivity for my filing with the FDA. So I’ve got five years to get back all that money, all that investment.

Dr. Ken Davis (16:12):

In contrast, let’s say I decide what I really want to do is make another H2 blocker for the stomach. I know where to go, I know the target. I can think very quickly through how I can get this thing into development. I have a good idea it’s going to be safe. So what’s my problem? My problem is I got a market to compete with, so instead of spending my money on R&D, I spend my money on marketing. That encourages me two drugs unless we get some kind of flexibility in patent law around encouraging what is truly innovative and discouraging, what are me too’s, we’ve got a business model that keeps us from really developing the breakthroughs that we need and we really have to take a hard look at that one.

Jonathan Boyar (17:01):

One that’s really fascinating and shows, I guess the importance of the NIH, is I’m assuming they’re involved is ketamine that actually happened at Mount Sinai. As far as I know, there hasn’t been a revolutionary drug for depression since the mid eighties with Prozac, there hasn’t been a new mechanism, I think, of action is the term, but within Mount Sinai you developed trials and I don’t know if it’s come, I believe it’s come to market.

Dr. Ken Davis (17:27):

Oh yes.

Jonathan Boyar (17:28):

Can you explain how that happens?

Dr. Ken Davis (17:30):

Sure. Let me go back. In fact, the mechanism of action for antidepressants is to keep the chemicals, the neurotransmitters between neurons around a little longer or make them more effective. That was accidentally discovered in the 50s and whether you increased norepinephrine, which is one of those neurotransmitters, whether you increase serotonin, which was the other one, these were all essentially the same drugs. So Prozac wasn’t different in the 80s, it’s just a drug we recent more recently remember. Ellivil, way back in the fifties, sixties. So there was an observation by just some very smart clinicians that ketamine, a drug of abuse, was seen to be mood elevating. And the question was how could we validate that in fact it had a sustained effect and that it was safe and that it wasn’t addictive and it wouldn’t be a drug of abuse. That took a lot of very smart, smaller clinical trials that demonstrated that in fact, the effect could be sustained, that the dose wasn’t a dose of abuse and that the mechanism of administration could be safe.

Dr. Ken Davis (18:49):

With that information and a use patent, Mount Sinai and collaborators were able to go to drug companies and say, “do you want to develop this?” And they did, but in that case, what it took was a lot of smart clinicians who were in the field of translational science taking, in this case, compounds that were out there and using them for other indications. More traditionally, drug development is about finding a new target and figuring out what molecule will be on that target to change the pathophysiology going forward.

Jonathan Boyar (19:28):

So for Mount Sinai’s effort of doing this, do they actually get rewarded? Is this something-

Dr. Ken Davis (19:34):

Yes, yes, we get a percent of a sales from Johnson and Johnson on ketamine.

Jonathan Boyar (19:39):

And do the taxpayers get reimbursed?

Dr. Ken Davis (19:41):

You ask a terrific question, which is this, if NIH money is generating the kind of intellectual property that leads to drug discovery, what should be the return on investment for taxpayers who are funding that and is a question that is rarely addressed, but I think should become a part of the discussion around drug pricing and it hasn’t yet entered the issue of drug pricing. I don’t hear a lot of people saying, wait a minute, that drug that you’re now selling for X thousands of dollars, where’d the science come for that? Who paid for that?

Dr. Ken Davis (20:28):

Now you know that there’s the Bayh–Dole law and what Bayh–Dole does is it allows places like Mount Sinai to take inventions that come from NIH funded grants and to patent them and then in fact to license them to big pharma. The government has the right to buy back, to drop in and to say, wait a minute, we’re taking this back or we’re going to sell that patent because of what your pricing it to to a competitor. They’ve rarely, rarely done that, but they have the power to exercise that authority, which could have an impact on how some of these drugs ultimately get priced.

Jonathan Boyar (21:16):

I hope you’ve been enjoying the interview with Dr. Davis. To be sure you never miss another World According to Boyar podcast, please be sure to follow us on Twitter, @boyarvalue. Now, back to the show.

Jonathan Boyar (21:33):

You had briefly mentioned trade issues. They’re in the headlines for a variety of reasons and you’ve discussed, drug pricing should be a trade issue. Can you just further elaborate on that?

Dr. Ken Davis (21:44):

Well, think about this. In single payer systems, governments sit down with big pharma and they say, we’re going to pay X for this drug. This is what we’re going to pay no more, no less. You want to sell it in our country, this is what we’re going to pay you. End of story. Drug companies argue they have no margin when they do that. So they come to the US where we don’t sit down and make that negotiation and they price it how they want.

Jonathan Boyar (22:10):

And sorry to interrupt you, why can’t Medicare do that?

Dr. Ken Davis (22:13):

It’s not legal.

Jonathan Boyar (22:14):

What’s the rationale?

Dr. Ken Davis (22:15):

The rationale is we believe in a free market. We believe in capitalism and we believe in a return on investment for the drug company that should be fair for all they’ve put into it. And I believe that at least decades ago when I was working with big pharma and helping them develop Alzheimer’s drugs, there was a social contract and the social contract went something like this, we want everybody, the drug company would say, we want everybody to be able to afford this drug. And as a consequence, you’re not going to turn around and then negotiate one price for all of Medicare. So we’ll be fair and you’ll be fair and we’ll move on because the rest of the world isn’t.

Dr. Ken Davis (22:58):

Well maybe that social contract’s been broken and maybe there are some people in big pharma who just want to price it where they want to price it and good luck if you can afford it. Maybe that overstates the case, but I think that the circumstance has brought on big pharma it’s own worst enemy, which is the question of well, shouldn’t Medicare have the right to negotiate drug prices with you? And if they got that right and that legislation is before Congress now, it changes everything. So then pharma can come back and say, we don’t have enough money to invest in science and it’s going to cost us in innovation.

Dr. Ken Davis (23:39):

Before we get to that, what I would like to see happen is sit down in trade negotiations and say, “wait a minute, US citizens aren’t going to have to pay for all these drugs, rest of the world, you got to pay too.” And then we have to sit down with the pharmacy CEOs and say, “if you get more money from the rest of the world, decrease what Americans have to pay so that it’s still fair. Don’t just put it in your pocket.” So there’s a long way to go, but I think to at least shine light on the fact that this is unequal around the world and should be a part of our trade negotiations is a good idea.

Jonathan Boyar (24:17):

So when the polio vaccine came out, it was essentially free. The cost of polio at the time to society was enormous, legend has it that Jonas Salk refused to patent the vaccine because he said, “would you patent the sun?” The actual truth to why he didn’t patent it is open to debate and there’s a lot of nuance behind that, but it’s a nice story nonetheless. Today, drug companies base their pricing partially on how much money they save the system and that’s why you see $80,000 price tags for drugs. What’s a good middle ground? How do you do this?

Dr. Ken Davis (24:50):

Well, it’s been suggested that you can do it based on how effective the drug is. I think that’s often hard to determine. I think it might be fair to have transparency to open up the books, to talk about, we’ve had this many failed compounds in this class. This is how much we’ve invested, a fair return would be X. We want that fair return going forward plus inflationary adjustment, but we haven’t had that kind of transparency yet.

Jonathan Boyar (25:20):

Speaking of transparency, PBMs, they’re an easy political target. They’re complex, they hold a lot of power. From your perspective as a provider and a large employer, how do you view the debate and do they have a positive influence? Do they have a reason to even exist?

Dr. Ken Davis (25:36):

You know, I just don’t know enough to really be knowledgeable about that other than to say, every time we have another hand in this line of potential profit, we’re just making it harder and harder for patients to pay for their drug and the most efficient way it would seem to me would be if we could get the best prices from pharma directly to the patient with the insurance company is perhaps the intermediary. I don’t know why we have to, but I’m sure there are good arguments for PBMs, but I just regret the fact that we have so many profit centers in line here that are getting some return on what is essential medications for people’s survival.

Dr. Ken Davis (26:23):

To return to your Salk vaccine, could you imagine if when we all, well, at least when I was, I remember seven years old and lined up to get the Salk vaccine and my parents were rejoicing, because in the summers we were all petrified that we’d wind up with some polio. Could you imagine if at the door you checked in you had to give them a couple thousand dollars? How many people, when I got the shot in 1954, would have said, “we can’t afford this. How can we do this?” Or could you imagine if the people who went to market with it said, as you pointed out, “do you realize how much money we’re going to save the healthcare system?” You know? Well, they’re not saving my mother. It’s not my mother and father’s money. I mean, they couldn’t afford it.

Jonathan Boyar (27:06):

We’re a money management firm and one of the companies we’ve invested in and written up has been CVS. They’ve changed their business model drastically. They’re not only a drugstore, they’re also a PBM. They’re also a major insurer, so they’re now really incentivized to take costs out of the system and they now have a strategy of preventive care, maintenance, chronic disease treatment. They’re going to have centers where people can go in and get seen by nurse practitioners. Do you think this is a good idea? Do you think this will help with the strain on large hospitals like yours and lower costs?

Dr. Ken Davis (27:41):

Time will tell. I don’t know. Certainly in theory you can see how an integrated system like that could save the system money on the other hand and integrate a system like that could also add expense to the system depending on how they wanted to price things. I worry about the kind of people on the front lines who will be in those places, staffing those facilities. How knowledgeable will they be about disease? How well will they be able to pick up some of the subtleties that suggest, by the way, that breathing problem you’re having, it’s a little more serious than you think. We better send you somewhere else. I don’t know if they’re going to afford the kind of quality care that you’d want. This isn’t like going to Walmart and just picking something off the shelf. You really need good people and I don’t know how they’re going to staff it and I don’t know what kind of doctors, if they’re going to get doctors at all, are going to be in the front lines.

Jonathan Boyar (28:35):

You’re an expert in Alzheimer’s disease. You hear a lot about the opioid epidemic, cancer, diabetes, all of these have tremendous cost to society. You hear a lot less about Alzheimer’s. However, the Societal cost is enormous. Can you give us some perspective, especially now with as the baby boomers are aging?

Dr. Ken Davis (28:53):

It’s an accident waiting to happen. I mean this can bankrupt the rest of the Medicare system. The percentages of people over age 85 who are demented is phenomenal and the system just can’t afford it and they don’t have the facilities to handle it so that what we badly need is a drug that can slow the progression of Alzheimer’s. The brain changes that happen in the Alzheimer’s patient happened 25 years, start 25 years before you’re symptomatic and we can identify those changes with tests now. What we need is a drug that we can start to administer 25 years earlier that say, would slow the progression by half, so that instead of average age getting it at 80 or 82 you’re now going to get it at 102 and you’re going to have a lot fewer people with dementia. Unfortunately, a myriad of drugs have failed and we’re still waiting for something that is really going to be efficacious here.

Jonathan Boyar (29:53):

Do you think it’s feasible?

Dr. Ken Davis (29:55):

To find the efficacious agent? I think the science can definitely provide that.

Jonathan Boyar (30:00):

How much are we talking about in terms of costs that have gone into this?

Dr. Ken Davis (30:03):

At this point? Billions and billions of dollars. The question is when we come up with a drug, can you imagine if it’s only marginally efficacious and the cost is $25,000 a year? That would be outrageous and it could be worse. So what we’re looking for is going to have to be a truly efficacious compound, not marginally efficacious, that we’re going to have to take for decades, that’s going to have to be fairly priced so that we don’t bankrupt the Medicare system just by the drug that’s going to slow Alzheimer’s disease rather than Alzheimer’s disease itself.

Jonathan Boyar (30:42):

Dr. Davis, I want to thank you for your time and the insights you gave. Mount Sinai is an organization that relies on donations in order to continue to deliver unbelievable services. If you’re interested in learning more on how you can help this wonderful organization, please visit To be sure you never miss another Boyer podcast, please follow us on Twitter @Boyarvalue. Until next time.

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of November 13,th 2019 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According to Boyar – Episode 10: Howard Lorber

About Howard Lorber

Howard Lorber is the president and CEO of Vector Group Ltd., a holding company. He is also the Chairman of Douglas Elliman, a subsidiary of Vector, which is the largest residential real estate brokerage in New York metropolitan area with 4,000 brokers as of 2014 (and an additional 300 in Florida). Lorber is chairman of fast food chain Nathan’s Famous .

The interview discusses:

    • How he helped turn Nathan’s Famous from a small restaurant chain into a global licensing business that sells over 480 million hot dogs per year;
    • Characteristics he looks for in companies he looks to acquire;
    • His thoughts on the New York real estate market;
    • What areas within the New York residential real estate market he believes currently offer the greatest values;
    • His views on technology disrupting the real estate business and who is potentially most vulnerable;
    • How he believes tobacco companies will participate in the cannabis market.

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About The Boyar Family Of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here

Boyar Research
Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here

Transcript of Interview with Howard Lorber:

Jonathan Boyar: (00:11):

Welcome to the World According to Boyar, where we bring top investors, bestselling authors, and market news makers to show you the smartest ways to uncover value in the stock market. I’m your host, Jonathan Boyar. Today’s guest is Howard Lorber, CEO of the Vector Group and Executive Chairman of the Board of Nathan’s Famous. Howard welcome.

Howard Lorber (00:32):

Thank you. Nice to be with you.

Jonathan Boyar (00:34):

You’re probably best known for being Chairman of Douglas Elliman, a real estate brokerage house with almost 27 billion in sales. But long before that you helped engineer a takeover of Nathan’s Famous, the hot dog company. What opportunity did you see at the time?

Howard Lorber (00:49):

Well, Nathan’s is a similar to a few other deals I did had something in common. It had a great brand name in business for many years and not the best management. And I always felt that companies with great brand names almost always survive, no matter how bad the management is at times or how bad the markets are for whatever they do at times. They’re pretty hard to kill. So I saw Nathan’s is fitting that category that with a great management team and plans to grow, that there would be a real winner over a period of time. And having said that, it took longer to really get it going than I thought, which happens a lot. But on the other hand, when you look back now, it was the right deal to do because of the name and because of the expansion we were able to do. And then the shareholders did very well including myself.

Jonathan Boyar (01:42):

Was the plan always really to become… get into the licensing business or did you expect to open more stores? It’s a very interesting evolution.

Howard Lorber (01:53):

Yeah. Well look, we started off when we took a private and started doing some franchising, then we took it public again and we’re plan was to use some of that money to open new stores. And really what happened is we opened a couple of new stores and they really weren’t doing well and we weren’t going to just keep opening stores and go through all the money when we saw that it wasn’t working.

Howard Lorber (02:15):

And one of the issues in thinking about the company and thinking about hot dogs in general, I think most people view hot dogs as a snack, as a snack food, not as a meal. Okay. So how could you make money in a restaurant, especially a large restaurant when people view it as a snack food.

Howard Lorber (02:34):

Then we tried different things. We tried by using other brands in conjunction with Nathan’s in the bigger stores and so forth, but it’s still with the rent you had to pay and the help you needed, it still didn’t really work too well. So we started looking more into the licensing business and we were stuck at the time with a license that for supermarket sales, which was not a great license deal for us. At the time we did it, I think it was when we were first taking it private and we didn’t have much leverage on what we could negotiate for, but years later we were in a much better position than when the first license agreement expired, we were able to make a deal that was multiples better than the first deal we had.

Jonathan Boyar (03:18):

In 93, 94 you join Vector and since the 90s the stock has gone up after dividends, I believe, over 10,000%, which has basically outperformed almost every other publicly traded company, including Berkshire. Can you discuss the evolution of that company?

Howard Lorber (03:34):

Well, thank you for the compliments. Anytime anyone mentions it in the same vein as Berkshire, I’m happy and proud. Look, we believe when you look at the tobacco business there was lots of litigation risks, lots of things going on in those days. And we were well aware of that and we were able to do a couple of things to limit those risks and also to benefit from a settlement with plaintiffs, which at a certain point in time were the state’s suing the tobacco companies for not disclosing the risk of nicotine being addictive. So the days of the lawsuits of cigarette smoking causing cancer were sort of waning because the warnings were on the cigarettes for so many years already by that time, so some smart lawyers came up with the theory of suing under the theory that it was never warned that nicotine is addictive, and maybe if people knew what was addictive, they wouldn’t start.

Howard Lorber (04:25):

So in any event we found a way to settle and get a special deal, and when the industry settled, we had a deal which allowed us to go from a company tobacco company making very little, if anything, to making a substantial amount of money on an ongoing basis. And our belief was still was an industry with problems and with really no big growth, because tobacco has gone through a constant slow decline over the years. So we always felt that the best thing to do was to pay out whatever we could in dividends to the shareholders, and that was a benefit, and that’s why the numbers look so good in returns. So for I think almost 20 years, we paid a dividend and we paid a stock dividend also for maybe most of those same years, and actually that was the plan.

Jonathan Boyar (05:16):

You can’t argue with success, but dividends are obviously not very tax efficient. Why dividends over buybacks?

Howard Lorber (05:25):

We thought about buybacks, but honestly we really did believe that the dividends were really what the shareholders wanted, so we didn’t really concentrate completely on tax efficiency and I think that the dividends ultimately did good for the shareholders, did very well for the shareholders. I’m not so sure the stock buybacks would have been the same, because at certain point you start buying back stock and then the stock goes way up and you have to stop buying back stock. The dividends you can just be paying. If you have the money, you just keep paying. So we felt that dividends were a better strategy.

Jonathan Boyar (05:59):

As I said, you can’t argue with success. I mean, in terms of the tobacco business, do you see tobacco companies the way beverage companies are starting to enter the cannabis industry? Do you see tobacco doing the same thing or is it a completely different business?

Howard Lorber (06:15):

There are some similarities, so you can’t say it’s completely different. But I will say from our point of view, the big difference is the fact that cigarettes are federally licensed and tobacco is federally controlled. Cannabis isn’t. It’s state by state. So a lot of times we’ve had cannabis companies come to us say, “Oh, it’d be great if you could distribute our product.” And we have a big distribution network and selling our cigarettes. But the problem is you can’t. You can’t do it. It’s state by state. So it really doesn’t work for us. And I think the tobacco companies that are going to make money in cannabis are the ones that invested in other companies that are completely remote. There’s really no tie in. They’re not distributing the product with their cigarettes. So it’s just a matter of investment.

Jonathan Boyar (07:04):

Yeah. And it’s obviously very hard to invest when it’s illegal on a federal level. So it’s-

Howard Lorber (07:09):

Exactly. For a public company especially. Yeah, it’s not something that we’d want to be involved in.

Jonathan Boyar (07:14):

So the most well known part of Vector is Douglas Elliman, which you bought in your early 2000s. What attracted you to this business? Was it brands again?

Howard Lorber (07:25):

Same story. Okay, great brand name. In business since 1911. Went through about three sales of the company over a short period of time. Not great on the management side. And as I always say, that if the management is great, how much more can me or my team add to the value? So this was a case where I felt we could add a lot, much as the same way I felt about Nathan’s. And it’s worked out.

Howard Lorber (07:56):

Right now, tougher time in the real estate business. Real estate is cyclical. A lot of real estate companies, in general, have over long periods of time have done well, but I have gone through the ups and downs and it’s a cyclical business. And look, let’s face it, the companies that I’ve done the best stock wise are companies that have consistent earnings growth, okay? Not cyclical. And so if we look, especially at the commercial brokerage companies, boy, they’ve been up and down and up and down and up and down, wide swings. And now you’re seeing that in the residential, because we’ve all grown and now we go into a tougher market, especially in New York and it’s been tough on the stocks.

Jonathan Boyar (08:39):

There’s a lot of talk. I mean the media loves to beat a story to death about disruption in the brokerage business with technology. Are there areas or pockets of the real estate market perhaps in the low end that there might not be a need for a broker in the future? I’m not about Billionaire’s Row.

Howard Lorber (08:56):

The answer is maybe. I think in markets maybe in the middle of the country, the discounters could probably grab some market share much easier than they could do it in major metropolitan areas. I don’t see it happening in New York City or the suburbs around New York. I don’t see it happening in South Florida. I don’t see it happening in California. I don’t see it happening in Boston or Aspen. And these are all the places where we are. I think that is not going to happen in any of those places.

Howard Lorber (09:26):

But yes, there will be companies that come into the market completely different models, whether it’s technology or whether it’s the discounters or where there are companies now who are brokers who now get 100%. All they have to do is pay a monthly fee for their desk. So there’s lots of options that have been around for a while.

Howard Lorber (09:47):

I wouldn’t say the big markets are immune from it, but as much less likely that it will happen. And also on the technology side, the one thing that I’ve learned over the years is you hear something about technology and generally it does happen, but it never happens as fast as anyone thinks. It’s always years and years and years later.

Howard Lorber (10:10):

I had that experience myself once. In some business daily, I ended up with a small chain of video stores. I think it was six or seven video stores, stores like Blockbuster, but smaller. And one night I’m watching television and there’s a business report, and it talks about something new that’s coming out. And that was called pay per view, where you could sit home and use your television remote in order movies. And I said, “Wow.” I didn’t sleep too well at night. I said, “That’s going to be the end of the video store business. Who’s going to go to a video store? Why would you go if you could sit at home and get the videos?” So the next morning I called up someone I knew at Blockbuster and I sold the video stores pretty quickly. And guess what? It eventually did happen, but it was almost 20 years later. So technology doesn’t change markets that quickly.

Howard Lorber (10:59):

And you could look at, even at Amazon. Amazon, everyone thinks it is great, it’s fantastic. When did they start? In 1990 or early 90s. It just doesn’t happen overnight.

Jonathan Boyar (11:09):

Yeah, it’s usually a slow bleed. And as I said, newspapers love to tell us a story. I mean that’s how they sell papers.

Howard Lorber (11:16):

They want to say out a disruptor. There’s disruptors coming into the market, and that’s going to be the end of the market and it may happen someday, but it’s not going to happen fast.

Jonathan Boyar (11:24):

In the areas that you operate, the competition for good brokers is unbelievably intense. You have people like Fredrik Eklund who just have unbelievable production. How do you convince them to stay with you? It’s just seems like the brokers have a very big hand.

Howard Lorber (11:43):

Generally speaking, brokers that leave for other companies, the ones that are doing great don’t leave so quickly, because why disrupt what they’re doing? The ones that tend to leave are brokers in bad markets, that are not doing that well, that just want to change or they’re being offered something where they get a few dollars and they figure well I shouldn’t go because I’m not really making much money now. So I think that’s basically what happens. But also I have a relationship with many and most of, probably all of my really high end, good brokers, but I’ll see anyone. I have eight appointments, seven, eight appointment a day and they’re all pretty much with brokers. Everyone knows they can pick up the phone and call me. So even though we’re a very large company, I still operate it. We try to operate it entrepreneurial and that means that the people, our executive team and myself are always available, whether you’re a big producer or a small producer are always available to help guide you. If you need more money for advertising, come to us. If it makes sense, we’re going to do it.

Howard Lorber (12:49):

We try to treat the people… it’s just simple thinking. And what I learned early on in the business is the buyers and sellers of the real estate are not my customers. Those are the customers of my brokers. So who are my customers? My customers are our salespeople, our brokers, because I’m… so therefore my job is to help them make more money. If I can help them make more money, we make some money. So I think if you think about the business that way is a pretty simple business to operate.

Jonathan Boyar (13:22):

I hope you’ve been enjoying the interview with Howard Lorber. to be sure you never miss another World According to Boyar episode, please follow us on Twitter @Boyarvalue. Now back to the show.

Jonathan Boyar (13:40):

How helpful is shows like Million Dollar Listing, which prominently feature a lot of your brokers or some of your brokers and you’ve made a few cameos, been for the brand?

Howard Lorber (13:50):

I think there was suspicion about how it would work in the beginning, including myself. I wasn’t sure, because we used to say, “Reality TV, there’s no real in reality.” But there is. So I think that looking back it’s been a great experience for the brokers. Million Dollar Listing has done unbelievably great. It is one of the top shows. I forget, the viewership is something like 18, 20 million now.

Jonathan Boyar (14:19):

Yeah, it’s one of Bravo’s best shows.

Howard Lorber (14:20):

It’s Bravo’s best. And I can only tell you my son was on for one year, the first year. I was in London with him a few weeks ago on business. There were people coming up to him saying, a couple of people, not a lot, but I think two different people came up and said, “I remember you, you were on Million Dollar Listing. This is seven years ago. And so the show has had a big effect on the brokerage business. And the companies that were very much against it, now would be thrilled to have someone on the show. I don’t think there’s any company that honestly would say, “Oh, we don’t want our broker to be on the show.”

Jonathan Boyar (14:54):

You couldn’t pay for publicity like that. I mean it’s-

Howard Lorber (14:56):

Exactly, exactly.

Jonathan Boyar (14:58):

On those shows, especially in New York and LA, you see sales numbers $10, $20, $30 million and then it shows the potential commission. I guess they kind of multiply… put a 6% next to it or 3%. How real are those numbers at the real, ultra high end? Are those numbers negotiable on a case by case-

Howard Lorber (15:16):

Commissions are always negotiable at the end to get a deal done. So typically what happens is you try to list in New York between 5 and 6%. That’s basically where it’s at and probably the average is about 5.5%. And then generally there’s two brokers. So if you have a negotiation because the seller’s not getting the full price you wanted, what I always say is, “How do you get the deal done?” It’s pretty simple when you think about it. The seller’s going to have to take a little less, the buyer’s going to have to pay a little more and maybe the broker’s going to have to get a little bit less commission. That’s how you do business.

Jonathan Boyar (15:54):

I mean, you’re certainly the pulse of the New York City real estate market. The press keeps talking about how bad it is. Is it really so bad?

Howard Lorber (16:03):

No, no, it’s bad compared to… we’re a little spoiled, right? We had a bunch of great years after the recession of 08, 09. And I’d say probably 15 was the best and then it started coming down a little bit. And I guess it still remains to be seen how much ultimately the SALT, the loss of the SALT deductions come into play. I’m sure they’re going to come into play to some degree.

Howard Lorber (16:25):

And now also we have the start of the increase in a mansion tax, which goes into effect July 1st and so that’s going to be interesting. The first quarter was pretty close to the same as the first… little down from the first quarter of last year, but we’ll see. I mean the first quarter is not generally a good quarter in the business. The best quarters are the second and third quarter. I have a feeling the second quarter is going to be pretty good and I think there’ll be probably more deals, because I think there are people that are going to rush to get deals done before the increase in the mansion tax takes place.

Jonathan Boyar (16:56):

One of the stocks we own, which we think is substantially undervalued, is a really small company, Trinity Place Holdings. Their major asset is a property on 77 Greenwhich Street to come into market shortly. They have about 90 luxury residential condos between one and four bedrooms, and they’re talking about getting numbers between 23 and 2,700 per square foot. I might be off by a couple of dollars. In this market. Is that realistic or?

Howard Lorber (17:24):

Are they REIT? Are they a REIT?

Jonathan Boyar (17:25):

No, it’s not a REIT. It’s just Syms, the former Syms corpus.

Howard Lorber (17:30):

Yeah, yeah, yeah, yeah, sure, sure, sure. Look, I don’t know the product. I would say it doesn’t seem to be crazy, the pricing. Maybe close to the 23 than 27, but you have to know the product. Look, there’s two things people look at today. They look at price per square foot, but they also look at total unit price. So the question is in the design, how efficient other units, because what you want to do today is you want to downsize square footage wise and that gives you a chance to get a higher price per square foot. So you want to have smaller one bedroom, smaller two bedroom, smaller three bedrooms and then people start… because people shop by price per square foot. But equally, if not more important, is total unit price. There’s only so much that want to pay for one bedroom, so much they want to pay for a two bedroom, and so much they want to pay for a three bedroom.

Jonathan Boyar (18:20):

You were talking about being spoiled. I mean anyone who’s invested in New York real estate since the early 90s who held on for any reasonable length of time has had a very good return.

Howard Lorber (18:30):

That’s for sure.

Jonathan Boyar (18:31):

Could you ever envision a situation where there’s a protracted downturn like we had in the 70s or 80s where they actually are giving property away or is that just never going to happen?

Howard Lorber (18:43):

I don’t think that’s going to happen. I think that those days are far gone. You have a much more stable environment. Even in 08, look, people always call it the real estate crash. It wasn’t a real estate crash. It was the financial markets crash. Right. Just so happens real estate got affected by it, but it wasn’t really a real estate crash. The financial markets crash caused real estate to go down due to lack of liquidity and other reasons.

Howard Lorber (19:08):

But I don’t see that happening. In fact, you can make the case that real estate is really undervalued now again, because traditionally we looked at real estate and it’s followed directly with the market for stocks, for equities. And with the big run up the equities have had in the last two years, the real estate has come down in the last two years, in New York for sure. New York City for sure.

Howard Lorber (19:34):

So the question would be is it going to be a catch up? And it very may well be a catch up and I think maybe the loss of SALT deductions has tempered it a little bit, but I think there’s still a reasonable chance that the real estate market is going to start outperforming again to catch you up with what the stock market has done.

Jonathan Boyar (19:55):

Yeah, that’s something that’s always… I’m a stock guy, but it’s one of the things that’s always perplexed me. Right now you look at the setup. You have ultra low interest rates. The economy is booming, and real estate hasn’t done well outside of the major cities. If you look on long Island, what you get compared to what you get in Manhattan is unbelievable. What’s caused kind of a lid on the real estate market?

Howard Lorber (20:22):

Well if you look at Westchester, Nassau, Fairfield County, the real problem was some overbuilding, that’s more in Fairfield County, but also the fact that the real estate taxes were very high. And now with the loss of the SALT deduction, you can’t deduct them except for $10,000.

Howard Lorber (20:42):

But having said that, I think you picked up on an important point. I think the suburbs around this city have again become compelling for people and for families. So you might see people starting to move back out there. It used to be young people getting married, they stay in an apartment in the city, they have a kid, by the second kid they’d move out to Long Island. And that would be that. Then you went through, now this recent years, you went through a period where they didn’t want to leave the city. Look, certain people, if they’re both, husband and wife are both working, it’s hard for both of them to be commuting and leave the kids every day. So that is difficult.

Howard Lorber (21:24):

But when they were able to leave and go out to Long Island, you look at what they were able to get, and this is the point you bring up. And therefore I think it’s somewhat compelling, Long Island is somewhat compelling again. And even if you were… and Westchester and parts of Fairfield County. So even if you buy a house for $2 million, $2.5 million and you’re paying $50,000 in real estate taxes, if you’re at a place in Long Island or Westchester, what a good school district, as opposed to being in the city and paying to private schools. You know what? It looks very cheap to be on Long Island.

Jonathan Boyar (22:02):

Yeah. And now that… if they ever actually connect Penn Station and Grand Central, if that actually ever happens, that makes Long Island even more valuable.

Howard Lorber (22:11):

Without question. When I bought my first expensive house on Long Island, I remember the broker was an old timer and he comped it to New York City condo price. And I remember how looking at and saying, “Wow.” I think New York City average condo price was $700 and I think the house I was paying 304 and the condo was… it was nice. It was okay building, whatever. But the house was on an acre, 6,000 feet. The condo, you couldn’t find a 6,000 foot condo. It will be a lot more money and I was on the water. And I said, “Geez, this is great when you compared it to the city.” But then again, those are rougher days in this city, when the city wasn’t doing as well and now the city has been doing great. So I think that, but I do think that there will be a trend which will start raising prices in the suburbs, because it’s just out of whack and things that I just out of whack generally something happens and it becomes more normalized. It really is at the point where it doesn’t make sense at this point.

Jonathan Boyar (23:11):

One final topic I just wanted to talk about, one of the things that you recently or I guess about two years ago you were appointed Chairman of the Holocaust Museum by the President. How has that experience changed you?

Howard Lorber (23:23):

Well, it’s been phenomenal. I would say it’s definitely life changing. My interest in it stemmed from my mother’s parents, my grandparents, who we lived with in the Bronx until I was about eight years old. My grandparents were Greek Jews that lived in this area of Greece, Thessaloniki, where half the Jews in Greek… it was about 100,000 Jews in Greece, 50,000 lived in this area, Thessaloniki. My grandmother and grandfather left early. They left around 1912 or 1913. But I remember asking my grandmother when I was about, I guess about five or six years old. My grandfather had passed away and I said, “What happened to grandpa?” And she told me the story that although they were able to get out early when the Nazis went into Greece, in Thessaloniki, they took… 48,000 of them were basically murdered in Auschwitz-Birkenau, and that they lost every friend they knew, relatives and so forth. They were lucky enough to already been here in the United States.

Howard Lorber (24:25):

And I always had that constant thought in my mind, when you think about it to wipe out 90% of the population in a small area because of their religion. It was just sort of inconceivable. And that was sort of my motivating factor into wanting to become more involved, to make sure things like that never happened again and I couldn’t think of a better way than doing it than through the Holocaust Memorial Museum.

Jonathan Boyar (24:54):

Is there more of a sense of urgency now that the last generation of survivors are getting up in age to make sure the stories are getting told?

Howard Lorber (25:04):

Yeah, without question there are, but in addition to that, look what’s going on, I’d say in the world, but let’s look at the country, with the shootings and the murders in the synagogues. I mean the antisemitism is surely on the rise throughout the world. And as time goes on, people tend to forget and that is our job is to never let them forget what has happened in the past. And I think that, thank God there’s other organizations, there’s other people that are trying to do it. There’s a position in the government that’s called the Special Envoy to Combat Antisemitism Throughout the World. It’s sort of an ambassador type position, and someone I know was just appointed to it.

Howard Lorber (25:50):

But this is the thinking now. You really have to be out there and you really have to fight what’s going on and it’s a difficult fight, but we have to do everything possible to make sure people remember so it doesn’t happen again.

Jonathan Boyar (26:04):

Well, Howard, I really want to thank you for your time today. You’ve been unbelievably generous with it and thanks for being on the show.

Howard Lorber (26:11):

Thank you. It was my pleasure, Jon.

Jonathan Boyar (26:18):

I hope you enjoyed the show to be sure you never miss another World According to Boyar episode, please follow us on Twitter @Boyarvalue. Until next time.

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of May 9th,th 2019 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According To Boyar Podcast Episode 9: Mario Gabelli

About Mario Gabelli

Mario J. Gabelli is the Chairman and Chief Executive Officer of GAMCO Investors, Inc., the firm he founded in 1977 that currently manages over $40 billion. A 1965 summa cum laude graduate of Fordham University’s College of Business Administration, he also holds an M.B.A. from Columbia University Graduate School of Business. He was Morningstar’s Portfolio Manager of the Year in 1997. He was named Money Manager of the Year by Institutional Investor for 2011 and is member of Barron’s All-Star Century Team .


The interview discusses:

  • His decision to start his own firm in the 1970s despite a horrendous economic backdrop;
  • His new book Merger Masters that he wrote with Kate Welling;
  • The rationale behind taking his company public and whether he would do it again;
  • His thoughts on portfolio construction including how many positions should be in a portfolio and how long it takes him to become fully invested for a new account;
  • How he incorporates tax ramifications into his sell decisions;
  • His strategy of what to do when a stock within his portfolio increases or decreases by a significant percentage in a short period of time;
  • Who he believes could be the next John Malone;
  • His thoughts on Discovery Communications, Madison Square Garden and Disney.

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About The Boyar Family Of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here

Boyar Research
Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here

Transcript of Interview with Mario Gabelli:

Jonathan Boyar (00:10):

Welcome to The World According To Boyar where we bring top investors, bestselling authors, and market news makers to show you the smartest ways to uncover value in the stock market. I’m your host, Jonathan Boyar.

Jonathan Boyar (00:23):

Today’s special guest, Mario Gabelli is a man who truly needs no introduction. After working at Loeb, Rhoades and William Witter, he formed his own firm, Gabelli & Company in 1976. Today he’s one of Wall Street’s best known investors and his publicly-traded firm GAMCO Investors manages over $40 billion utilizing primarily his private market value with a catalyst strategy. Today’s interview is especially exciting for me as Mario was my first boss after graduating from college. Mario, welcome to the show.

Mario Gabelli (00:56):

Well, terrific to be on the program. Obviously, I’ve known the Boyar family for probably close to 45 years. We used to have lunches in the 70s when there were very few of us around. 1970s, before somebody says 18 or 1670s.

Jonathan Boyar (01:10):

I wasn’t going to make that joke. Mario, you left a high-paying job at a well-respected Loeb, Rhoades, worked briefly at William Witter and then went off on your own. At the time the economy was awful, negotiated rates had ended, you had young children. What were you thinking?

Mario Gabelli (01:27):

What was I thinking? The answer is I thought it was a great time to be buying stocks, Jon. Prior to that for 10 years as a sell-side analyst, I covered a variety of industries. I graduated from local business school here at Columbia and I went to work on a Monday. Mike Steinhardt quit on a Friday. I picked up his industries, which were autos, farm equipment and conglomerates. Then fast forward a year or two later, I was assigned business services and I picked up the entertainment industry.

Mario Gabelli (01:52):

I was able to go through the environment of 1969, ’70, which was somewhat nasty, but quick and came out with some fairly easy stocks. Then I knew that I could select stocks in the ’73, ’74 economic downturn. The question was would I have enough money to be in business? I tried to raise a million dollars. I was only lucky enough to raise 200,000. I set off. I said, “Look, at some point money follows returns. If I could make returns for clients risk-adjusted, we basically hopefully will be okay.”

Mario Gabelli (02:26):

We started as an institutional sell-side firm. I got companies like General Motors and three or four other companies to actually buy my research for cash, which paid for some of the expenses. We had some institutional clients and then within a month or so, I picked up my first money managed account.

Jonathan Boyar (02:45):

I want to talk a little bit about your process. If a client walks in the door today at GAMCO, puts no restrictions, says invest in whatever you think is your best stocks. What would be the ideal number of holdings you would buy for him or her?

Mario Gabelli (02:58):

We would start asking simple questions. Have they been in the market before? Did you go through a period like 1987? Did you go through a period like 2000? Did you go through a period like 2008 or ’09? What happened to you if you were in the market in February of 2009? How long is your time-frame? What percentage of your assets? Depending on those answers, we could generally construct a portfolio that have 10 stocks that would represent a quarter of the portfolio and probably 70 or 80 representing the balance.

Mario Gabelli (03:31):

That doesn’t matter Jon, if they’d give me $1 million or $100 million. We would try to customize. Secondly, if it’s an IRA account, we would want to know that, or a 401k or a defined benefit or a tax free, because we tend to hold things for six, seven or eight years. But occasionally, we look at determining whether it’s not only what you make, it’s what you keep. In an environment where if a client comes in from California or New York City where they’re taking 13% of his earnings, if it’s short-term gains that are nondeductible because the SALT taxes, we want to be extra sensitive to all of that.

Jonathan Boyar (04:10):

That leads a perfect segue to my next question. For us in the 2009 period, we bought companies like MSG, Home Depot for clients. They were great stocks, still are great stocks. But because of capital appreciation, they’re now an outsize part of the portfolio, sometimes 7%, 8%. How do you handle situations like that?

Mario Gabelli (04:31):

Yeah, we have a nosebleed. No matter how good we are, there’s always some dynamic that you don’t know about. For somebody will come down and do something that says, “Okay, whoa.” The stock at 8% of the portfolio we say we want to trim it back. Our basic approach with generally, not for everyone, we would look at something that exceeds 5% or 6% and sell a couple of hundred shares. If you own 2,000 shares of Home Depot and it’s now $200 and you bought it at $15, we apologize, but we’re going to make you pay tax because we don’t want to own that much in the portfolio.

Jonathan Boyar (05:08):

It’s patriotic too.

Mario Gabelli (05:09):

It’s tough. Unfortunately, the real estate lobby has been very good at doing exchanges, Section 1031. But what is more hideous to the system and to the investor and to the owner of American business is the notion that company A buys company B and it’s a taxable transaction and you have no choice and you have to incur a very sizable gain.

Mario Gabelli (05:31):

We had that with Precision Castparts with Warren Buffett. We’re not unhappy with the price. We’re unhappy with the fact that we’re going to pay a toll tax of reinvestment. At some point, there’s financial illiterates that want it mark to market and tax you on mark to market gains. On the other side of the spectrum, you have to incur a tax for taxable accounts. For tax free accounts, Jonathan, the answer is fairly simple. We just sell it.

Jonathan Boyar (05:56):

Sometimes you have stocks that are extremely undervalued, may go down 20%, 30% in a day due to a reason that’s temporary, just a bump in the road. How do you handle that? Do you buy immediately? Do you wait for things to settle down to afford catching a falling knife? How does that work?

Mario Gabelli (06:14):

Well, that’s an interesting question as well. In theory and generally, for most of the stocks we follow, we have, today we have 40 analysts. We didn’t have 40 analysts 45 years ago. We had one, or 50 years ago when we started. They basically, the analysts prepare a spreadsheet. They gathered the data. They rated the data the way we want, in the value side of the house, not necessarily in other parts of our firm. We try to figure out, and this is for about 80% or 90% of what we do, what is the value of the business over time? When Mr. Market, that is the volatility in the market sends it up sharply or sharply down relative to what we think, we go through the positions. For new clients, we would probably start adding some because we’ll never catch Y.

Mario Gabelli (06:59):

Right now a good example, Jon, is the MAX 737. There are vendors to Boeing four months ago they said, “Ramp it up. We’re going up to X-number of planes per day.” Today they ramped it back down to 42 and they’re building up their pipeline. The vendors to Boeing would have an air pocket and that would cause some of them to have a second quarter decline. Can we look through that? Do we anticipate that? Are the street going to say, you know the short term momo and algo investor’s going to handle that when they generally announce an uninspiring quarter. The stocks down at 10%, 15%. Yes, we take a lot of dots into consideration and we look at that.

Mario Gabelli (07:35):

However there are time periods, like the end of the fourth quarter, where you had significant tax selling, you had significant momentum investors that just pounded on stocks that were going down. There’s no uptick rule. The third thing is that they didn’t want to show that they owned it. That gave us a significant buying opportunity, one of which was a stock that had dropped from 18 to four or two, be bold and it’s back to 12 and 13. What we would do is try to anticipate that. In taxable accounts we’d sell, we’d buy it back and we buy it in early November, sell it in early December or vice versa. Sell it in November and then buy it back in December to take advantage of what we knew was an “invariable” classic tax selling and window dressing. This is a daily-focused client-specific passion. Then you’ve got to know the stocks and then you got to know the client.

Jonathan Boyar (08:30):

If someone does come to you and you feel that it’s a good client for you, how long does it take for them to become fully invested?

Mario Gabelli (08:38):

Even if you start with $1 or $100, we probably will take anywhere from 60 to 90 days even though our mantra is to be fully invested in equities. It’s like going to the hospital for special surgery in New York for a knee operation. You go there because you know there’s a lot of issues that can come up independent of the function and you pick a specialist organization. We’re specialists and we just do stocks. We don’t do wealth management for clients. It’s unlikely that they’d be fully invested within 60 or 90 days. At least it would take 60 to 90 days to do it.

Jonathan Boyar (09:11):

In the late 90s you decided to take GAMCO public. Do you regret doing this?

Mario Gabelli (09:20):

Well, let’s go back. I started the firm in 1977 as I indicated to you, I tried to raise $1 million. I was successful in raising $200,000. One chap who went to Columbia with me gave me $25,000. He was also still an investor today. Another chap who was the CEO of a public company gave me X-dollars, but we had a lot of teammates. As people joined us, we gave them stock. We always bought or sold at stock, which was the way the Wall Streets were. Like a partner at Goldman Sachs, you buy a book, sell the book, but you get paid out at different time periods.

Mario Gabelli (09:51):

Fast forward in 1999, or in 1998, several of my colleagues said, “Listen, it’s hard to believe, but they said we want to retire,” which is something strange in my world. But basically they said, “Well, you have a moral obligation.” I agreed so we took it public. But what happened subsequent to that, and we went public at $17.50 through Merrill Lynch and Smith Barney, both of which are now part of other organizations. Our stock dropped to $15.50 and within three weeks we said we’d buy some, which was not consistent with the companies going public.

Mario Gabelli (10:23):

But fast forward, we then had Enron, WorldCom and obviously that resulted in Sarbanes-Oxley section 302, I believe. That has put a significant cost, not only in terms of money, which is maintained at a high cost, but in terms of time. When our board meetings meet, we’re checking boxes as opposed to saying let’s do the following acquisition or let’s do the following new product. We’re doing that, but we don’t divert as much time. It has really has proven to be a challenge in going public for that reason.

Mario Gabelli (10:58):

Clearly, there were benefits. Our teammates got a fair market value at the time, not necessarily full market value. That was the morally right thing to do because they were going to retire. Would I do it today? Probably not, unless the rules changed. With regards to the cost structure of being public.

Jonathan Boyar (11:20):

I hope you’ve been enjoying the interview with Mario Gabelli. To be sure you never miss another episode of The World According to Boyer, please follow us on Twitter @boyarvalue. Now, back to the show.

Jonathan Boyar (11:39):

You’ve done some, I guess, financial engineering. You spun out a few of your businesses, Teton as well as your brokerage business. What were the rationale behind that?

Mario Gabelli (11:49):

Well, Teton was a unique set of circumstances. Back in 1976 when you indicated I was at William D Whitter, Sue Byrne was a portfolio strategist. She took on the responsibility of managing several other companies. She started a group of funds called Westwood. In the early 1990s, she moved to Dallas and sold her company to a firm down in Dallas. They did not want the mutual funds. I said, “Okay, why don’t we take on the responsibility of administrating your funds? You guys manage them, you become subadvisors you will own, 35% of the funds.”

Mario Gabelli (12:20):

Fast forward, she then went public. We owned 18% of her company called Westwood Holdings. She’s done a fabulous job, but they didn’t want to be in the mutual fund business. We created an entity called Teton because we’re in Jackson Hole, Wyoming when we came up with the name. We spun it off to the shareholders. They decided to sell their holdings in Teton. It gave them a liquidity that they made a lot of money on it. It worked well. We sent it to the shareholders and the stock has done reasonably well since then.

Mario Gabelli (12:51):

With regards to the spinoff of Associated Capital, we were in the private equity business in the early 80s. It was Gabelli Rosenfeld, Jimmy Rosenthal, Rosenthal & Rosenthall are well-known factors in New York. We also brought in Needham & Company as a partner at one time. But the period was characterized by companies that would say, “For 10 cents on the dollar in equity, we can borrow the balance of the money through Drexel Burnham and we’ll take you over.” We made a decision to not be into private equity, but in the public markets. When we spun off Associated three and half years ago, we’re going full-fledged back into the private equity market doing it in the fundless equities.

Mario Gabelli (13:33):

Those were all tied together. But beyond that, Jon, beyond the CEO of a public company in the telephone business called Lynch Corp, and I think we’d done 36 acquisitions and about 10 or so spin-offs. Understanding financial engineering is all part of what we do. It’s part of our culture with regards to arbitrage. It’s part of our culture with regards to the owning companies. It’s a way to make money for clients. It’s a way to make money for shareholders. That’s why we do it.

Jonathan Boyar (14:01):

Well speaking of financial engineering, the master of that, besides you of course, is Dr. Malone. You’ve made a lot of money investing alongside of them. Do you see anyone who might be the next Malone?

Mario Gabelli (14:14):

Well, the current Malone is like Tiger Woods. The next Tiger Woods is Tiger Woods. I mean to bring back golf, for example on Sunday, everybody was saying, “Whoa, why is this sport declining? We need another Tiger Woods.” Well, Tiger Woods did it. Within the framework of what Malone is doing every day is a new opportunity. For example, yesterday with Barry Diller, John Malone and Barry Diller cut a deal with Liberty Expedia merging into Expedia and a lot of financial engineering. We don’t like some of the things that occurred. We don’t like the fact that Barry Diller was allowed to get 100% of his stock and equity in voting stock and everybody else didn’t.

Mario Gabelli (14:51):

But on the 90% that takes place, Barry makes a lot of money for shareholders. John Malone has. We look at the Malone empire and it’s significant. Chris Marangi and our team have a mutual fund that just started as a carry onto what we did to invest in the media mogul that we call them. Independent of that, don’t ignore that Warren Buffett still is very good at financial engineering. On the other side of the coin, this guy, Ed Breen, who is running DuPont, who’s in our hall of fame, has done a fantastic job in everything he’s touched whether taking on the Kozlowski empire or doing … and by the way, he put together a lot of very good businesses basically looking at that and then spinning some off, merging some, and now doing it with DuPont and Dow. He would be high on the list. He’s not the only one.

Jonathan Boyar (15:40):

In terms of Malone, one of our holdings, and I believe you own it too, is Discovery Communications. What do you think the endgame is on it? I mean Malone said he’s going to sell it over his dead body. I don’t think it’s going to go that far, but how does this story end?

Mario Gabelli (15:56):

Well, I’m not sure it ends. I think Zaslav has done a very good job of putting together as best as he can, content on a global basis. What works? Sports and news, live entertainment and so the package he’s put together in Europe is very intriguing to us. Clearly you want to go direct to the consumer in the new world. On what product can you entice? What product can you package? The fact that they bought the Scripps Network, putting together those companies both domestically and outside the United States. That’s a start. Is the stock undervalued relative to the numbers? Yeah. It’s show and tell. I mean show and then tell what you’ve done. We’re probably a year away from where even more of the good news will come out, but it’s got to still be proven that he can continue the momentum that he’s created.

Mario Gabelli (16:44):

Now, do I buy content for him? There’s a lot of pluses. You saw the benefit of Disney buying Fox. You saw the benefits of Fox shareholders about having Disney buy it. I mean, this has been a win-win for the Murdoch enterprises, the new Fox is being traded today. What is Zaslav going to do to get more content? How’s he going to do it globally? How does he accelerate going to the consumers? We own the stock. We like what he’s doing. We owned a lot of Scripps Network. Ken Lowe did a terrific job for the family at Scripps. Zaslav will do it for Malone.

Jonathan Boyar (17:16):

Do you see him ever potentially selling to Disney?

Mario Gabelli (17:20):

Look, Iger’s gone in two years. I don’t know who will succeed Iger. The Murdoch family becomes the largest active shareholder. The rest are mindless investors like Blackstone and like Vanguard and like State Street and like Invesco and like DFA. Those don’t think about what they’re doing, but with the Murdoch family owning 100 million shares of the 1.7 billion, they have a very active role. Will Discovery sell to Disney, I just don’t see why Iger would want to distract what he’s focused on at the moment in terms of buying Discovery.

Jonathan Boyar (17:50):

Clearly, he’d have to wait till he integrated Fox. He said he’s going to retire, but he said that a few times already.

Mario Gabelli (17:56):

Yeah, but you know what? He ain’t Rupert. He ain’t Buffett. These guys control the vote. He doesn’t control the vote. From my point of view, I followed Iger since he was a rookie, a broadcaster with Murphey and Burke at Cap Cities. They worked their way from Cap Cities to ABC. Then they sold ABC to Disney and then Eisner bought it. Then Iger got took over and has done a fantastic job.

Mario Gabelli (18:23):

We’ve been watching Disney 50 years now. I actually wrote a report on Cinderella every seven years how it would recycle itself, but I think Disney will do quite well in this environment the next 10 years. But I don’t think they’ll do it with Discovery over the next five. You’ll need another mate, John, for Discovery. They will put something else in the pot, but I don’t know what it is.

Jonathan Boyar (18:45):

A family-controlled company that we own that you, it’s one of your largest holding is-

Mario Gabelli (18:49):

Oh, don’t do that to me.

Jonathan Boyar (18:50):

… is Madison Square Garden.

Mario Gabelli (18:52):

I know where you’re going as soon as you said that.

Jonathan Boyar (18:54):

You know they’re spinning out the team from the entertainment, which I think is a good idea. What does he do with the Knicks and the Rangers?

Mario Gabelli (19:01):

I’m assuming that financial engineering, as you go back to Cablevision, Chuck Dolan and Jimmy were doing it. They tried to go private. For whatever reason, it didn’t work and I think I know the reasons. The second thing that happened is they spun off, I can’t remember the date, AMC networks. That stock has done very well under Josh Sapan. This third thing they did was MSG Networks. AMC is The Walking Dead and so on. Breaking bad, very creative, very important content in the world in which content and the assembly of writers, the assembly of talent and scripts and green-lighting them in a cost-effective way are important. They’ve done a marvelous job. MSG Networks is clearly waiting for whatever happens to the networks that Disney has bought in part through Fox, the regional sports networks, the RSNs they call them. Who’s going to buy them at what price is going to pay and MSGN is controlled by the Dolan family and that question is up for grabs.

Mario Gabelli (20:01):

Then we obviously have Madison Square Garden. We have a bunch of very interesting assets. It sells around $300 a share with around 22 million shares, with 24 million shares and they are spinning off the sports networks. However, they filed a form on a quiet basis, I believe maybe back in October, November. I just have not seen what they’re doing next. What did they do next? The good news is the Knicks are number one. This sports season, they took first place in being last place. They can obviously have a seat at the table on trying to get some talent. We’ll see.

Mario Gabelli (20:35):

But independent of their record, Jon, Forbes Magazine just bumped up again what they thought the valuation was. Live entertainment, of which sports is number one, an ability to own a basketball team and an ability to own a hockey team is kind of intriguing to anyone that wants to own a company. We’ll see what they do and how much debt they put on, if any and when they spin it off.

Jonathan Boyar (20:57):

Legalized sports gambling has to help a lot.

Mario Gabelli (20:59):

Well, if you watch Tiger Woods and you were betting on the last two holes in live real time and unfortunately, the guy on the 12th hole who hit the ball in the water and was an elite until then, there is an element in which the leagues will share in the revenues. There is an element that says this is going to occur. Clearly they go out of their way to talk about this guy that bet $65,000 or whatever the number was, the X-number of odds on Tiger Woods. FanDuel and all of those will come back. We’ll see. I understand the technology of gambling. We have companies that are betting on and have been involved with companies like GVC in London. We own MGM, but there’s an element that can help. We’ll see who gets what though. It’s still an allocation of revenues to the leagues and the teams.

Jonathan Boyar (21:51):

I just have one last question. You’ve accomplished pretty much everything there is to accomplish in the money management business. You don’t need to be doing this. What makes you come to work each day?

Mario Gabelli (22:01):

Come on, this is annual report time. We get 40 annual reports come in. Going through the CEO letters, I can’t read this as many as I used to. By the way, I can’t even carry them anymore. There’s 40 of them. You go through the ones you want and you get an idea. Listen, this is fantastic. The business of looking at how managements look at themselves, how companies pride themselves. Then you’ve opened an annual report of a company I’ve been following and all of a sudden there’s a full-page picture of the CEO. I’m saying to myself, “What?” How does change take place? How do companies evolve? How does management send you signals about what they’re going to do in the next phase of the business career? How do you anticipate in that only the fundamentals of a company, how do they build up the modes? How do they use cash flow? What’s going on in corporate governance?

Mario Gabelli (22:52):

Then every so often you get new things like ESG. This is exciting. I’m lucky to be in this business. I think I can do it for a long time. By the way, remember one thing. Tubby Burnham, John Loeb and I can go on. Carret, and the other legends of the investment business, I went to a meeting one time in New York at the Harmony Club. I was 45 years old. These guys were 75. They lived another 30 years investing. Just think about that. Owning a piece of America, owning a piece of the capitalistic system with all the flaws that we see, it’s a delight. Jonathan, I’m just starting. As somebody would sing, the best is yet to come.

Jonathan Boyar (23:35):

You just wrote along with Kate Welling a great book, Merger Masters.

Mario Gabelli (23:39):

Well, she was my inspiration. I convinced her to do it. She was my editor in Barrons. She can take complicated ideas and put them into simple language for people anywhere in the world to understand. She’s great.

Jonathan Boyar (23:51):

Well Mario, thank you for your time. I look forward to seeing you in Omaha. Hopefully, we can have one of these launches like you did in the 70s.

Mario Gabelli (23:58):

We’d be delighted to do it any time. See you in Omaha. Take care.

Jonathan Boyar (24:03):

Thank you.

Jonathan Boyar (24:07):

I hope you enjoyed the show. To receive a Boyer research report on Discovery Communications and Madison Square Garden, please email Until next time.

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of April 24th 2019 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According To Boyar Podcast Episode 8: David Alpert

About David Alpert

David Alpert is CEO of Skybound Entertainment, founded alongside longtime collaborator Robert Kirkman. Alpert is a prolific producer, with television credits including The Walking Dead and its companion series Fear The Walking Dead, Outcast, Robert Kirkman’s Secret History of Comics, and Dirk Gently’s Holistic Detective Agency.


The interview discusses:

  • How David and Robert Kirkman took the Walking Dead comic book series and turned it into the most watched show in cable television history;
  • What it means to sell a television show to a network in terms of both economics and creative control;
  • The actual role of a television and film producer;
  • What David and Robert did (that had never been done before) that helped turn The Walking Dead into an international sensation;
  • What it means that Skybound signed a “First Look” deal with Amazon;
  • David’s view on whether the current level of spending on content by companies like Amazon and Netflix are sustainable (and whether he believes they make economic sense);
  • David’s thoughts on the competitive position of content providers like Disney;
  • What low-tech form of entertainment is making a huge comeback and how Skybound is profiting from it in a major way

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Available wherever you download podcasts


About The Boyar Family Of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here 

Boyar Research
Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here

Transcript of Interview with David Alpert:

Jonathan Boyar: (00:10):

Welcome to The World According to Boyar where we bring top investors, bestselling authors, and market news-makers to show you the smartest ways to uncover value in the stock market. I’m your host, Jonathan Boyar. Our guest today is David Alpert, Executive Producer of multiple television programs and films, including The Walking Dead, which has the highest total viewership of any series in cable television history. It airs in over 120 countries and in 33 different languages. He’s also the CEO of Skybound Entertainment, a multi-platform content company he founded with Robert Kirkman. David, welcome to the show.

David Alpert (00:50):

Jonathan, thanks so much for having me. It’s a pleasure to be here.

Jonathan Boyar (00:52):

No, thanks for being on the show. You’re best known as Executive Producer of The Walking Dead. However, one thing that most people don’t know about you is growing up, you were a highly competitive athlete. You were captain of the Harvard swimming team, and made it pretty darn close to being an Olympian. Did the discipline it took to achieve that level of success prepare you for business success?

David Alpert (01:15):

Well, first, I think I was definitely a good swimmer. I was pretty far from being an Olympian. I’d like think as I’ve gotten older in the stories that I’ve gotten closer to being an Olympian, I’m a legend, perhaps maybe in my own mind. But, I think absolutely the discipline of having to get up starting at eight years old, and having to go to practice in the morning at 5:00 and be in the water 5:00 AM, it definitely helped. In some ways I feel like I never worked harder than when I was eight years old or nine years old. I was definitely sort of putting in the hours.

David Alpert (01:44):

The truth is now, honestly, the things that I do, it doesn’t feel so much like work. I mean, because I make everything from comic books, video games, movies, TV shows, and now wine, it’s like if I have a busy weekend of work, I have to take my work home, it means I’m going to have to play a video game, read some comic books, and watch TV, feels pretty good. It feels pretty good. It’s a lot less stressful than it used to be.

Jonathan Boyar (02:08):

So, you’re making wine?

David Alpert (02:09):

Yeah, we partnered with a company called Treasury Wine, and we have actually one of the fastest growing wine brands in the United States right now. We started with The Walking Dead. we did a blood red blend and a Cabernet, and then we launched a shark name, Sauvignon Blanc, and we’ve been tearing things up. It’s been really kind of fun. We built an AR app for it, so basically you hold up your phone in front of a bottle, and the zombie will jump out and break the screen, and you hold up another one, and Rick will come out and sort of kill the zombie, so every time you get a new bottle, it adds a little something to the story.

Jonathan Boyar (02:40):

That’s awesome. That’s certainly the definition of a brand extension.

David Alpert (02:44):

Yeah. For me, everything I want to do at my job is something that I love. So, it’s always work. But, if come in and I have to have a hard day at the office drinking wine and reading comics, it makes my life feel a lot better.

Jonathan Boyar (02:57):

So, you graduated from Harvard, went to NYU Law School, not exactly the traditional path to a career in the entertainment business. How’d you end up breaking into Hollywood?

David Alpert (03:07):

In law school, I quickly realized I didn’t want to be a lawyer. I had done a summer at a law firm and really quickly realized, I was like, this is just not the life for me. I felt very much that I was on the wrong side of the table. So, I was very much looking to say, “Hey, how do I get out and be an operator as opposed to sort of a service provider?” A buddy of mine who I met at that firm, he and I started a internet company and that was also a big thing to do back then, I guess as it is today. But this was 1.0, and we started this internet company and we had a little success and a lot of failures, but the best part was, it was the best way to get, basically while in law school, to get an MBA, because I would go to classes in the morning and then I’d be running a 50 person organization operation in the afternoons and in the evening. So, that was quite an education.

David Alpert (03:54):

I got out of that business and then started basically my own management company. I saw that there was an opportunity in film and television. There’ve been a number of successful movies that had come from sort of unknown or unheralded comic books. So, Men In Black was based off of a little comic that had sold maybe a thousand copies. The Crow, even little indies like Ghost World had been based off of this sort of independent comic book. So, I said, “Oh.” I grew up reading comics, and loving comics, and sort of trading, collecting and selling comics. So, I said, “Huh, maybe I can go find some of those people that I know, and I can help them bridge the gap between the comic book world and Hollywood.”

David Alpert (04:33):

So, that’s what I set out to do, honestly, knowing very few people and not doing much, I just started going to conventions and signing people up saying, “Hey, I’m going to take your products to Hollywood.” One of the people I met in that sort of first few months that I was doing it was Robert Kirkman, who went on to become the creator of The Walking Dead. So, very fortuitous, very lucky, but that was sort of the goal was finding great comic books that had film and television potential, and sort of being the conduit for them between their world and Hollywood.

Jonathan Boyar (05:02):

So, you met Robert Kirkman at a convention. At the time, obviously, his comic was well known in the comic book community.

David Alpert (05:10):

When I met him, he hadn’t done anything. The comic he was out there pushing was a comic called Battle Pope. It was this absolutely insane comic about a post apocalyptic New York where demons have sort of overrun the streets, and there’s a cigar chomping, whiskey swilling pope who’s living with his cockblocking roommate Jesus, and they’re out there trying to sort of save the doomed world, so pretty wacky, pretty out there, pretty indie. But, there was something both about the book, the writing was just really tight and taught, and there’s really something about Robert in the sense that I understood that he knew story, and he was charismatic, and he had sort of a certain charm to him that made me interested in knowing more about him and his work.

Jonathan Boyar (05:52):

How’d you go from that to landing at AMC? What were the steps that took you from that meeting to AMC, and eventually obviously getting it greenlit?

David Alpert (06:03):

It was a long way. So, the first is Battle Pope was actually the first thing we did together. We had made it into an animated web series at, and we were the number one show on Robert and I found that we loved working together, that we had sort of a really good, creative collaboration, we had an opportunity to sort of really understand production together. It felt really good and we decided that we wanted to do more of it. Around that time is when he started working on The Walking Dead, and instantly we all knew that the comic was something different. It was unlike anything he had written previously. It was unlike anything that had ever really been in the market. Even though it was in a familiar genre, both the horror and zombie genre, it really treated it in a way that no one had looked at. That was something I was like, “Wow, if you could really innovate inside such a well explored genre, you’re really onto something.”

Jonathan Boyar (06:55):

So, then what happened after that?

David Alpert (06:57):

So, originally we had set up the show at NBC in 2005, and it didn’t go. Robert got very frustrated by that process. After the show got passed on NBC, everybody else wanted it. Robert said, “Listen, don’t come back until you production commitment, and somebody’s allowed us to retain the rights to market and merchandise based off my comic, not interested in anything else.” So, for four years we were out there shopping around, and got offers from most of the major networks in town, and a lot of the cablers offering to do the show. When I told them what we were looking for, they told me I was crazy. They told me that I’ll never work in this town again. Some people laughed. Some people hurled insults. Some people threatened me.

David Alpert (07:42):

Then finally in 2009, AMC stepped up to the table. They agreed to our terms and they committed to making the show. The book had been out at that point for six years in the market, and it had only gotten more and more successful. But four years in the wilderness between our failed attempts to get it off the ground at NBC, and sort of our successful attempt to get it off the ground at AMC. So, a really long time, and the patience that Robert exhibited in that moment, and the determination to say, “Hey, I don’t want to deal with Hollywood until this happens,” I thought it was both infuriating but also sort of empowering at the same time.

Jonathan Boyar (08:19):

So, for those of us who aren’t Hollywood insiders, what does it really mean to sell a show to a network?

David Alpert (08:25):

So, historically a network like a CBS or an NBC would develop, let’s say, 80 ideas in a season, a season being a course of a year. So, they develop 80 ideas. They would then, say of those 80, they’re going to shoot 10 pilots, and then they’d pick up somewhere between one and four of them given the year in their schedule and their needs. So, you had roughly somewhere between a two and five percent chance of having sold this idea to getting it made. So, it’s a lot of ideas get sold, not a lot of ideas get made, and of the ideas that get made, not many of them last. So, there’s a lot of half-lifes that go on there.

David Alpert (09:05):

So, that said, for every network, one of those networks was developing 80, they’d hear thousands, literally thousands of pitches, and then pick up that 80. So, the pyramid gets very, very tight at the top, but the bottom of the base was pretty huge. The economics have changed and the structure has changed a little bit now, but getting a guaranteed pickup back in the day was one, was really quite rare, but also sort of instantly pushed you through a lot of the clutter at the bottom of it.

Jonathan Boyar (09:33):

What do you give up when you sell a show to a network? Do you lose control? Do they tell you what you can write? How does that work?

David Alpert (09:41):

Yeah. In general, you lose control of pretty much everything. I mean, most of the ownership in a sort of original idea, so something that’s not based on source material, is instantly transferred and is governed by the WGA rules. So, there’s certain participations for the creator, but they’re very limited, and they sit behind the infamous Hollywood accounting. Whereas what you’re doing on source material, since the source material deal isn’t governed by the WGA, you have a little bit more freedom to sort of negotiate how ownership could work.

David Alpert (10:15):

So, sometimes they’ll allow you to keep, oh, you’re doing comics, so we’re going to let you also do comics and books, or, oh, you get to do a comic, but maybe you get to do some prints and merchandising based off it. But we basically were able to say, “Hey, we’re going to do everything we can based off of the comic other than competitive TV shows, of course.” But the thing for us is AMC was then also allowed to make stuff based off of the TV show. So, sometimes now we end up competing with AMC in the same category and sometimes fighting for the same shelf space.

Jonathan Boyar (10:48):

Are they making wine?

David Alpert (10:49):

They are. We are outselling them by an order of almost a hundred to one.

Jonathan Boyar (10:54):

Good for you.

Jonathan Boyar (10:57):

I hope you are enjoying The World According to Boyar. To ensure you never miss another podcast, as well as to hear the latest from the Boyar Value Group, please follow us on Twitter @BoyarValue. Now back to the show.

Jonathan Boyar (11:15):

So, something I always wanted to ask and could never really get a great answer to, what does a producer actually do?

David Alpert (11:22):

So, a producer is someone who puts something together. Producer can really be the CEO. So, every project is almost its own little venture company. So, the goal of a great entrepreneur is you’ve got to put together a great team. You’ve got to have your business thesis. You’ve got to have projected financials. You have to have sort of the market analysis. You have to know the right investors and institutions to sort of put it all together. I think that would be sort of, if you were to talk about in a venture community, that would be kind of the idea. It’s very similar here in Hollywood, a producer does the same thing. So you, you identify a space where you think there’s something interesting, say it’s action, thriller, horror or comedy, but you find that sort of that lane, you figure out what your thesis is, okay, people haven’t seen this recently or they haven’t seen this recently, or this was popular a long time ago, but no one’s doing it right now.

David Alpert (12:16):

Then you try to sort of analyze that and you build out your creative team. So, you’re assembling everything from the writers, the directors, the actors, and the money, and you’re trying to put the whole thing together and go. So, the day-to-day responsibility of a producer is incredibly varied and changes both on the day and the need. But in general, you’re sort of making sure that everything runs from inception all the way to delivery, and most times, all the way through marketing and consumption.

Jonathan Boyar (12:42):

So, going a little bit back to the success of The Walking Dead, one of the things that you said really launched it was when FOX bought the international rights to it. Why was that so important?

David Alpert (12:52):

We came on air in a very interesting inflection point in television history. So, a lot’s been said about sort of the change in television and it’s still happening. It’s still changing and it’s still very dynamic. But, we went from sort of a height of the network era to the point where now we’re having a lot of the basic cablers, in addition to some of the premium cablers, sort of really launching shows. AMC was launching successful shows. You had FX launching successful shows. The idea that there was some place besides the networks and HBO launching successful scripted shows was a relatively new phenomenon at the time.

David Alpert (13:29):

One of the things that’s a problem inside of the traditional television model, when you had a network show, they could cancel that almost at any time. So, if you remember when we were growing up, a show could be canceled after four episodes, or three episodes, sometimes shows would be infamously be canceled after one episode.

David Alpert (13:47):

So, the problem is if you went to then try to go sell that show overseas, a foreign broadcaster would often look at the success in the U.S. market as an indicator as to whether or not they should pick it up, because they knew that if the show was going to be a big hit in the United States, there was going to get a lot of press, there’d be a lot of tours, a lot of promotion. They also knew that there was going to be a steady supply of content. If the show had been on air for four or five years, you don’t have to worry that you’re going to invest a lot in marketing the show, then it’s going to be discontinued.

David Alpert (14:18):

So, one of the things that happened in the rise of the cable era, or the basic cable era, was people were getting picked up straight to series, and these cablers, because they had such smaller inventories compared to traditional broadcasters, a traditional broadcaster would be doing three to four hours of prime time television every night during the week, whereas a cabler might be doing two hours once a week, or maybe one hour once a week. So, the likelihood that that show would return, and it would be sort of carefully marketed to and sort crafted, was way, way higher.

David Alpert (14:53):

So, all of a sudden you have the opportunity to sell a show internationally day one, as opposed to having to wait two to three years. So, that was really a major sort of shift both in the business landscape of television. But in terms of why was it so significant to have FOX, again, the other thing is historically is a lot of the foreign marketplace had been fragmented. So, you literally had to hand sell the show country by country. Sometimes you had to sell it region by region, because even inside our country there were some times you’d sell it to a regional broadcaster and then you’d have to get picked up by other broadcasters.

David Alpert (15:28):

So, it was a very time consuming and tedious job. One of the great things about the FOX deal, is they had cobbled together FOX International Channels Group, which basically meant that with one deal we would be live in 60 or 70 countries essentially overnight. So, we did the first global day and date release for a television show. So, that had never been done before. So, the idea being that we aired Sunday night, 9:00 in the United States, and within 48 hours, we had been seen in 75 countries around the world, which now it’s commonplace, because now you have streamers, and you have Netflix, and you have all these different sorts of platforms, but back then that was groundbreaking revolutionary.

Jonathan Boyar (16:10):

It absolutely is. I’m definitely going to ask about the streamers in a second. You actually, I guess now it’s about an over a year ago, signed what they call a first look deal with Amazon. What does that actually mean?

David Alpert (16:21):

So, basically for these outlets, whether it’s a broadcaster, whether it’s a cabler, whether it’s a premium service or a streaming service, they’re all looking to sort of lock in suppliers. So, the relationship is we’re a supplier of content, so they will give us consideration capital in exchange for getting the opportunity to look at our projects first. So, the first look means basically, let’s say I have a new idea for the Jonathan Boyar show, and everyone’s really excited. Everyone thinks this is a great idea, but I’m like, the Jonathan Boyar show should really be an HBO show. But because I’m in a deal at Amazon, I have to show it to Amazon first, and if they want to buy it, they have a pre-negotiated deal with me where they can sort of buy the Jonathan Boyer show.

Jonathan Boyar (17:08):

I’m for sale.

David Alpert (17:09):

Well, we’ll talk about this after the podcast, we’ll make this happen. So, that was really sort of the goal. So, the good news is when you do these deals is that you have an invested buyer sort of on your behalf. I’m a seller of content provider of content. So, having a buyer allows me to sort of sharpen my focus in terms of I get to know their tastes a little bit better. They get to know sort of what I’m looking for. So, the goal is by being in one of these relationships, is that we’re able to sort of work with each other more closely, so that it’s more efficient and effective for me in the projects that I’m developing, and they don’t have to worry so much about supply. So, they’ll have dozens of deals with people like us, so that they basically know that they don’t necessarily have to compete on the open market for every project that comes up, even though they still do, but they know that they have sort of a good supply chain of product coming into the company.

Jonathan Boyar (18:02):

Not that you or Robert need credibility, but I imagine this helps when you speak to talent out there that you have an extremely deep pocketed person behind you.

David Alpert (18:12):

Of course, because anytime that you’re doing, you would want to know sort of what’s the path to market, what’s the route to market. So, some people, they’ll come like, “I have an idea I think is good for Amazon. What’s my route to get there?” They’re like, “Oh, that’s a good idea. It feels like a Skybound idea, or that feels like Jordan Peele, he has a deal there too.” So, they’re like, “Oh, Get Out was great. This is sort of more genre and race based, or comedy based. Let’s talk to him.” So, there’s a lot of different people that have different sort of vibes and opportunities there, so they might want to think about what’s the best way to access that buyer might be through one of the deals they’ve invested in?

Jonathan Boyar (18:49):

They’re spending like drunken sailors. I mean, is that current level of spending by them, Netflix, is that sustainable?

David Alpert (18:56):

The short answer is we don’t know. Historically, you’ve always had to justify your success of your show by viewership. That was because you were basically measuring audience against consumer products that you can sell for advertising. I can get more Ford commercials on my show because I was getting more ratings than my competitor. So, that was sort of the model. HBO was really the first place to be like, “You know what, we’re going to aggregate subscribers in exchange for our content.” But they were sort of very discriminating. They were a single competitor. There was nobody else out there doing what they were doing. So, it was a very different type of model.

David Alpert (19:37):

It’s really only now though that you have this sense of these guys are out there sort of not going through traditional cable networks. Netflix is something people are accessing all over the world in all different ways, and so they really pioneered a different model. But Amazon has completely different metrics. I’m not sure that I fully understand the economics behind Amazon’s desire to be in filmed entertainments, the idea being that it drives subscribers to Prime. Okay, I get that. But it is also one of those things where they have a completely different monetization tool than Netflix does, or Hulu does, or even HBO. Because those places, you’re the number of subscribers is the thing that generates the revenues, so you’re making content because that’s the thing, you’re exchanging subscriptions for content. Amazon, you’re getting all sorts of different things. My understanding is that more people are likely to be Prime subscribers because there’s the content there. So, they’re still sort of driven by getting many people to watch as possible.

David Alpert (20:39):

But ultimately I’m not 100% certain if it is sustainable or not. It might because maybe what you need is to get more and more market share. Maybe that’s the new world we’re living in. I’m guessing that there’s going to be periods of often peaks and valleys, but I feel with AT&T now coming in and watching their streaming service, and Disney buying FOX and launching their streaming service, and Apple coming online, I do feel like we are a little bit going to be in an arms race for a period of time. I don’t know that it’s sustainable forever for all of those companies to be doing it, but it certainly seems like the foreseeable future, there’s going to be a battle between some of these big behemoths.

Jonathan Boyar (21:19):

Well, speaking of Disney, it closed today with a market value of $168 billion. So, for $168 billion, you’re buying ESPN, ABC, one of the world’s greatest film studios with characters from Marvel properties, to Mickey Mouse, to Frozen, to Star Wars. Then you have Netflix, which while it’s growing and has some good original programming, but nowhere near the level of Disney, you can buy that today for $120 billion. As a guy who’s in the content business, does this make sense to you?

David Alpert (21:52):

I’m not going to be able to speak to valuation in quite the same way. I certainly think that Disney is a more valuable company than Netflix. If someone was like, “Hey, I’ll give you Netflix or I’ll give you Disney,” I would take Disney all day, just owning Marvel, Pixar, Lucas. I mean it’s pretty insane, and that’s not even touching sort of the core ESPN or the core Disney properties. So, I feel like those are some really amazing, amazing things. Probably Netflix now owns a lot of stuff too, but really what they seem to have is cultural mind share, and an opportunity to sort of really fight to take over people’s eyeballs as you’re trying to compete in that marketplace. Is that sustainable? Your guess is as good as mine. Over time though, I think that as people are able to flip between apps much easier than even having to switch between channels, and everything is sort of On Demand, I think that the best content is going to win out in the long run.

Jonathan Boyar (22:48):

Well, something that’s a lot easier are board games and I noticed that you sell them. Is that still a market?

David Alpert (22:54):

What’s interesting, what we’re finding as sort of a broad based social comment, is that as people spend more and more time in the digital worlds, people still want social experience. So, I think what is the thing that’s saving the music industry? Concerts. Concerts used to be marketing for album sales, or CD sales. But now they’re the big revenue drivers, that and streaming. But it’s the live event that’s coming up. We see in the comic book space, conventions are going crazy. There’s conventions for everything. There’s conventions for individual properties. We have Walker Stalker conventions for Walking Dead. There’s Star Wars conventions, Star Trek conventions, comic book conventions, board game conventions. Everybody wants it.

David Alpert (23:36):

What we’ve also seen is as the video game business has exploded, people want that social interaction directly. So, the board game business has really taken off. So, we’ve had a few hits in there. We started with this game called Superfight. That’s just been a huge, huge perennial hit for us. As we’ve gone from there, we’ve just seen that people just can’t get enough. So, we’ve seen everything from the rise of board game cafes, to board game conventions, and they’re all the same people that love digital entertainment. At the end of the day we’re animals and we need social interaction to feel happy, and so having people play board games is a great way to interact with people.

Jonathan Boyar (24:15):

Can you explain Superfight? It really is a great concept.

David Alpert (24:18):

So, Superfight sort of takes that classic thing, who would win, Hulk versus Superman?

Jonathan Boyar (24:24):


David Alpert (24:25):

I would agree. Hulk smash. That would be my argument. People have this conversation now, like who’s a better basketball player? LeBron versus Michael. What’d you say?

Jonathan Boyar (24:33):

Oh, Michael without question.

David Alpert (24:35):

See, I don’t know. I used to think that. Three years ago I would think that. Now, I’m like LeBron might be the GOAT. Not sure, but you could make an argument either way, and people do. So, this guy named Jack Dyer came up with this idea for Superfight. The notion was you pick cards and you essentially assemble your fighter. So, my fighter might be Bruce Lee made of peanut butter, and you could be Abraham Lincoln with a katana sword. So, then you and I would argue in a fight as to who would win. Our third friend would judge and say, “Oh, you know what, Jonathan wins.” Then we’d switch it up and play again. So, it’s a very simple game. It takes about 30 seconds to learn. Then we built out all these expansion decks. So, we’ve done everything from a Walking Dead deck, to an R-rated deck, to a G-rated deck. We’ve done 80s deck.

David Alpert (25:19):

So, we’ve basically been able to sort of build out this experience where you can really have good, silly fun engaging in ridiculous arguments about who would win in these crazy situations. It’s a rare game that can be a great drinking game for kids in college, but it’s also a game that I play with my kids and that they love, because for them it’s a visual storytelling tool where they’re thinking about these things, they’re imagining these things, and they get into these crazy arguments as to who would win in these crazy situations. But at the same time is, honestly, we played it last night at our holiday Christmas party, and people are doing shots and having a great time, and it’s a great sort of fun thing to do there, too. So, people of all ages can engage in that debate and conversation, and I think that’s why Superfight has gone on to become this perennial success story.

Jonathan Boyar (26:08):

You made this guy a millionaire from this.

David Alpert (26:10):

Oh many, many times over. When we met him, he’s this brilliant guy, but he was living with his ex-mother-in-law. He was having a lot of trouble making ends meet, but he had this game, and the game had been a huge success on Kickstarter, and all the big toy companies were coming after him saying, “Hey look, we want you to come with us. We’ll give you $1 million, $2 million.” He kept saying no. He approached us because he wants a license from us, The Walking Dead, and so I played the game. I played the game with him, and what I realized was as we were playing the game, everybody in the office started coming over and watching the game, and next thing I know there’s 20 people watching us play this card game. I was like, “Wow, if watching people play a random card game just instantly gets people to draw to you, I was like, “There’s something here. There’s something really sort of magical about this.”

David Alpert (26:59):

So, I said to him, I said, “Look, we want to buy the game.” He goes, “What are you talking about? I’ll give you a deck.” I’m like, “I’m not looking for a deck. I want to buy the game.” He goes, “I’ve turned down all of these offers. Why would I come with you? You’ve never even published a game.” I said, “Because I will give you complete creative control.” He goes, “What?” I go, “You’re not going to be sitting behind some crazy Hollywood accounting. You’re my partner and you’re going to have control over what goes into the deck.” He goes, “Really? Nobody’s offered me that.” I go, “Yeah, I’m not going to give you anything like what those people said up front, but in success, if this does what we think it is, you’ll make way, way more money, and you’ll have way more control, and way more sort of control over your destiny by working with us.” He said, “That sounds awesome. That sounds amazing.”

David Alpert (27:37):

So, he signed with us. He’s gone on. He’s made millions and millions of dollars. Honestly, one of my greatest pleasures is every quarter, I send the guy a giant check, and I know that I’m always sending that giant check because I’m in the same business. If I hadn’t made that deal with him in the first place, I wouldn’t be having those giant checks for me. So, that part has been really great, and now we’re in the process, we’re turning it into a movie, a TV series. We’ve made merchandise out of it. We’ve made a web series out of it. This thing has become its own little multimedia business just based off of a deck of cards.

Jonathan Boyar (28:10):

That is an amazing, amazing story. I’m assuming he’s not living with his ex-mother-in-law.

David Alpert (28:15):

No. No. He’s got a big beautiful house, and his kids come in, and they’re super happy, and the truth is it really is an American dream. I do think there’s a great sitcom though, and the story of a guy living with his ex-mother-in-law, Lord knows I couldn’t live with my current mother-in-law.

Jonathan Boyar (28:29):

Well, I’m sure financially you did great from The Walking Dead, but how cool is it that you were a key part in creating a show that over 17 million people tuned into regularly and was a pop culture phenomenon? I mean, lots of people can say they made lots of money. Very few can say they accomplished what you did.

David Alpert (28:48):

First of all, Jonathan, thank you. The truth is I love that. It makes me really happy. But the thing that really makes me happy, the thing that I enjoy the most, is that I work with a partner that I love. I get to come to the office with a group of people that I love to work with, and we get to do things that are both really cool, and really fun, and it’s still work but it doesn’t really feel like work. So, I don’t mind doing it all day.

Jonathan Boyar (29:10):

Well David, thank you so much for your time. Where can you get the wine and where can you get the board games?

David Alpert (29:15):

So, come check out We have a beautiful online store where we will do all your fulfillment for you, for the board games, and for the comic books, and our video games. The wine you can get pretty much at any one of your major local outlets, so at Ralph’s, Kroger’s, Costco, Bevmo, all those places. You can also check it if you want to check that as well.

Jonathan Boyar (29:33):

Well David, thank you so much. This was a lot of fun and hopefully you can come back and tell us about your next project.

David Alpert (29:40):

I’m looking forward to it. Thank you so much for having me on the show. Really appreciate it.

Jonathan Boyar (29:46):

I hope you enjoyed the show. To ensure you never miss another podcast as well as to hear the latest from the Boyar Value Group, please follow us on Twitter @BoyarValue. Until next time.

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of December 13th 2018 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According To Boyar Podcast Episode 5: Ken Langone


About Ken Langone

Ken Langone is a co-founder of Home Depot and the founder and chairman of Invemed Associates LLC. He received a B.A. from Bucknell University and an M.B.A. from New York University’s Stern School of Business. He serves on the Board of Overseers of the Stern School and on the Board of Trustees of New York University, as well as serving as chairman of the Board of Trustees of New York University Medical Center.

The Interview discusses:

• The most important determinants of a successful business
• His fantastic book I Love Capitalism

• The importance of risk taking
• How he was able to convince Ross Perot to let him take his company public
• How Ken was able to co-found The Home Depot
• How he incentives employees and business partners
• Why he turned down an investment with Bernie Madoff
• The importance of not being complacent.

Never miss another podcast click here to subscribe today!

Available wherever you download podcasts

About The Boyar Family of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here

Boyar Research
Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of May 15th ,2018 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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Jonathan Boyar interviewed by Seeking Alpha

On this podcast Jonathan discusses:

  • His overall view of the stock market
  • Which sector are attractive
  • The type of stocks that he believes have the potential to outperform going forward

This podcast does not constitute a complete description of our investment services and is for information purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable. All investments involve risk, including the loss of your principal investment. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This article represents the views of Boyar Asset Management as of the date of publication and may change without notice. Boyar Asset Management as well as its affiliated companies, clients and employees may own positions in all of the companies mentioned in the article.

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The World According to Boyar: Episode 2 with Frank Blake

The World According to Boyar brings top investors, best selling authors, and market newsmakers to show you the smartest ways to uncover value in the stock market.

In Episode 2, we welcome guest Frank Blake, former Chairman and CEO of The Home Depot.

Never miss another podcast click here to subscribe today!

Available wherever you download podcasts

About The Boyar Family Of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here

Boyar Research
Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of March 19th 2018 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview.

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The World According to Boyar: Episode 1 with Chris Mayer

The World According to Boyar brings top investors, best selling authors, and market newsmakers to show you the smartest ways to uncover value in the stock market.

In Episode 1, we welcome guest Chris Mayer, Chief Investment Strategist of Bonner & Partners

Disclaimer: This interview does not constitute a complete description of our investment services and is for informational purposes only. It is in no way a solicitation to buy or an offer to sell any securities or investment advisory services. Any statements regarding market or other financial information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Past performance is no guarantee of future results and there is no assurance that any targets or forward-looking statements will be attained. This interview represents the views of Boyar Asset Management as of March 19th 2018 and may change without notice. Boyar Asset Management may own shares in any of the companies discussed during the interview..

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