John Davids (0:00)

This guy made over $660 million off YouTube, but he doesn't make videos. His name is Scooter Braun and you might know him as the guy who discovered Justin Bieber or the guy who bought Taylor Swift's song catalog, or the TV producer or the startup investor. Scooter does a lot and I'm gonna tell you exactly how he did it. And by the way, this is probably one of the most interesting podcasts I've ever done because I shared Scooter's story on Social a few weeks ago. Millions and millions of you, and I had quite a few people very close to Scooter Braun reach out to me and share all kinds of stories. So I'm going to give you guys all that today. Much of this never been told before, definitely not in one place. And that's coming up in just a second. Welcome to the podcast. My name is John Davids. You can call me jd. I'm the founder of influicity and on this show I like to share the stories of some of my favorite businesses and the people behind them. They if that's your thing, subscribe wherever you're listening. Leave a review of this episode. Let me know what you think. Get my best stuff to your inbox@johndavis.com and now let's get to the show you're listening to, Making it with John Davids. So Scooter's story starts all the way back in 2002. Scooter's a kid in college and he's trying to break into the music business. There's just one problem. He's got zero connections. He's got to find a way in. Now he's been throwing parties for a few years just to make extra money on the side, and he's actually gotten really good at it. These parties are some of the best in town. Concerts, raves, fashion shows. Pretty soon, these are the biggest college parties and maybe even beyond the biggest music parties you can go to in Atlanta. And then the music heavyweights start to take notice. The this record executive named Jermaine Dupre, who's running a label called so so Def Records, offers Scooter a job running the marketing team at his label. So Scooter can't pass this up. He drops out of college and gets straight to work. He quickly learns everything there is to know about the music business. He's really working hard, soaking it all in, making a lot of connections. And Fast forward to 2007. Our boy ditches the job and scrounges up and $1800 to set up his own talent management firm. He calls that firm SB Projects. And pause here for one second, because SB Projects is the company that Scooter will eventually sell for well over a billion dollars and make hundreds and hundreds of millions of dollars along the way. And that $800 investment that I just mentioned, that is the only outside capital, the only seed capital he will ever need. So SB Projects is now up and running. He's got a talent management firm all his own, and now he just needs to find some talent. And that's when he spots a kid making music on YouTube. And that kid's name is Justin Bieber. So Scooter tracks down Bieber's mom, gets them on a flight to Atlanta, and inks a record deal for Justin. And then he does something insane. He goes full throttle on social media, setting up gigs wherever he can get them and then posting all of the footage on YouTube. And I know this kind of sounds obvious today, guys, but it's unheard of in 2007. YouTube is brand new. No one does this. Within three years, Bieber is selling out arenas all over the world. Scooter's on a roll. But we're just getting started. Scooter keeps signing artists. He signs Ariana Grande, Demi Lovato, J. Balvin, so many more. Each of them is topping the charts. And behind the scenes, Scooter is thinking way, way beyond music. He's handling touring, TV shows, movies, endorsements, social media, sponsorships and investments, turning each act into a cash gushing music machine. And he's making millions just taking a small slice off every deal. And now it's time to put all that cash to work. So SB goes on a shopping spree. He buys a stake in Drake's management company. He buys a huge country music label. He, he invests early in Uber, Dropbox, Spotify. Scooter's diversifying, building a huge stack of assets. And all the pieces are in place. There's just one more thing to do. In April 2021, Scooter's phone rings. The founder of Hybe is calling. One of the biggest music companies in the whole world. And Hybe wants Scooter's business. All of it. They agree on a price. I'll tell you what that price was in just a minute. And Scooter sells the company and clears over $660 million off that one deal. Not bad for an $1800 investment. So that's the version of the story that I shared on social media. The quick Version that I put out on Instagram, Facebook, LinkedIn, TikTok, YouTube. Millions and millions of you saw it, and I got a lot of feedback. And like I said, a lot of people who are inside Scooter's orbit worked for him for many years, reached out to me in the DMs, and, and they wanted to share their versions of the stories, they wanted to expand on the stories that I told, and they wanted to give me detail on what really happened, deal by deal, dollar by dollar. Some of this stuff is so wild, it's actually hard to believe. I had to see it all for myself. The text, the documents. At one point, Scooter actually uses a tarot card reading to make $300 million on just one deal. So most of what I'm going to share now comes directly from insiders who are literally in the rooms and where this all happened. Let's start with the early days. So I'm going to take you back now to a time where Scooter almost lost everything before he even really started. So this story is back in 2006, 2007, time frame, and Scooter discovers this young artist named Asher Roth, who would eventually break out with a song called I Love College. And you guys might remember that from 2009 or just go to YouTube, check it out. So that would come a few years later. But in 2006, Scooter signs Asher to a management deal. Then Scooter discovers Justin Bieber and signs him too. And of course, you all know what happens with Justin Bieber. He's going to go on to become one of the biggest artists in the whole world. But again, that won't happen for a few years. And between now and then, Scooter's got to bankroll these artists with no money coming in. As you can imagine, signing artists actually costs a lot of money. And Scooter's paying for everything out of pocket. He's literally paying for these artists to live, food, travel, probably wardrobe allowance, right? So they can perform wearing nice clothes. He's even paying for Justin Bieber's hockey league so little Justin can play ice hockey. This is a huge financial drain on Scooter. He's got that cash flow running backwards. We don't like that it's flowing the wrong direction. It's flowing out, it's gotta flow in. So Scooter is down to his last few dollars. And then Asher Roth sends him a demo of this new song he's just recorded called I Love Colle. And Scooter loves it. He knows that this will be a hit. So he starts pushing like crazy harder than ever to get Asher a record deal. But he's struggling. Nobody wants to sign this kid. Labels aren't biting. And then Scooter pulls off one hell of a maneuver. This is the start of the legend of Scooter Broughton. Here's what happens. It's 2008. Scooter's at this big music festival, south by Southwest, and. And he books a dinner with executives from Universal Music. He's going to pitch them on why they have to sign Asher Roth to a record deal. Now, at the same time, Scooter books a dinner with executives from Sony at another restaurant directly across the street. So we've got meetings with two record labels happening at the exact same time across the street from one another. We got a little Mrs. Doubtfire action going on here. But that's not all. Scooter makes sure that the tables at each of the restaurants are at the window so both label groups can see each other. And then he bounces back and forth between them, negotiating Asher Roth's record deal in real time. So picture this. He's literally playing them off each other throughout this whole dinner, probably an hour or two. So he'll go and talk to the folks at Universal, hypes up the deal, raises the stakes. Then he walks out the door, crosses the road, sits down with the people at Sony, tells them the deal that Universal just offered him 15 seconds earlier. Then he's going back to Universal. He's literally talking to one record label while the other label watches him through a window across the street. You know that expression, if you don't take this deal, I'll walk across the street and give it to your competitor? Scooter is literally doing that. He's walking back and forth, trying to lock in a contract for his client. And it's working. I think the opening number is in the low hundreds of thousands. No one could quite remember. I talked to a few people who were there, and then it goes up a bit, and it goes up a little bit more. And by the end of that dinner, Scooter Braun, who I remind you at this point is broke as a joke, closes a $1 million record deal for his client, Asher Roth. His cut is 15% or $150,000. And that payday keeps him alive. It keeps the business running. Asher's song comes out. I Love College, it blows up. Then Bieber eventually blows up. And that's how Scooter Braun went from rock bottom in the mud, really, on the Brink of giving up entirely to building what will become a hit making and cash printing music machine. So a few years go by, Scooter continues to grow his music management firm. He signs a lot of other artists that you know, like I mentioned, Ariana Grande, Demi Lovato, Carly Rae Jepsen, Tori Kelly, psy, Remember Gangnam Style. You can thank Scooter for that one. And by 2012, Scooter is 30 years old and his company is now making $26 million a year in profit. Now, side note here, I'm about to get into a lot of information that has never been publicized. Numbers, accounting. And when I asked people close to Scooter how much money the company was actually making at various times in this year and that year, the only numbers they could give me were profit numbers. And that should actually tell you guys a lot. Normally when I ask a company how much money they're bringing in, you get a top line number, you get a sales number. But these guys didn't even know what the top line numbers were year to year when I asked them, what were you making in 2010, 12, 15, it was always profit or Epida. So Scooter is running a very tight ship, bringing in plenty of cash, especially for a 30 year old. So up until now, SB Project, Scooter's company hasn't taken on any investors. It's all being built from that initial $1,800 he put in at the very beginning. He hasn't sold any shares in the company. It's all his. And then in 2012, he does his first capital transaction. He sells 49% of SB projects to this Wall street firm called Waddell and Reed. And the deal is structured as follows. Scooter gets $140 million in cash. This is secondary financing, which is a fancy way of saying it goes directly in his bank account. Then he gets another $160 million in working capital. And that's money that he can use to grow SB projects by buying other companies, marketing, whatever. And believe me, he plans to grow. I'm going to get to that in just a minute. But there's one more very important deal point before this deal can get done. Waddell and Reed is a public company and they have a minimum investment threshold of $400 million. Their investors have set up, for whatever reason, this rule that the smallest deal they can do is, is 400 million. And that means to get this deal done with SB Projects, they have to invest 400 million. And we're not there yet. Right. They've given Scooter $140 million for himself, $160 million in primary capital for growth, and that's 300 million. So they've got to hand over another hundred million just to get this deal to the finish line. So here's what they do. They get creative. They put $100 million in escrow in a bank account. It's just going to sit there. And they tell Scooter, if you ever need this money for any reason, you can use it. And if you do use it, we'll dilute you by the fair market value at that time. So what that means is, in simple math, if a year from now, Scooter decides he wants to take that $100 million out of the bank and spend it on something, and let's say in a year from now, the company's worth $500 million, we get another 20% of your business, because $100 million is 20% of 500 million. So it's going to sit there. If you ever need it, that's how it'll work. Okay? Now none of this really matters because in reality, Scooter's never going to touch that hundred million dollars. He doesn't want it, and Waddell and Reid don't want to give it to him. They're literally just putting it there so they can meet the requirements that their investors have. It's got to be 400 million. Fine. Here's 100 million in escrow. Everyone's happy. And the reason we know for sure that Scooter is not going to touch that hundred million is because he doesn't want to lose control of his company. Right. He now owns 51%, while Dell and Reed own 49%. They know he doesn't want to give up any more of the company. So this hundred million is really just a placeholder to make everyone happy. And the reason I'm emphasizing this 100 million so much, guys, is because it's going to be very, very important and very consequential in just one minute. Hang on, I'll get there. So the deal closes and Scooter gets straight to work. He starts spending that $160 million war chest that they gave him. He buys 50% of this management firm called Atom Factory. They manage Lady Gaga, John Legend, Meghan Trainor. He buys a 50% stake in Drake's management company. Drake's one of the most streamed artists, I think the most streamed artist of the decade buys the firm that manages Bruno Mars, Lizzo, Charlie XCS, another firm that manages Casey Musgraves, Faith Hill, Tim McGraw. So he's buying up management companies one by one and he's just putting them into his company. He probably had the biggest music management company in the world at one point. At least one of the biggest. And at this point, he also creates a new company called Ithaca Holdings. So sometimes when you come across Scooter Braun story, you'll see two main companies. There's SB Projects, which is the one we've been talking about this whole time, and then there's Ithaca holdings, which is basically just a holding company for all these different management firms he's buying. So remember, he was doing $26 million in profit in 2012, and flash forward a few years, he's now at $80 million in profit after all this growth and all these acquisitions. And then in 2016, something bad happens. The stock market is crashing. Now, this isn't particularly bad for Scooter. It's actually going to be very good. But it's bad for his partners at Waddell and Reed. They're a publicly traded company and they've fallen on hard times like a lot of Wall street firms did at that time. And these guys need liquidity, they need cash money, and they need it right now. They need it fast. And that $100 million that's parked in an escrow account with Scooter's name on it right now is looking pretty good. We'd love to get our hands on that. Remember I told you this money would be consequential? Well, that time has come. So Scooter sees a real opportunity here. And he approaches Waddell and Reid with an offer they can't refuse. He says, guys, today you own 49% of my company. I'd like to buy 40% of my company back from you for $100 million. With a few conditions. Number one, you have to give up your board seat. I don't want you guys on my board. I don't want you guys controlling or having day to day, say, in my company. Number two, you've got to give up all your pref shares. So generally speaking, when a company on Wall street invests in a firm, they get what are called preference shares or pref shares. And they have certain rights and certain authority and they're better than common shares. So Scooter doesn't want them having those shares anymore. We're all on the same even keel playing field. You guys have the same shares as I do. And number three, I want the right to buy back that remaining 9% from you at a later time at an agreed upon fair price. So I'll take 40% now, but I want the option to buy that 9% at a later time. Wadellen Reed responds. Where do we sign? They take this deal. It's too good to be true. $100 million cash money right now. I'll take it. So, to recap what's just happened, scooter sold them 49% of his company a few years ago for $400 million. And he's now buying back almost all of it for $100 million, plus a bunch of gravy on the side. And now he's got a company doing $80 million in annual profit, almost triple what it was before he sold to Adeline Reed. And now he owns almost the whole thing. He owns 91 1% of this baby. Oh. So a year goes by, and Scooter's been building and Scooter's been working, and now he decides, you know what? I want that 9% back. So in 2017, he does another one of his legendary deals, this time with Carlile Group. Now, Carlyle is a huge private equity firm, and Scooter comes to an agreement with Carlile that they're going to buy 30% of his company. But the deal is going to work like this. The 9% that Waddell and Reid still owns, Carlyle's going to buy that. And remember, Scooter has the right to force Wadell and Reed to sell that 9% at his own option. So there's nothing that says he has to buy it. He can simply give that option to Carlyle. And Carlisle says, great, we'll put up the cash. We'll buy it. In addition to that, scooter sells another 20% of his own stake to Carlyle Group for $120 million. So he's now taken off the table, another 120 million for himself. And pause here for a second. I know doing math on podcasts is, like, the worst thing in the world, but I gotta just highlight this. He has now taken off the table between these two deals in 2012 and now 2017, $260 million. And he still owns, at this point, 70% of the company. But we're not even done, because now we're into what may be one of the biggest music deals ever done. This is 2018, and Scooter has a thesis. He believes that Masters are going to be worth a lot of money in the years ahead. Now, before I go any further, let me just give you guys a little Background on the music business. Master recordings, or masters as they're known, are the original recordings of a song. The version that's streamed or sold or licensed. You hear it in movies, ads and shows. Whoever owns the masters controls how the music is used and also makes most of the money when that music is played. Now, who owns the masters? Most of the time, it's the record labels. Artists don't own their own masters. That's incredibly, incredibly rare. That's also why when Spotify streams songs, the folks making the most money are the record labels, because they own the masters. Artists own something else, which is called the publishing rights, which is irrelevant for this conversation. But masters are the real ownership in songs. And in today's streaming economy, owning masters is like owning prime real estate, right? You've got Spotify, you've got Apple music, you've got TikTok, you've got YouTube. Whenever these guys stream a song, whenever you listen to a song on any of those platforms, they pay a fee to whoever owns the masters. And that's why, again, Spotify pays so much money to the record labels, the bulk of their revenue goes straight to the labels. And like I said, Scooter has this thesis, he has this belief that masters are going to go up in value big time for the exact reason that I just mentioned, right? You've got all these streaming platforms, they have this endless need for music. So masters have to go up. And by the way, Scooter wasn't the only person who had this belief. Lots of people had this exact belief. But Scooter was in a position to capitalize on it because he's got a lot of money, he's got a lot of power at this point. So he needs to buy a record label. And that's exactly what he's about to do. Scooter approaches a guy named Scott Borchetta who owns a Nashville label called Big Machine Label Group. And this is where the story gets really, really juicy, because Big Machine owns the masters of some pretty big country names like Luke Combs, Rascal Flatts, and a little artist named Taylor Swift. And this is how Scooter will come into possession of Taylor Swift's masters and cause a whole lot of drama. Now, as a side note, the Taylor Swift masters that we're talking about here are from roughly the first 10 years of her music career. So it's her 2006 album, which is called Taylor Swift, then Fearless speak now red, 1989, and reputation, which was 2017, that's all owned by Big Machine. So it's 2019. And Scooter makes an offer to buy Big Machine. And other players are at the table too. Universal Music is bidding. Warner Music wants it. They're making a bid, too. And even Taylor Swift herself is taking a look. Not at the whole label, but at her own portfolio of Masters. Now, at some point, Taylor bows out. There's actually a Tumblr blog post from June 2019 where Taylor explains that she did have a chance to earn back the rights to her Masters, but that deal felt unfair to her, so she passed. And as a side note, I'm not sure. I did some research. I can't quite figure out why Taylor couldn't just buy the whole record label. Now, obviously, Taylor Swift is an artist and not necessarily in the market to buy a label, but she's no ordinary artist. She's very astute. She has a brilliant team around her. So I'd assume that it's. If she wanted to buy the label, she could have kicked in a few million bucks of her own, raised hundreds of millions of dollars from private equity and purchased it, just like any other buyer would have done. But for whatever reason, she passes. So the sale happens, and Scooter winds up buying the label for $330 million. And this is where the Internet melts down. Taylor says that she's been blindsided. Scooter says her team knew the deal was happening all along. And in fact, Taylor's dad is on the board at Big Machine, so he had to actually sign off on the deal. But it doesn't matter. The drama has begun. And I'm not going to get into the drama on this podcast. I want to stick to the deals and the dollars. And the next deal is so good. It's so good, guys. All right, so let's recap where we are now. Scooter has just paid $330 million for Big Machine. And inside Big Machine, among other assets, are these Taylor Swift Masters. And those Masters are valued at about $140 million. So roughly 40% of the purchase price that Scooter just paid was just the value of Taylor Swift's music, about 40%. But there's one other factor that we need to consider. Kind of a curveball. So after Scooter closed the deal and took ownership of Big Machine, Taylor announces that she's going to re record all her albums, all her songs. She's going to come out with Taylor's versions of everything because she doesn't want Scooter or anyone else to profit off her early work. And she has the right to do that. She's going to effectively create new masters and she's going to own them outright. And I remember hearing this at the time and thinking to myself, huh, Whoever just did that deal to buy those masters, I didn't know it was Scooter Braun at the time. Kind of sucks for them because I bet you that's going to bring down the whole value of the portfolio, right? Maybe not. Scooter has other thoughts. So Scooter again pulls off a really, really smart maneuver. He starts shopping around the Taylor Swift catalog to investors to see if anybody wants to buy it. Not the whole record label, not all of Big Machine, just the Taylor Swift Masters. And he gets some interest from this firm called Shamrock Capital. Now, Shamrock is actually the family office of the Disney family, so there's a lot of Hollywood connections going on here. Scooter's negotiating the sale with Shamrock and Taylor makes this big announcement. She's going to rerecord all her masters. And of course, Shamrock gets cold feet. They're not sure if they should be moving forward with this deal if Taylor is going to kind of devalue everything they just bought. And so Scooter says, wait a minute, guys, wait a minute. Hang on. Think about this for a second. Taylor's going to re record her first six albums, basically. And everyone is going to be listening to these albums as though they're new because in a way they are. She's just re recording them. The biggest star in the world is breathing new life into this old catalog. And everyone's going to listen not only to the new recordings, but they're going to listen to the old recordings because they're going to want to compare and contrast. They're going to want to hear the differences. This won't devalue the catalog. It's actually going to increase the value of the catalog. So Shamrock, take Scooter's word for it. He hasn't been wrong too many times before when it comes to music. They buy the Taylor Swift Masters for, get this, $405 million. That's right, 405 million. Scooter just spent 330 million on big Machine, the entire record label, and now he's selling about 40% of it for over 400 million. He's already made a profit and he still owns everything else. Now there's also a little Easter egg in this story that I got to drop right now. I love this part. Before Scooter pulls the trigger with Shamrock, he actually has conversations, many conversations with Taylor Swift's team, and he's trying really hard to get them to buy the Masters. I think he was offering them to Taylor for about $300 million, knowing that they were worth a lot more. He'd be getting more if he just sold them to Shamrock, but he wants to give Taylor the chance to buy them for herself. And I actually know the name of the guy on Taylor's team who Scooter was negotiating with. I'm not going to share that name here. But he turned Scooter down for whatever reason. It's unclear if he ever even brought the deal to his boss, Taylor Swift. And like a week after Scooter's deal closes with Shamrock, Taylor fires the guy who had the conversation with Scooter and had the chance to buy those Masters because obviously she would have gotten a great deal if she had bought them herself. All this is just a crazy extension of the story. I think it's probably 80 or 90% true. Who knows? But wow, wow, is this a good story. Anyhow, let's go now to the last big deal in the story of Scooter Braun, and that's the final sale of of Scooter's company to Hybe, a big South Korean record label. In 2021, a story leaks in the media that Scooter Braun is in talks to sell his company, Ithaca holdings, to Blackstone for a reported $900 million. Now, nobody was authorized to talk about this sale because it was still being negotiated and it was very, very true. But it leaked into the media. Scooter was, in fact, doing this deal. He was going to sell to Blackstone for 900 million, and the deal was taking a bit longer than it should have. So maybe somebody on the inside got frustrated and leaks the deal to the press. Okay, so scooter is now four days away from closing this $900 million deal, and he's at a tarot card reading. Now, you should know Scooter is a very spiritual person. He's actually there, I would assume, to learn about his love life, because around this time in 2021, he is going through a separation from his wife. And. And during this tarot card reading, apparently the woman who is reading him his cards says to him, you know, I can see you're doing a big business deal right now, and I have to tell you, don't do it. You gotta wait two weeks before you do anything at all. And Scooter turns to her and says something like, well, what are you talking about? I'm actually here to talk about my love life. I'm not even here to talk about business and I don't want to wait two weeks to get this deal done. And the tarot card reader says, I know, I know, but trust me, you can't do this deal. You gotta hold off. So Scooter tells his team, hold off on this deal. And they do. His team waits. Blackstone is waiting. Everyone's getting very antsy, very impatient. One week goes by, nothing happens. Two weeks go by and Scooter gets a phone call from J.P. morgan. And the bankers at J.P. morgan say that Bang Si Hyuk, the founder of Hybe, wants to buy Ithaca. And they know he's in talks with Blackstone. So what will it take for this deal to happen? Scooter's got to leave his deal with Blackstone. Abandon $900 million. So Scooter does some math and comes out with a price tag, $1.2 billion. There's some back and forth. They pencil it all out. And on April 2, 2021, it's announced that HYBE is buying Ithaca holdings for $1.2 billion. Just two months before Scooter's 40th birthday. And this is the final transaction of the company that Scooter Braun started almost two decades ago. So let's recap. Starting with the $1,800 in 2006, almost losing it all, but making $150,000 back in the nick of time. Then taking SB projects to $26 million in annual profit by the time he was 30, then selling half his company to a dullen reed for $400 million, then buying it back for $100 million, then selling a chunk of it again to Carlyle Group, pocketing hundreds of millions more, and then selling it for a third time to Hybe. Wow. There are three big takeaways that I got from this story and I want to share them with you right now. The first one might sound like maybe just a coincidence or a lucky break, except that it happened over and over and over again throughout this whole story. It's more of a theme, and that is that Scooter really knows how to keep his options open. He understands the power of optionality and really the leverage that it gives you when you're building and scaling a business. You don't want to go through too many one way doors. You don't want to. You always want to have many roads to go down, many options to pick from. Let me just pull these out for you so you can hear them in order, one after the other. In 2007, when he's just starting SB projects and finding talent, he's got not one artist, but two. Asher Roth and Justin Bieber. He's giving himself not just one chance to win, but two chances to win. Then he's negotiating Asher Roth's record deal. And he doesn't just set up one record label meeting, he sets up two at the same time. Then fast forward to 2012. He does that deal with Waddell and Reid and negotiates that $100 million in escrow. Not cause he needs it, not cause he knows what's gonna happen in the future. He just wants the option. Maybe it'll come in handy at some point in the future. And it does. Then in 2016, when he's buying back the shares from Waddell and Reed, he bakes in the option to buy back the remaining 9% at a later time. He's not sure that he needs it to, but maybe he'll use it. And of course he does. Then, when he's negotiating his Blackstone deal, he pauses negotiations for two weeks because he believes there's a better option somewhere down the road, which, of course, there is. He sells to HYBE for $1.2 billion. Now, you could say that one or two of these things were lucky breaks, but all of them, every single one, I doubt it. I think Scooter understands the power of optionality, the power of a batna, your best alternative to a negotiated agreement. And the lesson here is that in business, you've got to keep your options open. You've got to have more than one way to win. That doesn't mean you don't commit. It just means you have a plan B. You put yourself in a strong position by having other alternatives. My second takeaway is kind of an extension to the optionality piece. And that is Scooter bootstrapped his way to $26 million in annual profit by 2012. Five years into the business, he is cleaning up and having cash. Being able to rely on yourself to build your business and grow, that gives you plenty of options. But then he did something else. When he did that deal with Waddell and reed, he pulled $140 million off the table. And a lot of entrepreneurs miss this point. They keep all their options and all their eggs in one basket for way too long. And it doesn't always work out. Things could go very bad. Things could have gone bad for Scooter. Who knows? What if Scooter had gone under two years later and he never had that final exit to Hybe at least he was securing himself taking cash off the table, giving himself more optionality. And by the way, at the beginning of this podcast, when I said that scooter made over $660 million, that was just off the last transaction to Hybe that was his share of of the 1.2 billion. He was taking cash off the table the whole time for a reason. And the lesson here is, no matter how much you believe in your business, no matter how much you want it to win, you've got to diversify a little bit. Especially after you have an initial win, you've got to de risk so you don't make dumb and desperate choices. And my third takeaway is that beyond having great taste and a real talent for music and entertainment, which Scooter clearly does, he's also a really phenomenal capital allocator. He raises capital and uses that money to build what was maybe the biggest music management company in the world for a few years there. And then he buys Big Machine and manages to sell off one asset there, the Taylor Swift catalog, which pays for the entire acquisition. Of course, he's got ton of organic growth too, but he really understands how to pull both levers. I'm getting Bernard Arnault vibes, maybe even Bob Iger vibes, the CEO of Disney, who of course has had a ton of organic growth but has grown through acquisitions like Marvel and Lucasfilm and Fox. The lesson here is that it takes more than just raw entrepreneurial talent to win, especially at this level. You've got to understand capital allocation, or at least surround yourself with people who do. And it's more than just money. I'm talking about time, resources, your team, your equipment, identifying your constraints and working backwards from there to allocate your resources appropriately. That's the story of Scooter Braun. That's the story of SB Projects, Ithaca holdings get my best stuff to your inbox@johndavis.com.