Ep. 380 Private Equity Wins, The Community Loses Out with Megan Greenwell

Summary

Podcast Summary: Ep. 380 Private Equity Wins, The Community Loses Out with Megan Greenwell

Introduction

In Episode 380 of The Stacks, host Tracy Thomas engages in an illuminating conversation with journalist and editor Megan Greenwell, author of the compelling new book, Bad Company: Private Equity and the Death of the American Dream. Released on July 16, 2025, this episode delves deep into the opaque world of private equity, unraveling its intricate mechanisms and highlighting its profound impact on various industries and communities.

Understanding Private Equity

Megan Greenwell opens the discussion by demystifying private equity for the listeners. Addressing the concept in simple terms, she explains:

"Private equity is a system of financing where they pool money from outside investors... and use it to buy companies. So unlike venture capital, this is buying companies outright." (06:06)

Greenwell contrasts private equity with venture capital, emphasizing that private equity involves the acquisition of entire companies, often leveraged with significant debt:

"The loans make up about 70 to 80% of the average deal, and the private equity firm is not responsible for paying those loans back. Only the portfolio company is responsible." (06:12)

This structure creates a split in incentives between the private equity firm and the acquired company, setting the stage for potential conflicts and negative outcomes.

Impact on Industries

The conversation transitions to specific industries affected by private equity, with Toys R Us serving as a prominent case study. Greenwell elucidates the detrimental effects of sale-leaseback agreements:

"If you sell all of those hospitals, you pocket the proceeds as the private equity firm, and then you start charging rent to the portfolio company... you're doing pretty well while literally weakening the company that you've acquired." (07:34)

Tracy Thomas further probes into the Toys R Us example, highlighting how private equity firms impose new financial burdens:

"They sell the buildings or sell the land on which the stores sit, and then make Toys R Us pay rent for something they already owned outright." (09:21)

This maneuver not only adds significant expenses but also destabilizes the companies, making them more susceptible to failure.

Financial Mechanisms: The 2 and 20 Model

A critical component of private equity's profitability is the infamous "2 and 20" fee structure. Greenwell breaks it down succinctly:

"The 20 is the private equity firm just automatically gets 20% of any profits over a certain threshold... The two is the private equity firm gets 2% of the total value of the deal every single year as a management fee, regardless of how the company is actually doing." (10:21)

This model incentivizes private equity firms to pursue larger and more lucrative deals, often at the expense of the acquired companies' long-term health.

Ethical Private Equity?

Addressing the ethical dimensions of private equity, Greenwell expresses skepticism about the existence of genuinely ethical firms. She references Pete Stavros of KKR, who attempts to mitigate negative impacts through initiatives like Ownership Works:

"They have sought to establish themselves and KKR as like the good private equity guys... workers at that company will get a small ownership stake in the company." (36:24)

However, Greenwell remains critical, pointing out that despite these efforts, the overarching system remains fundamentally flawed:

"The system is so broken that even if it works in individual cases, we still have like this fundamental problem that needs to be addressed." (37:26)

Megan Greenwell's Writing Journey

Greenwell shares her personal journey in authoring Bad Company, revealing the challenges of securing willing participants and the depth of research involved. She recounts a particularly difficult experience attempting to engage a subject for her housing section:

"I booked a plane ticket... and I get into my hotel... She is not there. I've never heard from her again... I was like, oh, no, this book isn't. I'm gonna have to return my book advance." (48:56)

This anecdote underscores the complexities and emotional toll of investigative journalism focused on exposing systemic issues.

Choosing Industries and Characters

The selection of industries—retail, hospitals, journalism, and real estate—was intentional, aiming to demonstrate the pervasive influence of private equity across varied sectors. Greenwell highlights the interconnectedness:

"You can see the playbook for modern private equity deals gets set in retail and then applied to industries like hospitals, as if those are the same thing." (23:52)

Her meticulous process involved interviewing over 150 individuals to find subjects who could vividly illustrate the personal and communal fallout of private equity acquisitions.

Related Works and Recommendations

Greenwell recommends several narrative non-fiction works that resonate with the themes of her book, including Evicted by Matthew Desmond and The Spirit Catches You and You Fall Down by Anne Fadiman. She emphasizes the importance of using personal stories to illuminate broader systemic issues, making complex topics more accessible to readers.

Conclusion

Tracy Thomas and Megan Greenwell conclude the episode by reflecting on the significance of Bad Company as a necessary exposé of private equity's detrimental effects on American communities. Greenwell's work serves as a clarion call for greater transparency and accountability within the industry, urging readers to understand the profound consequences of financial maneuvers driven by profit over people.

Listeners are encouraged to engage with the book to gain a deeper understanding of how private equity shapes industries and affects everyday lives, reinforcing the episode's central message: while private equity firms may thrive, the communities they touch often pay a steep price.

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Notable Quotes with Timestamps

• Understanding Private Equity

  • Megan Greenwell: “Private equity is a system of financing where they pool money from outside investors... and use it to buy companies. So unlike venture capital, this is buying companies outright.” (06:06)

• Sale-Leaseback Agreements

  • Megan Greenwell: “If you sell all of those hospitals, you pocket the proceeds as the private equity firm, and then you start charging rent to the portfolio company... you're doing pretty well while literally weakening the company that you've acquired.” (07:34)

• 2 and 20 Fee Structure

  • Megan Greenwell: “The 20 is the private equity firm just automatically gets 20% of any profits over a certain threshold... The two is the private equity firm gets 2% of the total value of the deal every single year as a management fee, regardless of how the company is actually doing.” (10:21)

• Ethical Private Equity

  • Megan Greenwell: “They have sought to establish themselves and KKR as like the good private equity guys... workers at that company will get a small ownership stake in the company.” (36:24)

• Writing Challenges

  • Megan Greenwell: “I booked a plane ticket... and I get into my hotel... She is not there. I've never heard from her again... I was like, oh, no, this book isn't. I'm gonna have to return my book advance.” (48:56)

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Timestamp Guide

• 06:06: Megan explains what private equity is.
• 07:34: Discussion on sale-leaseback agreements in hospitals.
• 09:21: Tracy elaborates on the Toys R Us example.
• 10:21: Explanation of the 2 and 20 fee structure.
• 23:52: Evolution of private equity's influence from retail to hospitals.
• 36:24: Ethical private equity practices at KKR.
• 37:26: Greenwell's critique of the private equity system.
• 48:56: Greenwell shares a challenging experience while writing her book.

Note: The timestamps correspond to the interview sections for easy reference.

Transcript

[Tracy Thomas]

New York is a big city and finding the perfect hotel to stay in can be intimidating at best. But friends, let me tell you about Kicksby. Kicksby is a luxury boutique hotel steps away from quintessential New York City sites such as the Empire States Building, Times Square, Madison Square Garden and Penn Station. I just stayed there for a week with the mini Stacks and we had the best time. It is close to so many subway stops and so many fun things to do with kids, but makes this hotel really stand out is their brand new loyalty program. It's called the Kicksby Book Club. Yes, that's right. A hotel with a book club program. Once a member, you can visit their lending library and check out books during your stay. They even offer book club members exclusive perks such as discounts, VIP gifts, and more. The best part is a portion of Kicksby Book Club proceeds go straight to the New York City Public Library. If you're interested in joining the program, visit the Kicksby hotel website at www.kicksby.com kicksby book club for more, that's k I x b y.com kicksby book club.

[Megan Greenwell]

I'm still learning all the time that industries that private equity has growing influence in that, you know, I've been researching this for three years. There are too many industries to keep up. And the reason retail is the first section of the book is when you really start digging in, you can really see the ways in which the playbook for modern private equity deals gets set in retail and then applied to industries like hospitals. As if those are the same thing.

[Tracy Thomas]

Right?

[Megan Greenwell]

Because it doesn't matter what they do, they're just replaceable widgets.

[Tracy Thomas]

Welcome to the Stacks, a podcast about books and the people who read them. I'm your host Tracy Thomas and today I am joined by journalist and editor Megan Greenwell. She is the author of a brand new book called Bad Company, Private Equity and the Death of the American Dream. The book follows the lives of four individuals whose lives were upended when private equity acquired their workplaces or their residents. Through these individuals, we get a deeper look into the private equity industry and understand how it is harming our communities today. Through our conversation, Megan offers us a deeper understanding of what exactly private equity is and how it works and how we got here. Plus, we talk about how she picked the individuals to focus on in the book and so much more. If you're confused andor concerned about private equity, today's episode is for you. Quick reminder, everything we talk about on each episode of the Stacks can be found in the link in the show notes. And if you love this podcast, if you want inside access to it, if you want to support the work that I do as an independent podcaster, please consider joining the Stacks Pack on [e-mail] the stacks and subscribing to my newsletter at Tracy Thomas substack.com in both of these spaces you will get perks like bonus episodes, access to our Discord community, hot takes on pop culture and books, our mega reading challenge, and until the end of September, access to my non fiction reading guide. Head to patreon.com thestacks or Tracy Thomas substack.com to subscribe. All right, now it's time for my conversation with Megan Greenwell. Okay, everybody, I'm so excited. I am talking today to Megan Greenwell. She's the author of Bad Company, Private Equity, and the Death of the American Dream. This book is the exact kind of non fiction catnip that they make in a lab and then they dangle in front of me so that I can scream into a microphone about it. So I'm really, really excited. Megan, welcome to the Stacks.

[Megan Greenwell]

Thank you so much for having me. I'm a true fan of yours, so this is very exciting for me.

[Tracy Thomas]

Well, I'm a true fan of yours, so this is exciting for me. Before we even get into the book, you're from the Bay Area?

[Megan Greenwell]

I am.

[Tracy Thomas]

You grew up in Berkeley?

[Megan Greenwell]

I did.

[Tracy Thomas]

Did you go to Berkeley High?

[Megan Greenwell]

I did.

[Tracy Thomas]

Oh, my God.

[Megan Greenwell]

Where did you go?

[Tracy Thomas]

I went to Bishop o'. Dowd. Oh, you from Oakland?

[Megan Greenwell]

Okay. Okay, cool.

[Tracy Thomas]

We'll do more of this offline. I just wanted to let everybody know that all the best people are from the Bay Area and the East Bay in particular. Particular. Particular. Like, not people who say they're from the Bay Area, but are really from Napa also. I just want to just throw a quick stray for those.

[Megan Greenwell]

I think that's important.

[Tracy Thomas]

I think so, too. Okay, the book, in about 30 seconds or so. Will you tell us about Bad Company?

[Megan Greenwell]

Yeah. So Bad Company is narrative nonfiction exploring the impacts of the private equity industry on workers and communities. And I do it by following four characters whose lives were upended when private equity took over their employer or their landlord.

[Tracy Thomas]

Okay. Amazing. That was really good. We're gonna get to the actual contents of the book in a moment, but I want to start with just, hi, Talk to me like I'm five. What is private equity?

[Megan Greenwell]

Yes, a very good question. Because I didn't know the answer to this until private equity came into my life and that was what this kicked off this whole reporting process. Basically, private equity is a system of financing where they pool money from outside investors. So sovereign wealth funds, university endowments, public pension funds, ultra wealthy individuals, you know, all of those normal sources of capital, and they combine that money with bank loans and use it to buy companies. So unlike venture capital, this is buying companies outright. And unlike venture capital or any other system of finance, the loans, a, make up about 70 to 80% of the average deal, and B, the private equity firm is not responsible for paying those loans back. Only the portfolio company that they've bought using the loans are responsible. So if I take out $1 billion in loans to buy the Stacks Podcast and I drive the company into the ground, right. The podcast goes out of business.

[Tracy Thomas]

Trace, it's already there. So good luck. See if you can drive it a little lower.

[Megan Greenwell]

Then, if you enter bankruptcy proceedings, only the Stacks podcast is legally responsible for repaying those creditors. The private equity firm gets to walk away scot free. So it's this weird system that sort of causes a split between the incentives of the parent firm and the incentives of the portfolio company. And that's why it was so interesting to me, because it seemed to, like, kind of violate everything we think we know about free market capitalism.

[Tracy Thomas]

Right. And you said they walk away scot free, but actually they walk away having made money.

[Megan Greenwell]

Yes. Great.

[Tracy Thomas]

It's sort of like by design. That is the business model of. Or a version of the business model for private equity.

[Megan Greenwell]

Exactly. So not only do they not have to pay the loans back, they also have all of these other tricks that allow them to make money even if the company is doing poorly. So I talked about that split in incentives. One of the biggest risks, ways in which that comes through is that a private equity firm will very often sell off a portfolio company's real estate in what's called a sale leaseback agreement. So let's take an industry like hospitals, where obviously hospitals require a ton of land. And if you're building a chain of hospitals, that becomes a ton of land.

[Tracy Thomas]

Right?

[Megan Greenwell]

And so if you sell all of those hospitals, you pocket the proceeds as the private equity firm, and then you start charging rent to the portfolio company, to this chain of hospitals, skimming a little off the top each month from the rent payments for yourself, you're doing pretty well while literally weakening the company that you've acquired. So they now are burdened under these rent payments and also these rent payments for, you know, the exact same land they used to own. And they're in a much Weaker position than they were before the private equity came in.

[Tracy Thomas]

Right. I wanna. I wanna explain this part one more time again, just because I was under the impression, when I heard about this before I read your book, that was like, oh, you know, they went and they bought Toys R Us, and then they made Toys R Us pay rent to a company that was affiliated with the private equity. That's not what happens. What happens is that Toys R Us already owned their store property. The private equity firm sells the buildings or sells the land on which the. Which the stores sit, and then makes Toys R Us pay rent for something they already owned outright. So they're adding a huge expense to a Toys R Us plus the loan. That's like $5 billion in that case. So it's not like, oh, they were already paying rent, now they're just paying rent to us. It's like, oh, you did not have this expense line on the pnl, and now you have a huge one. Because these also are huge pieces of land, like a Toys R Us or a hospital. It's not, you know, one little storefront on Melrose or whatever. It's. It's, you know, you've been to a Toys R Us, people. You know what I'm trying to say?

[Megan Greenwell]

Yes, yes. No, that's exactly right. So the rent payments go from literally zero. Toys R Us in particular, was famous throughout the retail industry for owning its own land. You know, in most cases, they had owned those parcels for, like, decades, so they weren't even paying a mortgage payment on it at that point. And now all of a sudden, they have to pay rent. And. And the private equity firm is literally profiting off of those rent payments because.

[Tracy Thomas]

They'Ve partnered with the new landlord.

[Megan Greenwell]

Exactly. In the case of Toys R Us, the landlord was actually one of the partners in the deal. So it was two private equity firms and a real estate firm. But in other cases, yes, they sell it to a company in which they. With which they have a sweetheart deal, essentially. And so they win. The real estate firm wins, and only the portfolio company, the workers and the community loses out.

[Tracy Thomas]

Okay, I want to ask you about another part of the way that they make money, which is. Can you explain this 2 and 20 thing?

[Megan Greenwell]

Yes.

[Tracy Thomas]

Okay, thank you.

[Megan Greenwell]

2 and 20 is the basic payment structure of all private equity deals. The 20 is the private equity firm just automatically gets 20% of any profits over a certain threshold. So that, you know, maybe that's okay. Right. Because that's like, at least a performance incentive. The two is, the private equity firm gets 2% of a deal as the management fee. So 2% of the total value of the deal every single year as a management fee, regardless of how the company is actually doing. So if you're looking at a 5 or 6 or $10 billion deal, 2% every single year is working out pretty nice, even before you get to all the, like, bonuses they pay themselves and dividends and all of this other stuff that 2 and 20, like, just works out so well. So in the case of Toys R Us, the company, you know, went under kind of spectacularly. And reporting at the time made clear that both Bain Capital and kkr, the two main private equity, the two private equity firms that had purchased Toys R Us, both made money over the life of the deal.

[Tracy Thomas]

Can I ask you this? Does that mean that it incentivizes private equity firms to pay more for a business than they. Than they would? Because if the deal is $5 billion, like, if you say, okay, Toys R Us, I'm going to buy you for $5 billion, when you're really maybe only worth, like, $2 billion, you still get that 2%. Or are the banks at all discerning with how much they're going to lend out? Like, if it's driving up the price of a thing that's not worth that?

[Megan Greenwell]

It's such a good question, and I don't totally know the answer. I mean, there are some checks at the bank level to make sure you're not paying, like, orders of magnitude more, right? Like, if you're buying a house, they'll stop you from being able to pay way more than it's worth because it's bad for their business. But that said, one of the questions I often get asked is, why do companies agree to buyouts from private equity firms? And the answer is, because if you have a board that the board, in most cases has a fiduciary responsibility to accept the best bid. And so in a lot of cases, private equity is bidding more than any other type of firm, any other type of buyer, because they don't have the same need to make money in, like, the classic way by improving the business. Because private equity doesn't like that. They can certainly afford. Afford to pay a lot more because they're going to make their money either way.

[Tracy Thomas]

Right, right. Are. I mean, I'm sure there must be instances where the board is like, no, we care more about the brand than we do about the dollar, or, no.

[Megan Greenwell]

Sure, it can happen, but in a lot of cases, it's not totally in their control anyway because of this legal concept of fiduciary responsibility, they would have to make such a strong case why they're not selling for a, you know, lucrative bid.

[Tracy Thomas]

So it's not like buying a house. It's not like when you like write a nice letter to the seller and they're like, okay, we'll take this like slightly less offer because you've got seven kids and a dog and like you told me, you want to do Christmas in the backyard.

[Megan Greenwell]

Yes, exactly. That's such a good distinction to draw because like, if somebody comes to your board and you're a company with an offer, they're going to have a hard time saying no and justifying that to the shareholders who want, you know, want to pocket a little bit of the proceeds of that deal.

[Tracy Thomas]

Even though long term they're likely to do.

[Megan Greenwell]

Correct.

[Tracy Thomas]

Bad.

[Megan Greenwell]

Correct.

[Tracy Thomas]

Okay.

[Megan Greenwell]

The, the argument is essentially like, look, we don't really know what'll happen long term.

[Tracy Thomas]

I see.

[Megan Greenwell]

Theoretically they'll make the company 10 times bigger in the long term. In the case of private equity, they almost certainly will not do that. But private equity is a short term game and sales are. When people sell companies, they do it seeing like three feet down the road.

[Tracy Thomas]

Okay.

[Megan Greenwell]

So yeah, it's really kind of a wild system that does seem to like violate some basic things that we think we understand about how money works. And so these kinds of questions are like among the most common. I get like, wait, I don't understand. How could it possibly work that way?

[Tracy Thomas]

This is, this is actually me I want. So when I was reading your book, I had to text my brother and say, can you explain mortgage backed securities to me? To which he just responded with the voice memo, what are you up to? Because he knew full well there was no way I had any business even being curious about mortgage backed security.

[Megan Greenwell]

So good.

[Tracy Thomas]

He was like, girl, what's. Are you in trouble? He was like, I thought maybe like some scammer got you and you were interested in like getting a mortgage back security. I was like, no, I'm just trying to read a book. Like, I'm just trying to get more information.

[Megan Greenwell]

Wow, that's true. Brotherly love. Knowing.

[Tracy Thomas]

Yeah, yeah. He was like, he was like, something bad has happened here. She's asking about a phrase that like, is just so far outside of her wheelhouse.

[Megan Greenwell]

Yeah, that's good.

[Tracy Thomas]

But okay, another question about what's actually happening. And then I'm going to shift to some other questions about what's going on in your book per se. But how come private equity gets to have these Sort of like handouts or like capital gains taxes, which I also don't understand. Like, they're spending. In the book, I think you say that they're spending in Maryland the same amount on private equity as they are on higher education. Like, how come so much of our money is going into private equity?

[Megan Greenwell]

When.

[Tracy Thomas]

Why is that? Why is that? Question mark. Yeah, final answer.

[Megan Greenwell]

Recently asked me a version of this question that was. So follow up question, do laws exist? And the answer in the case of private equity is basically no. Private equity was designed to work around existing laws. Right. So it wasn't like they had to get stuff lifted. They were just able to see, like, okay, there's a loophole here. We're going to, like, design a system that fits through it. And so that worked out super, super well as the industry started gaining steam in the 70s and 80s, and then they developed a very robust lobbying operation to make sure nobody ever got in the way of, you know, tried to regulate it. And there have been attempts at regulating many facets of the private equity industry. Right. So Elizabeth Warren has proposed what she calls the Stop Wall Street Looting act time and time and time again. And it never comes close to getting out of committee because 88% of members of the House and Senate receive donations from private equity. So it doesn't matter what side of the aisle you're looking at. There's. There's just no incentive to regulate this system. And private equity people are a lot of the most powerful people in our society, in our economy, in our philanthropy. So they're doing a nice job of both engendering a lot of goodwill and sort of like disguising what it is they actually do. One of the examples of this that I think about all the time is I live in New York. Stephen Schwartzman's name is on everything.

[Tracy Thomas]

Do you know he's my. Do you know his daughter's my personal enemy?

[Megan Greenwell]

I do. She is a lot of people's enemy. She's. But yeah. So Stephen Schwartzman's name, among many other things, is on the central branch of the New York City Library. And I think if you asked, like, a hundred highly educated people walking into that library, 99 of them would not know what stories Stephen Schwarzman does, other than that he's a rich philanthropist and maybe that he's a big Trump donor. They cannot.

[Tracy Thomas]

Very Sackler family. It's very Sackler family on all of the things.

[Megan Greenwell]

Yes, exactly. They have an interest in making sure we don't know what they do. And so you can get your name out there in certain ways, without getting it out there, that this is how you've made all your money. And I think that has been an incredibly profitable strategy. Because who wants to hurt the poor guy whose name is on the New York City central branch of the library? Right?

[Tracy Thomas]

I mean, I do, but I also do. But I think more of us do.

[Megan Greenwell]

Then we know, more people learn. And that was a lot of what I wanted to do with this book is like, it is an industry that is opaque on purpose. I didn't know how it worked. An experience I had over and over when talking to workers is until everything fell apart, they had no idea their employer was owned by private equity. Right. And so a lot of what I wanted to do was just pull back the curtain, not by, like, getting inside the firms, but just by showing people these are the effects. Because the firms don't want you to understand the effects.

[Tracy Thomas]

Right. And for people who don't know, just because you've mentioned it twice now, sort of. Your introduction into private equity was that you were the editor in chief of Deadsp. It was acquired by private equity, quickly run into the ground. Was they were doing things that basically were antithetical to what Deadspin is and was. They had, like. It was just a mess. You left, and then that led you to sort of start writing. Writing this book. I'm kind of paraphrasing there, but yes, exactly.

[Megan Greenwell]

I left in my last day. I wrote an article that we published on Deadspin called the Adults in the Room that was about my experience, and that. That went, I mean, orders of magnitude more viral than anything I've ever written. And I think a lot of people were like, great, write a book about that. And I was just so not interested in writing a book about my own experience. It's not the kind of writer I am, okay. And I didn't want to write a book that was so narrowly focused on the media industry. So originally I was sort of like, no, I'm not writing a book about private equity. And then I just got really obsessed and couldn't stop reading. And then I was like, okay, well, I guess this is a book, but I just have to do it in my own way. So it's really not about my experience, except a couple paragraphs in the introduction. But that was absolutely my entree into, like, diving deeper into this world.

[Tracy Thomas]

You start the book, you have this idea, you start it. How far away are you from where you thought you might be when this book came into the world? Like, what were the things were There. Or were there things that surprised you or totally threw you for a loop or, like, did you discover things that you were like, I had no idea about this.

[Megan Greenwell]

Oh. Over and over and over. I'm still discovering things that are totally horrifying to me. So our mutual friend Brian Goldstone, who you've had on the show, I went to one of his book events, and I learned from him that, you know, one of his characters got evicted from her apartment because private equity bought it and jacked up the rents, and then she ended up in an extended stay motel. The extended stay motels are also largely owned by private equity firms, largely Blackstone.

[Tracy Thomas]

Which is why I want Brian to write the Blackstone book. But you guys could write it together.

[Megan Greenwell]

Well, I'll totally do it with Brian. I'll do any project with Brian. He's brilliant. But, yeah, that. Like, I didn't know that private equity was in extended stay motels. I'm still learning all the time that industries. That private equity has growing influence in that. You know, I've been researching this for three years. There are too many industries to keep up. Right. There is just no way to keep tabs on absolutely everything they're up to. So, yeah, I mean, I knew it would be a good book because I had been reading about it for maybe three or four months and was still getting, like, enraged all over again every single day. And that was a good sign to me that, like, I wasn't going to lose interest.

[Tracy Thomas]

Right, right, right, right. That makes sense.

[Megan Greenwell]

So, yeah, it's been a lot of that.

[Tracy Thomas]

Well, I heard you talking on the culture study podcast, and you mentioned that, like, private equity is kind of getting out of retail, which I thought was really stunning because I think of it as being sort of like, in the retail and, like, restaurant space. Because of Red Lobster.

[Megan Greenwell]

Yes.

[Tracy Thomas]

In my mind, it's like Toys R Us and Red Lobster. I didn't. I mean, I cannot overstate this enough. I did not understand what private equity was basically until I started reading your book. Like, I only knew those two sort of case studies, like, those two sort of ideas. And so I guess when Brian. In Brian's book, There is no Place for Us, when he talked about it, it made sense to me than when I was reading your book that it was like, oh, hospitals, sure. Those are places with physical locations. Because in my mind, it was like, oh, they. They do housing and. And things that have a lot of real estate. So it was interesting to, like, kind of go back and see the origins of this and see that, like, Retail was such a huge part of it, and now it's not, because of course that makes sense. And so I, I was really fascinated by that sort of evolution too.

[Megan Greenwell]

Yeah, no, thank you. I'm glad you appreciated that because that was really important to me to sort of show that evolution. And the reason retail is the first section of the book is when start digging in, you can really see the ways in which the playbook for modern private equity deals gets set in retail and then applied to industries like hospitals, as if those are the same thing.

[Tracy Thomas]

Right.

[Megan Greenwell]

Because it doesn't matter what they do. They're just replaceable widgets. And so, like, the sale leaseback agreements was a huge part of retail deals long before private equity was in hospitals at all. And then they started getting into hospitals largely as a result of the Affordable Care act, which just created a larger guaranteed pot of money. And so then you see them be like, oh, that's the only spec thing. It worked great in retail. Let's use it in hospitals too.

[Tracy Thomas]

Are they, Are they largely in private prisons too?

[Megan Greenwell]

Yes, so they're in private prisons. And even in government run prisons, there are a lot of the prison like service providers. So like the super predatory phone systems, of course, charge prisoners like, wow. Right, Exactly.

[Tracy Thomas]

I feel like an idiot. Should have seen that.

[Megan Greenwell]

Yeah. Okay, so they're so deep in prisons.

[Tracy Thomas]

Right. And it's gonna get way worse. I bet that's like probably the one of the rising industries given what we. What's going on right now politically.

[Megan Greenwell]

Oh, yeah, yeah. They'll be big in like this concentration camp system, I'm sure.

[Tracy Thomas]

Oh, yes. I mean, with like the deportation part of it also with this new, like big beautiful bill or whatever. I mean, I think we're talking a lot about like people losing Medicaid and people losing food stamps and all this stuff. But like, that's going to lead to a quote, unquote, rise in crime, which is going to lead to more people being able to be put away into institutions like prisons and juvenile detention centers, which means there's going to be this room in the same way that the Affordable Care act made more room for hospitals. It's going to make more room for prisons.

[Megan Greenwell]

Oh, absolutely, yeah. I mean, you know, obviously our criminal justice quote, unquote system is so broken. Right. Like the prison population just keeps growing anyway.

[Tracy Thomas]

Right.

[Megan Greenwell]

So, yes. Any way to like throw more people in prison and gouge them on things like phone providers is. Yes, is absolutely going to happen.

[Tracy Thomas]

Okay, before we take a break, I'm going to ask you this question Is there such thing as ethical private equity? Okay, we'll be right back. Hey friends, it is I, your host, Tracy Thomas. If you've been enjoying today's episode of the Stacks, but you're thinking, gosh, one episode a week is just not enough, I've got two places that you should check out to keep these bookish vibes going. The Stacks Pack on Patreon and my newsletter Unstacked on on Substack. The Stacks Pack is where the community lives. We're talking book club meetups, a private discord chat, our year long mega challenge. Plus members get a bonus episode every month. It is a great way to support me and the crew and for you to connect with other readers. Over on Unstacked. I keep the conversation going twice a week. On Monday you get my grown up show and tell, which is basically where I tell you about all the things I loved and hated in the last week. And then on Fridays you get something special. Sometimes it's a bonus episode, sometimes it's an installment of my non fiction files. There is both a free and a paid option over on Substack plus right now through September 22nd. If you join in either place, you can get my Nonfiction Reading Guide, 30 book recommendations of fantastic nonfiction just for you. If you're looking to meet other book lovers. If you want to support this black woman, run independent podcast. If you just want more of me yelling at you, come hang out with me on [e-mail] the stacks and subscribe to my newsletter at tracythomas.substack.com hey everybody, I'm back to tell you about Lumi Gummies. Imagine if edibles just made you feel good instead of too high. Consistent, mellow and super delicious, Lumi Gummies are specifically designed to make you feel good, not stoned. Whether you're looking for an end of day de stressor, a midday mood boost or help Getting the Best Sleep Ever Lumi Gummies has strain that is right for you. As you all know, I am a reader. Reading is my job. I also really like to sleep and both of those things seem to be getting harder and harder as I deal with gestures wildly. The rest of the world microdosing gummies can be a real game changer if you want to curl up, if you want to let everything else melt away, if you want to focus in on a good story, these gummies can help. Lumi Gummies are available nationwide. Go to lumigummies.com that's L gummies.com and use the code the stacks for 30% off your order. Again, that's L u m I gummies.com code the stacks lumigummies.com code the stacks okay, let me just tell you this from firsthand experience. If you're starting a new business, that can be incredibly intimidating. When I first started this podcast, there seemed to be about a hundred million different things that I had to learn and figure out on my own. That's why I know how important it is to find the right business tool to help you get things done. Not only to get things done, but to make it simpler for millions of businesses. That tool is Shopify. Shopify powers 10% of all E commerce in the United States. Shopify has world class expertise in everything from managing inventory to international shipping to processing returns and more. Whether you're a big brand or starting your first business, they make it feel approachable from day one. With hundreds of ready to use templates, Shopify helps you build a beautiful online store to match your beautiful brand. And they even help you get the word out. Like you have a big fancy marketing team behind you. If you're ready to sell, then you're ready for Shopify. Turn your big business idea into with Shopify on your side, sign up for your $1 per month trial and start selling today at shopify.com the stacks. Go to shopify.com/the stacks. Shopify.com/the stacks. Okay, we're back. I left you with a cliffhanger. Is there such thing as ethical private equity? Are there firms we could be? Because here's the thing that I learned also, if you're a person, an individual, or maybe you're a teacher, maybe you have money in a pension, a state pension or something like that, your money is going towards private equity, your retirement, your money is going there to get a stronger return on the investment so that you can be paid out when you retire. If you are a person who has disposable income and has and is investing in things, right, like maybe you're not filthy rich, but maybe you've got a little money here and there. Your investments might be tied to private equity firms. So is there, are there private equity firms that we should, should be, could be supporting that are doing things that in the quote unquote right way? Like, is there any way to be engaged in this space and not be just like Blackstone?

[Megan Greenwell]

Yeah, it's such a good question. The answer is complicated. I don't think every private equity deal is like evil. And I don't think every Private equity deal hurts people. So to take a step back, Private equity arose in the 60s, 60s with what they called bootstrap deals, which were essentially looking at small family run companies and saying, look, they could, you know, they stand the potential for serious expansion, but they don't have the capital to do it. Let's pump in some capital, they'll have either a profitable exit or go public or whatever. That's like a pretty benign system. And there are a lot of private equity deals that are still that. Right. So the private equity industry's main lobbying group loves to say that the vast majority of their deals are still in these small family run companies. That I see no reason to disbelieve that that's true. The problem is the number of deals and the amount of money or the amount of workers affected are very, very different statistics. And so I don't think there are any private equity firms that are really just doing these little, very benign deals. Or at least if they are, they're doing it because they're not successful enough. Like the, the ethos in finance is so much about being bigger. Right. And so every deal has to be bigger and more lucrative than the last. And so there's not a lot of incentive to be a private equity shop that's really only doing these small deals because then you just look like a second tier organization. And so what ends up happening is they get greedier and hungrier and every deal has to be bigger. And those bigger deals just work out badly, much, much more often.

[Tracy Thomas]

Right.

[Megan Greenwell]

So it's not that any individual deal or every individual deal is like evil.

[Tracy Thomas]

Sure.

[Megan Greenwell]

But the biggest ones tend to work out the worst and those are the ones that affect the most people.

[Tracy Thomas]

So basically what you're saying is no, you shouldn't have your money in private equity at all if you want to be investing ethically.

[Megan Greenwell]

I mean, I would say that's true, although I would also say that the vast majority of people don't really have a choice. Right. Like if you are an individual person with investments in a pension fund, you get one vote in where those pensions are invested, but like not nearly enough to control it. Right now private equity really wants to get in on 401k money, which would double the amount of capital that's available to private equity firms. And like theoretically you can make your individual decisions on where your 401k money is going. But like most people don't realistically, whoever does that, right. All I do is I like pick the little slider bar. This is most conservative or Most risky.

[Tracy Thomas]

Right.

[Megan Greenwell]

Put it like somewhere seems appropriate for my age. Right?

[Tracy Thomas]

Exactly. In the middle always. I don't care how old or how young I am. I'm just, I'm in the middle. I'm not getting risky. I'm not getting.

[Megan Greenwell]

No, I'm certainly not getting risky. But then if you do the most conservative, like you never get any interest. So. Right, yeah, like I am not a fight a personal finance expert and I have no desire to be a personal finance expert. So like I'm not going to go to that level of detail. Which means that if my 401k, I mean I'm a freelancer, so I don't have a 401k, but if my husband's 401k gets into private equity, like it's really going to be on us to make the decision. Like we don't want that.

[Tracy Thomas]

Right. And there's no like private equity firms that are trying to be like we're the ethical private equity firm. Like there's no.

[Megan Greenwell]

Absolutely.

[Tracy Thomas]

But are there any that are actually like, are there any? Because it seems to me, you know, whenever we get in these situations of like the these companies are bad or like this kind of thing is bad, then quickly there, there emerges some shiny like we're doing it the right way and we are actually making sure that workers pensions get paid out or like workers severance gets paid out before we pay whatever like that we are really specializing in this industry so that we're trying to make the industries build or like make the company be successful or that we're approaching it in a different way. That is not strictly money. Like do those private equity companies exist?

[Megan Greenwell]

So the only like top private equity executive who gave me an in depth interview on the record for the book is Pete Stavros, who's the co head of global private equity at kkr, one of the five biggest firms in the country. And Pete Stavros is like a super smart, thoughtful guy and he talked to me at length and answered all of my like very critical questions with a great deal of thoughtfulness, which I really appreciated. He has sought to establish himself and KKR as like the good private equity guys largely by establishing a nonprofit called Ownership Works that so now when KKR acquires a company, the workers at that company will get a small ownership stake in the company. So for books people, this happened prominently with Simon and Schuster. KKR bought Simon and Schuster and every worker there had the option to acquire a small ownership stake in the company. That has been Stavros's way of saying, you know, look, this is a more ethical way to do it. And also a way that in his view, like engenders more productivity from workers because like now they have skin or whatever. Right, exactly.

[Tracy Thomas]

Okay.

[Megan Greenwell]

And. And there have been successful outcomes from this. So Stavros loves to talk about this garage door manufacturer in Illinois that KKR bought, turned around, sold for profit, and you had factory workers, truck drivers, whoever, making like mid six figure payouts. That is like genuinely cool. Right? Nobody thinks truck drivers should not get a six figure payout if their company does well. Or at least nobody. I want to be in conversation.

[Tracy Thomas]

Yeah.

[Megan Greenwell]

That said, we are talking about a couple of hundred people and the problem is private equity companies owned by private equity are 10 times more likely to enter bankruptcy proceedings as other kinds of companies, companies. So obviously if your company goes bankrupt, you're not seeing a six figure payout. You're not seeing a payout at all. So my argument is like, the system is so broken that even if it works in individual cases, we still have like this fundamental problem that needs to be addressed.

[Tracy Thomas]

Okay, great. That answers my question. Okay. I want to talk about the actual writing of the book. I know we've did so much, but I think, think it's rare that I read a book where I'm like, I actually feel like I need to do nitty gritty with the author about the book's contents because I think so many people and again myself leading the charge just don't understand. Like, I hear the word private equity, I hear the words venture capital and I, my mind goes blank. Like, I'm just like, money, no money.

[Megan Greenwell]

And that was the scariest thing about writing this particular book, particularly as my first book. Because I was like, people aren't going to hear you wrote a book about private equity and be like, I'm not buying that. I have no interest in that. Right. So I really had to like make. I mean, this is why I took the very character based approach because I was like, you'll like reading about these people and then you'll learn something about private equity along the way. But like, right, the idea that like most people are going to like pick up a 300 page book that's just a primer of how private equity works and is crazy in my opinion. And so, yeah, no, I'm glad we did some of the nitty gritty because I think it, it makes it a little less like intimidating.

[Tracy Thomas]

Yeah. And I think, I mean, I said this to a friend as I was starting the book. I was like, oh, yeah, no, people can read this. Like, this is super readable. Like, you go. The introduction has, like, a lot of details about sort of, like, what's going on here, a little bit about the money, the background. But you start chapter one, part one. You're with Liz. Toys R Us, Liz. And it's just like. Like, boom, we're in. I get it. I see what we're doing here. And so for people who are at all nervous about, like, the. The density of the information, it's really spread out really well. And everything that's in the introduction comes back again later to be explained again. Like, it's. I mean, I think it's really well done for. For us idiots. I don't know. I don't think that's a nice way. Yeah. Okay, newbies. That's better. You cover four industries in the book. You cover retail, hospitals, journalism, and real estate. So I want to know, how did you pick which industries you wanted to cover, and how important was it to you that you pick? You know, case studies that involved particular private equity firms like KKR or Bain. I mean, there isn't a there. None of the firms are Blackstone that are, like, deeply covered, though Blackstone comes up a lot. There is a paragraph on page 71 that I have sent screenshots to basically everybody I know about a letter from the UN To Stephen Schwarzman. Schwarzman. That I was like, imagine getting a letter from the UN that's like, you are the worst person to ever exist. But so I'm wondering, how did you pick the industries? How did you pick which private equity firms? Did you do some changing around to find people that fit with the right firm or the right industry? Like, how did you kind of pick these subjects in this moment?

[Megan Greenwell]

Yeah, so I picked the industries first and largely because they felt like industries where private equity is big and that are representative enough that you can sort of show that evolution. Like I was describing. You can see the through line from retail to hospitals, for example, and then housing media and housing media and hospitals are all, like, public goods in some way. Right. So they're all really fraught when you talk about for profit models at all. Much less like a, you know, very.

[Tracy Thomas]

Hungry form of, like, juicing them for all they're worth.

[Megan Greenwell]

Exactly.

[Tracy Thomas]

Like big margins for hospital. Feels weird.

[Megan Greenwell]

Exactly. So I knew I wanted to start with real. I'm sorry. I knew I wanted to start with retail because that is still just like a business.

[Tracy Thomas]

Right.

[Megan Greenwell]

You may have had all the feelings in the world about Toys R Us and hated that it went under, but it is a retail chain of toys.

[Tracy Thomas]

Not necessities, per se.

[Megan Greenwell]

Exactly. So I wanted to sort of start there to establish the basics of this is how it works, and then sort of come in later with, okay, and now it's in your home and your hospital and all of these other things I did. So once I had the industries, then I picked characters. I did think about which firms to pick, but the hardest thing was picking the right characters. I Talked to probably 150 people to get those four, because I just needed so many. They had to check so many boxes. Right. So I needed geographic diversity, and I needed racial diversity, but I also just needed people who would, like, spill their entire lives to me. I followed these people's lives for two years each. So, like, I needed them to tell me everything and never decline to answer a question. And most people will not do that. I would never do that. So. So that was just really hard. And I had a bunch of people who I got to assign certain point, and then they just, like, got a little more reticent, and I knew that they would not work for this purpose.

[Tracy Thomas]

Okay.

[Megan Greenwell]

So, you know, then I did try to tailor everything to, like, the right firms. I would have loved to write about Blackstone. I would have loved to write about Carlisle cim, which is the private equity.

[Tracy Thomas]

Firm for the real estate.

[Megan Greenwell]

Yes, exactly. So they're, you know, they're a little smaller. And so arguably, I should have focused on Blackstone instead of them. But I just found this one. You know, I found Loren as a character so compelling. I found the story of CIM's rise so fascinating that I just couldn't resist. But, you know, I would love to write a version of this book that's twice as long and that, like, ticks off all of the biggest private equity firms.

[Tracy Thomas]

I'm telling you, we have a Black Stone book here. People between you and Brian, either of you can have it. I already told Brian I would be the agent. I would be the editor. I would help you. I would be your marketing person. Like, I will live and die for the book. The only thing I can't do for you is I, I. I probably can't actually write it because I can't write, but I can tell you, like, go deeper, babe. Like, keep going. Like, we need the Blackstone book that is Empire of Pain. Like, we need the Sackler family biography, Allah Schwartzmann. Okay. Like, we need it.

[Megan Greenwell]

No, we absolutely do. I mean, Blackstone is both the biggest private equity firm in the world and.

[Tracy Thomas]

Also the biggest landlord in the country. Right?

[Megan Greenwell]

It's wild. Yeah.

[Tracy Thomas]

I mean, this. This paragraph, I got. We got to do the paragraph, guys. We don't have to do the whole paragraph, but we got to do some of the paragraph. Okay? Blah, blah, blah, blah, blah, Blackstone, which is the. Not to blah, blah, blah, your book. Sorry. So rude. I'm hyped up. Okay, so we're talking about real estate and Blackstone. Blackstone, which is both the world's largest private equity firm and the nation's largest landlord, is explicit about how America's affordable housing crisis benefits its shareholders. Quote, a structural shortage of housing has resulted in pricing power for rental housing assets, end quote, it wrote in a letter touting its growing investor returns. The firm has also poured millions of dollars into fighting ballot measures designed to expand rent control protection in California. Parenthetically, a state in which I live and where Megan is from. In 2019, a United nations committee labeled Blackstone's involvement in the housing industry as a human rights issue, writing in a letter to CEO Stephen Schwarzman that the firm was, quote, unquote, having deleterious effects on the right to housing, end quote. This is the most damning paragraph in the world for this company, to me, and we need the book.

[Megan Greenwell]

It's. It's a very good book. I think you're right that there's an Empire of Pain style of book, which is, like, definitely not what I did. I, like, did not get these companies that.

[Tracy Thomas]

That's why there's room for you and.

[Megan Greenwell]

Yeah, no, I mean, I. I want to read that book, at the very least.

[Tracy Thomas]

Okay, well, we'll call Patrick, Rad, and Keefin. I know between the three of you.

[Megan Greenwell]

Great.

[Tracy Thomas]

We need it done or find a friend. Like, you have done amazing work with this book, and because you have, you have been welcomed into my circle of people I would trust to write the Blackstone book.

[Megan Greenwell]

Wow.

[Tracy Thomas]

So that's high price. Okay. That's real.

[Megan Greenwell]

Seriously, we're calling a board meeting.

[Tracy Thomas]

Yes.

[Megan Greenwell]

Me, Brian, and Patrick, we're actually starting.

[Tracy Thomas]

A private equity firm to take over this idea, run it into the ground, sell it for parts, and then let's some less qualified person run it and pay us rent on it.

[Megan Greenwell]

Honestly. Perfect.

[Tracy Thomas]

We're gonna make so much money. Yes. Okay.

[Megan Greenwell]

But anyways.

[Tracy Thomas]

Okay, so you didn't. I totally cut you off. You didn't end up including Blackstone, which you would have wanted to do because of their impact, but you had to stick with the people that you felt like you had the best, best stories with.

[Megan Greenwell]

Yes, exactly. And that, you know, that's just, like, always going to be the hardest thing. Yeah, right. And particularly when it is a topic that is so complicated. Like, I knew from the beginning that I really needed characters that readers were going to kind of fall in love with and feel super invested in their stories. And so I think I found those people, but that was so hard. I bet I've told this story at a couple live events, but, like, I had the darkest night of the soul of my career where I had been talking to this woman for the housing section in Indiana for months, and she'd given me recordings and notes and whatever. And I was like, okay, I have to, like, come out to meet you to be able to write about you. And she was like, yeah, sure, whatever. Fine. So I book a plane ticket, obviously on my own dime, and I get out to Evansville, Indiana, and I get into my hotel, like, the most depressing strip mall days in. You've ever seen in her life. And I text her, and I'm like, you know, what time do you want to meet in the morning? And she doesn't text me back. And this is somebody who always responds in, like, five minutes.

[Tracy Thomas]

And I'm, like, so stressed.

[Megan Greenwell]

Oh, no. So I go to bed feeling very, very nervous about what is happening here. By the next morning, she has still not written me back. I text again. I call multiple times. I drive to her home. She is not there. I've never heard from her again. I know she's alive and well. Like, she still posts on Facebook. I think she just, like, couldn't commit to talking to me at the level of me being in her home.

[Tracy Thomas]

Wow.

[Megan Greenwell]

Awful.

[Tracy Thomas]

Oh, my gosh.

[Megan Greenwell]

That was the moment where I was like, oh, no, this book isn't. I'm gonna have to return my book advance. Like, this is not good.

[Tracy Thomas]

Oh, my gosh. Oh, my gosh. Okay, so not to spoil the book, but. But there is a through line between all four of your subjects about sort of. So the book is broken down into before, during, and after. And in the after section, we sort of find out, like, what happens to these companies to. To. These are, like, to, like, the Toys R Us and the hospitals and, like, what these people have done, and sort of all four of the people are activists in some sort of way within their industry. Was that piece important to you that you found people who would do that, or had you already entered their life and started reporting on them before? That piece kind of played out in some cases.

[Megan Greenwell]

I knew the whole story. So, like, in the Toys R Us example, you know, Toys R Us had gotten out of business in 2019 before I started reporting on this, so I sort of knew in other cases, it was still very much playing out. I think what was important for me was that there was some sort of after. Right. One thing I really don't like in narrative nonfiction is when, you know, you're really in the story. And then at the end, there's this chapter that's, like, super prescriptive, like, here's how we fix this problem.

[Tracy Thomas]

Right.

[Megan Greenwell]

That is just, like, not. I'm not an activist. I'm not a scholar. I don't have an interest in being either of those things. And so, like, telling people how to fix this problem felt like somebody else's job and not mine. On the other hand, I knew I couldn't end this book with, like, man, so this system's really bad, huh? Okay, bye.

[Tracy Thomas]

Yeah, right.

[Megan Greenwell]

And so the way I found to thread that needle was, you know, following people who had all tried to do something about it. I don't think in at least two of the four cases, those folks would never identify themselves as activists or identify what they had done after private equity came into their lives as activism. In the case of the media industry, the journalist Natalia Contreras is, like, working to kind of rebuild the industry from the ground up. I don't think she sees that as activism, and I think a lot of people do. Right, right. And so that was super interesting to me. In the case of hospitals, that community that I write about in rural Wyoming, I won't spoil it, but has taken, like, some pretty audacious steps to try to save their community. And I don't think they see that as activism. They just see that as, like, what they need to do to continue to have a good place to live. But it was really important to me to get people who were, like, whose story didn't end at private equity took my job.

[Tracy Thomas]

Right. Okay. I meant to ask you this. When you brought up cim. One of the things that I found extremely intriguing about CIM is that allegedly, nobody knows what it stands for.

[Megan Greenwell]

They claim it doesn't stand for anything.

[Tracy Thomas]

But you sort of make it sound like maybe there's some ideas of what it stands for.

[Megan Greenwell]

I don't know. I have never heard a good argument. I wish I had. It feels insane to me that it doesn't stand for anything. Like, I don't, like, how did you.

[Tracy Thomas]

Pick those letters then? You just picked. You just, like, were. Like, did. Like the Ouija board.

[Megan Greenwell]

Exactly.

[Tracy Thomas]

I can't handle it. It's so unsettling to me.

[Megan Greenwell]

Everything about that company is very weird. Like, their origin story is, like, almost too perfect. It was like, these guys going door to door trying to do landscaping work in, like, wealthy neighborhoods of la, and they just so happened to knock on the door of a private equity guy who just so happened to be so impressed by their moxie that he decided they should form a private equity firm together.

[Tracy Thomas]

Yeah.

[Megan Greenwell]

I mean, I'm not saying it didn't happen. I'm just saying it is very tight.

[Tracy Thomas]

Could be the third book. Could be the third book. This could be where we expose CIM for being a fraud. These people all were rich. They made it up. Like, we're gonna find the notes. Like, this private equity world, to me, because of the scamming that's going on, is just rich for sequel after sequel. Like, we. Like, Megan, this could be your life. You could become, like, private equity Megan. I mean, I don't want that for you. It sounds horrible, but also, like. Like, there is so much here that I am like. I'm like, we need the movie. We need, like, the Wolf of Wall street movie for CIM or whatever. Yeah, they would make a great movie.

[Megan Greenwell]

They would make a great movie. They are endlessly fascinating to me.

[Tracy Thomas]

Okay, we gotta talk a little bit about your process, because we always do this. There's a few questions I have to. Wait, I have to ask you this. Is there anything that's not in the book that you wish could have been?

[Megan Greenwell]

Oh, a thousand things. Yes. I mean, talking about Blackstone, I wish the story of the tenants union in San Diego that has really fought back against Blackstone in, like, pretty extraordinary ways could have been in there. I mean, it's mentioned, but, like, could have been, like, a focus.

[Tracy Thomas]

Another book.

[Megan Greenwell]

I wish I could have written about autism therapy practices, which has been a huge area of private equity investment with really devastating, devastating impacts. I wish I could have written about public utilities, which are increasingly coming under private equity management. Yes.

[Tracy Thomas]

I. I want to die. This is so bleak. It's so bleak.

[Megan Greenwell]

Meghan, I filed my first draft of this book at, like, 110,000 words, and my editor was like, no, no, no, it's way too long. And I was like, no, it's way too short. What are you talking about? It has to be.

[Tracy Thomas]

What is it at now? How many words?

[Megan Greenwell]

I think it's maybe at, what, 87,000? Something like that.

[Tracy Thomas]

Oh, okay. Okay.

[Megan Greenwell]

Yeah.

[Tracy Thomas]

That wouldn't have been too long for me, but I'm. Thanks to your editor for. I Think other people would say, thank you. Let's fight. How do you like to write? How often? How many hours a day? Music or no snacks or beverages? Rituals? Anything?

[Megan Greenwell]

The only way I can write is if I do it, like, first thing when I wake up. So I don't make coffee, I don't make breakfast. I just, like, go to my desk, sit down, and write. And then if I don't start first thing in the morning, I will not start. So that is just, like, sort of a lost day. So it always feels very high pressure in the morning. But it's sort of nice because it's just like, I know what I need to do. Like, I just. And then I usually will write for, you know, four or five hours. So I will write through the first half of the day, essentially. So. So, you know, maybe seven to noon, something like that. And then if I, at the moment I take a lunch break, like, there won't be any more writing.

[Tracy Thomas]

It's just over between 7 and noon. Are there any snacks and beverages? Is there any break that happens? Or do you just sit down and just. All you do for the first four to five hours of your day is right if you get it going.

[Megan Greenwell]

I will take pee breaks, and occasionally I will. I generally won't eat. Sometimes I will take a break to walk my dog. And sometimes if I, like, need to go really deep in the zone, I will say to my husband, like, that's your job. I'm turning on. Do not disturb.

[Tracy Thomas]

Okay.

[Megan Greenwell]

Because, yeah, I just. I'm so stupidly precious about it that, like, once I get interrupted, it feels like I will never get that flow back. And actually, one thing, like, I do not come out of, like, writing Craft World. And I've, like, made fun of those people to some extent. I'm sorry to all of my MFA friends, but, like, one thing that I finally. One lesson that I finally applied during the writing of this book that I had never tried before, and I had, like, a little bit scoffed at, but it's absolutely true, is the idea of, like, they call it parking downhill. So you're supposed to stop for the day in the middle of a thought or even in the middle of a sentence so that the next morning, you're not starting from a dead stop. You know exactly what you need to do. And that has been so good for me, because I. Starting from a stop is the hardest thing, right? Like, starting a new section or a new chapter feels like running up a mountain to me.

[Tracy Thomas]

But you don't lose the thought, because I would lose the thought, it has.

[Megan Greenwell]

To be something obvious enough that I know I won't lose.

[Tracy Thomas]

Okay.

[Megan Greenwell]

Sometimes I will write, like, a couple of bullet points below about what I need to do. But, yeah, it's, like, the only way I've found to, like, make sure I pick up the next morning and I just start writing.

[Tracy Thomas]

I love this. I'm gonna let you off the hook for not having a snack or a beverage, because I like this. And I think you're the first person to ever say this on the show. I've never heard of it, so.

[Megan Greenwell]

Okay, cool.

[Tracy Thomas]

I'm letting you off the hook. But, you know, I can't be sure the listeners will, so that's something you're gonna have to deal with. What's a word you can never spell correctly on the first try?

[Megan Greenwell]

Honestly, this is such a. I feel.

[Tracy Thomas]

No, you're a good speller, too.

[Megan Greenwell]

I mean, I am a very good speller, but I do, like, every time I write the word Wednesday, I have to look at it over and over and be like. Right, right. Yes.

[Tracy Thomas]

I was gonna say if you were a good speller and you didn't snack, I was gonna like, megan, we can't release this episode. The people will be so bad. The people will be so bad.

[Megan Greenwell]

To be clear, I love snacks. The problem is I love snacks.

[Tracy Thomas]

Too much.

[Megan Greenwell]

Too much. They'll interrupt it. I'll like, be distracted by how delicious my chips are, and then I'm screwed.

[Tracy Thomas]

What kind of chips? Give us something to work with.

[Megan Greenwell]

I mean, any sort of. Like, I just love any salty snack. But, like, any corn chip ranging from, like, a plain, like, tortilla chip. No salsa. Great. A Dorito. Great. Like, honestly, give it all to me.

[Tracy Thomas]

A corn chip. Okay. Okay. Few. Okay, guys. Megan. Safe.

[Megan Greenwell]

Don't worry.

[Tracy Thomas]

You don't have to hate her. You can still get the book. I really like the book, but I don't like sex more than any book.

[Megan Greenwell]

I mean, I agree with this, but I like snacks way more than working, and so I just.

[Tracy Thomas]

Yeah, well, for sure. Is this process that you described the same for when you're doing just journalism writing as well, or is it strictly just for books?

[Megan Greenwell]

Yes. So when I was, like, a news writer earlier in my career, then I was far less precious about it because it was just like, just get the facts on paper. When I'm trying to write, like, beautiful, I think that's when I get annoying about it. So now I write mostly, like, long form features, and the process is very much the same.

[Tracy Thomas]

Okay, got it. So in your acknowledgments My favorite part of every book, you thank your agent for being a good gossip with you. And I want to know, because I have this fantasy life that I am an investigative journalist because I once read all the President's Men and was like, oh, that's my dream in life is to be like Bob Woodward, but like 70s Bob Woodward, not like now Bob, not like rage bubble word. But I feel like this urge for me comes from my love of gossip. And so I'm wondering, do you think that your gossip love because you, I. I assume you're Gossip Girly because you thanked your agent for gossiping with you in your acknowledgments, do you think that plays into your, like, investigative reporting journalism desires?

[Megan Greenwell]

Absolutely. I mean, so much of reporting is just like figuring out what the gossip is. One of my best friends, Kelsey McKinney.

[Tracy Thomas]

Wrote this book, Normal Gossip Gal.

[Megan Greenwell]

Yes. Did the Normal Gossip podcast and then wrote a book that came out earlier this year, a New York Times bestseller, all about gossip. And so she and I have, like, thought about, like, the psychology of gossip a lot. She and I also both grew up in the church. We are the both the children of pastors. And I think that is like a very particular relationship with gossip. But yeah, I mean, reporting is just like serious gossip, right?

[Tracy Thomas]

Yeah.

[Megan Greenwell]

And the other thing, like talking about my agent specifically, this was my first book. I do not come out of like, like books, journalism, working in books, any of that. And so, like so much of gossip about any industry, it's like figuring out how it works. Right. Figuring out what the power dynamics are. And so when you are engaging in what is like seemingly meaningless gossip about a person or a company or whatever it is, a lot of what it's also doing is teaching you, like, this is how things actually work, which can be so super helpful when you're doing something for the first time.

[Tracy Thomas]

Yeah, yeah, no, that makes a lot of sense. I just, I. Anytime a serious writer, which is what I would say that you are, has a sort of quote unquote low brow interest or opinion, I am instantly like my people. I don't know if you are familiar with Adam Higginbotham, but he wrote the Challenger book.

[Megan Greenwell]

Yeah.

[Tracy Thomas]

And he wrote the Chernobyl book. And he came on the show last year. And at the end of the year, you'll get this email too. I sent an email asking everyone to tell me about the best book they read that year and the one book they're looking forward to and the way that I cackled and screamed and was delighted that the book he was most looking forward to this year was Atmosphere by Taylor Jenkins Reid. Like, it just. It's like, you don't think Adam Higinbotham, Kirkus Prize winner, journalist, British journalist, is like, the thing I'm most excited to read next year is Lesbians in Space.

[Megan Greenwell]

That is so good. I mean, a book that I am not. Not to like, ruin the bit now, but this is not a book that I will be looking forward to next year, nor will it probably be the best book I read this year, but Parvati Shallow, who is like reality star queen, just had a memoir out that is supposed to be arriving at my house today. She is most famous for Survivor. I realized you didn't actually ask this.

[Tracy Thomas]

No, but I'm. This is what I want. This is what the show's about. I do all the hard work at the beginning, so we could do this now.

[Megan Greenwell]

Great. So I've never watched Survivor, but I fell in love with her on the Traitors.

[Tracy Thomas]

Okay, I need to watch this show.

[Megan Greenwell]

Oh, my God.

[Tracy Thomas]

I know, I know. Everyone tells me I'm scared to start because I know I'm gonna get sucked in. And I love Alan coming and I love his Scottish accent so much.

[Megan Greenwell]

Yes. Well, plus there's. There's US Traders, there's UK Traders, there's Australia Traders, and there's New Zealand Traders.

[Tracy Thomas]

This is a fucking problem for me, Megan.

[Megan Greenwell]

But there are probably only eight or nine seasons total, so we're not talking about, like various friends have tried to convince me to get into Survivor and at this point, there are what, like 50 something seasons of Survivor. It's too late for me and I.

[Tracy Thomas]

Can'T do Love island, uk, US or anywhere the fuck elsewhere else every day, you guys. Are you kidding? I'd never read another book. Because my problem, problem is I will get sucked in and then what won't happen are these podcast episodes. Okay? That's what will happen.

[Megan Greenwell]

What you do for the Traders is you don't do it at a time you would otherwise be reading. Because I've had this problem too. Traders is the perfect show for when you are doing laundry, like filing receipts, like anything that is like you do not have to pay full, full, full.

[Tracy Thomas]

This is when I watch my sports. This is my problem. I just. I don't have watching time. I know. It's killing me. Okay, I'm gonna just do it. I heard this next year where there.

[Megan Greenwell]

Are not enough good sports.

[Tracy Thomas]

That's true, that's true. That's true. That's true. That's true. Okay, I'm gonna try it. Everyone tells me. I know that I should. The thing is, I know that I'm gonna love it. Like, there's. I have no doubt that this is the perfect show for me.

[Megan Greenwell]

I'm gonna send you the order in which you should watch them.

[Tracy Thomas]

Okay. Yeah. Give me the. Give me, like, the best. Not the best. Save the best for a little bit later. But give me, like. Yeah, I need, like, a great introduction.

[Megan Greenwell]

You're never gonna start.

[Tracy Thomas]

And if I can skip any, that would be I ideal.

[Megan Greenwell]

And the US Ones are tricky because they are reality stars from other shows. And so if you don't watch other reality shows, which I don't, Parvati is like an exception to me where I fell in love with her on the Traders, but I didn't know her before. But most of these people, it's like they want you to know all these lore. So I am like, very much a UK Traders person because those are just random shows. Right? You're getting to know them at the same time everybody else is getting to know them.

[Tracy Thomas]

Okay. Okay. But, oh, my God, I'm so excited. Like, a personalized list of the order to watch Traders from, like, renowned journalists. Like, it's just. It's. That's my kink. Okay, we gotta go soon. And we're like going over, but I have a few more questions I have to ask you.

[Megan Greenwell]

Sure.

[Tracy Thomas]

One is that this book's been out in the world for like two weeks, almost three weeks.

[Megan Greenwell]

Yeah.

[Tracy Thomas]

Who's the coolest person who's expressed interest in this book?

[Megan Greenwell]

I mean, this is sort of a cheesy answer, but I have heard from so many people. Tell me if you're like, this is not what I'm asking. I wanted a celebrity, but I've heard from so many people who worked for the companies involved in my book and other private equity owned companies that it's just been, like, really cool. I ended up meeting a woman at a book event in Portland who worked for Toys R Us until it was driven into the ground and. And was born at the hospital that I write about in the hospital section, coincidentally in Wyoming.

[Tracy Thomas]

In Wyoming Lander or whatever. Or the other one.

[Megan Greenwell]

Riverton.

[Tracy Thomas]

Riverton.

[Megan Greenwell]

Yeah. So she had lived in the Pacific Northwest for years. Like. Like, I don't ever want to go back to Wyoming. But she was born in that same hospital.

[Tracy Thomas]

That's cool.

[Megan Greenwell]

Maybe this is the wrong kind of cool, but it was.

[Tracy Thomas]

No, that's really cool. That works. That works. Okay. For people who love this book. What are some other books you would recommend to them that are in conversation with Bad Company?

[Megan Greenwell]

I mean, I have to say Brian's.

[Tracy Thomas]

Book, because we've been talking about it this whole time.

[Megan Greenwell]

Yes. There's a lot of overlap and there's a lot of like, we were clearly like kind of setting out on similar projects.

[Tracy Thomas]

Yeah.

[Megan Greenwell]

Which was exciting to me. A weirder one that is also a friend is Amanda Hess's book Second Life, which came out in May. I don't know that the overlaps are not super obvious. So Amanda's a cultural critic at the New York Times and she wrote this book about.

[Tracy Thomas]

Oh, yes, I do. Sorry.

[Megan Greenwell]

About babies, pregnancy through the lens of the Internet. I am not a parent. I am like, not an aspiring parent. But I just found this book so fascinating in terms of, like, how clear eyed its philosophy is in looking at systems that we all take for granted and questioning them. Right. And so that though the books are very different, that was like sort of something similar to what I set out to do. And then there are just like. While I was writing this book, I went back to my favorite narrative nonfiction books over and over and over just to like, keep kind of that spark lit for me. So Evicted, certainly, like, that was like the model for what I wanted to do. The spirit catches you and you fall down, which is a 1991 book set in a hospital in a Hmong community in Central California. Maybe my favorite work of narrative nonfiction ever written.

[Tracy Thomas]

I've never read that. Let me add it to my list. I know it, but I just never read it.

[Megan Greenwell]

I am obsessed with it. And it's like one of those books that hasn't gotten enough attention. Yeah. I'm just crazy about it. Jason deparl's A Good Provider is one who Leaves, which is a few years old and is about immigration from the Philippines to the US and follows one family really closely.

[Tracy Thomas]

Yeah, those are so good. I definitely think obviously Evicted comes to mind. It's sort of like the gold standard of this, like, narrative non fiction that follows people but then exposes industry. It also, I mean, I don't know if you read the People's Hospital a few years ago that sort of follows that same kind of model. I love non fiction, which I'm sure everybody listening and you all know. But one of the things that I love about this particular kind of nonfiction that follows people and sort of is like super narrative and tells stories of individuals and exposure, this industry, is that I think it is the most accessible entry point for readers who are Nervous about nonfiction. To read nonfiction and still get like the human interest part of it. And sometimes when it's done well, like your book or Evicted or Brian or Ricardo's book or whatever, I think it can be really powerful. I do have a part of me that hates it when authors try to write a serious, like straight up nonfiction book and then infuse these personal stories. I'm always like, don't do that either. Go lean into the people or lean into like writing the thing. But the like, muddiness drives me crazy. And I think so many people have seen the success of books like yours and all these other people, and they try to kind of like dip their toe in. And I'm like, no, no, no, no, no, no, don't do that.

[Megan Greenwell]

Yes. Oh, man. That is really a genre I hate as well. When we are not recording, we can shit dock particular examples of it.

[Tracy Thomas]

That's after hours content, ladies and gents. Okay, last question question for you, Megan, before I let you go. If you could have one person dead or alive read this book, who would you want it to be?

[Megan Greenwell]

Okay, I'm gonna say one sort of like intellectual answer and one kind of sappy answer. The intellectual answer is like, I write a lot about Milton Friedman in the book, Obviously the godfather of so much of what has happened in our economic system. And yet I argue in the book that he's also. This actually sort of goes against the private equity system, goes against a lot of what he outlined. So his infamous New York Times essay about shareholder value theory actually says there should be exceptions for schools and hospitals. And schools and hospitals are two of the most active area investments for private equity now. So I would just be genuinely curious, like, what he made of it. And then my sappy answer, like, the book is dedicated to my dad, who was, you know, such an important person in my life. Never went to college, but, like, made me love reading in a really deep way. And I was still working on the proposal when he died in 2021. And it is like, I would have really loved him to have got gotten to have seen the book completed.

[Tracy Thomas]

I love both of those answers. Everyone. You can read and you should read Bad Company. It's out in the world. You can get it wherever you get your books. I listened to, I think one or two chapters on audio. I like your audio guy. He. He did some other book. I think he did like the book about guns or something from like One Nation Under Guns. He does what?

[Megan Greenwell]

It was. Yes.

[Tracy Thomas]

Yeah, and I listened to that too. He's like, like a serious man who reads non fiction. And I, you know, sort of, I'm sort of into it, sort of hot. Okay, good. So if you guys want that, I, I can vouch for the audio though I think that if you are more nervous about non fiction, you probably want to read this one with your eyes because there's a lot of information. I did a lot of underlining and you might need to go back or if you're doing an audio, be comfortable going back and like re listening to things because it is kind of detailed and you. I did flip back and forth a lot. So my recommendation is 50 physical. But the audio is good. I like the guy, so that's, that's what I'll say. But Megan, thank you so much for being here.

[Megan Greenwell]

Thank you so much for having me. This was so fun.

[Tracy Thomas]

This was amazing. And everyone else, we will see you in the stacks. All right, y', all, that does it for us today. Thank you so much for listening and thank you again to Megan Greenwell for joining the show. I'd also like to say a huge thank you to, to Kyra Devo and Megan Wilson for making today's episode possible. Remember, our book club pick for this month is God Help the Child by Toni Morrison, which we will Discuss on Wednesday, July 30th with Dana A. Williams. If you love the show, if you want inside access to it, if you want some Perks, go to patreon.com the stacks to join the Stacks Pack and subscribe to my newsletter@tracy thomas.substack.com make sure you're subscribed to the Stacks wherever you get your podcasts. And if you're listening through Apple Podcasts or Spotify, please leave us a rating and a review. For more from the Stacks, follow us on social media at the Stacks Pod, on Instagram threads and TikTok, and check out our website@the stacks podcast.com this episode of the Stacks was edited by Christian Duenas with production assistance from Wykea Frielo. Our graphic designer is Robin McCwaite and our theme music is from Takirijis. The Stax is created and produced by me, Tracy Thomas. It.