271: David Rubenstein, Co-Founder of The Carlyle Group, on…

PodcastThe BidDavid RubensteinSep 18

Rubenstein discusses how technology is reshaping baseball and warfare, including AI, quantum computing, RNA advances, and drones. He frames his Orioles ownership as a civic investment in Baltimore, while noting the long-term nature of sports ownership, the importance owners place on winning, and the role of media rights in franchise values. He believes sports franchise prices may eventually plateau, despite continued investor interest.

Technology Stocks Artificial Intelligence Venture Capital Market Valuations Investment Strategy Quantum Computing

Preview · 10 more points in the app

Read the Full Summary

Key Takeaways

Rubenstein describes buying the Orioles as a civic gesture amid Baltimore’s population loss, shrinking tax base, and loss of corporate headquarters, rather than as a private-equity-style return play. He also points to Camden Yards’ downtown location and design as a way the team drew fans and helped shape later ballparks.

Rubenstein says sports owners often take more pride in winning and improving their teams than in maximizing financial returns, while still needing investment discipline. He contrasts franchises that owners may hold for decades with private-equity investments’ typical five-to-seven-year exit horizon, and cites the Orioles’ late-season spending on a Mets player as a bid to improve their playoff chances.

Rubenstein says franchise values have benefited from lucrative TV contracts and strong live-sports viewership, citing live sports among 95 of the 100 most popular U.S. TV shows in recent years. He contrasts the Yankees’ $8.8 million 1972 purchase price with a current value of about $10 billion, while cautioning that franchise prices are unlikely to rise indefinitely and may eventually plateau.

TECHNOLOGY

Baseball Analytics — Rubenstein says baseball teams are increasingly using AI in their analytical staffs. He expects AI to become important across society and sports, though it has not yet fully permeated baseball.

“Now every team has detailed analytical staffs, and now increasingly these staffs are using AI. So increasingly AI will be used and some will use it better than others…”—

Quantum Computing — Rubenstein says quantum computing may be nearing realization after years of being described as five years away. He sees investment opportunities in publicly traded quantum companies and says the technology could make decisions much faster than current computers.

“Quantum computing has always been said to be five years from now…”—

ECONOMY

Baltimore's Decline — Rubenstein says Baltimore fell from the ninth-largest U.S. city in the 1950s and 1960s to outside the top 20, amid population loss, crime and drug problems, and the loss of corporate headquarters. The shrinking tax base leaves the city with fewer resources. Baltimore and St. Louis are independent of surrounding counties, so tax revenues from people who move to those counties do not return to the cities. Rubenstein viewed buying the Orioles as a way to help revitalize Baltimore.

“When I grew up in Baltimore, it was the ninth biggest city in The United States in the 1950s and 60s…”—

MARKETS

Civic Ownership — Rubenstein says he bought the Baltimore Orioles primarily as a civic gesture and a way to give back to Baltimore, rather than pursuing the return targets he would consider in private equity. He still did not want to lose money.

“In the private equity world, you're trying to make money and you're always looking at certain rates of return…”—

Team Profitability — Rubenstein says investors are attracted to sports teams because profitability can be high, though he qualifies that outcome as dependent on luck and buying at the right time.

“There's no doubt today that a lot of people are attracted to it because the profitability seems to be pretty high if you get lucky and you get it at…”—

Stadium Design — Rubenstein says Camden Yards' downtown location and design evoked older ballparks such as Wrigley Field and Fenway Park, drawing fans. It became a model for stadiums built from 1991 onward.

“The stadium is called Camden Yards…”—

FORECASTS

Valuation Plateau — Rubenstein says sports franchise prices have risen sharply but are unlikely to rise indefinitely. He thinks they are likely to plateau at some point, though investors remain interested. He cites the Orioles' $2.2 million 1954 purchase price and his group's $1.7 billion purchase price.

“The Orioles came to Baltimore in 1954 for a purchase price of $2,200,000 My partners and I paid $1,700,000,000 So the prices have gone up and a lot of people…”—

Rubenstein Buys The Orioles

Rubenstein says he bought the Orioles primarily to give back to Baltimore, viewing ownership as a civic investment rather than a conventional private-equity play.

Baltimore's Civic Stadium

He explains how the Orioles and Camden Yards can support Baltimore's downtown revival, while describing stadium upgrades aimed at improving the fan experience.

Baseball's Emotional Business

Rubenstein says fans connect their local team's success to their own identity, and that owners take greater pride in winning and community impact than in rising franchise values.

Sports Ownership Leadership

He describes sports ownership as a long-term leadership role, balancing the drive to win with financial discipline and delegating baseball and business operations to capable executives.

Franchise Values And Media

Rubenstein attributes rising team values to lucrative media deals, expanded leagues, and strong live-sports audiences, while warning that franchise prices may eventually plateau.

AI In Baseball Analytics

He expects AI to become increasingly important across sports, extending baseball's use of analytics and helping teams make more data-informed decisions.

Quantum And Biotech Investing

Rubenstein points to quantum computing, RNA-based medicine, biotech, and space as areas with potential, while noting that smaller investors can access sports through partnerships.

Defense Technology And Baseball

He says drones are changing warfare and may draw investment into aerospace defense, then reflects on his childhood Orioles fandom and the memories that made baseball meaningful.