welcome back to second to of hip mojo
and watchmojo.com joining me is kevin
o’leary so previously you touched on
Mattel what was the transaction 3.4
billion no including the 800 million of
dad it was 4.2 billion so 4.2 billion
now the CEO I remember I was in high
school at the time I wasn’t even in
business school but Jill Barret was on
oh no I was actually in University
College so she was superstar like the
you know Carly Fiorina of that era like
the female high-profile CEO of Mattel
first of all what was your dynamics and
your relationship with her like did you
get along from day one or was it
friction and well let’s just paint the
environment at the time for all the toy
companies remember at this period this
is the late 90s what was happening is
the price of pcs was collapsing below a
thousand Walmart got in the business of
selling PCs and PC software 3 to 7 year
olds started spending hours and hours
and hours in front of their computers
playing Rita rabbit Carmen Sandiego you
know all of these titles the toy
companies look this is said my goodness
we’re losing mindshare from this very
important demographic of our customers
instead of playing with our dolls and
with our GI Joes if in case of Hasbro
they’re playing with the learning
company’s software so both companies
were interested in jumping in the
digital age and in addition something
else had occurred we had a title and my
whole strategy in the software business
was to take engines of development see
had an engine of development and they
just add characters on which was very
inexpensive to do we licensed an
American girl which was a type of doll
very popular doll that Mattel owned and
we took a title that sold 30,000 units a
year called opening night and we put the
American girl character into it and sold
a million units and Mattel saw that and
went wow what could you do for a
portfolio what could we do for our
portfolio that was the thesis of the
deal so you know what happened was they
hired bankers they approached our
shareholders and a negotiation began at
the same time unbeknownst to us and
later found out by the whole market
Barbie sales were collapsing
the specialty high-end Barbies the Vera
Wang Barbies they weren’t selling
anymore because they were very expensive
and frankly mothers and fathers were
buying a lot of digital content at that
time so Mattel decided to make a move
and a quarter when they were gonna miss
their numbers as we found it after the
quarter came out by the learning company
and the thesis was that we would take
just like we did with the American Girl
across a whole portfolio of titles let
me give you an example we own Mavis
Beacon teaches typing which is a very
famous software title teaches how to
type we’re gonna take the Barbie
character pull Mavis out of there stick
barbie in and sell a typing product to
seven-year-old girls talk to Walmart
about it and all the retailers who said
love it it’s gonna be a huge hit we
figured we could do that in about 90
days so the deal closes our Fremont
developers call down to Mattel which is
in LA and say send up the art and all of
a sudden we run into a whole bunch of
red tape this is where the cultural
clashes started I detail it in the book
when you have a fast you know growing
entrepreneurial environment like The
Learning Company and stick it with a
very slow growing toy company bad things
can happen you lost for CF forward but
everybody you know my CFO was a deal guy
the sky one he was fast-paced and he
wanted to do deals and continue to grow
and and the Mattel CFO said I’m gonna
take over that role so he exited many
people I said I tried to stick around
and I actually ran Mattel calm for a
while you know at the end of the day
cultural clashes can be brutal and I
detail the whole experience it really
depressed me because I was taken out of
the market for three years I had a
non-compete they paid me five million
bucks not to work I thought that would
be great it ended up being bad because I
really wanted to be in the game and I
wasn’t I learned a lot from that and
that’s a mistake I won’t make again
that’s the whole point of being an
entrepreneur you’ve got a fail yes so I
actually got sued also for violating
mine on competition from News Corp and
went to court and I won you touched a
lot about you you hint at the theme of
the lawsuit it was a five billion dollar
loss five point two billion dollar base
achill II we’re accusing you of like
everything you say now you’re not afraid
to what do you think of lawyers look you
know if you think about this the pecking
order of single cella me about the
bottom
the ocean lawyers are just underneath
had some of them have come up to the
surface and breathe air that’s okay but
you know look these are contingency
lawyers I use them today to litigation
is a tool in business and I understand
it but you can’t scare me with
litigation anymore I’ve been to hell and
back with the mattel litigation all
these allegations prove to be false at
the end of the day and we settled like
most litigation does settle but I went
through a five-year process of that now
if people threaten to litigate me I say
bring it on because I actually work with
dozens of lawyers in all kinds of
complaints it’s a tool in business yeah
okay so playing devil’s advocate you say
you have a great line that says if
someone wants to buy your company sell
because their optimism is greater than
yours usually it is usually I usually
okay usually okay so there is some great
line with you there okay usually it is
but I just want to play devil’s that
well first of all isn’t that a lot like
the buy on rumor sell on use adage that
you hear you know it really depends
because generally speaking and I found
this to be consistent across my career
when people come knocking on the door
either they’re a very optimistic or the
environment is deal oriented but you
have to ask yourself as an entrepreneur
you know I love starting companies I’ve
probably got 20 deals on the go right
now knowing that maybe two of them might
work I enjoy the process of it I’m you
know I like to think I can do add value
so if somebody wants to buy me I’ll sell
it and then I’ll take that capital
redeploy it that is what you’re supposed
to do as an entrepreneur because you’re
creating jobs for the ones you’ve just
given up on the company sold that’s your
job in society now you mentioned that at
the end of the day one of the lessons
you got from the Mattel exercise let’s
call it experience was that it’s up to
the buyer to make an acquisition work is
that playing devil’s advocate not like
easy I mean when I sold my last company
well I it was my responsibility to make
it work because I was the smaller guy
they had a much bigger business isn’t
that like one of the problems with
society now that when there’s a deal the
guy sort of says well I got my money I
could care less it’s your problem look I
did over 30 transactions when we were
building up the learning company we were
acquiring all of our competitors very
complex ones and very simple ones we
bought art we did hostile transactions
it’s always the buyers responsibility to
prove the synergies and the value to the
shareholder because remember
was going to the market raising billions
of dollars and saying give me this money
because I’m gonna buy companies and
they’re gonna be get the creative
transactions in other words I’m gonna
buy them at a price in a way that I can
make more money buying the company so my
strategy was to buy a software developer
that has successful title fire all the
salespeople cut all the overhead just
keep the core developers and put that
into my distribution system you know I
probably fired thousands and thousands
of people but it was okay because it was
a growing environment obviously that
sector was growing consumer software
they’d get rehired I’d help them get
rehired and then I buy a company three
months later find the same guy and fire
him again it would be over and over and
over again because solid ation works
that way but at the end of the day if
you’re the buyer it’s your
responsibility to make money I don’t
worry about the guy just bought it from
he’s cashed out okay now I want to know
I have no problem admitting this I am
extremely driven to prove people wrong
I’d be lying if I said that wasn’t true
I guess I do it for myself and do it for
my team and all that but I’d like to
prove people wrong because everybody
always doubts me you have two quotes in
the book one is that reader was 1.5
billions ago when you raised all the
area people thought you couldn’t do it
and the second one was aligned about how
you could basically bulldoze the Lincoln
Mall after the gum scraping incident how
much of your drive is driven to prove
people wrong and how much is it for
yourself and your family and your
shareholders I’ll tell you a story that
my life a long time ago I was working my
first deal special event television and
I had a partner there named Jerry
Patterson he’s dead now but he was a
sports agent for hockey players he was
one of the first guys to bring over
Russian players at that time was the
Soviet Union into Canada and Jerry was a
shareholder in the special event
television we were doing shows like
Bobby Orr in the hockey legend the
original six you know all the
intermissions for Hockey Night in Canada
Don Cherry’s John Cherry’s grapevine you
know and in television there’s a lot of
controversy every week about the story
you’re publishing or whatever and we
used to take a lot of flack from people
why are you profiling Gump Worsley
instead of this goalie whatever and
Jerry said to me listen Kevin you get up
in the morning it all this criticism is
just noise that’s all it is it’s just
some guy talking ignore it completely
and just keep focused on the goal which
is to broadcast our show at 12:00 noon
on Saturday we have to start it on
Monday
shoot it cut it and send it to the
satellite at noon
they aren’t on Saturday and I realize
Jerry was right and it’s been my
philosophy all my life you know I read
bad press every day I listen to guys
that are critics it’s all noise who
cares
ultimately the only people you’re
responsible to are your shareholders
that’s who matter everybody else I
couldn’t give a damn about them that’s
actually the one of the surprises I had
I mean I’m too busy running a company so
I’ll be honest even though the show’s
Shark Tank and Dragons Den are in my
demo I actually rarely watched them
obviously I knew about them so I was
like I wonder how you know Kevin got
into TV but you actually have a history
in media and NTV so you talked about
special event television take us from
there how do you end up on CBC how do
you end up on ABC you know I’ve always
been behind the camera I love it i tried
wants to be a fashion photographer in my
early days I wanted to do that I’d still
shoot a lot I have lots of cameras I was
working after we sold the learning
company I was working for Thomas H Lee
in the private equity market because I
needed a place to hang my hat I had some
capital to deploy I wanted to partner
with Lee and he was one of my largest
shareholders so he said because of my
office one day says hey Kevin their
licensing up in Canada digital formats
in other words the movie channel the gay
Channel the Food Channel the dog channel
all that stuff he said look why don’t
you go up there and bid for all of them
and then we’ll parcel them up and sell
them afterwards I said Wow
Tom that’s crazy said oh no go up there
and ask him you buy them all so because
it was a CRTC auctioning process so I
show up I start doing my research up in
Toronto and Ottawa that’s where the
action was and a business station
they’re called report on business
television called me up and said hey
listen we heard that you’re bidding for
these things why don’t you come on and
tell us what you’re all about so I show
up and this woman named Janis Mackey
frere was the host she’s become a very
famous reporter in the Middle East now
she works for CTV but she says to me you
know Kevin we think that all of these
channels have to be owned 51% by
Canadians and I explained to her why
that was a dumb idea and a stupid policy
and I would kill the PD interest of
course of course it kills the PIA
interest I explained to her the cost of
capital for Canadian operators is gonna
go up and the interest is gonna go down
the globe
investors we start a little bit of an
argument about five minutes later she
starts crying right on the air because
we’re having a heated debate I look at
her say what are you crying about and
she’s sobbing and the phones light up
and the producer says hey can you come
back tomorrow
that was the beginning of my television
career so now okay fast-forward a bit
because it’s interesting I mean take us
mainly through you know you were on CBC
in Canada on dragons then what happens
with Mark Burnett and ABC and the whole
six guys show up five of them well you
know I think if television is sure chaos
it’s just serendipitous what happens I
mean it’s just you know one day the
phone rings I’ve been working for a year
on Dragon’s Den I mean Dragons Den
itself some guy calls me up the name
Stewart Cox and says hey how about you
come to my studio bring millions of your
dollars and all and I want you to buy
stuff I said what are you nuts
anyways I went in there I met him and I
thought this format sounds interesting
I’ll try it we had a lot of fun the
first year then the phone rang and it
was a producer in London England saying
hey listen we want to hire you for the
Discovery Channel when I did that and
then Mark Burnett called it’s just sort
of you know television is is just it’s
an art not a science well okay all right
we’re gonna take a short break come back
for the segment three the last one we’re
gonna talk it’ll be lightning round
we’re going to ask you questions you got
to answer you know your two cents but
we’re gonna start off when we come back
with two words Steve Jobs you have a
very interesting encounter with them
we’ll be back for segment three
and watchmojo.com joining me is kevin
o’leary so previously you touched on
Mattel what was the transaction 3.4
billion no including the 800 million of
dad it was 4.2 billion so 4.2 billion
now the CEO I remember I was in high
school at the time I wasn’t even in
business school but Jill Barret was on
oh no I was actually in University
College so she was superstar like the
you know Carly Fiorina of that era like
the female high-profile CEO of Mattel
first of all what was your dynamics and
your relationship with her like did you
get along from day one or was it
friction and well let’s just paint the
environment at the time for all the toy
companies remember at this period this
is the late 90s what was happening is
the price of pcs was collapsing below a
thousand Walmart got in the business of
selling PCs and PC software 3 to 7 year
olds started spending hours and hours
and hours in front of their computers
playing Rita rabbit Carmen Sandiego you
know all of these titles the toy
companies look this is said my goodness
we’re losing mindshare from this very
important demographic of our customers
instead of playing with our dolls and
with our GI Joes if in case of Hasbro
they’re playing with the learning
company’s software so both companies
were interested in jumping in the
digital age and in addition something
else had occurred we had a title and my
whole strategy in the software business
was to take engines of development see
had an engine of development and they
just add characters on which was very
inexpensive to do we licensed an
American girl which was a type of doll
very popular doll that Mattel owned and
we took a title that sold 30,000 units a
year called opening night and we put the
American girl character into it and sold
a million units and Mattel saw that and
went wow what could you do for a
portfolio what could we do for our
portfolio that was the thesis of the
deal so you know what happened was they
hired bankers they approached our
shareholders and a negotiation began at
the same time unbeknownst to us and
later found out by the whole market
Barbie sales were collapsing
the specialty high-end Barbies the Vera
Wang Barbies they weren’t selling
anymore because they were very expensive
and frankly mothers and fathers were
buying a lot of digital content at that
time so Mattel decided to make a move
and a quarter when they were gonna miss
their numbers as we found it after the
quarter came out by the learning company
and the thesis was that we would take
just like we did with the American Girl
across a whole portfolio of titles let
me give you an example we own Mavis
Beacon teaches typing which is a very
famous software title teaches how to
type we’re gonna take the Barbie
character pull Mavis out of there stick
barbie in and sell a typing product to
seven-year-old girls talk to Walmart
about it and all the retailers who said
love it it’s gonna be a huge hit we
figured we could do that in about 90
days so the deal closes our Fremont
developers call down to Mattel which is
in LA and say send up the art and all of
a sudden we run into a whole bunch of
red tape this is where the cultural
clashes started I detail it in the book
when you have a fast you know growing
entrepreneurial environment like The
Learning Company and stick it with a
very slow growing toy company bad things
can happen you lost for CF forward but
everybody you know my CFO was a deal guy
the sky one he was fast-paced and he
wanted to do deals and continue to grow
and and the Mattel CFO said I’m gonna
take over that role so he exited many
people I said I tried to stick around
and I actually ran Mattel calm for a
while you know at the end of the day
cultural clashes can be brutal and I
detail the whole experience it really
depressed me because I was taken out of
the market for three years I had a
non-compete they paid me five million
bucks not to work I thought that would
be great it ended up being bad because I
really wanted to be in the game and I
wasn’t I learned a lot from that and
that’s a mistake I won’t make again
that’s the whole point of being an
entrepreneur you’ve got a fail yes so I
actually got sued also for violating
mine on competition from News Corp and
went to court and I won you touched a
lot about you you hint at the theme of
the lawsuit it was a five billion dollar
loss five point two billion dollar base
achill II we’re accusing you of like
everything you say now you’re not afraid
to what do you think of lawyers look you
know if you think about this the pecking
order of single cella me about the
bottom
the ocean lawyers are just underneath
had some of them have come up to the
surface and breathe air that’s okay but
you know look these are contingency
lawyers I use them today to litigation
is a tool in business and I understand
it but you can’t scare me with
litigation anymore I’ve been to hell and
back with the mattel litigation all
these allegations prove to be false at
the end of the day and we settled like
most litigation does settle but I went
through a five-year process of that now
if people threaten to litigate me I say
bring it on because I actually work with
dozens of lawyers in all kinds of
complaints it’s a tool in business yeah
okay so playing devil’s advocate you say
you have a great line that says if
someone wants to buy your company sell
because their optimism is greater than
yours usually it is usually I usually
okay usually okay so there is some great
line with you there okay usually it is
but I just want to play devil’s that
well first of all isn’t that a lot like
the buy on rumor sell on use adage that
you hear you know it really depends
because generally speaking and I found
this to be consistent across my career
when people come knocking on the door
either they’re a very optimistic or the
environment is deal oriented but you
have to ask yourself as an entrepreneur
you know I love starting companies I’ve
probably got 20 deals on the go right
now knowing that maybe two of them might
work I enjoy the process of it I’m you
know I like to think I can do add value
so if somebody wants to buy me I’ll sell
it and then I’ll take that capital
redeploy it that is what you’re supposed
to do as an entrepreneur because you’re
creating jobs for the ones you’ve just
given up on the company sold that’s your
job in society now you mentioned that at
the end of the day one of the lessons
you got from the Mattel exercise let’s
call it experience was that it’s up to
the buyer to make an acquisition work is
that playing devil’s advocate not like
easy I mean when I sold my last company
well I it was my responsibility to make
it work because I was the smaller guy
they had a much bigger business isn’t
that like one of the problems with
society now that when there’s a deal the
guy sort of says well I got my money I
could care less it’s your problem look I
did over 30 transactions when we were
building up the learning company we were
acquiring all of our competitors very
complex ones and very simple ones we
bought art we did hostile transactions
it’s always the buyers responsibility to
prove the synergies and the value to the
shareholder because remember
was going to the market raising billions
of dollars and saying give me this money
because I’m gonna buy companies and
they’re gonna be get the creative
transactions in other words I’m gonna
buy them at a price in a way that I can
make more money buying the company so my
strategy was to buy a software developer
that has successful title fire all the
salespeople cut all the overhead just
keep the core developers and put that
into my distribution system you know I
probably fired thousands and thousands
of people but it was okay because it was
a growing environment obviously that
sector was growing consumer software
they’d get rehired I’d help them get
rehired and then I buy a company three
months later find the same guy and fire
him again it would be over and over and
over again because solid ation works
that way but at the end of the day if
you’re the buyer it’s your
responsibility to make money I don’t
worry about the guy just bought it from
he’s cashed out okay now I want to know
I have no problem admitting this I am
extremely driven to prove people wrong
I’d be lying if I said that wasn’t true
I guess I do it for myself and do it for
my team and all that but I’d like to
prove people wrong because everybody
always doubts me you have two quotes in
the book one is that reader was 1.5
billions ago when you raised all the
area people thought you couldn’t do it
and the second one was aligned about how
you could basically bulldoze the Lincoln
Mall after the gum scraping incident how
much of your drive is driven to prove
people wrong and how much is it for
yourself and your family and your
shareholders I’ll tell you a story that
my life a long time ago I was working my
first deal special event television and
I had a partner there named Jerry
Patterson he’s dead now but he was a
sports agent for hockey players he was
one of the first guys to bring over
Russian players at that time was the
Soviet Union into Canada and Jerry was a
shareholder in the special event
television we were doing shows like
Bobby Orr in the hockey legend the
original six you know all the
intermissions for Hockey Night in Canada
Don Cherry’s John Cherry’s grapevine you
know and in television there’s a lot of
controversy every week about the story
you’re publishing or whatever and we
used to take a lot of flack from people
why are you profiling Gump Worsley
instead of this goalie whatever and
Jerry said to me listen Kevin you get up
in the morning it all this criticism is
just noise that’s all it is it’s just
some guy talking ignore it completely
and just keep focused on the goal which
is to broadcast our show at 12:00 noon
on Saturday we have to start it on
Monday
shoot it cut it and send it to the
satellite at noon
they aren’t on Saturday and I realize
Jerry was right and it’s been my
philosophy all my life you know I read
bad press every day I listen to guys
that are critics it’s all noise who
cares
ultimately the only people you’re
responsible to are your shareholders
that’s who matter everybody else I
couldn’t give a damn about them that’s
actually the one of the surprises I had
I mean I’m too busy running a company so
I’ll be honest even though the show’s
Shark Tank and Dragons Den are in my
demo I actually rarely watched them
obviously I knew about them so I was
like I wonder how you know Kevin got
into TV but you actually have a history
in media and NTV so you talked about
special event television take us from
there how do you end up on CBC how do
you end up on ABC you know I’ve always
been behind the camera I love it i tried
wants to be a fashion photographer in my
early days I wanted to do that I’d still
shoot a lot I have lots of cameras I was
working after we sold the learning
company I was working for Thomas H Lee
in the private equity market because I
needed a place to hang my hat I had some
capital to deploy I wanted to partner
with Lee and he was one of my largest
shareholders so he said because of my
office one day says hey Kevin their
licensing up in Canada digital formats
in other words the movie channel the gay
Channel the Food Channel the dog channel
all that stuff he said look why don’t
you go up there and bid for all of them
and then we’ll parcel them up and sell
them afterwards I said Wow
Tom that’s crazy said oh no go up there
and ask him you buy them all so because
it was a CRTC auctioning process so I
show up I start doing my research up in
Toronto and Ottawa that’s where the
action was and a business station
they’re called report on business
television called me up and said hey
listen we heard that you’re bidding for
these things why don’t you come on and
tell us what you’re all about so I show
up and this woman named Janis Mackey
frere was the host she’s become a very
famous reporter in the Middle East now
she works for CTV but she says to me you
know Kevin we think that all of these
channels have to be owned 51% by
Canadians and I explained to her why
that was a dumb idea and a stupid policy
and I would kill the PD interest of
course of course it kills the PIA
interest I explained to her the cost of
capital for Canadian operators is gonna
go up and the interest is gonna go down
the globe
investors we start a little bit of an
argument about five minutes later she
starts crying right on the air because
we’re having a heated debate I look at
her say what are you crying about and
she’s sobbing and the phones light up
and the producer says hey can you come
back tomorrow
that was the beginning of my television
career so now okay fast-forward a bit
because it’s interesting I mean take us
mainly through you know you were on CBC
in Canada on dragons then what happens
with Mark Burnett and ABC and the whole
six guys show up five of them well you
know I think if television is sure chaos
it’s just serendipitous what happens I
mean it’s just you know one day the
phone rings I’ve been working for a year
on Dragon’s Den I mean Dragons Den
itself some guy calls me up the name
Stewart Cox and says hey how about you
come to my studio bring millions of your
dollars and all and I want you to buy
stuff I said what are you nuts
anyways I went in there I met him and I
thought this format sounds interesting
I’ll try it we had a lot of fun the
first year then the phone rang and it
was a producer in London England saying
hey listen we want to hire you for the
Discovery Channel when I did that and
then Mark Burnett called it’s just sort
of you know television is is just it’s
an art not a science well okay all right
we’re gonna take a short break come back
for the segment three the last one we’re
gonna talk it’ll be lightning round
we’re going to ask you questions you got
to answer you know your two cents but
we’re gonna start off when we come back
with two words Steve Jobs you have a
very interesting encounter with them
we’ll be back for segment three
Please follow and like us: