Barry Sternlicht

The Virgin model: license your brand and take 7% on every leg

Begelman explains licensing a media brand instead of selling it: e.g. Barstool could license to Penn, take ~7% of the betting app, get paid for advertising it, and even run a venture fund investing in the JV—taking a piece on every leg. Barry Sternlicht runs this stack across Starwood Capital, brands, and hotels.

“Instead of them being bought by Penn Gaming, I think it was, they could have licensed their brand to Penn. Penn could have spun up an app for sports betting and Barstool maybe takes 7% of it. And in addition to that, Barstool maybe gets paid for advertising so that they advertise the new app. And in addition to that, if they want to take it a step further, they could even raise like a venture fund. And invest in the new joint venture so that they're basically taking a piece of the pie on every leg.”

Steal thisLicense your brand to an operator for ~7%, get paid to market the JV, and run a fund that invests in it—take a cut on every leg.

Sternlicht stacked Baccarat: crystal factory, hotel brand, and the fund behind it

Begelman marvels at Barry Sternlicht buying the old Baccarat Crystal company, spinning a hotel brand off it, licensing that brand to a Manhattan skyscraper developer, filling the hotel with crystal from his own factory, and backing it all with his own private equity fund.

“He buys the Baccarat Crystal company. It's been around forever. He then takes that brand and he creates a hotel company off of it and he licenses the hotel brand to a development company that builds a skyscraper in Midtown Manhattan called the Baccarat Hotel. He fills the hotel with Baccarat Crystal, which he buys from his own factory. And then his private equity fund is the equity behind all these operations.”