Enrique Abeyta: Thanks. I want to welcome everyone here to the Empire SPAC Investor SPAC Deal Book. We're very lucky today to have with us two of the most prominent – if not the most prominent – SPAC sponsors in the history of SPAC's. You know, I want to welcome – both old friends of mine – Harry Sloan and Jeff Sagansky.

Jeff Sagansky: Thanks.

Harry Sloan: Thanks, Rick.

Enrique Abeyta: Great. I thought, you know, what we do here – I mean, we've known each other for quite some time. You know, I want to talk a little bit about your backgrounds; you know, the SPAC market. And then, your most recent deal Flying Eagle acquisition and Skillz. But maybe, you know... you guys have some fascinating backgrounds. Quite untraditional, perhaps, of the financial industry. Although you guys have been involved in finance also your entire careers. Maybe if I could get both of you just briefly to talk about your individual backgrounds, and then we'll kick it off there.

Harry Sloan: Sure. I started off as a lawyer in the entertainment industry. And after a while, decided to become – if I could – an investor and an entrepreneur. And I took two companies public that I created. One was New World in the '80s, which I sold to Ron Pearlman; which was a successful stock; and in the '90s, early 2000's, SVS Broadcasting where I created a group of television and radio stations and cable networks in Europe. Sold that to KKR and Permira in '06. Again, pretty successful stock. I think that was maybe at 40 percent IRR over ten years.

And then, I ran MGM Studios for a few years. We had some difficulties with the financial crisis of '08; company went through a restructure, and then Jeff Sagansky came to me about ten years ago and told me that he had heard that you could just raise money from the public markets on your good looks and...or actually, on your track record and be able to buy companies. And I always wanted to get back into running a public company again. And that was our original though, is that we'd buy a company and try and run it. And ten years later, we failed to do that, but we've gotten six deals done which have competent management. So that's where we are.

Enrique Abeyta: Great. Jeff?

Jeff Sagansky: And for me, I spent the first 25 years of my life sort of in the institutional media entertainment business; ran a CVS and Sony Pictures and actually have known Harry for almost my entire professional life. Met him 40 years ago because he was my very first lawyer in the entertainment business. He started his company and his legal firm when he was in his late-20's; was extremely successful right out of the box. He wasn't my lawyer for very long, but he's been my friend for 40-plus years.

Enrique Abeyta: Great. Great. My next question was actually, how did you guys meet? [Laughs] So I'm curious, Jeff. You know, I've been involved in the SPAC market for 20-plus years. And to say it was an esoteric area of the markets would be an understatement. How did you first learn about SPACs and sort of what was the catalyst for your initial interest and involvement?

Jeff Sagansky: So I – when I stopped managing companies – this was probably in the middle of...around 2005 or so – I started looking at other kinds of financial vehicles to do...you know, for which to do deals. And at that point, there was this sort of the backwater of the financial markets – these SPACs – that were sort of...there were no bulge bracket firms doing them at that time. It was mostly, you know, sort of...some would say bucket shots. But smaller-

Enrique Abeyta: Secondary brokerages. How about that?

Harry Sloan: Secondary brokerage houses. And I looked at it, but it was a very imperfect product at that point because the number-one thing that hadn't been fixed was the right to redeem and the – your vote as to whether you wanted to go ahead with a deal or not were tied. And it was only after the financial crisis when they were basically de-coupled that the whole business started to take off.

Jeff Sagansky: Yeah. But then, Jeff was able to bring City Bank and Deutsche Bank who were not far from bucket shots; you know, they were arguably first-year banks to lead our first SPAC. And that got my attention, but that was all his doing.

Enrique Abeyta: Right. So, I mean, it would be fair – and I'm not trying to be overcomplimentary here – you guys really were one of the pioneers, if not the pioneer, of the modern institutional era of the SPAC. I mean, I can't – off the top of my head, I can't recall...I mean, there might've been a couple others that sort of moved towards the larger banks. But you were right in that first wave.

Harry Sloan: I think we were the pioneer – I think we were the pioneer a little bit differently. Martin Franklin was clearly the first and, arguably today, the most successful SPAC sponsor. And he was, to some extent, our mentor. He had come to me at MGM to try to buy MGM in the SPAC. That's when I learned about it. And Jeff and I took a lot of guidance from him. So he is clearly, I think, the pioneer and the leader here. I think what we did a little differently was, up until then people like martin who were basically financial players who had built either conglomerates because they were knowledgeable in many, many areas or people who had run companies.

But again, only in the financial sector had done SPACs. And what Jeff and Id did was, we said, "No. We're going to go sector-specific. We're going to create a media SPAC." We went out and saw people. It was funny. We got in to see investors because they wanted to ask us, "You know, hey. You guys have had a lot of experience in the business. Is Netflix a short?" That was the question – that's why they wanted to talk to us. We got in the rom because they wanted to figure out, you know, what stocks they should buy from two guys who had been running media companies for a long time. And while they're at it, you know, throw a little money into our SPAC.

Jeff Sagansky: And in the beginning, Rick, in 2011 when we launched we were 20 percent of the entire issuance that year. WE had $190 million in SPAC, which was the largest SPAC raised since the financial crisis. The entire issuance of the SPAC market was only $1 billion. When we did our second SPAC two years later in 2013, we raised $325. The entire SPAC issuance was only $1.5 billion. So we were still 20 percent of the market. And the same was held true, you know, right through '15 when we raised $500 million. It wasn't until three years ago that the SPAC market really took off. And that year was the first year there was $10 billion of issuance in 2017.

Enrique Abeyta: So I want to ask you more about your partnership. And again. It's going to be very important we talk about Flying Eagle and your pending deal. But I want to talk a little bit more about the SPAC market. You know? There's obviously been huge changes. I mean, we've referenced some of them right here. What do you think have been the biggest changes in the SPAC market? I'll break it into two spots or two eras: before you were involved and then since you've been involved. You know, if you were to really drill down to one or two things in each of those eras that you think have led to this...I mean, it's been an explosion – and I think in a very positive way of SPAC issuance and activity. What are those changes?

Jeff Sagansky: Harry, you want to take that one?

Harry Sloan: I'll take the second part of it. Why don't you take the first part, what changed as we were getting into it? And then, I'll take the part about – 'cause I have a lot to say about what's going on now.

Jeff Sagansky: Okay. So I think in the beginning, we actually struggled in a sense. Because there were a lot of sponsors of deals. The PE firms, the VC firms. And none of them would consider a SPAC merger. So, you know, it was very interesting. A lot of the firms that now the – some of the banks that are the leaders in SPACs now, we couldn't get their attention at all in the beginning. They just would never recommend to a client that they'd go public through a SPAC merger. And Harry, I think, will get to the second part. But it was the success of the deals that were brought to market that have completely changed the equation. So, Harry, I'll tee it up there for you.

Harry Sloan: Yeah. What's going on now is, you know, just completely different world. What's going on now is, there's a belief that SPACs are at least as good or maybe a superior way to take a company public as regular way IPO. And therefore, everybody who wants to be in the IPO business has to raise a SPAC. And everybody who's been successful in IPO's – I mean, my friend Arie Belldegrun who's in the Biotech world created Kite and Halogen and all of that. Every bank calls him every day and says, "You need to have a SPAC." I mean, it's almost like you need to have a SPAC to be firms; have to have a SPAC. You can't, you know, even be in the game to do IPO"s if you don't also have a SPAC.

And I just think that makes no sense at all. SPAC is a specialty product. It works, in our opinion, for companies which don't have comp's. A company which you can go out and say, "There's, you know, five similar companies. And they're trading at 9 times. And we'll take it public at 7 times. So it's a good deal." That should be a regular way IPO. What's great about the SPAC process is that you've got plenty of time and the opportunity to go back and forth with the investors and figure out what the right valuation is and figure out whether or not it's a right deal.

And the regular way IPO process is fine for everything else; things that are easy to value. Look at the deals we've done. The first deal was Wi-Fi to the airlines. There were no comp's. It was ten years ago, and it was maybe even ahead of its time. And then, satellite TV in India. Then a combination of – anyway. I think you get it. Draft things coming up now. The whole point of DraftKings is pure-play – the only way to invest in sports betting. We feel the same way about Skillz. If someone comes to us with a deal that should be a regular way IPO, you know, we don't want to just walk in. We think we need to add some value. And I don't believe we necessarily add value - to a company that can go public on its own.

We used to say 10 years ago, 12 years ago...both media executives. We'd run successful media companies domestically and internationally. And if something would go wrong with the company, either of us could step in and run it. That was of some value to the investors. And that's not our presentation anymore. So a presentation now is, "We can figure out better than anyone else, you know, whether this company should be public and what valuation." And over time, you just learn it. And it's no coincidence that our 5th SPAC – our latest SPAC – is our most successful. You learn something along the way.

As a matter fact, DraftKings may end up being the most successful SPAC ever in terms of SPAC deals. It looks like it could be. But again. You know, we got to the point we knew the CEO and founder of DraftKings for four years. We had gone through three different NDA's, three different SPACs. Same thing with Skillz, the current one. We met Andrew in 2017. The idea that guys are creating SPACs right now, and they may end up luckily getting into a deal or they get into a deal in a smart way...but they certainly don't have a chance to get to know people in these industries along the way so that they can make, I think, the most informed decision.

Enrique Abeyta: So Harry. You know, I think you're bringing up a bunch of things that we've discussed with our readers and audience. And what we've tried to do also is, for people, investors – ordinary investors who may not be familiar with SPACs – giving the introduction to them and guide them through it. You know, one of the things that I said – I've got an interview with an institutional investor coming up – is that SPACs are not an asset class. It is just another way to take a company public that has some particular advantages both for the companies where there's a right fit as well as the investors.

Harry Sloan: Yeah. Look. Every one of our SPAC deals...I can run you through it. And I don't want to talk everybody's ear off...but has been unique and has been a company that shouldn't, couldn’t go public at that time in the regular way. The first deal, we created a brand-new company. Wi-Fi to the airlines and content. We took a content company and a company that had technology, we merged them so it was two companies coming together.

You can't IPO two companies at the same time. You have to put them together. You have to do consolidative financials. You have to show the synergies, and then you can IPO them together. So that SPAC plus the DraftKings – which was a merger with SBTech – plus the target, which was a merger...3 of our last 5 SPACs were three-way mergers requiring two companies taking in public at the same time. That, you need to use a SPAC for. The other one, Williams Scotsman, was a company that needed $1 billion to buy its competitor. There was a private equity firm that was going to put in $500 million, and we were sitting on $500 million.

So it made sense they could quickly put together $1 billion. They couldn't have done it the regular way IPO. And then, the other one – Satellite TV to India – the India market didn't have the liquidity where they could raise $300 or $400 million. Maybe they could've raised $100 there, but the Indian management didn't have any visibility here in the US. So we were able to provide the right perception, the right endorsement. for them. But every one of our deals have – should've gone public in the regular way.

Enrique Abeyta: Right. So that's very interesting. You talk about the opportunism of your strategy and, you know, that SPACs give sponsors the opportunity to move quickly in unusual situations. Let's actually take that forward. And again, we'll talk about Skillz in just a bit. Let's take that forward to the COVID world. You know, this is certainly – in my lifetime, and I suspect the lifetimes of anyone we know – been the most interesting market event that happened at least momentarily.

How does that opportunistic capability or advantage that the SPAC...you know, that SPAC sponsors have, that the structure have – how does it play into the current COVID world? You know, has it presented more opportunities? Has it presented less? And obviously, you guys have identified a target now. But I'm interested to hear your sort of overall view on how it plays into the SPAC opportunities.

Jeff Sagansky: Yeah. Hey, Rick. I don’t think that COVID itself, you know, has changed the way companies...or should change the way companies consider going public. It comes down to the specific company itself. Now, obviously DraftKings and Skillz have benefited from COVID 'cause people have been home, they've spent more time on their mobile phones, et cetera – which is how these games are mostly played. But the actual fact of COVID really shouldn't change how a company considers going public.

Harry Sloan: Yeah. I think what it's done, though, is this gigantic surge in new SPAC issuance; has absolutely, I think, been made more possible, more probably 'cause of COVID. 'Cause in the pre-COVID days, in order to raise a SPAC you would do a road show. You'd hit, you know, five, six, seven cities. On our first one, we probably hit 15 cities. But now, you certainly hit three or four cities. You do a couple weeks. There's a lot of work setting up the road show. Now, basically a bank...and that doesn’t apply to us necessarily 'cause we're on our 5th or 6th or 7th. They know us. They don't have to see us in person. But 1st-time issuers would've had to – and 2nd-tie issues – would've had to have hit the road for a couple weeks. Very complicated arrangements. The banks would actually have to do some hard work.

Nowadays, if a guy has a little bit of a name, the banks can set up a one or two-day road show where a guy was sitting at his desk, and the banks are sitting at their desk, and the investors are sitting at their desk. And they want to buy SPACs, it's kind of easy. They've checked the box that they've met the guy over Zoom. So I think it's made it much easier for particularly these 1st-time issuers to go out and raise $250, $300, $400, $500 million. And I would guess that we wouldn't have near many news SPAC issuers if we weren't in the COVID situation – if it was back to the old days; if we had to meet in person.

Jeff Sagansky: Yeah. I also think that the fact that we're in a 0-interest-rate environment for all these guys that say, "Hey. I’m going to have a certain amount of my allocation of my fund in cash" – it's really not costing them. There's no opportunity cost of putting into a SPAC now because, you know, you're in treasury bonds. You're not getting any yield. And if you're going to be in cash, you might as well have the optionality – by the way. This goes for retail investors as well – to have the optionality of the SPAC and what the sponsors come back with.

Enrique Abeyta: Well, and that's one of the big things that we talk about. But I want to come back one second to the companies. You know, one of the advantages for a company is – and I've been involved in many IPO processes like you guys – I mean, it is a months-long process. It involved a huge amount of work, especially from senior management. And so, you know, in our view – and it's quite obvious – one of the advantages of doing a deal with a SPAC for a growing company that has a lot of opportunities is saying, you know, perhaps two things; number one, a lot of the work of going public has already been done. So while there still will be the same regulatory filings and the same degree of regulatory rigor around the eventual company, it saves the management themselves from having to do the same kind of road show, the same kind of process, the same kind of financials. Eventually it all ends up in the same place. So I would – you know, I've talked to several managements.

And a lot of them say to me – they go, "Look. You know, it's just a lot easier – especially in the COVID world – where we've either got two types of companies in COVID for a lot of businesses; ones that are doing very poorly and ones that are doing exceptionally well." Both of them want to focus on their business. And a SPAC opportunity allows them to do that while, you know, more quickly getting public. And the second piece of that is the opportunity to partner with experienced managers and executives like yourself.

Jeff Sagansky: Yeah. I think two sorts of parts to your question. One is that, you know, obviously we know the capital markets extremely well. We know the investment community, and we know who's going to do PIPEs. You know, we know both the fundamental and the hedge fund. And particularly if you're coming out of a VC-baked firm or even a PE-backed firm, we're always surprised at the lack of knowledge about the capital markets from some of those...you know, some of those sponsors. So we have that. But I think the more important thing – and I love, actually, Harry's opinion on this. But the price certainty and the real certainty is actually even more important than maybe the time you save; you know, the couple of months of going regular way versus SPAC.

Harry Sloan: Yeah. Look. I think the ability to have price certainty – and I want to emphasize that he said certainty, not accuracy. [Laughs] He said certainty. There's a difference...and have deal certainty is probably the best advantage here. For example. With DraftKings, the only way they could buy SBTech was to raise $200 million in a PIPE. And the only way they could do that was part of our SPAC. Otherwise, the whole thing falls apart. Second. The only way that DraftKings could make the timeline they wanted to be fully funded, up and running for this football season – again – was doing it through a SPAC.

So that actually made a lot of sense. Now, price certainty and deal certainty...what that means is the deal is going to get done at a certain price. 'Cause you have to figure out the price either during the negotiation of the PIPE or when you file your papers with the SEC. So you know what the price is going to be. And you can also create the deal certainty because the target company can decide what the minimum proceeds are. If the target company says, "You have a $500-million SPAC. You need minimum proceeds to $250" – you can line that up ahead-of-time. We did that on Skillz. We did that on DraftKings.

So that's different, though, than this view out there that the SPAC process is a better way to get a more accurate valuation. And, you know, it's really...I like the fact people say that to us. But think about it. DraftKings, we went out with a $3-billion valuation of DraftKings and SBTech together – $3 billion together for the two companies together. WE went out to raise a PIPE. We went on months of road show. We saw every investor we could, and the price didn't hold. It was knocked down to $2.7 – by the time we filed the deal, it was $2.7.

But we had tested the hell out of it. We had seen 100 institutions. We've been on the road for two months. We thought we had that price down to exactly where it should be. So we bring the stock down to $10, and now it's $42. So it's 4X. So, you know – whereas on the last one, which was target, on target we did the same thing – we brought the thing out at $10. It's trading at $1.50. Obviously, it got hit with the energy crisis because it's businesses in the permeant. But, you know, it's no panacea of accurate valuation because it's a SPAC. What it is, is deal certainty. You can create a deal certainty. You don't get a situation like we work where you have to pull the deal like Endeavor where you have to pull the deal.

That's incredibly valuable. As a matter of fact, you don’t even have to file and announce the deal until you've lined up the money. So no one's that embarrassed. We've gone out and tested the waters and seen investors with managements two or three times where the valuation didn't hold, or investors didn't think it was a good idea. And no one even knows about it. I could tell you about three, four, five companies that are still private because we went out with the IPO process through the SPAC on a confidential basis, and it didn't fly.

Jeff Sagansky: Yep. So, you know, this is an important thing to understand. You know, particularly for your retail investors. Because a SPAC is already public, we're able to go to big investors and basically – with our management – we're able to...with the management of the company we intend to merge with, we can lay out the whole thesis of the investment. And these investors can meet several times – three or four times – with the management to do their models, to understand the business. This is not the way a traditional IPO works. Basically, there's a road show, you meet with them for an hour, you're expected to do your work. They can't give you any projections.

And then, you have to make a decision on a very short timeline. That is not the way the SPAC process works. We're able, as Harry said...take our investors over the wall. They agreed not to trade, but then they can dive deeply into the company and the economics of the company. Sometimes we're there for a PIPE, sometimes we're there for a confirmation of price. But we can do a lot more work before we ever announce the deal so we know that the deal is going to get done by the time we announce it.

Enrique Abeyta: So let me boil this down. You know, because many of our audience are sophisticated investors, but they're not necessarily as in-tuned with a lot of the Wall Street jargon that we all are surrounded with and that we have our careers. You know, I'll kind of boil down what you're saying into a couple points. Number one. SPACs allow an opportunity set or are able to take advantage of an opportunity set that can – invest in companies that maybe wouldn't be as advantaged in a traditional IPO that has multiple elements.

That may be that there is no comparable company out there for investors to look at. That may be that there is a transaction involved – a merger with another company; a private equity, financing, et cetera that would be difficult, slash, impossible to do in a traditional IPO process. It also may be that – again, as you mentioned – in an IPO you kind of come out and say, "Well, we think it's going to be $10, but maybe it'll be $15, and maybe it'll be $5. And if the company has something they need to get done, it would be really nice to know that the price is $10. And with the SPAC structure" – so I can see where the opportunities...it's interesting. You know, it's a much more sophisticated group of advantages than, "Oh, this is easier than going through the process." But I want to come back to one-

Jeff Sagansky: And, Rick, I want to add one thing there. And that is the ability to do a PIPE. In other words, when we announce these deals – Skillz, DraftKings – most of our deals will already say, "Hey. We've got – in this process, we've got Wellington and Blackrock and some of the biggest"-

Enrique Abeyta: And just – so one second, Jeff. Just so everyone knows, a PIPE is a private and public equity. It's another way to raise additional capital from a very well-established group of investors. And so, getting back to the idea that more complex transactions can be done with a SPAC. I want to come back to two other aspects of the SPAC, and then I want to talk about your guys' most recent deal – both of your most recent deals; the one before the one you just announced and the one you're currently working on.

So in addition to SPACs being advantaged by being able to take advantage of this opportunity set, there's tow other things that we tell our readers what's so unique about this. Number one is the opportunity to partner with great sponsors like yourself who have money on the table or are highly motived. You know, normally most retail investors couldn't get into a private equity fund to co-invest alongside folks like yourself. The other aspect of that – and this has been a big topic for us – has been – when I started my career, which is a little bit later than you guys but not much – there was a whole group of second-tier investment banks.

You know, Montgomery and Hembrecht & Qwist and Alex Brown who really focused on these IPOs more for smaller growth companies...they're gone. You know, now you basically have the bold firms who, if it's a company below $1 billion of revenue, they're not particularly interested in the IPO. So I remember when I started my career in the '80s and '90s you could find great growth opportunities to invest in in the IPO market. Now, I mean, Uber and all these great private companies that have created so much value – a lot of that value has been in the private market; not in the public market.

By the time they go public, they're actually not great stocks; versus, you know, we see an emerging opportunity with SPACs where you sort of see a re-emergence of that – I won't call it earlier-stage opportunity – then getting involved in a company like WeWork or Uber or whatever. I mean, those ones haven't worked out so well. But Palantir will be a great example too. We'll see how it does. See if the IPO will do well. So these two things; you know, the investors, A, can partner with great sponsors and, B, get in on higher-growth opportunities in a way that maybe hasn't been available for the last decade or so. I'd just love to get your thoughts on that.

Harry Sloan: Yeah. Look. And you're missing the other point, which is no downside. If they don't like – if they don't like the deal that we brought them, or their advisors don't like the deal we've brought them, they can get their money back.

Enrique Abeyta: Yeah. Yeah. I think, Harry, those are great points. I mean, you know, the three things that we've been hammering with our readers is, number one, the opportunity to partner with great sponsors in a way that they may not – a normal investor may not have; number two, the opportunity to get in on investment opportunities that maybe haven't existed in the public markets for a decade. And then, the last one – which I think you just talked about, but I'd love to hear your thoughts...you know, if they are involved in the investment in the SPAC when the deal is announced, if they don't like the deal they can get their money back or at least the SPAC unit price – or if they need their money back. You know, all these things. Really unique advantages for individual investors.

Harry Sloan: Yeah. That's right. And, you know, it's actually so advantageous I've been trying to figure something out. So people are pouring money into SPACs for the reasons you just said – and particularly the no downside. Banks are loaning investors the money. Like 4 times their money, they get in for 4 or 5 times leverage. And I keep thinking, you know, what's wrong with this picture? How is it going to blow up? I mean, we all know that there's way too many SPACs. It's probably not going to end well. But how is it going to not end well? And I haven't been able to figure out, you know, "What is wrong with this picture from the investors?"

And all I can figure is that it's going to maybe blow up in the sponsor's face; meaning that the higher-quality sponsors – and hopefully, we've put ourselves in that category...but of a specific reason. We talked about, "SPACs are good for certain situations." A three-way merger, an international deal brought here, timing; the DraftKings, no comp's. But for most of these deals, they're looking to do what could've been regular way IPO's. And my guess is that the companies who want to go public will do a SPAC-off, and they will go to these sponsors and they will say, "How cheap are you willing to sell us your SPAC? We don't need – we don't need you. You're not bringing anything in particular to the table.

But you happen to already have a public shell. How cheap can we get into your public shell?" So if it doesn’t end particularly well, it's going to – in my view, it'll not end particularly well for the SPAC sponsors who are – where there's way, way too many and maybe shouldn't be doing it to begin with. And that will sort its way out. And therefore, those who say SPAC is a bubble, I don't agree with you. I've seen bubbles. I think they're actually – it makes a lot of sense. I haven't figure out what's wrong with this movie the way you laid it out for the investors.

Enrique Abeyta: That's a fascinating, fascinating point.

Jeff Sagansky: You know, the SEC mandates that the money that a SPAC takes in is kept in Escrow, in treasury bonds. So there's no, you know...it's sort of-

Enrique Abeyta: Which earned interest; although albeit not a long.

Harry Sloan: Not very much. So I think this is an incredible opportunity which has never existed before for retail investors to play on an equal footing in IPO's with big institutional investors.

Enrique Abeyta: Yeah.

Harry Sloan: Traditionally, it is the big institutional investors who the banks reach out toward to basically give their allocation in an IPO. Here, when a SPAC goes public, for a long time it'll trade pretty much close to par at $10 or $10.25. And any investor that wants to get in at that point after the IPO can get in at par. And as Harry said, they always have a chance if they don't like, you know, the merger that the sponsor's bringing back...they can get their $10 back. And they're left with a warn. If they bought a unit – which is one share at $10 and a warrant to buy a share at 15-percent up – then that is the $10 unit. And you can often buy those almost at par once the IPO goes off.

Enrique Abeyta: I think, you know, I'll say we've been doing a lot of these calls. And you guys being the pioneers – or one of the pioneers in this – you've expanded my mind on this on a couple of areas. You know, I think the idea of the SPACs having a unique ability to do deals that others couldn't do is one of those. The other thing, though – I think, Harry, you just said. 'Cause everyone's asking like, "Oh, is this a bubble?" That whole thing, we know this ends badly.

I mean, I get a little tired of it 'cause I hear it all the time. And when everyone says, "This'll end badly," about everything, well eventually you're going to right about some things. [Laughs] But your point is – what does have a good point is that when we see a ton of capital flow into any sector, always the returns in that sector go down by definition. That is a rule of economics.

But in this case, what's unique – and by the way, I want to move onto DraftKings and Skillz here in a second. But what's unique is that maybe the bursting of the bubble or the decline and returns on capital doesn’t necessarily happen for the retail investor. They can just get their...they can just get their cash back if they do it right – hopefully with our advice – on the right kinds of ideas; but that it's really the sponsors that end up kind of holding the bag. And they end up wasting two years-

Harry Sloan: All of this – all of this, it's not going to end well. We don't know why, but it's not going to end well. It's got to be nuance. I think it...I don't see how it doesn't end well for the investors. I think the investors have a really good opportunity here, and they've put an edge in their favor that previously private equity only had where it doesn’t particularly end well for these sponsors that are, you know, putting up money upfront to raise a SPAC. And they may want to be in the SPAC-off to take Palantir or to take any of these big things public. And they may get the deal, but they're going to have their economics taken away, and they're going to get brushed aside because these good companies don't need them.

Enrique Abeyta: Yeah. And it's a really unique situation. But again. I think you guys have ultimately had – I'm going to move to DraftKings here. Sorry. You've both hit on one of the core messages...I guess we have two core messages that really come down to it. This is the opportunity for retail investors to participate like institutional and private equity investors in opportunities where they never would've had this opportunity before. And the second is, you kind of get a free look. You know? That's what's so unique about how this has evolved.

Jeff Sagansky: Yeah. And Rick. You know, almost this year it looks like almost 40 percent of all the IPO issuance is going to be around SPACs. There is, I think – when I last looked – there's $40 billion of IPO SPAC issuance that's looking for a deal. That's a lot, and those average SPACs are about $300 million or, you know, $300 to $350. So those are fairly big companies. Those aren't $500-million companies. Those are companies with a market cap of at least $1 billion.

Enrique Abeyta: Yeah. Yeah. Okay, guys. We've talked a lot about the SPACs. Thank you for the insights. I wish I would've called you guys before because this is a lot [laughs] of things I'm learning here. Let's talk about-

Harry Sloan: Well, you know, experience does actually pay off. Again. I don't think it's an accident that our latest SPAC is our most successful. You gain, you know, knowledge, and you have relationships. And you know what to do and not to do. You know, we've been doing this for a decade. If anything, we should be better at it. We're still learning things. We're still making mistakes.

Enrique Abeyta: So let's go to that subject. I mean, your latest SPAC, DraftKings, I remember it was actually over the winter holidays. And we had just come up with this idea for this product. You know, it's obviously sometimes these things take a while as well as COVID kind of got in the middle. But I saw the deal hit. I was familiar with Drat Kings. I'm a big sports guy, although not much of a gambler 'cause I feel like I've been in the stock market for 25, 30 years.

So I don't need to gamble on sports too. And you were kind enough to return my call literally the day after the – I think it was the day after Christmas or some crazy thing; a huge success, awesome growth company. Maybe talk a little bit about your experience there, why you think it's been so successful, what you guys really brought to the table. And then, let's just move that right into the most recent deal; you know, Flying Eagle Acquisition has announced a potential deal with a mobile gaming company called Skillz. But let's start with DraftKings and then kind of segue through to what you guys are – the great opportunity you're looking at today.

Harry Sloan: Today's right. Start with today. Okay? So today, Draft King stock is up 10 percent. I don't know if you noticed that. WE announced...I say we 'cause I'm Vice Chairman and continue to heavily be involved in DraftKings. We announced a big, co-exclusive deal with ESPN today. Therefore, we now have a media partner. And we have the best media partner there is to have in sports – ESPN. But let me tell you something. I've probably been talking to Jason Robins and the other guys at DraftKings and the deal maker about Disney and ESPN for well before the IPO.

We all understood that the day would come when these major, you know, sports-betting sites like DraftKings and FanDuel would have tie up with media companies. This has been discussed for 18 months. Jeff and I, our background is media. We know everybody at Disney. We know who the deal-makers are. We know the head of ESPN. And so, we were always in a position to plan with DraftKings. Well, what could go wrong? Disney's an investor in DraftKings. "What if we don't get a deal? What if ESPN goes with somebody else? Right? How would that impact us?"

So we have been involved from the very, very beginning. And so, we added value in that case because we're media guys. And DraftKings were basically tech guys. And sports-betting was a business of its own. And the media side was always going to be important and culminating today, we're very proud that we actually were able to snag the deal with ESPN. That was a big carrot out there in the sports-betting world.

Enrique Abeyta: And for a rights owner like ESPN to be tied up with DraftKings, you know, it basically makes every game that they're televising more interesting. Because if you have money down on it, you're going to watch more closely.

Harry Sloan: Yeah.

Jeff Sagansky: Yeah. Go to Las Vegas and walk through one of those sports books and how many people are watching...they'll see a guy throwing his beer about six different teams. You're like, "What the hell are you doing? You know, how are you a Vikings and a Bears fan and a Dolphins fan all at once?"

Harry Sloan: And people will stay engaged because, for all we know, they've got a bet on who's going to kick the final extra point in a 40-to-nothing game. You know? So it's huge for the media companies, like Jeff says. The value of the sports of the teams and the value of the media companies have all gone up because of sports-betting. But again. This is just an example where we were probably – we were the right SPAC and actually brought something to the table. Besides all the other things we talked about, which is that they needed money and they needed to acquire SBTech, and they wanted to get the deal done before the football season.

Enrique Abeyta: Yeah. so let's go right into it. You know, where you guys are spending more of your time today. And by the way. I really appreciate you taking the time out to talk about your history, to talk about the SPAC market, your unique insights. I think, again, for our audience – and there will probably be hundreds of thousands of people that actually watch this video – to get the chance to sort of be in the room with you guys and hear your insights...it's just a really unique opportunity.

And we've very appreciative of it. Let's talk Skillz with a Z. You know, about two weeks ago you guys announced potential combination – I say potential 'cause it's not finalized, obviously – where your most recent SPAC, Flying Eagle Acquisition Corps, ticker FEAC, will be doing a transaction with a mobile gaming company and platform called Skillz. You know, I was a big gamer when I was a kid. I have two kids. One of them walked in the video earlier.

They'll probably cut that out. [Laughs] You know, so I'm not much of a gamer today. I'm pretty busy. But maybe start with telling us what Skillz does and what it is, and then walk us very quickly through the deal. I mean, my team has started doing the work on...it looks awesome. I mean, you know, gaming is such an opportunity globally. And mobile is even, you know, biggest part of that opportunity. So give us a quick introduction.

Jeff Sagansky: You just did it. Look. Gaming is bigger than movies and books and music all combined. And within gaming, mobile gaming is a $60-billion business last year going to $150 billion business. Who grows like that? What business grows like that? So if you can get a piece of that, if you can be an enablement platform, an open platform where – in this case – developers of mobile games can be matched up against consumers who want to play those games, enter contests in those games and have the best technology for all of that...and again.

And this is just with basically game developers that you've never heard of, let alone the big-name games. They're already growing 50 to 100 percent. It's, you know, held an opportunity. And personally, gaming is an area that I'm really interested in. 20 years ago, I was one of the founding investors of Bethesda Games out of ZeniMax. You guys may know some of those games – Fallout, Elder Scrolls, Quake, Doom, Doom: Legend – anyway. So 20 years ago, I was doing that. For the gaming world – you've gone off-camera, Rick.

Enrique Abeyta: Yeah.

Harry Sloan: But the gaming world – but the gaming world has evolved. So now, we've taken it all the way up to DraftKings. And the next step in our opinion is going to be contests where you can make money playing against your peers and against your friends and against bigger groups mobile games. It's another way to do Esports. Jeff and I have been out telling investors for three SPACs now that if we can find a way to bring a pure-play stock where you can invest in a company which benefits from Esports – and we've been trying to find something.

We've looked at the teams. We've looked at the tournaments. We've looked at the players. We've looked that leagues. We have not been able to find a pure-play Esports with AAA titles. But here is what is basically casually sports, where everybody can play these games and get involved in content. So in addition to what I said, an enablement platform that's bringing gaming together with entertainment, we also have a chance for the investor to have exposure to the growth of Esports. It's-

Jeff Sagansky: Yeah. And right now, the Skillz platform is for developers of casual games. But I think Andrew Paradis – who's basically the sort of founder and the genius behind the Skillz business – he sort of sees it as an enablement of all competition on the internet. He's going to provide the competitive platform for any kind of competition on the internet. And that's a huge...I think that's a huge ambition. And it really sort of points to how big this company can be.

Enrique Abeyta: Well, and I think a couple things, you guys. And again. We like to boil it down for readers and my products. I have a growth product that's done very well where we only look at stocks we think can go up 500 to 1,000 percent. Now, that's not in a day, a week or a month. That's across years. But the first thing we do is start by looking at the TAM – which you guys know what it is. But for our audience, a total addressable market. "How big is the opportunity?" You know if I own a restaurant that's...a restaurant stock that's just building restaurants in Arizona, there's not a lot of opportunity there.

But here, we're talking about gaming. We're talking about global. We're talking about mobile. We're talking about moving, you know, not just from casual gaming. But the casual gaming's great because that means, you know, it's not just hardcore, you know 22-year-old's in their mom's basement playing Doom. It's literally the mom while she's waiting in line at the grocery store going through her mobile phone 'cause she's got ten minutes to kill, 'cause she's bored.

Harry Sloan: Well, Jeff is one of those people. Jeff has played Math Guru. He's played Solitaire. But you know what? I think you did mention, I think, a really interesting point with regard...which I think has to do with Skillz and also has to do with DraftKings. So investors, by buying the SPAC stock now, are actually able to buy Skillz. So Skillz has millions of players playing their games. They then say, "Oh, gosh. I see Skillz is going public. Let me buy the Skillz stock."

And they type in SKI, there's no way to find the site. So you have to know that if you want to get a share of Skillz stock, you have to buy the Flying Eagle stock; you know, FEAC, which is our stock. Same thing with DraftKings. Between the time we closed – announce the deal and close the deal and Draft King was trading on its own as DKNG – it traded as Flying Eagle as our SPAC. So I think one thing your investors need to know is, if they like the deal that's been announced and they haven't already bought the SPAC...if they've already bought the SPAC, they will end up getting a share in that company. But if they like Skillz for some reason, they can invest in it now by buying the SPAC shares. Because every SPAC share will turn into a Skillz share.

Enrique Abeyta: And one of the unique – you know, coming back to the uniqueness of a SPAC, Andrew Paradis has said, "Hey. My business, which is going to do $225 million this year, is going to do $555 million in two years." Now, that's a forward projection two years out. It's a 57-percent kegger. You can't do that on a traditional way to go. But because FEAC is already public and this is a merger, he can make those kinds of projections.

Jeff Sagansky: Yeah. Well, it's interesting. You know, one of the things...one of the reasons we're doing this – again. I have a long history in this business investing in SPACs. And we work really hard at Empire Financial Research to kind of go into areas where traditional investors may not have access to. You know? If they want to hear about Amazon and what's going on there, I mean, there's 1,000 research reports.

But, Harry, you just referenced something that – 'cause we have to coin-turn sometimes...we jokingly call "the secret ticker" – which is, there's this great period of time where the deal has been announced, but the actual ticker of the company has nothing to do with the deal unless you have, you know, a guide that can really walk you through that. And that's what we're really doing, is we're doing the due diligence on these deals and things that maybe would be off the run or not on investors' radar screen. So I think it's a great point. I mean, so Skillz – it-

Harry Sloan: Yeah. Two separate businesses for you guys. You can pick the SPAC sponsors you like and say, "Here's the SPACs you should buy or the SPACs you shouldn't buy." But then more importantly, you can evaluate the deals that they announce. Because you know the SPAC world well enough, you understand well enough whether SPAC helps the deal and how much.

Jeff Sagansky: Well, and we're also – and remember. We're investors at heart. So it's not that – we're not SPAC guys. We have to be...we happen to be very, you know, experienced, capable investment research analysts and portfolio managers that also are able to take advantage of pools in the market that may not be in the common knowledge like SPACs.

Enrique Abeyta: Yeah. I mean, I just want to come back to, you know, just this period between announcement and the actual completion of the merger. DraftKings today is trading at $49. You could've bought DraftKings back in April after we announced the deal in the $11 range. It was before we concluded the deal. At the time of the actual merger, April 23rd, I think the stock was trading at $19. But for a long time, it was trading between $11 and $19.

And you could've come in and, as a retail, could've bought it then. And it's been re-risked to a certain extent that you know what's going to happen, and you can begin to get...you know, you've got projections. That's also a huge thing; to actually have management – that's one of the peculiar things about the IPO process, right? "Come buy our company. It's awesome. We can't tell you how it's going to perform at all. We can't give you any clue 'cause it would be illegal." I mean, if I went and bought a business – any business in the private markets - and the seller of the business said, "Hey. I'm going to sell you the business. But I can't tell you how it's going to perform," I'd look at him like he was crazy; versus the IPO market allows that to be done.

Harry Sloan: Look. During – again, trying to make this current. During the discussions, the over-the-wall discussions, the so-called PIPE discussions...whatever you want to call it. For DraftKings, every single investors said, "Gosh. Disney's investing in your company. Are you going to do something with ESPN?" We had those discussions 10 months ago, 11 months ago so people could evaluate whether that would happen. And by the way, Jeff. I hope by the tie this interview Airs you write that DraftKings is $49. It's actually $46 now, not $49. But as I said, I think that's probably the most successful SPAC – at least in recent memory.

Enrique Abeyta: So let's – guys, you've been incredibly generous with your time. I want to close with sort of two things. You know, let's come back to Skillz. I think we've done a good job of going over the high level. But maybe just give us a couple sentences about the opportunity as you see it today for both Flying Eagle and Skillz. You guys are actually super generous with your time. You're on the road show right now – the virtual road show [laughs] You know, really quick, why should an investor invest in Skillz...or, sorry, Flying Eagle today with the opportunity to acquire Skillz?

Harry Sloan: You know what? I'm going to let Jeff do that. I'm too close to it. I'm out, you know, on the road show getting all excited. So maybe Jeff will be a little more dispassionate. How should we look at Skillz right now, Jeff?

Jeff Sagansky: Yeah. I think for a couple reasons. One is that the company is not taking – you know, when you develop a game, sometimes that's a very, very risky proposition. You're putting, you know, millions of dollars in development money – what Skillz does is, they basically monetize for the developer their gains. So they're not taking content risk. What they're doing is, they're putting it out there, and they're using their proprietary platform...it's a platform play. It's not-

Enrique Abeyta: Picks and shovels.

Jeff Sagansky: Exactly. They're not actually developing the game. They're working with the developer to monetize the game through their proprietary platform which creates competition – one-to-one competitions. Sometimes many, you know, players playing at the same time. They're creating that platform for the developer to monetize. And as we know, there are 10,000 developers out there. There's an infinite amount of gains, and their Skillz is really good at evaluating which games are going to be able to be monetized at what rate on their platform.

So if you think that the video game is going to – video game TAM is going to explode like all the experts are saying, and Harry referenced how big it's going to be, then you're really playing the growth of casual right now – casual video games. But in fact, it can be any kind of video game because the platform is so flexible that they're going to be able to get in over time into any kind of video game play. Yeah.

Harry Sloan: I would – I'll...It's a different – for an investor, it's a different analysis than DraftKings. We always said that DraftKings is not for the faint of heart. It depends on how fast states are going to adopt sports-betting. And of course, with COVID it turned out they're adopting sports-betting faster because the states need the revenue. But that was a bet, to some extent. And it's turned out to be a home run – a grand slam home run. I think Andrew Paradise – who's fantastic, who's the founder of Skillz – would tell you that that's not how people should look at Skillz.

Skillz should be looked at as a solid, up-the-middle single or an extra bass hit once during the game. But every year, year-in, year-out...because it's clear the TAM is growing, it's clear that they have proprietary technology and it's clear – as Jeff said – that they're not taking big risk; mentioned Doom: Legend. I think we had $100 million in development of that game and another $50 or $100 million in marketing of it; you know, not having to take those kinds of risks. Again, solid singles and doubles. But every year is how I would look at Skillz.

Jeff Sagansky: Look. You know, right now it's strictly domestic play. But video games, we know, is a worldwide phenomenon. So one of the things that they're going to do – the main thing they're going to do – with the proceeds of this merger is, they're going to expand out into the international market place. And we think they're going to be extremely successful at doing that.

Enrique Abeyta: Yeah. The nice thing about-

Jeff Sagansky: And that's not in any of the numbers, Rick, that I just cited.

Enrique Abeyta: The great thing about platform companies too...I think you said it best, Jeff. If you believe that video gaming and mobile gaming grows a lot from here and then if you believe they have good technology and a seat at the table, those are the things you need to believe. You know, traditionally video games have been a very hit-driven business like the movie business.

Jeff Sagansky: Yeah.

Enrique Abeyta: But here, you've really de-risked it. So last question for you guys. Again. You guys...I mean, the SPAC market is almost synonymous in some ways with your name. I mean, you guys have bridged more money cumulatively as SPAC investors than anyone else. Although, I guess Bill Ackman with his single SPAC is probably right up there with you. [Laughs] You know, if you were to sit down your son's girlfriend's father and give him a piece of advice about the SPAC business or, "Why invest with SPACs" – you know, we want to really...I would say I don't really understand something or can't really explain it if I couldn’t explain it to my mother; who's a very bright woman and all that. But that was sort of my measure. What would be sort of your parting words for SPAC investors in general? Why this opportunity and why you think it's so good. And here, I'm talking about the SPAC industry or asset class as a whole.

Jeff Sagansky: I think the answer is what we've sort of covered; and that is that you can play the upside of the, you know, fast-growing media tech market...at least in our case with very little risk. Because you are not compelled to actually invest until we tell you what the company is that we're merging with. And that optionality doesn't exist anywhere else really in the financial universe; you know, to be able to put your money down, but then to be able to take it back pretty much at the same price you put it down at? That's a pretty, you know, unique option.

Harry Sloan: Yeah. Look. If you're an investor who doesn’t feel he knows business...I mean, my wife for example, said to buy Beyond Meat 'cause she understood that just the way she said to buy Whole Foods. And she turned out to be right. But if you're not one of those people or have a view on something, you know, I would listen to someone like yourself, Rick. And I'm not just saying that to make you feel good. But there are very few people who have your level of sophistication who take the time to call me the day after DraftKings and say, "What's going on here?" And you have that kind of access. People will take your call. So I think people should, you know, find someone they think they can follow and trust and take their advice.

Enrique Abeyta: Got it. Appreciate. And just for everyone to know. During my Wall Street years, I often also went by Rick because Enrique is a mouthful for a lot of people. [Laughs] 'Cause you guys have known me so long. You knew me in my Rick as well. Enrique is my full name. Great, gentlemen. I just want to say, again – I've said it 100 times. I'm going to say it 100 more. Thank you for your time. You know, the ability to learn and benefit from your experience in the SPAC market, your experience as investors and managers. And then here, I think the opportunity with Skillz just...it seems really incredible. It's a whole bunch of themes that we've been very interested in and investing in and combining it with the SPAC opportunity and you all in particular. You know? I think it can be an absolute home run. So thank you again. We appreciate your time.

Jeff Sagansky: Thanks. And we will be readers. So we can't wait to see the first issue.

Enrique Abeyta: Absolutely.

Harry Sloan: And, Enrique, thank you for what you're doing.

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