Strauss Zelnick, Take-Two Interactive

**David Senra** (0:02)
Can you run through how you wound up buying and taking the deal to get Take-Two Interactive?

**Strauss Zelnick** (0:09)
You know, the interesting thing is, it's not a story that we've told. And part of the reason is, stories like this tend to be sort of self-serving because it worked out well, and not everything works out well. In fact, most deals don't happen, and deals that do happen don't always work out. This one did. It's kind of a set of one of one. The way we did this deal has never happened before, and I'm pretty certain it will never happen again because we essentially did a hostile takeover with no money. The reason we did that is we had no money, so it was really our only choice. But I had a background in the video game business and started ZMC with partners, and the goal of ZMC was to buy, in certain instances, turn around, and in all instances, build up and create value. And companies that stood at the intersection of media and technology. And the idea in 1 when we started the business was that technology would supercharge media and create lots of value and destroy value. And of course, that's a story now that's more resonant than ever.
I thought in 1 it was pretty obvious, but it was non-obvious to the entertainment business.

**David Senra** (1:15)
I guess we should give some context. By that time, you had already spent two decades in the entertainment business?

**Strauss Zelnick** (1:21)
About that, yeah. And I've been in every entertainment business there is.

**David Senra** (1:25)
So why was it obvious to you in 2001 and not obvious to other people in the industry then?

**Strauss Zelnick** (1:29)
I was the new media guy. So my goal getting out of grad school was to run a movie studio, an old business, even when I graduated from grad school.
So I got to Columbia Pictures in a very junior job. It was the only job I was offered. And by definition, the best I could get in the entertainment business. I was responsible for international television distribution, which was basically the last stop on the train of distribution of film and television. In those days, there weren't many outlets. With motion pictures, you went cinemas, and then you went to the beginning, the very beginning of home entertainment, the very beginning of pay television, the very beginning of cable television, and eventually free television. And my job was to distribute to free television.
So I'm sitting around and new media has come along to the entertainment business. And in those days, believe it or not, new media was home entertainment, which at that time was video, set distribution, and pay television.

**David Senra** (2:24)
And this is in the 80s?

**Strauss Zelnick** (2:25)
This is in 83

**David Senra** (2:27)
Okay, so that's new media in 83 A term still used all the time, almost 50 years later.

**Strauss Zelnick** (2:32)
Amazingly. So big companies like Columbia Pictures, which made their money in film and television production and distribution, and were really old line companies who were just beginning to modernize. I was one of a small cadre of business school grads who had been recruited into the business, which was atypical for the industry until the early 80s. So they realized, like, we need a new media guy, like the way today everyone needs an AI guy or AI army.
And so they looked around and they're like, who is the least valuable executive at this company that we can put in charge of new media? And that was me. So in addition to my day job, I became responsible for new media, which was the best thing that ever happened to me, because I had always been a futurist. My thesis in grad school was a history of the electronic entertainment business from its inception in 1895 until when I graduated in 83, and I tried to stay current since then. So the notion of looking ahead sort of came naturally to me, but now I had to do it for my job. Oh, and I had to deliver revenue in that job as well. So that was my initial exposure to new media. And actually, if you look at my career, it has been the combination of traditional businesses and new businesses driven by technology, which is why this is such an exciting time with all things AI.

**David Senra** (3:47)
I want to interrupt you one second. Did you say, so you were a futurist by looking back, though? Did I just hear you were studying?

**Strauss Zelnick** (3:53)
Don't you have to be a futurist by looking back?