Sam Zell's rule: let the other side do a little better
Sam Zell would let a counterparty get a slightly better deal than he did. Richard C. Wilson says that is why people came back to Zell for deal after deal. He teaches it at the end of his deal structure section, right after showing how easy it is to rig terms in your own favor.
Terms beat valuation
Richard's setup is that a sophisticated buyer knows the terms matter more than the headline price. If a seller is fixed on an 8x EBITDA multiple, you can agree to 8x. You then ask for seller carry, some retained equity or a low rate over a decade, with interest only and a balloon at the end. A great deal can be made awful through structure, and an average deal can be made great.
A hundred ways to tilt a deal
He lists the levers: who holds the collateral, who gets the cash flow, whether one side's upside is capped, who gets liquidity and flexibility, who gets transparency. Any of them can be pushed all the way to one side.
Why Zell did not push them all the way
Zell's answer was to make it good for everyone. Richard says the real win is a long reputation and many more deals with the same strong counterparty. Squeezing one deal costs you the next eleven.
In Richard's words
"Like, a sophisticated person always knows it's the terms, it's not the valuation, right?" (Richard C. Wilson, 2026 bootcamp, about 5:39:14)
"He'd let someone get even a slightly better deal than he would, and that's the reason why they come back and do 12 deals with Sam Zell." (about 5:39:39)
"It's not about screwing the other person over." (about 5:39:55)
How to use this
- Agree to the other side's number when you can win on terms. Seller carry and retained equity are common tools.
- Before you sign, make sure no lever is pushed all the way to your side. Start with collateral and cash flow, then look at caps and liquidity.
- Leave something on the table with counterparties you want to see again.
- Count a repeat partner as part of the return on the first deal.
Questions and answers
What was Sam Zell's approach to negotiating?
As Richard C. Wilson tells it, Zell would let the other party get a slightly better deal than he did. People wanted to work with him again, which led to many repeat deals.
Why does Richard say terms matter more than valuation?
Because structure decides who carries the risk and gets the cash flow. A seller can get their headline multiple while the buyer wins on seller carry, interest rate and retained equity.
Does this mean accepting bad deals?
No. Richard's point is to make the deal good for both sides instead of maximizing every lever for yourself. The payoff is reputation and repeat business with strong partners.