CWC EP 28 | Andy Cagnetta Sits w/ Eric Straus, Manhattan Franchisee and M&A legend

In this episode of Coffee with Cagnetta, Andy Cagnetta (CEO of Transworld Business Advisors) interviews Eric Straus, the Manhattan franchisee and M&A legend. Eric shares the incredible history of the Straus family—from their tragic connection to the Titanic to the founding of Macy's—and dives into his own journey from investment banking to owning 10 radio stations and a $30M job board empire.

Whether you're interested in media M&A, the "Silver Tsunami" of retiring business owners, or the secrets to surviving NYC real estate, Eric’s "singles-and-doubles" philosophy is a masterclass in long-term wealth creation.

📍 Contact Eric: estraus@tworld.com
🔗 Learn more: https://eatmancereal.com
📌 Visit TWorld.com for more information about M&A, Leadership, and Business.

Transcript

SPEAKER_01 0:10

And welcome back to Coffee with Cagneta. And we are still here live in New York at the Theorist Podcast Studio. And we we couldn't be in New York without having Eric Strauss in. So Eric, welcome.

SPEAKER_00 0:27

Thank you very much. Great to be here.

SPEAKER_01 0:28

Eric, again, a name synonymous with New York, the Strauss name. Your family's been here for a long time.

SPEAKER_00 0:36

Been here for a long time. Came over on the Titanic. If you watch the Titanic and that old couple that was going down, hugging each other.

SPEAKER_01 0:44

Yes.

SPEAKER_00 0:44

That was my great aunt Ida. Right. Who said she didn't want to get off. She'd been married to him for 55 years. She wasn't going to leave him now, and she went down on the ship. Yeah. Pretty impressive, right?

SPEAKER_01 0:55

Yeah, that's crazy famous. Lovely romantic story. Yeah. Yes. So your family was coming over at that time? And so how did the rest of your family get over? They all weren't on the Titanic.

SPEAKER_00 1:06

No, they're all on the Titanic. I'm not exactly sure how we all got over here, but we we've been here for quite a while.

SPEAKER_01 1:12

Right. And so your grandfather was in business here?

SPEAKER_00 1:16

So my grandfather uh was uh Nathan Strauss, um, who was uh quite important in the start of Macy's.

SPEAKER_01 1:25

Right.

SPEAKER_00 1:26

Um, and then got into the broadcasting business, and my dad followed him in the broadcasting business, and I followed my dad into the broadcasting business.

SPEAKER_01 1:33

Yeah, so the family had a long history in the radio business, and you were in the radio business, uh, and as like any good son would do, wouldn't listen to their father or did something different, right?

SPEAKER_00 1:46

Yep. Working with in our business right now, we see a lot of father-son teams. And I always say to the son, trust me, I know it is a bear working for your dad.

SPEAKER_01 1:56

Right.

SPEAKER_00 1:56

Um, it it's tough. Um and my mom was involved in the business too, and my sister too. So it was a real family business, and you know, it got to be difficult, but uh learned an awful lot, and they were fantastic teachers. Um and my dad did some great things. The um first radio station in the country to ban cigarette advertising. Really? Yep. In the hopes that we would set rules so that um they would allow cigarette advertising after kids were in bed. So, like from 10 p.m. on, but that didn't happen, so it got banned completely. Also, the first station in the country to editorialize for Nixon's impeachment. Hmm. And uh interesting story there. The following week, there was an IRS audit and an FCC inspection.

SPEAKER_01 2:44

Obviously, you passed both. Yes. So and and uh, you know, it's so funny. I just saw what what what did we just see last night from this from the audience? The Broadway show with uh Just in Time. So we saw Justin Time, and they actually mentioned that Bobby Darren's career started by Murray Decay, which worked in your family's radio station. So that the family radio station really built a lot of careers here in New York.

SPEAKER_00 3:11

Yep, that's true. The WMC good guys were pretty amazing back in the days when there were like, you know, three or four or five AM radio stations covering all of New York City, and you know, WMC was one of them, and and the good guys were just a phenomenon.

SPEAKER_01 3:25

Right. So you you grew up in that business, but you decided to branch out and do something else, and you got involved in the in the internet?

SPEAKER_00 3:33

Well, so uh I worked for my dad for a while. Right. Uh then he sold the station in '86. And uh I was working for the new owners, and an investment bank called me and said uh they wanted to talk to me to interview me. So they interviewed me and they did media mergers and acquisitions. And so they hired me, and I did media MA for 18 months working for them. Right. Um, did 14 deals in 18 months, which I'm proud of. Yep. They called me at that place, they called me Rod Carew. A lot of the guys were working on million-dollar fees and two million dollar fees, and I was cranking out the hundred and two hundred thousand dollar fees, just selling little newspapers, little radio stations, little television stations all over the country. Um it was a fantastic experience. And I saw these idiots getting rich in the radio business, in the media business, and I thought I wanted to be a rich idiot. So um my dad was selling off his last radio station up in Ellenville, New York, a town of 4,000. And so I said, go out and get offers and let me match your highest offer and give me better terms.

SPEAKER_01 4:36

Right.

SPEAKER_00 4:37

And so I ended up buying that station for a million dollars, 10% down, $900,000 over 10 years at 10% interest.

SPEAKER_01 4:44

Wow. So that's a lot of interest back then.

SPEAKER_00 4:47

A lot of interest, but I mean I was very lucky that I had that opportunity, right? Right. So I moved, I I went from being this sort of big swing in you know what in New York City as an investment banker, I moved up to Ellenville, New York. The most expensive apartment I could find was like $250 a month, right? I mean, it was just middle of nowhere. And um, so I go to work on day number one and listen to the morning show on the day driving in, and the morning guy announced that VAW, the largest employer in town, announces they were closing their doors at the end of the year. Not a good sign for the radio business, right?

SPEAKER_01 5:19

Yeah, sure.

SPEAKER_00 5:19

And then I get to work and the toilet's overflowing. And about an hour in, the chief engineer comes to me and says, uh, the past owner's been underpaying me for years. I need triple my salary. And I'm like, dude, this is day number one for me. Let's talk in two weeks. He's like, nope, now or never. So I had to triple his salary. So anyway, my parents are both quite entrepreneurial. And about nine o'clock at night, my mom calls me and says, uh, hey Ricky, how's day number one going? I'm like, oh my God, you're not gonna believe it. The VAW announces they're closing their doors, the toilet overflowed, the chief engineer is, you know, totally sticking it to me. And she says, Hey Ricky, welcome to management and hangs up. That was day number one. Wow. But it went pretty well over time. You know, we were selling spots for a dollar a spot back then. I got the rates up, I got better programming, and then uh went and got an SBA loan and bought some more stations. And over the next 10 years, I had 10 stations throughout the Hudson Valley of New York, Ellenville and Kingston, and Poughkeepsie and Catskill and Hudson. And then um, very luckily, Clear Channel was sort of gobbling up everything. Now IERT Media was gobbling up everything, so I sold them those stations um in 2000. Wow. And I like to always point out that I've owned a couple of businesses before. I've always used an intermediary when I go to sell my businesses. So I like to talk the talk.

SPEAKER_01 6:40

Well, we didn't even say that yet, that Eric, one of the reasons Eric is here is obviously he is our franchisee here in Manhattan, and he has been for how many years? 15 years. 15 years, and he's a hall of famer here at Trans World. So he not only is a well-loved son here at Trans World, but uh, you know, an amazing partner. So um so you you got out of that business.

SPEAKER_00 7:04

Got out of that business, and then so this was 1999. Um the Poughkeepsie Journal was doing in their help wanted section $15 million a year. Total radio revenues in Poughkeepsie were $12 million a year. So I came up with this idea why don't we start a local job board online was becoming a thing, right? Promoted on my radio stations to go up against the Poughkeepsie Journal. But the sort of little magic thing that we figured out is I got my radio competitors in the market to work with me. So these guys would stab me on the back every day to get business for me. But I went to them and I said, look, let's all get in bed together and let's really stick to the Poughkeepsie Journal. And that sang to everybody. So I had 22 radio stations promoting Hudson ValleyHelpwanda.com, and the thing took off like a rocket. So I went back to my investment buddy friend from OnSpocker, the firm I used to work for. We went on a road trip, raised, I think two million bucks, and launched, you know, if it's in Poughkeepsie, why not everywhere, right? So it was me and my business partner, Bill Cludier, would just travel around the country, like Southwest got a lot of business from every little burg to every little berg. And we'd have Louisville Help Wanted and Tulsa Help Wanted and Buffalo Help Wanted, and the model was the same everywhere. We got all the radio broadcasters in the market to work together, to promote their local job board, to stick it to the newspaper basically in the market. Wow. And we got that to 30 million revenues and 7 million of Ibita. Um, and then uh in 07, I didn't know help wana is a leading economic indicator. Right. I'm a radio guy selling unsold inventory, is what I'm doing now. So all of a sudden things started to slow. I'm like, I don't know what's going on, but we better get out. So we went out and hired an intermediary, went to market, got 18 bids, and Warburg Pinkers ended up buying us. So and that was uh 2008. Due diligence took six months. I call it the world's longest colonoscopy. Six months. We closed in February 08, right, and arguably the world fell apart in March. So we got very lucky in timing-wise. Right. And then I went and started another, I had to work for Warburg for two years. I learned that I'm not a very good employee.

SPEAKER_01 9:23

Right.

SPEAKER_00 9:23

Uh after my two years was up, I went out and we started another sort of the same model uh in the coupon business. We went to radio stations, got their free airtime in exchange for a revenue share. Um anyway, it was a miserable flop. Right. So very humbling. Yeah. Right. So now I'm 50 at that point. I have no genius idea. My wife suggests I go to a franchise expo. So I jump on a plane, I go to a franchise expo in Miami, and I can't see myself selling Auntie Ann's pretels on Ninth Avenue. But I bump into actually this guy's at a Synorama booth with a huge mitt. This is huge hand, and he pulls me in. I'm like, dude, it's JT Tatum. I'm like, dude. I can't do Synorama, I'm colorblind, like this is not for me. He says, Oh, we got some other things, and he pitched me Trans World. Anyway, the rest is history. Here we are. Here we are.

SPEAKER_01 10:19

Here we are. So it's I mean, it's been an incredible run. And so tell us about TransWorld. I mean, you've been doing Trans World for 15 years. What have you seen here in New York City over those 15 years about buying and selling businesses? I mean, I think one of your big complaints sometimes is it's it's a tough landlord town.

SPEAKER_00 10:41

Yes. In fact, one of the great uh silver linings of COVID is landlords were always very difficult to work with, and now they're just difficult to work with. Right? It's it's better. It's a tough landlord time, especially in retail.

SPEAKER_01 10:55

Right.

SPEAKER_00 10:55

Um, there's a lot of cash going through businesses here. I it doesn't seem to get reported. Oh, just pretty much any restaurant, any retail business where the tax returns reflect reality is an exception.

SPEAKER_01 11:10

Wow.

SPEAKER_00 11:11

I'm still I'm setting up a liquor store, and he said, I promise you every dollar's on the books. I'm like, I'll believe it when I see it. I mean, anyway, it's remarkable. So um one of the cool things is there's just so much business here, right? Right? There's just so much opportunity. And we have a team of six guys, there's no infighting. I think it's the same in Florida too. It's just like the right, like, you know, there's so much opportunity to get listings. There's no reason to fight over things, you know? Yeah. Um and we're having a good year, you know, it could always be better. Some deals are gonna close, some deals have fallen through, but that's the nature of the business.

SPEAKER_01 11:48

Yeah, and you've been bringing on some young people. We talk about young people a lot, and uh and I I and you're starting to sell some businesses to young people. We're seeing on young people be more entrepreneurial.

SPEAKER_00 11:59

That's absolutely well, don't they say the millennials are gonna be the richest generation?

SPEAKER_01 12:02

Yeah, right?

SPEAKER_00 12:03

I mean, I think they're gonna get a lot of baby boomer money, right?

SPEAKER_01 12:09

Yep, but I mean And then they're gonna hopefully they're gonna do something with it.

SPEAKER_00 12:12

And they don't want to work for the man.

SPEAKER_01 12:13

Right. A lot of them don't want to work for the man, and they're they're starting to buy businesses. Yep. So what's your advice to young people? I know you talked, you have a lot of uh young nieces, nephews, kids.

SPEAKER_00 12:27

What's your what's your well, I guess this is coming from Rod Carew, right? I'm a singles guy. I I would just say it's all about blocking and tackling. Just, you know, do the work. And I don't want to sort of mimic what you always say, but just it's get the listings, get the listings, get the listings, right? It's all about going out and getting businesses that are priced right that want to sell.

SPEAKER_01 12:47

Right.

SPEAKER_00 12:47

And don't be sort of waylaid by the sparkly things that could be a lot of money. Go out and get the deals done.

SPEAKER_01 12:54

Cut your teeth.

SPEAKER_00 12:56

Exactly right.

SPEAKER_01 12:57

I mean, you you you seem to do that, you know, even with your kids and everybody that you you you you make them worldly. You you give them a lot of different experiences, and you want them to have a lot of different experiences.

SPEAKER_00 13:08

No question. In fact, speaking of kids, one thing I want to say, which I'm very proud of, I'll plug this here. My daughter, we have a lot of entrepreneurship in my family.

SPEAKER_01 13:16

Yes, you do.

SPEAKER_00 13:17

Uh my daughter is starting a new cereal. In fact, we just mentioned the New York Times business section yesterday. Wow. Crowd report. Yep. That's true. It's called Mansereal, creatine, low-carb, high protein cereal, launching in September. So uh eatmanserial.com, if you want to sign up.mansereal.com.

SPEAKER_01 13:36

My wife is ordering it. She's over my shoulder. She's now ordering some eatman serial.com.

SPEAKER_00 13:43

And they raised a low seven-figure number. They really they you're not going to be able to do that. They went out and did a little roadshow? Yep. I'm really so I'm so proud of them. So it's really exciting. And and this is not singles ball. This is like home run ball, right? I mean, they're getting a cereal business, very exciting.

SPEAKER_01 13:57

Yeah, it's cereal businesses, you know, with there are some of those businesses like the beverage business, uh, the foods business that, you know, it's a it's a struggle. You got to get shelf space, you gotta get traction. But if you get traction, yeah, the money's big.

SPEAKER_00 14:12

Yeah, no question.

SPEAKER_01 14:13

Because you don't even need to make a lot of money. So it's not like our business, uh, you know, like where you know, a lot of small businesses of multiple of earnings. Uh, you start moving product, people want to be a part of that.

SPEAKER_00 14:24

No question.

SPEAKER_01 14:24

Wow.

SPEAKER_00 14:25

Yeah.

SPEAKER_01 14:25

All right. That is exciting. So what are they, what, what are, you know, I know you're bi-coastal now. You go, you're both on California, New York, back and forth. What are what are some of the fun things that you like to do here in the city or even on the other West Coast?

SPEAKER_00 14:40

Well, I'm an avid tennis player, more avid than good, but I I do love it. Uh, play a lot of tennis. And you know, when I'm here in the here in the New York area, get to see my son, out in California, get to see my daughter. Um, that's it.

SPEAKER_01 14:55

All right. What are your favorite places to eat in New York?

SPEAKER_00 14:59

Wow, okay. So I always tell people, I have I have a long list of people come to New York. Uh, Grays Papaya at 72nd on Broadway, best hot dog in the world. No question.

SPEAKER_01 15:08

You know, I've seen that, I saw that on a TikTok that they said it was the best hot dog.

SPEAKER_00 15:12

I mean, you gotta go. My wife always says I'm ridiculous. There's no seats, you just go in. Anyway, fantastic. Um, as far as fancy places, I love Tamarind, which is an Indian place downtown. Quality meats is my favorite steakhouse in town. That's a good start. I can keep rambling on.

SPEAKER_01 15:29

That's a that's a good start. You know, uh I I I think what are you most excited for in the future with Trans World and everything, you know, some of the other entrepreneurial things that you do?

SPEAKER_00 15:40

I mean, well, I mean, I guess for Trans World, people talk about the silver tsunami. I think there's no question, right? People that are our age of the oldest. We're seeing older, right? Yeah, no question, are are retiring and need to sell. And so that that's a great opportunity. And the next generation is coming up and I think ready to buy businesses. So I'm excited about the future of Trans World.

SPEAKER_01 15:58

Yeah, I am too. It's it's been it's been going good. Eric, I what's the best way to get in touch with you if somebody wants to buy a business here in Manhattan?

SPEAKER_00 16:07

Uh E. Strauss, E S T R A U S at Tworld.com.

SPEAKER_01 16:12

Eric, thank you so much for being a part of Trans World. Thank you for sharing your story. It's amazing. Appreciate it my time.

SPEAKER_00 16:20

Thank you.