Conversation with SBA CEO Jeff Stoops

Jeff Stoops, President & CEO of SBA Communications speaks with Colby Synesael, Communications Infrastructure and Telecom Services Analyst. In this episode, they discuss Jeff’s background, the importance of recruiting and factors that make a candidate attractive in an interview.

They also discuss how a SPAC brought Jeff to SBA, what the tower industry was like at that time, and his promotion to CEO. Lastly, they look back at the telecom bust in 2001 & the shift in investor sentiment on the tower industry from the time SBA went public to today and look towards new business opportunities including mobile edge computing, data centers and macro tower opportunities.

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Transcript

Speaker 1:                       Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Colby Synesael:               My name’s Colby Synesael, and I’m the Equity Research Analyst at Cowen, covering communications infrastructure and telecom services. Today I’m joined by Jeff Stoops, who is the CEO of SBA, joining us as part of our Leaders, Legends, Luminaries, and Visionaries podcast series. First off, Jeff, thanks so much for being here. Appreciate it.

Jeff Stoops:                      Yeah, happy to be here, Colby. Good to see you.

Colby Synesael:               I wanted to start off today going through some of your history to get a better sense of who you are and how you got to where you are. So you grew up in Wilmington, Delaware, and attended the University of Delaware for two years where you said you majored in having a really good time. But before taking a bit of time off and then transferring to Florida State University to pursue a degree in political science, with the intention to ultimately obtain a law degree. I guess just to start, what made you decide to focus on a law degree?

Jeff Stoops:                      I grew up in a long line of tradesmen and folks who worked with their hands. My father was an engineer. So as I was growing up in that era, so let’s see, that’d be the ’60s and the mid ’70s, there was a general kind of push, at least in my family to be more of a professional. And in those cases they looked at that as like doctors, lawyers, dentists, things like that. So I blew my chance to be a doctor by majoring in having a good time at the University of Delaware, and I do have a lot of respect for doctors today because they actually have to get it right from the start.

                                         And then when I transferred down to FSU, I was intrigued by what other options I had, but to be very honest with you, at that point in life, what was I? 21 or so, while law seemed to be a good idea, the fact of staying in school for another three years was also appealing. But as it turned out, I really enjoyed law school. I looked at it from the start to not be a trial lawyer, but to be more of a transactional lawyer, a business lawyer. And I have to say that I could not be doing what I’m doing today if I had not had that background. So it all kind of turned out.

Colby Synesael:               It’s interesting. I’m in the process right now of interviewing for a new associate, and I’m interviewing these kids that are 22, 23, and some of them have known they wanted to be in equity research, or at least in finance since they were in high school. And they all have these really interesting stories behind them, or they’re just lying to me and I just haven’t been able to figure it out. But what’s interesting is so many people, when I do these interviews now and speak to people like yourselves, you didn’t know exactly what you wanted to do. You had some idea, and really it just works out in the end and you kind of make something of it.

Jeff Stoops:                      I’d be surprised if a 22 year old man or woman really truly has known what they’ve wanted to do for three or four years. That’s a talent that was well beyond me at that age.

Colby Synesael:               Certainly myself as well. So we’re recognizing that you didn’t go to an Ivy League school, and I didn’t either, just for the record. I’m curious, when you’re hiring someone, how much weight you put on the school that someone graduated from?

Jeff Stoops:                      We put some. I mean, Ivy League schools have a certain amount of base requirements just to get in there. But what I really put more weight on is the path of school, how they might have handled themselves in challenging situations. If people really kind of struggled, not struggled so much as really worked hard to get to where they are, and have they overcome some adversities in life. But getting in to an Ivy League school, that definitely is overcoming a challenge, because not everyone is able to do that. But it’s not, I look for much more than that. I look for folks that are hungry and want to work and want to take wherever they are today and be more than that in the future.

Colby Synesael:               It’s such a great word you use, which is hungry. My view has always been that you have to have some certain level of intelligence in education, but really what separates people is their desire.

Jeff Stoops:                      Yes.

Colby Synesael:               And what motivates that could be different for everybody. It could be because that’s what your parents did and you just want to make them proud and do the same thing. It might be because you just want to make money. It might be for other reasons but I’m always looking for, is the desire there? Is the passion there? What’s going to push them to go that extra mile? And it sounds like you look for the same thing.

Jeff Stoops:                      Oh, absolutely. You’ve got to have a certain element of desire, hunger and street sensibility, regardless of what school you came from.

Colby Synesael:               When you are interviewing someone, particularly someone who is earlier, than in their career, what are those key things that you’re looking for? How do you ask the question? How do you pick up that they have that hunger or other aspects?

Jeff Stoops:                      There are certain things in the resume that you can look at. One of the things, and this I’m a bit biased because I had twin boys that played college baseball. Anybody who played sports in college has overcome tremendous challenge. So those folks were always attracted to. Folks that have served in the military. Folks who have proven that they can succeed in team settings and just by mere definition of being in the military or a college or pro athlete, you’re facing challenges every day. And you also know how to deal with defeat, because not everyone wins every day. And those are all great career-molding places that we look at. But in the interview, I would try my best to bear it out, what experiences in life have shaped the particular candidate’s desires and motivations. Are they there because they really want it and they’re hungry for something, or are they just passing time?

Colby Synesael:               Yeah, that’s a good point. And I sometimes ask that, too. I sometimes say, you could be interviewing at a JPMorgan versus a Cowen. Why would you want this job potentially, versus the other? If you got an opportunity to go on the buy side versus the sell side, would you actually interview for that, and what’s your desire to do something like that? Because you’re trying to get a sense of, how much do they want this job versus any job?

Jeff Stoops:                      Exactly. Just because they think they need a job.

Colby Synesael:               I read somewhere you had your first job at 12, and at one point you did door-to-door sales for Fuller Brush, selling household cleaning items. I don’t know who Fuller Brush is, admittedly. And it seems-

Jeff Stoops:                      Yeah, you’re too young for that one, but hopefully some of your listeners will remember Fuller Brush, yeah.

Colby Synesael:               Well, it seems to suggest a pretty strong work ethic. Where do you think that that comes from for you?

Jeff Stoops:                      Well, I grew up in a solidly middle class home. My parents provided what we needed for us, but there were not a lot of extras and additional things. And I learned early on that I like nice things, and would like to have nice things, and there was no way for me to get any of that stuff except to go out and get a job and work for it. So I think my first job was working at a grocery store as a bagger, which I don’t think you can do today at 12 years old, but you could back then. And then Fuller Brush was quite an experience. I realized that I was not cut out for sales, particularly door-to-door sales, although I will tell you Fuller Brush had some of the greatest products. Ask your mom and dad about Fuller Brush, they’ll remember. They’ll remember it fondly.

                                         And then I did construction, I worked retail. I probably had 10 different jobs by the time I was 22. And there were some things that told me what I was well-suited at and what I wasn’t well-suited at, and one of the reasons that I did choose law is it was very clear that I was not well-suited to work in the construction industry. So that was a bit of, helped me steer things there. But where does all that come from? I wanted to go out and have some things that my parents weren’t able, or that frankly they would have been willing but they weren’t simply able to provide, like my own car when I was 16.

Colby Synesael:               Can you teach that, or is this just kind of a function of one’s background, and you don’t necessarily have to come from your background to have it. You could have grown up in a financially affluent background and I’ve seen people that have just as much desire as those that haven’t. But can you teach it, or is it really just a function of how someone was brought up in their own situational background?

Jeff Stoops:                      I think it’s at least 50% genetic. You’ve got to have a certain drive. And whether, like you say, you’re brought up in a middle class background or a very well-to-do background, there’s plenty of those folks who want to compete and have the desire to be the best at what they’re doing. So I think it’s hard to teach, frankly, and that’s why the recruiting process is so important. And over the years we have learned just how important the success or failure of our organization and our employees is really 90% dictated by, do we hire the right people? So after talking that through with you, I’d have to say it’s more genetic than it is learned.

Colby Synesael:               Yeah, no. And I think that, that’s true too. I mentioned that we’re going through a hiring process right now, and if we find the wrong person they leave after six months or they leave even after a year. It just wasted the year of our time, and ultimately we’re having to do it all over again. So trying to find somebody who’s the right person that’s going to stick with it, that’s going to stay with us for a long period of time and be successful, so much of it starts just obviously with making sure we get the right candidate in the door.

Jeff Stoops:                      Absolutely.

Colby Synesael:               So after graduating from Florida State with a law degree in 1984, you go to work for the law firm Gunster in West Palm Beach, where you ultimately become a general partner focusing on corporate, securities, and M&A. We’ll talk about your chance encounter with Steve Bernstein that ultimately brings you to SBA, but before we do that, when did you start to realize you wanted to move in to the corporate world and out of the law world, if you will?

Jeff Stoops:                      Yeah, I really enjoyed the practice of law, and I really enjoyed the camaraderie and the collegiality we had at the firm. And some of those folks have always impressed me as the smartest folks that I’ve ever had the pleasure of being around, and I’ve had a chance to be around a lot of folks. But in a Florida corporate practice, unlike Wall Street corporate practice, it’s quite varied. So we had all kinds of different clients and different types of businesses and different types of tasks. And through all that I got to see a great variety, and I actually must have shown an aptitude to my clients to be more than a lawyer, because I kept getting brought in to much broader, deeper, general business strategy conversations, and I found that I really enjoyed it.

                                         And the thing that, I think has allowed me to make the transition from law to business well is I’ve always had, and maybe it goes back to jumping into things like Fuller Brush sales and construction, I’ve always had an appetite for risk. And you really have to do that and be able to do that, particularly coming from a legal career where, for the most part, you’re trained to avoid and eliminate risk to a business background where you have to embrace it to some degree if you ever truly hope to succeed. So I think there was just a part of my makeup there about appetite and comfort in taking risks. A lot of people thought I was crazy, frankly, to leave a full partnership at the law firm to join a company that did things that nobody really had heard much about or knew much of. But it’s all turned out okay.

Colby Synesael:               So let’s talk about that. So I mentioned a chance encounter with Steve Bernstein, which is the SBA. So it was Steven Bernstein Associates-

Jeff Stoops:                      Correct.

Colby Synesael:               … before you guys shortened it. He’s still also, by the way, the chairman of SBA. How did you meet him? What’s the story there?

Jeff Stoops:                      It’s a good story that I’ve actually gone back to the law firm and told in some large group gatherings, they’ve had me back. I literally was sitting at my desk eating lunch when a call came in from one of my litigation colleagues whose brother-in-law was the CFO of SBA at the time. And he got a call saying, hey, do you guys do corporate work, and we’ve gotten this offer from what at the time, was what today is all the rage, a stack. Back then we called them blind public shells, and this fellow had offered Steve to merge his blind public shell with SBA and give Steve this or that. So Steve needed a corporate lawyer.

                                         And just through the relationship with the CFO and the brother-in-law who was in the litigation group at Gunster, I got a call. I would not have got that call if my senior partner, who was running the corporate department at the time, was sitting at his desk. But he was out to lunch. I was there working through lunch, and there you go. That was one of the twists of fate that have put me in the seat that I’m in today. So Steve and I developed this great relationship. I helped him see that what he was being offered wasn’t all that great.

                                         Steve was a subchapter S guy, he didn’t understand multiples. He thought his business was only worth what was in the bank account, and it’s not that that was any sheer genius on my part. Any good corporate securities’ person would have been able to help Steve along, but we developed this great relationship. I steered him away from that, which he was thankful for, and then really got to become his thought partner even though I was still at the law firm. His thought partner in where to take SBA, and it just so happened that this was the same year of the Telecommunications Act of 1996, which changed forever, the way the duopoly wireless carriers thought about their infrastructure and sharing and things like that.

                                         So chance meeting with Steve, chance time in history, felt things were good at SBA. It was interesting because I had hooked up SBA with an accounting firm and investment bankers and they were going to raise money. Steven owned 100% at time. And every one of these folks that I respected, Arthur Andersen, they were the best, best seller office in town. Alex. Brown led our private placement. All these people came back and raved about SBA, about how clean it was, how well the business was run, how good, for a private company, the systems were.

                                         So a lot of signals were all flashing green to me, and then when Steve said, look, we’re about ready to close, but I really want you to come inside the company. Leave Gunster, be my general counsel, but what I really want you to do is lead the company into our new area of focus, which is owning wireless infrastructure. Because prior to that time the company did not own any wireless infrastructure, they were a services firm. So-

Colby Synesael:               Great story.

Jeff Stoops:                      And that, again, gets back to a bit of the risk tolerance. I had four kids at the time under six years old, my wife was like, “Well, gee, are you going to get health insurance?” Because that’s pretty important. And so, it all kind of turned out. But it’s not something that everyone would have jumped at in my position, but I’m surely glad that I did.

Colby Synesael:               There’s a few things there. Number one is, again, in so many of these stories, as I do more of these types of interviews, there’s some element of luck.

Jeff Stoops:                      Absolutely.

Colby Synesael:               Having to be at the right place at the right time.

Jeff Stoops:                      Absolutely.

Colby Synesael:               But then, A, having the willingness to take that opportunity in this case there was some risk. Having four kids under six, like you said, that’s actually a pretty big deal. Because I find that as I get older, my own risk tolerance has gone down quite a bit to be candid with you. And not only that, you also have a supporting wife who was actually comfortable with you doing that as well, because I also know of situations where, if both people in that family, the adults aren’t on board, that could create a whole level of stress in the background that could prevent that person from being as good as they hoped to be. So I think that, that’s a big part of it as well, is having that support, actually. And then it relates about just taking advantage of that opportunity, being as good as you hope you are and seeing what happens, and obviously you had that occur for you.

Jeff Stoops:                      Everything you said is absolutely right. And I often introduce myself to folks who have no idea of my background, that I’m one of the luckiest folks in the world.

Colby Synesael:               So after 13 years at Gunster, you leave in 1997 to join SBA, as you mentioned, as general counsel. Today the tower industry is well-established in the US, but how would you describe the tower industry at the time you joined SBA?

Jeff Stoops:                      It was undefined. It was fragmented. There was a company called Telecom Tower, which was probably one of the first true independent tower companies, but their business was a lot of paging and other services, because you still had yet to see the wireless carriers embrace, sharing and collocation on other people’s architecture. So Crown, American, and SBA all kind of got their start at the same time, but from three entirely different origins. American was a spinoff of American Radio, and that shaped early thinking around in the investment community, because it was picked up by radio analysts, broadcast analysts, and it’s obviously an extremely different business, but that’s who started following the industry because of just Steve Dodge and the fact that they had grown to know him, so they were going to pick up American Tower.

                                         Crown was a bunch of real estate developers. And SBA, we were actually doing all of the tower work, but we just had never taken the forward step of capitalizing the company so that we could actually own and operate the infrastructure ourselves. But prior, and this was all around ’97, there really couldn’t have been a tower industry prior to that. And it really, I do believe, was as a result of the Telecommunications Act of 1996, which of course spawned Sprint and what’s now T-Mobile and basically got the other two, the duopoly, thinking that, well, they’re going to need to use their money for a lot more things than owning infrastructure.

Colby Synesael:               Wow. What an exciting time that must have been. So in 2000, so three years after joining the company, you’re promoted to CFO. I guess just first off, was that a difficult transition, from GC to CFO?

Jeff Stoops:                      Didn’t seem like it at the time, but now that I look back on it, I’m like, “Oh my gosh. What were people thinking, to let me be the CFO?” But no, I had always been very involved with the numbers. Very detailed, very quantitative in my approach to things. And I had done a lot of securities work and IPO work, and it was really, had we not been going public? I probably would not have made that transition, but I was thought to be a good front person along with Steve, to go out and basically be the road show. And I wasn’t going to be able to sit at that table if I was a general counsel. So I became the CFO and made sure that we had all the folks around me who could regap and understand gap and all that good stuff.

                                         But I always did have a fairly good sense for the flow of money and the things that create value and how much debt to add and what kinds of debt. Those things, and I said early on in our conversation about how well law school prepared me for what I’m doing today, and it’s a lot of those things.

Colby Synesael:               It’s funny, you mentioned how we, on the investment side, only really interact with the CEO and CFO. And in this case it’s you and Brendan and obviously Mark on the IR side. But it is interesting, because there’s obviously this great group of people in these organizations, but at least in terms of who we typically interact with, it’s a very small group and if they want you to be that guy then you need to have that title.

                                         And then in 2002 you’re promoted to CEO, and you’ve now been in that position for nearly 20 years. To be honest with you, when I was thinking about who to interview for our space, I was emailing with Jonathan Adelstein, and I said, who do you think is the best person I could interview on the tower side? Who’s got the best history? I’m like, I think it’s Jeff, but who? He’s like, hands down, it’s Jeff. If you’re going to do this, you’ve got to go to Jeff.

Jeff Stoops:                      Nice of Jonathan to say.

Colby Synesael:               Across the tower space, we’ve seen a lot of CFOs become CEOs. Why do you think that is?

Jeff Stoops:                      Candidly, it’s a financial business more than it is any other type of business. There’s not a lot of, and I don’t mean to demean us or my peers, all of whom I respect, but there’s not a lot of invention. It’s not like we’re finding the cure for COVID or things like that. We’re basically a financial engine that needs to execute well, and because of all the heavy financing and that aspect of the business and the need for that to be a success in this business, I think it’s just more natural than other parts of the organization that typically would give rise to the next CEO. In the car business it could be sales, in the drug business it could be your chief scientist, but-

Colby Synesael:               Great point.

Jeff Stoops:                      That’s just the way our industry works and the things that are really important. I think it’s of all the different disciples, it’s probably most logical to come up through the finance side.

Colby Synesael:               Really great point. How would you describe your management style?

Jeff Stoops:                      I’m active. Some days my guys and gals would say I’m annoying. But I think you have to hire good people, let them do their job, but you have to stay abreast of what is going on. Because there’s a certain rhythm and cadence to our business and an organization that, I believe, if you’re not touching and active, I just don’t think you’re going to be as good a leader.

Colby Synesael:               That’s a good point. Give them enough rope to hang themself, if you will to be successful and have their own impact on the organization, but at the same time be mindful of what’s going on so that it’s never too far out of [crosstalk]-

Jeff Stoops:                      Yeah. I mean, there will be times where my direct reports and I might not talk for a week, but if there’s an important matter, we’ll be talking twice a day.

Colby Synesael:               You also had to contend with the telecom bust in 2001 and 2002. And I believe at the time SBA was probably close to 15 times. It’s funny, we joke about your 7 to 8 times these days. And still wasn’t really a tower core as you mentioned, as much as a service provider. You said that one of the company’s proudest moments was not having to declare bankruptcy during this time. How close was SBA to being forced to declare bankruptcy, and why was that? What was going on?

Jeff Stoops:                      We were very close. We had two private equity firms, distressed investors, who had purchased up a blocking position in our high-yield bonds, which means that they control 66%. So nothing was going to get done without their consent. And they wanted to own SBA, because they had seen what had happened with Pinnacle and what had happened with SpectraSite. So they were on that path, and we were not sure there was another path. But as it turned out, we did pursue another path in parallel, and we actually had two parallel tracks going. One was a Chapter 11 bankruptcy path, but the other path was to sell just enough towers that would allow us to stabilize the fulcrum issue in our debt structure, which was a senior credit piece above, in seniority, the high-yield, and it was basically a non-monetary default.

                                         But at that time in the world, the lending community to telecom went crazy. Historically they’d never taken a loss, and then all of a sudden you couldn’t get a relationship guy on the phone, you were sent directly to the workout group. So what we basically had to do was sell enough towers, and because towers are a unique business model that stand on their own, we could approach it geographically. So we started at the Pacific Ocean, because we weren’t as dense out west as we were out east. And just started coming east, and basically got to the Mississippi River, sold 800 and some odd towers, used that to pay off the debt piece that was the issue. We refinanced with GE Capital at the time for liable plus 750, which at that time looked pretty good. And we slowly got our way out of it.

                                         And the debt guys, they didn’t get what they wanted because they wanted to own SBA, but of course they bought that debt at 30, 40, 50 cents on the dollar and ended up getting paid out at par. So nobody’s crying for them. But deep down, the proud part of that, Colby was, as we were approaching the Chapter 11 side of things, we had all the advisors, we had Wall Street firms and banks and they kept approaching it as like a clinical procedure. Like, okay, you just declare this, and then you come out the other side, and everything’s okay, and look at SpectraSite, blah blah blah. And I’m like, what? You’re talking bankruptcy. This is not a word that I grew up thinking anything good could be attached to. And of course in reality there’s not a lot of good attached to a Chapter 11, because your shareholders get wiped out. Steve [crosstalk]-

Colby Synesael:               Steve would have gotten wiped out.

Jeff Stoops:                      That’s exactly, my next statement, Steve would have been wiped out. And I’ve got all these guys whispering in my ear that, oh, where will you stay Jeff Stoops, and the management team. Well, first of all, you’re not developing the most warm and fuzzy feeling with the distressed debt investors as your future bosses. And then you know that the rest of the shareholders, including Steve Bernstein, who I would not be where I am today without him, he would’ve been wiped out. So this was something that I was just, in my core resistant to, and it gave us, I think, enough impetus to truly pursue that parallel sale path to successful completion.

                                         But again, that was a bit of a lucky break too, because it was just around the time that we were able to accomplish that, that the financial market started to loosen up and things started to look better. And had there been a total lead on financing for our industry that had lasted another six months, we would not be here today.

Colby Synesael:               Wow. These stores are just always so fascinating to me because, for an analyst or for people picking up your business now, we think of it maybe going back a few years at most. But we certainly don’t think of it back in 2001, 2002, and it’s just amazing the story there. 

Jeff Stoops:                      Well, and there’s a big part of our culture that is in that story. I mean, we fought for our lives. We did it, we’re extremely tight as a group, we’re proud of who we are, proud of what we’ve accomplished, and a lot of it has been molded by those experiences.

Colby Synesael:               So when SBA went public in July of 1999, we talked about the tower industry and what the feeling was, and you talked about 1996 Telecom Act being big as it relates to enabling the tower industry to be what it ultimately became. But what was the investors’ understanding of the tower business back when you went public? How did investors, how did sell-side analysts, how did the buy-siders think of towers back when you went public?

Jeff Stoops:                      Very different than today and at that time, unfortunately erroneously, and it caused us a problem. We had a tough time going public. We had to stay on the road an extra week, we ended up reducing our price at which we were selling. We actually had a bunch of selling shareholders, start the process, those got taken out so that it was just a primary issuance, but then to actually get the deal done, those selling shareholders, our private equity and Steve, frankly, had to buy in to the IPO to get it done. Now it’s turned out to be a pretty good investment for him, but it was not easy. And two reasons, we hit a soft patch in the market, but investors didn’t really understand the tower industry and what makes it tick and what makes it a success.

                                         See, we followed American Tower and Crown, and they were both bigger, and the investment community took a somewhat of a Walmart-like approach to their view of the world. It’s like, “Well, let’s see, you’ve already got two companies out there that are bigger, why do we need you?” They did not appreciate the exclusive real estate nature of the business, the fact that a company of any size, with scale, with unique assets is going to have the possibility of doing well. They basically viewed it as, only the big survive. And we weren’t the biggest, and we were not going to be the biggest, so that was a bit of a stumbling block.

Colby Synesael:               Yeah. I mean, for the first few years as an industry in the public markets, it was difficult. You mentioned Pinnacle, which ultimately turned in to Global Signal, and then you mentioned SpectraSite. And both of those companies ended up declaring bankruptcy, which obviously didn’t look well for the space that you had that happen. And to your point, there was five of you, and it was probably hard, ultimately, for people to differentiate, particularly in just knowing the nuance of the space itself. But that obviously started to change.

Jeff Stoops:                      Yeah.

Colby Synesael:               Go ahead, Jeff

[crosstalk]

–

Jeff Stoops:                      Well there were no… Remember, and we were still struggling to find our home on the cell side in the analyst community. I mean, and we had radio guys covering us. There were no real people covering us at that time. We slowly morphed into now, a position where wireless carriers and towers are generally covered by the same people, which is, obviously they’re different businesses, but because they’re so inextricably tied together, that’s a good thing. But it took a while for people to figure out how best to think about us, and it’s ultimately, we’re specialized real estate.

Colby Synesael:               When does that change, though? When does it become a more positive situation? Is it when American Tower became a REIT? Was it during 2012, ’13, when we saw just some fantastic growth as a result of 4G LTE? I mean, when do you start to feel like, we’re finally getting our just dues?

Jeff Stoops:                      Yeah. I think it probably took five to 10 years after we all went public, and it’s like anything else in life, you’ve got to fight and prove yourself. And what I think the investment community realized is, these are good businesses. We have good macro conditions that will keep us good businesses as long as we continue to execute well, and they bear close watching. But it was only, it wasn’t right away, it took five to 10 years and this is part of the fun too, because we got to shape all this as an industry.

                                         And I really feel fortunate that conversations with folks like you, that really helped to play the part in getting the investment community to understand what to focus on and what was important and what was not important. And we’ve gotten there, I think the industry is extremely well-known now. I think it’s mature in its identity. It’s not mature in its future. So much growth and so many different things to do, but I think we all have a pretty good sense of who and what we are now, as to our investors.

Colby Synesael:               That’s interesting. My next question was going to be, do you think it’s fair to call the US tower industry mature at this point, and you would say that in terms of understanding the model, yes, but in terms of the opportunity, no. Can you kind of just give us a little bit more color on that?

Jeff Stoops:                      Well, I think the world has a long way to go in terms of its digital infrastructure and architecture, and we have a long way to go to participate in that as an industry. There’ll be adjacencies which we’ll be exploring. None of us in the US are much into the active electronics side of the business. Many wireless carriers around the world would like someone to do that. So there’s all kinds of different possibilities, but deep down now it’s clear that we are communications infrastructure, and as to where we belong now in a research group or who gets coverage or is this more like radio or is it more like wireless carriers or is it more like real estate? I think those basic fundamental questions of who and what we are, those have been answered.

Colby Synesael:               Okay. So a common statement, I think amongst investors that we speak to, is that the tower business is the best business in the world. The downside to that statement is, it makes it hard to want to do anything else. With that in mind, do you feel SBA and other tower companies will have the luxury to just be a tower operator, or do you think that over time the market will force you to expand and augment your model and strategy?

Jeff Stoops:                      Well, we’re always pushed for growth. We’ve had a pretty unbelievable 20 year run, but that’s not what any new investor wants to talk about is the last 20 years. They want to talk about the next 20 years. So we have to continue to find ways to grow and we have focused on, because we’ve been much more, I think narrowly-focused than some others. I think it’s fair for folks to understand why, it’s because we’ve been focused on return on invested capital. You can move a lot of the different levers that people look at by growing in certain ways and areas, but if it’s not long-term and a good return on invested capital, for us at least, it’s been something that we’ve generally shied away from. So the market needs to be careful to not press for top line growth at the expense of return on invested capital. That would be, I guess, my hope for our futures.

Colby Synesael:               Okay. And I guess to that point, you mentioned that you don’t think of the US tower industry as mature in terms of future growth opportunity, therefore is the presumption that you could continue just on the tower side, or you mentioned as an example, carrier interest perhaps in the electronics aspect of the management of their networks, the lit portion if you will. How do you kind of parse those things apart?

Jeff Stoops:                      Well, we want to find things that will have a good return on invested capital, where it’s a capital intensive endeavor, which is kind of what we are as a business. We’re infrastructure owners. So the things that we can do that makes sense that fit that goal, I think we will explore at which will take us outside the traditional focus of just macro towers. A good example of that is the mobile edge computing side, and the fact that we bought two data centers to help facilitate that. Now, I don’t know that I can justify growing a standalone data center business that’s otherwise unconnected with the rest of our business inside SBA, just because I had the capital to do that.

                                         But what I think, I’m very much justified and our shareholders want us to do is find ways to tie those two worlds together in a way that makes sense for tower company, which is why, the mobile edge computing and actually getting the presences at our cell sites where obviously we’re the best to capitalize on that. Those make so much sense. So those are the kinds of things that you will see us continue to pursue. Plus obviously, the right macro tower opportunities to either build or buy.

Colby Synesael:               To your point on data centers, you’ve gone and acquired two data centers as you mentioned. Do you think at some point data center business at scale and a tower business at scale belong together, not necessarily SBA, maybe you’re not the first one to do it, but do you think that, that’s kind of where the space will ultimately go?

Jeff Stoops:                      Yeah. I think it could because from an operational and a capital allocation and a financing perspective you definitely have basic tools to do both. The real question is, if you’re talking about in public company, does the public world allow it because right there as you know better than I, there has been a focus and you have activists who will come out and preach hyper-focus in your business and hive off this or do that. The days of the truly multi-business conglomerate that are in somewhat disparate businesses, but just happen to succeed because they’re great managers and great financiers.

                                         They don’t see that a lot anymore because the public markets have forced those to be broken up. So you’re going to have to balance all that stuff, but deep down I think that data center is a good business and I’m going to connect it to our towers in a way that everybody says, this is the right thing to do, so keep going.

Colby Synesael:               Really interesting and really great point you bring up about being a public company and having to appreciate not just fundamentally if it makes sense or not, but when the market actually award you for that [crosstalk].

Jeff Stoops:                      Great.

Colby Synesael:               My last question, before we go into what I refer to as the lightning round, but I feel like you’ve been dismissive of this small cell model in some of the public comments that which you’ve made. Is that because you think the financial model isn’t attractive, or because you believe there will be a limited need for small cells provided by third-party providers?

Jeff Stoops:                      Clearly the former, I think there’s going to be a ton of small cells. I just think it is for us a less attractive opportunity based on my return on invested capital comments that I made earlier but there’s going to be a ton of them, there’s no doubt. But do you grow your top line or do you grow your return on investment capital?

Colby Synesael:               We’re going to go to the lightning round. So I have three questions. They’re a bit more lighthearted. And we’re asking for a short response, no more than 30 seconds, but why are there been so many tower companies based in Florida?

Jeff Stoops:                      They all want to be around us and want to be like us.

Colby Synesael:               It’s amazing though. I mean, got Colony down there. Today we have you guys, you have Tarpon, you got a few others I think as well.

Jeff Stoops:                      It’s a good place to live, unfortunately that’s secrets app now. There’s pretty crowded down here, but American Tower Jimmy Eisenstein, good friend of mine he was based down here. And he spent a lot of his early time with Steve Dodge, still with his Florida roots. And one of the big assets that they had were some towers in Florida. Mark’s grown up around these parts for a while, and then a couple of folks, you had Phoenix Tower there kind of a spinoff of the old whatever it was before Vertical Bridge. So it’s one of those things that has just happened, but it’s nice to be able to see each other and talk and meet. And there is some cross-fertilization and pollinization of the companies, but it’s just one of those things.

Colby Synesael:               Right. Next question, will you be attending our communication [inaudible] in the summer in Boulder?

Jeff Stoops:                      Will there be one physical?

Colby Synesael:               I think that they will. We’re going to make that call in mid may, whether or not we go in that direction, but we’ve been doing all of our invites in the last two weeks or so. And I’ve been pleasantly surprised with the amount of people are saying, I hope it’s in person. I’ve already been vaccinated. I expect to be vaccinated. I feel I’ll be comfortable going, and I’m crossing my fingers that it is. So we’re looming like it’s going to be, but we’ll make the official call sometime in mid may.

Jeff Stoops:                      Well, I will participate and I hope I could do it in person.

Colby Synesael:               Okay. And then as a Seminole Boosters, how do you feel about the upcoming collegiate football season?

Jeff Stoops:                      We are going be better this year than we were last year. I don’t know that we will win the ACC this year. We still have a bit of a multi-year healing and restoration process going, but I will tell you that coach Norville, our new hire from Memphis. He is an unbelievable, charismatic, motivational, real deal guy who took that program or frankly, I don’t know that he had his access to the same level of recruiting talent that he will have here in Florida and he took it to the top of their conference. So very, very optimistic for the years ahead.

Colby Synesael:               Spoken like a true optimist.

Jeff Stoops:                      Or a true Seminole that…

Colby Synesael:               Yeah. Thank you so much. I really enjoyed the time with you. And I look forward to speaking with you again soon I’m sure.

Jeff Stoops:                      Colby I look forward to it. Thanks for having me.

Speaker 1:                       Thanks for joining us. Stay tuned for the next episode of Cowen Insights.

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