Charles and Chase Koch Becoming a Principle-Driven Leader July 2025

The Renaissance Age for Psychedelics?

Author's note: I had been contemplating writing this blog post for a while but for whatever reason had many stops and starts over many months. 

Why the Results Are So Interesting

What makes psychedelic-assisted therapy so interesting to me is not just that the topic is new or unusual. It is the magnitude of the results. In many areas of mental health treatment, progress can be slow, incremental, and incomplete. A medication may help a patient feel somewhat better, or therapy may reduce symptoms over time, but full remission can be difficult to achieve, especially for conditions such as PTSD, addiction, or severe depression.

That is why some of the psychedelic studies are so compelling. The results are not just small improvements on a symptom scale. In several studies, a large percentage of participants no longer met the diagnostic criteria for the condition being treated. That is a very different type of outcome.

MDMA-Assisted Therapy for PTSD

The strongest evidence so far appears to be for MDMA-assisted therapy for PTSD. PTSD is notoriously difficult to treat, especially when it has lasted for years or decades. Many patients try medications, therapy, or both and still continue to suffer from nightmares, hypervigilance, anxiety, depression, avoidance, and difficulty functioning in daily life. That is what makes the MDMA data so remarkable.

In a 2021 Phase 3 trial published in Nature Medicine, 90 participants with severe PTSD were randomized to receive either MDMA-assisted therapy or placebo with therapy. The study measured PTSD symptoms using the CAPS-5, which is the Clinician-Administered PTSD Scale for DSM-5 and is commonly used to assess PTSD severity.

The results were striking. Participants in the MDMA-assisted therapy group had a much larger reduction in PTSD symptoms than those in the placebo-with-therapy group. Even more importantly, 67% of participants who received MDMA-assisted therapy no longer met the diagnostic criteria for PTSD, compared with 32% in the placebo group.

To me, that is the key point. The study was not simply saying patients felt a little better. Two-thirds of the participants receiving MDMA-assisted therapy no longer met the criteria for PTSD. For a condition that can destroy someone’s quality of life for decades, that is a major result.

A second Phase 3 study, published in Nature Medicine in 2023, was also impressive. This study included 104 participants with moderate to severe PTSD. By the end of the study, 86.5% of participants in the MDMA-assisted therapy group had a clinically meaningful response, and 71.2% no longer met DSM-5 criteria for PTSD. In the placebo-with-therapy group, 69% had a clinically meaningful response, and 47.6% no longer met PTSD criteria.

The placebo group also improved, which matters. It shows that the therapy itself was powerful. But the MDMA group improved more. The most important takeaway is that MDMA-assisted therapy is not simply a drug experience. It appears to work through the combination of the medicine, preparation, a therapeutic setting, and integration afterward.

That is part of what makes this treatment model so different from traditional psychiatry. Instead of taking a pill every day indefinitely, patients go through a limited number of highly structured sessions designed to help them process trauma in a different way.

The Durability of MDMA Results

Another reason the MDMA data interest me is the possibility that the benefits may last. Many psychiatric medications work only as long as the patient continues taking them. If the medication is stopped, symptoms may return.

MDMA-assisted therapy is being studied differently. It is not intended to be taken every day. It is used in a small number of therapeutic sessions. That makes durability extremely important.

A long-term follow-up study of MDMA-assisted psychotherapy for PTSD found that PTSD symptoms were reduced one to two months after treatment and that symptom improvement continued at least 12 months after treatment. Another review summarizing earlier MDMA-assisted therapy studies noted that the treatment effect appeared durable at one year and that, at nearly four years, many participants still no longer met PTSD criteria.

If results like that hold up in larger studies, the economic and human impact could be enormous. A treatment that produces durable improvement after a limited number of sessions is very different from a treatment that requires lifelong medication management.

Psilocybin and Smoking Cessation

The results for psilocybin and smoking cessation are also fascinating because smoking addiction is so difficult to treat. Many people try to quit multiple times using nicotine patches, gum, medications, or counseling, only to relapse.

A 2014 Johns Hopkins pilot study led by Matthew Johnson looked at psilocybin-assisted therapy for smoking cessation. The study was small, with only 15 participants, and it was open-label, meaning there was no placebo control group. So the results should not be overstated. But the magnitude of the results was hard to ignore.

At six months, 80% of participants were abstinent from smoking. A later long-term follow-up study found that 67% of participants were confirmed as smoking abstinent at 12 months, and 60% were confirmed as abstinent at long-term follow-up.

Those are unusually high numbers for smoking cessation. What interests me is not just that people quit smoking, but that the treatment seemed to help people change their relationship to the addiction. This is one of the themes that comes up repeatedly in psychedelic research: people often describe gaining a new perspective on destructive patterns that previously felt impossible to break.

More recently, a 2026 JAMA Network Open pilot randomized clinical trial compared psilocybin-assisted treatment with nicotine patch treatment. Both groups received cognitive behavioral therapy. At six months, 17 participants in the psilocybin group had biochemically verified prolonged abstinence, compared with 4 participants in the nicotine patch group.

Again, this does not mean psilocybin is a magic cure. But when a treatment produces results that appear meaningfully better than a standard comparison, it deserves serious attention.

Psilocybin and Alcohol Use Disorder

Psilocybin has also been studied for alcohol use disorder, another condition where relapse is common and long-term recovery can be difficult.

In a 2022 randomized clinical trial published in JAMA Psychiatry, 93 participants with alcohol use disorder received either psilocybin-assisted psychotherapy or an active placebo combined with psychotherapy. The study followed participants for 32 weeks.

The results showed that participants who received psilocybin had a much greater reduction in heavy drinking days than participants in the placebo group. NYU Langone summarized the study by reporting that two doses of psilocybin combined with psychotherapy reduced heavy drinking by 83% on average.

This is important because the study was not merely measuring whether participants felt more hopeful or had a meaningful experience. It measured actual behavior. People drank less. That is the type of result that matters clinically, economically, and socially.

Alcohol use disorder does not just affect the person drinking. It affects spouses, children, employers, friends, and communities. If psilocybin-assisted therapy can meaningfully reduce heavy drinking for even a portion of patients, the ripple effects could be significant.

Ibogaine and Trauma-Related Symptoms

Ibogaine may be even more complicated, but the early results are hard to ignore. Ibogaine has attracted attention for its potential role in addiction, trauma, traumatic brain injury, depression, and anxiety. It also has a more serious safety profile than psilocybin, particularly because of possible cardiac risks, so this is not something that should be viewed casually or outside medical supervision.

A Stanford-affiliated study published in Nature Medicine examined ibogaine treatment in 30 U.S. special operations veterans with histories of traumatic brain injury and repeated combat or blast exposure. Stanford Medicine summarized the findings by explaining that ibogaine treatment was associated with major improvements in disability, PTSD, depression, anxiety, and cognitive functioning.

The study was not randomized and did not include a placebo control group, which is a major limitation. However, the symptom reductions were very large. One month after ibogaine treatment, participants experienced average reductions of 88% in PTSD symptoms, 87% in depression symptoms, and 81% in anxiety symptoms.

What makes this especially meaningful is the population being studied. These were not people with mild symptoms. These were special operations veterans with significant trauma histories, and many had likely tried other approaches before seeking ibogaine.

Because the study was small and uncontrolled, it cannot prove that ibogaine caused all of the improvement. But the size of the symptom reductions makes the findings very difficult to dismiss. At a minimum, ibogaine appears to deserve more rigorous study.

Why These Results Could Matter Economically

The economic side is another reason I find this area so interesting. Mental health conditions are not only personally devastating; they are also expensive. PTSD, depression, addiction, and anxiety can lead to emergency room visits, hospitalizations, disability, unemployment, lost productivity, incarceration, family breakdown, and years of ongoing care.

This is where psychedelic-assisted therapy could potentially be different. The upfront treatment cost is high, but the treatment is limited in duration. For MDMA-assisted therapy, the total cost has been estimated around $11,000 to $15,000 per patient because the protocol requires preparation sessions, dosing sessions, and integration sessions. Therapists may spend 30 to 40 hours with each patient, and often two therapists are involved.

That sounds expensive. But if the treatment produces durable remission or major symptom reduction, it may actually save money over time.

One cost-effectiveness analysis published in PLOS ONE estimated that MDMA-assisted therapy for severe or extreme chronic PTSD could be cost-saving from a payer’s perspective while delivering substantial clinical benefit. A MAPS Bulletin article summarizing the economic research stated that MDMA-assisted therapy could save the health care system approximately $47,000 per patient over a 10-year horizon.

A later analysis estimated that treating 1,000 patients could generate approximately $132.9 million in discounted net health care savings over 30 years, while also producing gains in quality-adjusted life years and reducing premature deaths.

That is what makes the economics so compelling. The question is not whether psychedelic therapy is cheap upfront. The other issue as well is if insurance companies would cover this treatment especially if the payout takes many years and individuals are switching health insurance plans each year. However, Medicare would be different given once you are 65 the coverage is until you pass away (the economics there would make more sense). The question is whether it can reduce decades of downstream costs by helping people recover more fully and more durably.

The Challenge of Scaling the Results

The results are exciting, but they also create a practical problem: how would the system actually deliver this treatment if demand increased?

Psychedelic-assisted therapy is not easy to scale. It is not like writing a prescription and having a patient pick it up at a pharmacy. The treatment often requires preparation, a long dosing session, and integration afterward. One or two therapists may need to stay with a patient for six to twelve hours during the dosing session.

That means the bottleneck may not only be FDA approval. It may be the number of trained therapists and facilitators.

Some estimates suggest that tens of thousands of therapists may need to be trained over the next decade if psychedelic-assisted therapy becomes broadly available. Right now, the number of trained practitioners is far lower than what would likely be needed.

Cost is also a major issue. A 2023 study on group psychedelic therapy estimated that group therapy could reduce clinician costs by 50.9% for MDMA-assisted therapy for PTSD and by 34.7% for psilocybin-assisted therapy for major depressive disorder. For MDMA-assisted therapy, that translated into estimated clinician cost savings of $3,467 per patient.

Oregon’s psilocybin program gives an early example of both the promise and the scaling challenge. The state’s Oregon Psilocybin Services program is one of the first regulated psilocybin access models in the United States. Early real-world data have been encouraging from a safety standpoint, but access remains limited because the model is labor-intensive.

Service centers can only handle so many clients because each session requires trained facilitators, physical space, preparation, and follow-up. Even if demand is high, the number of trained facilitators, available rooms, and session hours creates a natural ceiling.

My Overall View of the Results

My own view is that the results are strong enough to take psychedelic-assisted therapy seriously, but they should still be presented carefully. The most impressive results appear to be:

MDMA-assisted therapy for PTSD, where Phase 3 trials found that approximately 67% of participants receiving MDMA-assisted therapy no longer met diagnostic criteria for PTSD, and a later 2023 Phase 3 trial found that 71.2% no longer met DSM-5 criteria for PTSD.

Psilocybin-assisted therapy for smoking cessation, where a Johns Hopkins pilot study found 80% abstinence at six months and a long-term follow-up found 67% abstinence at twelve months.

Psilocybin-assisted therapy for alcohol use disorder, where a randomized clinical trial in JAMA Psychiatry found a major reduction in heavy drinking days.

Ibogaine treatment for trauma-related symptoms, where a Stanford-affiliated study in Nature Medicine found large one-month reductions in PTSD, depression, and anxiety symptoms among special operations veterans.

Ibogaine treatment has a great potential for people who suffer from abusing opioids. Almost 80,000 people in America die each year for abusing opioids. This study found that after a single ibogaine treatment 50% of people had a reduction in cravings for opioids after 1 week and that declined over time. The interesting point is they found almost 50% of people who abstained were able to be abstinent for 1 years and 33% were able to abstain for 2 years. 

Even more recently ibogaine in a case report showed improvement for a 52 year old woman with Parkinson's disease. She received a gradual increase of ibogaine and after 4 weeks had more energy, improved gait, 

What stands out to me is that these are not minor improvements. In several cases, the studies show large changes in symptoms, behavior, or diagnostic status after a limited number of treatment sessions.

At the same time, the limitations matter. Some studies are small. Some are difficult to blind. Some lack placebo control groups. Some need longer follow-up. The FDA has also requested more data before approving MDMA-assisted therapy.

Even with those limitations, I believe the results are too significant to ignore. If future studies confirm these findings, psychedelic-assisted therapy could become one of the most important developments in mental health treatment in many decades. 

Charles and Chase Koch: All-In Podcast

Chase and Charles Koch on the All In Podcast (May 12, 2026)

Charles Koch April 2016 ABC News Interview

I honestly can't believe it has been 10 years (to the month) this interview took place with Charles Koch when he was promoting his book Good Profit and ABC News reporter Jonathan Karl. 

Charles Koch Milton Friedman CATO Award

Elizabeth R. Koch Divorce

Recently I became aware that Elizabeth R Koch (daughter of Charles and Liz Koch) recently got divorced in 2023. The tip came through my blog site as a comment to one of the blog posts I had written previously. Typically it is not easy for me to look at court records as each county has the records and sometimes you need credentials to access them. The alternative is using a website called PACER that offers the legal documents however the issue is many of the documents can be sealed and the courts often charge for documents. It is even harder to know what information the documents contain until you actually purchase them.  

Elizabeth initiated the divorce from her former husband Jason Peter Kakoyiannis. The couple was married on June 9th, 2012 and the separation date was February 27th, 2023 with the divorce being finalized in August 30th, 2023 in Los Angeles, California. The divorce records show that there were no children which is accurate considering I have never seen any pictures of Elizabeth with her own children. As part of the divorce many of the details are hidden from the public. One of the interesting aspect of the divorce is the mutual waiver of spousal support. Both parties agree that under new circumstances will either seek financial support from the other. All this ensures is that both spouses start clean from a financial perspective. 

Elizabeth had three different attorneys that represented her. Alyssa Dickerson, Dana Lowy (she signed off on the legal paperwork), and Lisa Meyer.  Lowy and Meyer both work for a law firm that handle the high profile/complex family law cases. Her former husband Jason only had one attorney Laura Wasser. 

Jason (Elizabeth's former husband) himself is no slouch as he went to Brown University for undergraduate school, then he earned a master's degree from Yale University, and then went to University of Southern California for a law degree. He started his career working as an attorney and then moved over to the marketing business development side and now is a managing partner at a firm called Ferment. Jason makes a small apperance in a birthday video to Charles Koch here. 

The financial aspects of a divorce are not public like other divorces because there is a "confidential further stipulated judgment" which already has financial arrangements for both parties. Said in a different way this is probably a prenuptial agreement to determine in the event of divorce what would happen to both parties. Over the decades the Koch family has been private in terms of legal proceedings. For example after the Koch vs. Koch trial Charles, David, Bill, and Frederick all signed a agreement that they could not discuss the details of the case ever again. Koch Industries itself for many decades has remained fairly private. Even for instance the revenue that Forbes publishes each year Koch will never confirm if that number is 100 percent accurate but just uses it as a range for roughly what their revenues are.

Previously I had blogged about Elizabeth Koch and her relationship with a previous boyfriend with its ups and downs. Actually the post I had on Elizabeth Koch is the most popular blog post ever on my blog. Last year Elizabeth spoke with the New York Times regarding the different charities she was involved with to help people with their "perception boxes". She does admit when she was younger she suffered from panic attacks and meltdowns and was taking pharmaceutical drugs to help with her mental illness. She admits that she has taken psychedelic drugs in the past even though that they are currently illegal. She had mentioned that when she took the psychedelics she felt as if Looney Tunes characters were coming out of her body. At one point she went to Peru and took ayahuasca and then started vomiting and at one point found herself in a nudist colony. I honestly wonder what Charles Koch would think of all this. For the New York Times article Charles Koch declined to be interviewed but had mentioned that he was delighted and couldn't be more proud of his daughter for trying to make the world a better place. Having said all this I still believe that Elizabeth Koch is a very fascinating person however I could maybe see how some of her personality traits may not work in a long term relationship.

Her brother Chase Koch is also divorced and was divorced in 2020. I did a blog post about that here. It is interesting that two children that came from parents who have been married over half a century now find themselves both divorced. Liz Koch herself was divorce before she was with Charles Koch. However it is hard to know upon closed doors what really happened in each case as there are always two different sides to the story. Elizabeth was married for roughly eleven years and her brother Chase was married for roughly 10 years.

The effect of Elizabeth getting divorce doesn't impact the future of Koch Industries however given that Elizabeth didn't have children. Charles Koch in a 2023 Forbes interview mentions that he has gifted Chase and Elizabeth equal amounts of non-voting shares of Koch Industries. Non-voting just means that as shareholders they don't get a say in how the company is run (from a shareholder perspective) or can control the company, however still in theory should receive the dividends generated from Koch Industries. In the future I am curious to see what happens with the ownership of Koch Industries after Charles Koch passes and there will be many potential shareholders with Chase, Elizabeth, Mary Julia, David Jr. and Mark Koch. 

Koch Industries Inc. Historical Dividends 1984-2024

Recently I did a analysis on the historical dividends of Koch Industries. I have data going back to 1984 and have recent data up until 2024 on the dividends of the company. This represents 40 years of data which is a pretty good data set given how long Koch Industries has been around for. In order to obtain the historical information going back to 1984 I had to obtain access to historical Forbes, Fortune, Wichita Eagle and other articles that have been written over years about the Koch brothers and Koch industries.

Back in the 1960s Koch Industries paid out a pretty small dividend to shareholders. In 1961 the company (by my estimation) had roughly $117,000,000 of revenue, profit of $3.5 million (the revenue was derived based off historical single digit profit margins), and Koch Industries paid out total dividends of $150,000. The year that Fred Koch died in 1967 Koch Industries had about $177,000,000 of revenue but only paid out dividends of $300,000 (according to Sons of Wichita). Between the start of the 1960's to the end of the decade the dividends for Koch Industries more than doubled. Charles Koch didn't take over Koch Industries until 1967 (after his father Fred Koch passed). 

In order to try to best estimate the historical dividends for Koch Industries what I had to do is take the revenue of the company utilizing sources like Forbes and Fortune. They both estimate the revenues of Koch every year and then I had to apply a profit margin assumption for the company. In this 1974 Forbes article Charles Koch doesn't exactly say what the profit of Koch Industries is by confirms that $100 million of profit is an accurate number. The company had $2 billion of revenue in 1974 which would make the profit margin roughly 5%. However, by the 1980's the profit margin of Koch Industries was only 3%. 

By the late 1990's the profit margin was only 1% as Charles and David Koch had to battle their brothers and other Koch Industries shareholders which led to a major distraction where questionable deals. It should be pointed out that historically Koch Industries has gone through ups and downs like they did in the 1970s losing money with the estimated lost ranging from $50 million to $80 million-within their shipping business, then again in 1998 when they purchased Purina Mills with an estimated loss of $120 million on that business). 

When I evaluate the historical profit margin of Koch Industries in the past from either published data or estimates I get roughly a 2% profit margin. I assumed a 2% profit margin from 1984 until 2002. After the Purina Mills loss and the Koch vs. Koch lawsuit was over the leadership decide to make changes which I believe would result in higher returns over time. For that reason the profit margin from 2003-2011 is 5%. In 2012 it was estimated that Koch Industries had a profit margin from Forbes of 10%. However I believe this is somewhat overstated as Koch industries over the past decade or so has gotten into a lot of different technologies and even Chase Koch has mentioned that a lot of these projects are "pre-revenue" (this was covered here) or in other terms not making any money. My estimate would be that Koch might have to write down some of the businesses under Koch that are related to technology. With that all said beginning in 2011 I assumed the profit margin was on 7% (compared to 5%). This also reflects the fact that historically Koch Industries was tied to the oil and gas business (which historically made up a large percentage of their revenue and profit) and we finally business which can have much lower margins than other businesses.

There might be questions of how do I know that this data is accurate and this is a good and valid question. One way to check is Pro Publica within the past couple of years published information regarding the top income earners which included Charles and David Koch. Pro Publica had estimated that from 2013 to 2018 that David Koch had roughly $234,000,000 of annual income each year. When I look at the estimates that I have for 2013 to 2018 I come up with an average of $231,000,000 which is fairly close. However there are some things for instance that I'm not including (for example any salary or bonuses that Charles and David Koch earn from Koch Industries). 

The growing dividends over the years has lead to the Koch Industries shareholders being able to enjoy their investment. David Koch would enjoy toys from now and then. He mentions in this article that in the 1980's had only one Ferrari and not 15. David would enjoy taking a private jet with his close friends and visit Africa, the Himalayas and the Amazon jungle. In addition to this he in the past he has had a $100,000 Alaskan cruise where he rented a minesweeper that was converted into an excursion ship, and he would charter three helicopters before getting into the boat. Even in the 1990's David had a car and driver pick him from his office (however the family didn't have a social secretary). Later on the Koch family had a chef and three nannies. In addition to spending money on himself David also would regularly give over half of his income to charity). In this post I covered David Koch and his lifestyle. Even before David had his extreme wealth he did like to live a little large. In August 1993 David through a lavish party on a Saturday night after beating prostate cancer at his Southampton estate. David spent $100,000 just on the fireworks, With dancing by the tennis courts in pool and had several famous sous chefs that had made to order omelets at 3:00 AM. Now that is a life! I covered the different homes and lifestyle of David Koch in this article. 

The growth of Koch Industries was fueled by a couple of things. The first is Koch Industries policy of reinvesting 90% of the profits back into the company (I don't know of any other major company public or private that does this). Reinvestment of profits back into the company compounds quickly over time. Also Charles Koch has spent his whole career focusing on ensuring that his company can add value and provide products and services that customers value. Believe it or not this isn't typical of most companies. Many companies just believe here is our product and the customer needs to accept it without thinking through if it provides value, how it can be improved, and the wants and needs of customers. The company back in 1960 was only paying out $150,000 to all Koch shareholders, which grew to $28 million by the early 1980's, and I estimated in 2024 the dividends Koch Industries pays out is roughly $691 million (based on a profit margin of 7%, corporate tax rate of 21%, and reinvestment of 90% of the earnings back into the company). This would say over between 1984-2024 the dividends grew at an annual rate of 10%. Charles Koch and his company have rewarded shareholders over many decades with adding more commas and zeroes to their dividend checks and the main shareholders are now billionaires as a result of the long standing growth. 

David Koch Jr and Mary Julia Koch Foundations: Giving Away 40% Of Their Annual Income

Recently I discovered that both David Koch Junior and his sister Mary Julia Koch each have their own charitable foundations. I have previously discussed Chase Koch and his family foundation here. Family foundations are required to file a tax return with the IRS each year and report any contributions and also any distributions to charity as well. Foundations are legally required to distribute 5% of their assets each year. Previously I covered David Koch and his giving here. David Koch Jr Foundation was created in August 2022. David Jr's mother Julia Koch also has her own family foundation as well (along with a website as well). The family foundation for Julia Koch, Mary Julia, and David Koch Jr. have mission statement "to promote the common good and general welfare of the community".  

The David Koch Jr Foundation although created in 2022 didn't have any contributions until 2023. The foundation had $28 million of contributions. The foundation paid out $5 million in grants which would be about 18% of the total contributions for the year. The $5 million contribution went to The Allen-Stevenson School in New York. The school goes from kindergarten through the 8th grade. David is an alumni of the school and graduated in 2014 and the school has their gymnasium named after him. David Jr then went on to the Dalton School and graduate in 2017 and then Duke University and graduated in 2021 with a degree in political science and government and last we knew worked as a membership experience executive for Madison Square Garden Sports. His most recent role is a basketball operations assistant for BSE Global (a brand that includes the Brooklyn Nets-his family recently purchased an interest in the team). 

More recently in 2024 the David Koch Jr Foundation donated $20 million to Columbia University for glomerular kidney disease (I am unsure if David Koch Jr actually suffers from this disease himself personally). The 2024 tax form for the David Koch Jr Foundation isn't available so it is hard to know what percentage was given away.

David Jr suffers from severe nut and shellfish allergies and has to carry an epi-pen. His parents in 2017 donated $10 million to Stanford to perform research on allergy and asthma and the new allergy clinic was established in 2022. The money donated was used to create a 4,000 square foot facility that featured 14 exam bays and allowed for 20-30 appointments per day. 

Mary Julia Koch gave $5 million to Harvard University for launch grants and undergraduate scholarships. Mary Julia graduated from Harvard University in 2023 as a history major and also was the editor in chief of the Harvard Independent (Harvard student newspaper). Academically while she was at Harvard she did extremely well. She graduated summa cum laude with a degree in history and graduated cum laude from Harvard College. In addition she was named John Harvard Scholar (top 5% of her class). I am sure her father would be proud as in 1987 David Koch would reflect on his college experience as "great friends, wild parties, athletic triumphs, academic successes, and actually learning something useful". 

The Julia Koch Foundation is the largest foundation for the family. The foundation was established in February 2023 and had contributions of $55 million. In February 2024 Julia Koch Family Foundation gave $75 million to NYU Lagoon Health Ambulatory Care Center in West Palm Beach for a state of the art facility. The eight story facility will have enough space for 50 doctors and serve 150 patients annually. As part of a press release Julia Koch can mention that her and her family had been impressed by NYU Langone for the past 20 years.

Julia like her children also gave $5 million away to a school that she attended. Julia gave $5 million to University of Central Arkansas (she graduated in 1984 with a degree in marketing and was a Gamma Beta Phi-in the top 20% of her class and here she is her junior year, sophomore year, and freshman year). She wanted to support educational initiatives for the College of Arts, Humanities, and social sciences. Julia came for very humble beginnings in a small town in Conway, Arkansas (her house growing up was less than 2,000 square feet and 2 and half baths). In 1998 she had told the New York Times that she thanked God every day and in the 1980s was making $200 per week (this would be around $32,000 in 2025 dollars) as a fashion designer assistant and was worried about paying the rent and finding taxis in the rain. She had said that those were very hard days and she enjoyed taking on the role of being David Koch's wife. Julia and David went on their first date in January 1991 and after the date Julia said "I'm glad I met that man because know I know I will never go out with him". Apparently on the date David claimed he was a little too forward with his humor.  After 6 months Julia and David ran into each other and David introduced himself and not realizing they had previously gone out. Julia had to remind David of this and David had to get out his "trusty black book" to confirm.  By 1995 they were looking at purchasing a home together (at Julia's urging since David had a 1970's UN Plaza bachelor pad). David was diagnosed with prostate cancer in the summer 1995 and after dating for four and a half years gave David two choices he would "be a live husband or a dead bachelor" (they were married in May 1996). Julia worked as a fashion designer assistant in the 1980's and early 1990's however hasn't worked since 1993.  

For 2023 when you add up the assets of the Julia Koch Foundation ($65 million), the Mary Julia Koch Foundation (~$3 million), and the David Koch Jr. Foundation ($23 million) gets roughly $91 million of assets. As I write this in February 2025 Julia Koch is worth roughly $74 billion. The contributions for 2023 were $55 million (Julia Koch), $7.6 million (Mary Julia Koch), and $28 million (David Koch Jr.) which is around $90 million of charitable contributions for 2023. 

In the last estimate I had for the Koch family I had estimated that the dividends for David Koch's family would be $193 million per year (this was based on Koch Industries having $115 billion of revenue per year). My new update for the dividend amount is $210 million per year (the revenues for Koch Industries has increased to $125 billion per year). If Julia Koch and her family are receiving dividends of $210 million per year and giving away $90 million per year (for 2023) this would say the family is giving away over 40% of their income to charity. David Koch back in 1999 told MIT Spectrum that he regularly gave away 50% of his income every year. It appears the family even after he has passed is consistent with this principal. Giving to charity does reduce federal and any state income taxes they may owe as well. 

Clearly the Koch family has come into money after David Koch passed. Although the family does not give a large portion of their assets they are giving away nearly 40% of their income which is a large percentage considering most religious organizations suggest tithing at only 10%. Also, it should be pointed out that all these organizations they are giving to are not political in any nature and are only to their former schools and for medical research.

In Defense of Live Nation, High Ticket Prices, and the Department of Justice Investigation

Recently I purchased a ticket to go see Sebastian Maniscalco and was surprised how much I made in "ticket fees" when I ordered the tickets. I was curious to see what caused the high ticket price and decided as a result to write this blog post. 

Recently the U.S. Department of Justice sued Live Nation (Ticketmaster is a subsidiary of Live Nation as a result of a merger back in 2009).  The central claim is that Live Nation has monopoly power over people who would like to see a live event and therefore should be broken and as a result to create more competition to potentially lower ticket prices. 

According to the Justice Department Live Nation controls about 80% of ticketing for major events and 60% of concert promotions 60% of concert promotions at major concert venues. The CEO of Live Nation disputes the percentages given how the Justice Department has a more narrow definition of what a major concert venue is. Live Nation President Joe Burchtold went on CNBC to explain when you look at potential comparable venues their market share is only 50-60%.  

Part of the issue is a lack of understanding how the business works. You have multiple groups in the mix. First you actually have the actual artist, then you have the business team for the artist, then you have the promoter, then you have the actual venue, and then you have the ticketing company. The artist and their business team have to decide what the financials for the tour look like and select a promoter they would like to use. Live Nation and AEG Presents are the two largest promoters in the industry. The promoter can offer cash guarantees for the tour (the guarantee will depend on tour expenses and how popular the artist is the guarantee will depend on tour expenses and how popular the artist is). In addition to the cash guarantees the artist may get a percentage of ticket sales depending on how successful the show is. The promoter has all the financial risk as they have to ensure the tour is financial successful and have to work the logistics of obtaining the venue, transportation, and have to work with the business team of the artist to price the tickets at a reasonable level. Live Nation in 2023 paid artists $13 billion. Live Nation for 2023 had revenue of $22.75 billion. In addition to this Ticketmaster has spent over $1 billion since the merger with Live Nation to improve the technology. During COVID Live Nation had to borrow $1.2 billion to borrow $1.2 billion 

Taylor Swift's Eras Tour grossed $1 billion in revenue, with each show grossing $17 million, the average ticket price was $238, and 4.3 million tickets being sold. The cost of the logistics and transportation was $30 million. In addition to this Taylor paid the crew $55 million in bonuses as the tour had 50 production truck drivers. So just the transportation and logistics was $85 million. Also the tour had 131 different performers . Forbes put some pencil to paper and estimated for the first 22 performances roughly $300 million of revenue for the tour was earned, Taylor and her team earned $110 million from performance (after touring/production costs) and Taylor earning $30 million (after expenses, taxes, agent, and publicist). The Eras Tour ended up having 152 shows so doing some math would say Taylor made $207 million after expenses and fees from the tour. Ticket prices for the same show varied by each city. The highest ticket price in Kansas City was going for $450,000 while in Seattle were going for a little over $4,000 (for essentially the same show). The artist usually makes 90% of the ticket fee. LiveNation keeps around 6% of the ticket price and the profit margin (given LiveNation has their own costs) and has a profit margin of 2% on tickets. So if the average ticket price for Taylor Swift was $238 Live Nation made less than $5 per ticket. AEG was the promoter for the Eras Tour and their profit on promoting is 2% so add another $5 per ticket. So on a $238 ticket Live Nation made $5 per ticket so $21.5 million (on 4.3 million ticket sold) and AEG the promoter made $21.5 million of profit during the Taylor Swift Eras tour compared to $207 million Taylor Swift made after expenses (closest thing to a profit margin for an apples to apples comparison). Part of the reason why ticket prices for Taylor Swift were so expensive is two fold. One is she had not toured in at least 3-4 years and post COVID there was pent up demand to see in person concerts which fueled over 14 million people trying to obtain 2.4 million tickets which caused the Live Nation site to crash. The demand was so high that Taylor in order to meet the demand would have had to play 900 concerts (20 times the concerts she performed or over 3,000 shows which would have added another 2.5 years to her tour-assuming she performed every single night). 

Most people are upset (including myself) about the service fees for the price of one ticket. However, the venue determines what the service fees are and Live Nation or the ticketing company passes these fees along to the consumer. The venue gets about 67% of the service fee and the ticketing company only earns 7% of the service fee. For all the venues that Live Nation owns they have moved to all-in-pricing since Fall 2023 and actually have seen an 8% increase in ticket sales as a result. Also the venue gets to decide if the all in price is displayed or if the service fees are charged. The profit margin on this part is only roughly 2%. Also it is important to remember that Live Nation has 50,000 concerts or events. Ultimately only the top 5-10% of artists are able to command high prices as the demand for their performances exceed the supply of available tickets.

The reason for high ticket prices is multi-faceted. Given consumers during COVID weren't able to see live concerts drove up demand for these services. In addition also the cost to produce the actual show increased since COVID. Additionally artists use to make money from album sales or music sales however the artists now have to give the music away and tour in order to make their money back. If anything some artists are underpricing their ticket prices since secondary markets like StubHub and SeatGeek exist. Given that the secondary market for tickets is roughly over $2 billion says that this is precisely how much artists are undercharging. Artists and their management teams have to walk a fine line between being able to make money, while not enraging the fan base of the artist. 

ProPublica The Top 400 Income Earners Americans and Charles and David Koch and Koch Industries Dividend Estimate Update

Within the past year ProPublica released information on the 400 richest Americans. The actual information came from leaked IRS records that came from an IRS contractor. The contractor (Charles Littejohn) is now facing criminal charges for leaking the confidential information to two news organizations (ProPublica was one of the news organizations).

Charles and David Koch showed up on the list of top 400 highest income earners. According to data from ProPublica from 2013 to 2018 Charles Koch earned an average of $213 million per year. His brother David Koch earned on average $234 million per year. It is interesting to point out that Charles was the 153rd highest earning individual in the United States and his brother David was 136th even though they had the same ownership percentage within Koch Industries. There are a couple of reasons why this could be true. The first is David Koch owned many different homes all over the United States and a sale of one of these homes could have increased his adjusted gross income (AGI)-this is the metric that ProPublica used for income. Another potential difference would have been if David Koch's tax and financial advisors sold any other assets (stock/bonds/etc.) during this time period that his brother Charles Koch didn't sell. 

Evaluating these numbers and comparing them to what I previously have estimated is a useful and entertaining exercise (I am curious how close I am). My first dividend estimate back in 2015 suggested that David and Charles Koch were each earned around $200 million per year. My estimates have varied over time given new information that was presented. My last estimate for Koch Industries dividends was that Charles and David Koch each earned around $800 million in dividends however I believe this figure is grossly overstated. The biggest reason for this is the assumed rate of return that Koch Industries earns on their revenues. Steve Feilmeier in this YouTube video stated when Koch Industries evaluated $40 billion of investments over many years the average return was 12-13%. Daniel Fisher for Forbes back in 2012 estimated that Koch Industries earned a 10% pre-tax profit margin. However, this figure seems to be high for a number of reasons. The first is if you look back at publicly available data Koch Industries has historically had a low profit margin. Koch Industries is a large conglomerate of various different companies and no longer just in the oil and gas industry. 

In 1961 Koch Industries generated $3.5 million in profit. Although an exact figure for the revenue of 1961 can't be found the 1960 revenue for Koch Industries was $70 million. This would say the profit margin in the early 1960's for Koch Industries was roughly 5%.  

Back in July 1974 when Forbes did a profile of Charles Koch and Koch Industries the reporter had had Charles Koch if their profits were $100 million and Charles responded to the reporter as a typical engineer would that "You're not off by a whole order of magnitude". According to the Forbes article, in 1974 Koch Industries had revenue of roughly $2 billion which would put their profit margin at 5%.   

In the 1980's Koch Industries continued to have a low profit margin. Beginning in 1980 Koch Industries. In 1982 Koch reported $565 million of pre-tax earnings on roughly $17 billion of sales. The next year the company reported $467 million of pre-tax earnings on $15.6 billion of revenue. In 1988 the company reported a profit of $400 million on $16 billion of revenue. This would say even though the 1980's was a decade of greed Koch Industries on average only had a profit margin of roughly 3%. What is even more interesting is how Koch Industries nearly ended the decade with less profit then at the beginning of the decade. 

In 1994 the Dallas Morning News had estimated that Koch Industries made $308 million in profit on $23.7 billion of revenue. This would say Koch Industries had a profit margin of 1%. In the mid to late 1990's Koch Industries got into trouble investing in projects that ultimately didn't turn out well. Koch in the 1990's was spending plenty of money on Purina Mills and ultimately lost $120 million on it. Charles Koch in this video explains the failures during that time

Using a lower profit margin for Koch Industries of around 5% changes the numbers for how much Koch Industries pays out in dividends. In 2015 (I took the midpoint for the ProPublica estimate) Forbes estimates Koch Industries had $115 billion of revenue. If you take $115 billion revenue x 5% profit margin would say the Koch generates $5.75 billion in profit. Assuming Koch Industries pays 20% for corporate income taxes would say Koch has $4.6 billion of after tax cash available. Koch historically reinvests 90% of their profits back into the company which would say that the company reinvests $4.1 billion back into the company leaving $460 million left over to distribute to shareholders. Since Charles Koch owns 42% of the company it would say that roughly $193 million of Koch Industries dividends would be paid out. David Koch's family would also receive the same amount $193 million) given similar ownership interest. These numbers are also similar to what was reported on the tax return for both Charles and David Koch. Also there may be other income for Charles and David Koch (dividends from stocks/bonds/other investments) that would push up their income. 

The bottom line is Koch Industries is large company with a possibly low profit margin. However, the fact that the company has reinvested 90% of their earnings back into the company has help the company growth dramatically. According to Sons of Wichita the company in 1967 paid out $300,000 in dividends to shareholders. Using the updated figures I would estimate that Koch Industries Inc. paid out $500 million in dividends (based on $125 billion of revenue). This would say over a 56 year period Koch Industries has increased their dividends by 14% per year. Actually this figure seems reasonable given the company has historically grown 12% per year. The story of Koch Industries and it's magnificent growth given their unusual policy of plowing 90% of their earnings back into the company every year.