“I didn’t buy the Mavs as an investment, I bought them as a basketball junkie,” says Mark Cuban, as he breaks down how he transformed the Mavs into NBA champions. After buying the Dallas Mavericks in 2000 for $285 million, Cuban had the daunting task of turning a team in turmoil into a championship-winning team. Fast-forward 11 years, and the American businessman got his chip. Here’s how Mark trail-blazed his way through the NBA, turned the Mavs around and bagged his ring.
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00:00I'm told myself going in I wasn't going to try to fit in I was going to be
00:04myself and if they like me great if they didn't like me great if they wanted to
00:09force me out great I'm Mark Cuban and I'm gonna break down everything that
00:13goes into running an NBA team so I bought the Mavs January of 2000 it was
00:23285 million dollars I had just sold my company for 5.7 billion dollars in stock
00:29so I thought why not I didn't buy it as an investment I bought it because I'm a
00:33basketball junkie basketball was life I played pickup then I played pickup now
00:36was the season ticket holder so I put my money where my mouth is bought the team
00:41and have had a blast ever since but it was never because it was an investment
00:45although it did turn out to be a pretty good one my first goal when I bought the
00:51Mavericks was to change the culture when you go into an organization whether it's
00:55a company or basketball that has sucked for a decade plus you can't just let
01:01things go on as they were I remember meeting with the players and asking them
01:05what are the things that you would change there was a guy by the name of
01:08Gary Trent and it was like Mark we get into some towns after a game 2 3 4 in
01:15the morning have you ever tried to go get something to eat in Oakland
01:19California at 3 in the morning no disrespect to Oakland doesn't matter
01:22what the city was but the reality was the hotels we stayed at at that time
01:28didn't have room service they just got the cheapest price and I was like this
01:31is ridiculous and that really helped me set the tone we upgraded immediately so
01:35we stayed at nothing but the best hotels we made sure they had not only room
01:39service but healthy foods we brought in nutritionists Dirk Nowitzki used to say
01:44that he would eat chips and candy bars before a game we gave him the
01:47opportunity to be healthy but the other thing that I did that completely changed
01:51the NBA when I bought the team we had four coaches head coach and assistant
01:56coach and two other coaches that did things like work with the guys to
02:01develop skills rebound for them when they wanted to get shots up and those
02:04types of things I realized that we were spending more money to train our office
02:09employees how to use Excel and Microsoft Word than we were on developing our
02:16players to improve their skills despite the fact that we were paying those
02:20players hundreds of thousands of millions of dollars each I went out and
02:24found former Mavericks more than Wiley Greg dry lean and a long long list and
02:29said we want to bring you in and give you each an individual player to work
02:33with and it was up and running within weeks it also changes the culture so
02:38that they understand that I'm ready to do whatever it takes to win when I got
02:45to the NBA in 2000 they thought they were in the basketball business anything
02:49they did that wasn't considered old-school classic basketball was
02:53frowned upon back when David Stern rest in peace David was the commissioner and
02:57Adam Silver was second in charge I used to say NBA nothing but attorneys because
03:02that's how they thought just like a bunch of lawyers they didn't really
03:05think as entrepreneurs you always have to know as a business what business
03:09you're in the NBA and all the professional sports is in the business
03:13of creating experiences that are memorable forever in professional sports
03:18are so unique because it's the one form of entertainment where that ball is in
03:22the air you're down one and if it goes in you're screaming and yelling if you
03:28miss it's the worst feeling that's so different than any other form of
03:33entertainment and if your team is good enough and you win a championship they
03:38throw a parade Google has a good quarter ain't nobody throwing a parade so the
03:43hardest part when I took over the Dallas Mavericks were the other owners they
03:47hated me the Board of Governors are the 30 owners of NBA franchises and we each
03:52own a third of the NBA entity itself and we get together two or three times a
03:57year to discuss everything that's going on from the business and basketball side
04:01of the league all the other 28 teams sat in a room and started grilling me with
04:06questions grilling me are you gonna be like Jerry Jones what are your goals are
04:10you gonna be George Steinbrenner whoever they wanted me to be like them they
04:14wanted me to sit up in the suites and sign the checks I literally remember
04:18walking into one of my first Board of Governors meetings and asking David
04:23afterwards are we allowed to talk you know he's like yeah I want you to talk
04:27I'm like are you sure because doesn't look like anybody else here is going to
04:31talk he goes no Mark that's one of the reasons you're here you know you're a
04:35tech guy you're a media guy you understand things that these guys don't
04:39know so I'm like okay you asked for it everybody else was in a suit and tie I'm
04:43walking in in jeans and a t-shirt and they're all staring at me man I didn't
04:48shut up for 24 years I got fined a lot but I didn't shut up
04:52David Stern was a visionary for sure and he was smarter than me in a lot of ways
04:56you know there would be rules like setting up our own website no you can't
05:00set up your own team website you got to use NBA.com I set up our own website
05:04because the thing with David is he had to deal with the other owners cursing
05:10him out saying why are you letting Cuban get away with this stuff and so he
05:14had to take on that burden for me and he did he was a first-class guy and despite
05:19our differences and what was findable and what should not be findable he
05:24always had my best interest and the best interest of the NBA at heart different
05:31owners have different goals my mission was to win championships I really didn't
05:35care about the rest I didn't try to maximize revenue in fact at one point we
05:39had $2 tickets then they got scalped too much but I always wanted to make
05:42things affordable I didn't want it to be about anything but fans having fun in
05:47the arena and the Mavs winning championships what's changed
05:50dramatically over the years is the valuation of teams it went from
05:54individuals being able to buy them to then corporations buying them as the
05:58prices trickled up to getting to the point now where their ownership groups
06:01that are buying teams because it's really difficult for any one person to
06:04afford them when you represent an ownership group instead of just yourself
06:08you're probably not going to be as vocal you're probably going to be a
06:12little bit more conservative and how you spend money because your partners don't
06:18want to have capital calls where they have to write checks because the team
06:22lost money because I remember my first ten years I never thought of the
06:25valuation of the team it's changed dramatically so in terms of my day-to-day
06:32responsibilities when I first bought the team I had a lot to learn and so I was in
06:37there every single day just absorbing everything that I could trying to figure
06:41out the best ways to market to sell tickets I'd let the CEO of the business
06:46side just run the business side because I wasn't as focused on making money I
06:49just want to make sure the tickets were sold on the basketball side I was always
06:52involved because that's where the real money came into play the big money I
06:56mean I remember in 2001 we traded for Jawan Howard and he had a 21 million
07:01dollar a year contract that's a lot of money now that was incredible amounts of
07:05money then to be able to say yes to a trade you have to know the insides and
07:09outs of the collective bargaining agreement the impact and your ability to
07:13make future trades your draft picks your cap room all these little nuance details
07:18matter and so early on I had to spend time doing that when you have a team
07:25that hasn't made the playoffs in a decade and was voted the worst
07:30professional sports franchise of the 90s it's not what you would call a
07:33destination franchise players looked at it as a intermediary station a stop
07:39before you went somewhere else and that's really what I had to
07:42change fortunately we're getting ready to open up a new arena the American
07:46Airlines Center in 2001 I went and just completely changed the design of team
07:51locker rooms I made it so that every locker had a PlayStation and a TV
07:56screens headphones you know stereos whatever they wanted to put the locker
08:00was set I also bought a plane and we literally designed it so that Sean
08:05Bradley who was seven foot six had enough legroom that he could lean back
08:09and fall asleep without crushing the person behind them but that wasn't the
08:13fun part about the plane the fun part about the plane was lying about it
08:16because what I decided to do was get together with all the guys and said look
08:21we're the only ones that are going to be on here it's not like media or other
08:25people are coming on I want everybody to tell everybody we have a weight room
08:29on the plane that we have a movie room and anything else you want to make up
08:34I'm fine with just you know embellish as widely as you can and I can't tell you
08:39how many times players over the next three years do you guys really have a
08:43weight room on the plane so you get a workout in yes it's amazing you know
08:48just you got to check it out but you have to play for the Mavs in order to
08:50see it general managers talk to each other and they're throwing out trade
08:57deals all the time it's almost like fantasy basketball but then maybe
09:02something happens somebody gets hurt or the style of play you get a new coach
09:07and the style of play changes and all of a sudden it is remember when you said
09:11you had interest in this player well there might be an opportunity and that's
09:14typically how it starts when both teams get to the point where they have a need
09:19they start discussing what the details of the trade will be and then also has
09:24to work within the constraints of the collective bargaining agreement there
09:27are very literal and specific trade rules if your salary for your team is
09:33above X amount that means it's about the first apron if it's above a larger
09:38amount that means it's above the second apron if you're above the second apron
09:42then you cannot make a sign and trade if you're above the first apron you can't
09:48make a sign and trade but you can trade your minimum players as part of a deal
09:51there's all these little details that I don't want to bore you with but you have
09:54to go through all that and the league has evolved so that you have cap experts
09:58you have people who literally are on staff because they learn the salary cap
10:03and the collective bargaining agreement in detail and look for every little
10:07angle that they can find back in the day when I was doing it and there weren't
10:10those cap experts oh my god it was so much easier to fleece the team and then
10:14once you agree to the deal you have to call the league and do what's known as a
10:17trade call the crazy part is you still aren't sure it's going to leak to the
10:22media I mean I literally have had trades where here's the trade call and before
10:28the trade calls even hung up on the word is out and that's how a trade works
10:35the Mavs are probably 25 to 30 percent TV and broadcast 20 percent of ticket
10:43sales 30 percent sponsorships and 25 percent merchandise another when I
10:49bought the Mavs I immediately took the TV row seats the seats where you're
10:53gonna be seen on television and jack them up to $2,500 across period of time
10:58I've had $2 seats but that was got scalped we had $10 seats up until about
11:03five years ago but now to this day we have at least 4,000 seats that are $29
11:10or less you always want to make it affordable relative to everything else
11:14season ticket holders are incredibly important they obviously have the
11:17greatest commitment to your team but from a financial perspective they're
11:20your revenue base they're the ones that you know you have your 10,000 or 12,000
11:25or 14,000 tickets already sold and also allows you to more easily set number of
11:31tickets you make available to the buying public how does revenue share work
11:35that's a good question I'm not quite sure anymore because it keeps on
11:40changing we'll see what happens now because of the new TV deal you know
11:43every time there's a new TV deal over the past 25 years we always hope that
11:48teams don't lose money but they still do because it's so competitive and you want
11:52to win so badly sometimes you're willing to pay that luxury tax and whatever
11:56other taxes and take the restrictions of the collective bargaining agreement your
12:00organization doesn't do a good job selling sponsorships or tickets and you
12:04lose money the NBA always benefited from a TV contract perspective from
12:09competition once things really took off in competition between TV networks like
12:14ESPN and TBS that's when the numbers really started to get a whole lot bigger
12:18and then fast forward to 2023 in particular and you started to get
12:24interest from streaming companies which created a really difficult situation for
12:29linear television because the best viewed events were sports linear
12:35television needed the NBA in particular because the NFL had already signed a big
12:39deal and so that put the NBA in a great position to negotiate to their credit
12:43they put together a phenomenal 77 million 11 year deal is going to jack up
12:48revenues not only for teams but the way the collective bargaining agreement is
12:51organized players get 51% of that revenue and so they're gonna come out
12:56really really well so I sold a majority stake for a couple reasons first and
13:02foremost I can talk tech I can talk media entertainment all day every day
13:07but the world is changing and revenue sources are changing dramatically for
13:12professional sports and now it's become as much a real estate business with the
13:17arena that you have being the center point for the real estate that you're
13:21gonna build around it I just don't know real estate at all and so I made sure I
13:25sold to somebody the Dumont family who runs the Sands who knows that stuff cold
13:29and just as important you know in a social media world today the critics of
13:34the ownership of any professional sports team can be brutal I don't want my kids
13:39potentially feeling the pressure to walk into my spot as owner and have to deal
13:44with that when I bought the Mavs it wasn't a financial investment and
13:48honestly selling it wasn't something I was excited to do but I thought it was
13:51the right time to do none of this was about economics it was and is about
13:56matters of the heart in terms of what's next well I'm still involved with the
14:02Mavs so that's not gone but really where my focus has shifted other than spending
14:07more time with my family is costplusdrugs.com I'm really on a mission
14:10to change healthcare in general but the whole pharmacy industry pharmaceutical
14:15industry specifically we launched January 22nd of 2022 and have already
14:20completely turned the pharmaceutical industry upside down when you go to
14:24costplusdrugs.com and you put in the name of one of the 2,500 medications we
14:28carry we show you our cost we show you our 15% markup you can either pick it up
14:33at a local pharmacy or for $10 we'll have the pharmacist review it and we'll
14:37mail it to you as a result of that we've seen the prices for pharmaceuticals
14:42drop the ability to have a company that I co-founded change the entire health
14:48care industry that's like winning an NBA championship and that's where my
14:52focus is now my name is Mark Cuban and now you know everything there is to know
14:56about owning an NBA franchise