Mark Cuban knows what he doesn’t know—and he doesn’t know real estate.
That’s what led him to sell his majority stake in the Dallas Mavericks to families linked to Sheldon Adelson, the late Las Vegas casino magnate. Yesterday the NBA announced its approval of the $3.5 billion deal, which will see Cuban keep a minority stake.
The billionaire cofounder of Cost Plus Drugs and Shark Tank star expressed satisfaction with the deal, which allows him to keep control of basketball operations, noting, “This is what I love to do.” But “I’m also self-aware,” he said Wednesday on the court before a game.
“If you look at the teams that spend the most money right now,” he added, “it’s not because of their media deals. It’s because of their real estate empires that they’ve built…And I have no knowledge in that at all. It’s been hard enough learning the pharmacy and basketball business, let alone trying to learn real estate as well."
Real estate will become crucial for NBA teams to succeed on and off the court, Cuban believes, especially as the media industry looks increasingly shaky. With that in mind, he started thinking about the creation of a casino and destination resort linked to the Mavs a few years ago.
“It’s another base of revenue that wasn't there before,” said Cuban.
Knowing little about real estate, he realized he wouldn’t be the one to build such things. “If someone's going to come in as a partner and invest potentially billions of dollars, they're going to want equity,” he noted of the team’s new majority owners.
Not that Cuban thinks he made a bad deal. He believes the new arrangement will lead to the Dallas Mavericks becoming a significantly more valuable sports franchise.
“I still own 27%,” he said, noting that “27% of a watermelon is a whole lot better than 27% of a grape.”
Cuban referenced another deal, announced earlier this month, that calls for the NBA’s Washington Wizards to move from downtown D.C. to nearby Alexandria, Va., where they would play in a new arena situated near stores, restaurants, and conference space, as well as a performing arts center.
The advantage for sports franchises today, Cuban said, is “what can you build,” so you need “somebody who's really, really, really good at that.”
Cuban noted of the new majority owners, “They’re not basketball people; I’m not a real estate person…They’re great at the things I’m not good at."
