♟️ Mark Cuban's Chess Move

Cubes Sold His Baby?!?

In an unprecedented move that was finalized last Wednesday, Mark Cuban, longtime Dallas Mavericks owner and Shark Tank personality, agreed to sell the majority of his basketball baby to the owners of the Las Vegas Sands casino empire (headed by billionaire, Miriam Adelson) for a reported estimate of $3.5 billion. But why now? What’s the long term play? He didn’t actually sell the one true thing that makes him happy, right?? As a true MFFL, we had to investigate…

What’s this Shark’s background?

• Mark Cuban made most of his wealth just before the dot-com bubble popped from selling Broadcast.com to Yahoo! for $5.8 billion.

• Shortly after, in 2000, Cuban beelined to sports and bought the Dallas Mavericks for $285 million from Ross Perot Jr.

• In 2011, Cuban joined the hit ABC show Shark Tank. Since then, he has made around 90 deals and invested nearly $20 million.

• In 2022, Cuban launched Cost Plus Drug Company with the aim of lowering generic drug prices for real folks like us.

What’s on the horizon for the NBA?

• The NBA’s media rights deal expires in 2025 with streaming companies (Amazon, Apple, Netflix, etc.) looking to be involved in these next rounds of negotiations…which means, CA$H MONEY for the league, teams, and players.

• NBA franchise valuations continue to rise (Table 1), as 3 out of the 4 highest priced teams were sold within the last year.

• So…with valuations increasing because of higher popularity, more competition, a new media rights deal around the corner, and possible team expansion to Seattle and Las Vegas, why cash out?

The play can’t just be for more cash, right? (PSA: No one worry! Mark Cuban’s not desperately running to his local sperm bank every Tuesday for a few extra bucks. He’ll be fine. But, seriously, why do this?)

• If he wanted to maximize his returns, why not wait until 2025 when the new NBA Media Rights deal starts? Well…sources indicate Cuban will still be in charge of all basketball operations within the Dallas Mavericks (which is extremely unprecedented) and will have a minority 27% stake of the team.

• Cuban has dropped hints of wanting to expand casino resorts and sports gambling in Texas—with Dallas being the epicenter of it all. What better way to accomplish that than to bring in casino tycoon and MUCH richer partner Miriam Adelson (net worth est. $33 billion 😮)?

• Cuban understands the impact competitive advantage has, not just in business, but in team sports as well. He knows that he was the right man for the job when the NBA started to incorporate technology, media enhancements, and streaming, because that was his bread and butter. But he also knows when something needs to change as team owners become richer and tougher to compete with and both real estate and sports gambling continues to expand.

Where could this new ownership lead?

• More funds to spend on the franchise: Richer owner = more opportunities to spend more for players and dip into a luxury tax penalty.

• TX government can be a tad bit stubborn: The Mavs are on the hook with their current arena lease at American Airlines Center through 2031. This will give Cuban and the Republican-donor friendly Adelson family time to strap on their lobbying boots to try and convince Lt. Gov. Dan Patrick, the Texas Senate, and Texas residents to support casinos and gambling as nearly all forms are illegal in the state.

• TX state economy losing money: Texans are betting billions of dollars illegally and Texas is losing nearly $300 million annually in projected gambling tax revenue to neighboring states like NM, OK (Tribal Gaming), and LA. Bringing in gambling revenue could be used as a long play to bolster the Dallas economy and the state of Texas as a whole. Making it more of a destination for events, family trips, and weddings. Instead of visiting via a Southwest Airlines layover at Love Field or a late night Honey Butter Chicken Biscuit at Whataburger.

• Reinforcements could help: It’s no secret Texas already has an NBA owner and casino operator in Tilman Fertitta of the Houston Rockets, who has been attempting for years to bring gambling to the state. Rest assured, Fertitta will demand a piece of the pie. Ultimately however, the more deep-pocket voices, the better.

Only time will tell…what we do know is that it looks like Cubes knows how to broker a deal without giving up his prized Sealyham terrier for adoption.

Quick Hitters

• 📺 Amazon is in talks of making an investment into Diamond Sports Group as well as signing a multiyear streaming partnership, which would offer the Regional Sports Network (RSN) owner a big time out as Diamond is currently in Chapter 11 bankruptcy proceedings.

• 🍢 Florida State University has taken legal action against the ACC in what could be the first step to withdraw from the league. The exit fee + forfeit of media rights could cost the school around $572 million.

• 🧢 Did the entire Los Angeles Dodgers front office get CPAs within the last year? On the surface, they are in the middle of a billion-dollar offseason after signing 2x MVP Shohei Ohtani and Japanese ace Yoshinobu Yamamoto and trading for + extending former Tampa Bay Rays flamethrower Tyler Glasnow. And this is all thanks to the MLB’s nonexistent salary cap and never before seen deferrals (thank you, Mr. MVP Ohtani).

• ⚽️ Remember that dumb Super League idea back in 2021? Yeah uhh about that…it could be back. The European Court ruled that both FIFA and UEFA unlawfully abused their position by forbidding clubs from joining this league. With sport development company A22 leading the way with updated competition plans and support from top tier Spanish clubs, Real Madrid and Barcelona, things could get a little stickier in the coming months.