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The hidden hopes behind Mark Cuban’s $3.5B Mavericks sale to casino mogul

Nov 29, 2023

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It’s a bombshell that shocked the worlds of business and sports. Billionaire Mark Cuban is reportedly selling a majority stake in the Dallas Mavericks to Miriam Adelson — casino mogul Sheldon Adelson’s widow. 

When news first broke Tuesday, Nov. 28, that Adelson was selling $2 billion in Las Vegas Sands stock to buy a sports franchise, Cuban’s squad wasn’t high on the speculative list. The NBA is targeting Las Vegas for an expansion team, and the Adelsons are shareholders in a major Las Vegas casino.

Details about the agreement provide another twist to the merger. While Cuban is reportedly selling a majority stake for $3.5 billion, he will keep some shares of his team and will maintain full control of basketball operations. Cuban first bought the NBA team in 2000 for $285 million. The values of sports franchises have ballooned since then.

However, is this about more than just high time to sell? It seems Cuban’s decision to sell to a casino mogul may be more calculated. In early November, he hinted at his goal of making Dallas a national tourist destination through a resort and casino in an interview with the Dallas Morning News.

“When you think of all the places you want to save up to vacation, Texas isn’t one of them,” Cuban said. “And I think resort gaming would have a huge impact and so we’re trying to push in that direction. I think we’d be able to turn Dallas into the number one tourist destination in the country. That’s a big bet, but that’s our goal.”

Straight Arrow News spoke with sports business economist Victor Matheson about the deal. Matheson is a professor of economics at College of the Holy Cross.

Simone Del Rosario: It appears this deal is a lot more than just Mark Cuban deciding now is the right time to sell. Tell me a little bit about what we’re learning about this potential merger between the Mavs and gambling.

Victor Matheson: What it looks like is we have Mark Cuban selling a bunch of shares, but not all of his shares, to the widow of Sheldon Adelson. Sheldon Adelson, one of the richest casino owners in Las Vegas, also owner of the major newspaper in Las Vegas, instrumental in getting the stadium built that moved the Raiders to Las Vegas several years ago.

And so what it looks like here is that this is not just a random sale, but this is a sale to someone heavily involved in the casino industry, potentially looking ahead to a time where the Mavs would build a new arena that would be associated with a casino. Now mind you, that’s way off in the future. But I think we’re laying some foundation right now.

Simone Del Rosario: What happens if that vision doesn’t come to fruition? We know right now that this isn’t a proposal that would even be legal in Texas.

Victor Matheson: Right, so let’s be very clear about Texas and their relationship with gambling. No casinos in Texas. Also very important that sports gambling isn’t even legal in Texas. It’s one of the handful of holdout states that have not legalized gambling since the Supreme Court gave the go ahead for states to legalize gambling back in 2018. Strangely, Texas, Florida and California — three of the biggest states — are three of the holdouts, while most of the rest of the country has legalized sports gambling.

So this is certainly something that’s looking way ahead. I think probably what’s going on is Mark Cuban is saying, “At the very worst, I’m selling a portion of my franchise that’s now over $4 billion in value, cashing out some nice value.” And if we get some sort of synergy with a casino in the future, all the better.

But let’s just be very clear, Mark Cuban has done very, very well, as well as any owner of an NBA franchise has done pretty spectacularly well over the last decade or two.

Simone Del Rosario: So while this might have more to do with this casino merger in this new relationship with the Adelsons, yes, his investment itself, from $285 million to now, has done very well. How unusual is this deal structure that you’re going to have Mark Cuban staying on with the Mavs, running basketball operations? It’s unprecedented, right?

Victor Matheson: Yes and no. We certainly do see ownership groups, very commonly in the NBA and in Major League Baseball, where there are multiple owners, one of whom is the face of the organization while you have other people with significant investments behind the scenes. And so it’s not necessarily that unusual to see a person who is a minority investor as the face and owner of the operations.

For example, right there in Dallas-Fort Worth, the way George W. Bush got his first fame and start, other than being the son of the president, is by being a minority owner of the Rangers. He owned a very, very tiny percentage of that operation but was the face-man, the frontman of that. It made him fabulously wealthy and also made him famous and turned him into governor and later, president.

So it is not unusual, necessarily, for ownership groups to own NBA teams or Major League Baseball teams and have one person who’s not necessarily the biggest owner be the person who’s running the show.

Simone Del Rosario: What does Miriam Adelson and the family get from this? I was running through the list when it came out that she was selling $2 billion in stock on what sports team she was going to buy. The Mavs were not on my list. I really thought that she was going to be picking something in Vegas, that seemed to make a little bit more sense to me. Is this just a good investment right now? Is this the way of sports franchises?

Victor Matheson: Certainly, we’ve seen a gigantic explosion in the price of franchises, particularly in the NBA over the last decade or two decades. The most obvious example is in 2014, the Milwaukee Bucks sold for $550 million. They just sold earlier this year for over $4 billion. That’d be roughly the same sort of franchise value that is implied by the Dallas Mavericks deal here.

So again, gigantic explosion in franchise values. I don’t know whether that’s going to continue. If it continues like that, obviously, investing money in the Dallas Mavericks is a pretty good investment. Of course it remains to be seen whether franchise values continue exploding.

The other interesting thing related to this is Las Vegas itself has gone from kind of a sports desert to a sports mecca. As recently as 10 years ago, they were the largest city in the United States without a major league sports franchise. It looks like they are poised to become the smallest city in the United States with three major sports franchises with now an NHL team, an NFL team and it looks like the the A’s and Major League Baseball will be moving there as well.

They also have this spectacular new venue that some people have suggested is just meant to try to attract a basketball team. But it’s hard to believe a basketball team moving out of one of the nation’s 10 largest metropolitan areas in Dallas and relocating to Las Vegas. Certainly, if this was a smaller franchise and a smaller city, you could see that writing on the wall maybe, but it’s hard to imagine that Mark Cuban and the Mavericks depart the metroplex.

Simone Del Rosario: Yeah, so you’re a “no” on rumors about the Mavs eventually being that Las Vegas team.

Victor Matheson: It seems wildly unlikely that that’s the case. It’s much more likely that they are actually awarded an expansion franchise in Vegas. Again, the NBA could make probably $3 billion or $4 billion dollars right now selling a brand new expansion franchise to Las Vegas. That would mean $100 million in every owner’s pockets immediately just for granting a franchise.

So it’s hard to imagine them allowing a team to move, again, out of one of the 10 largest metropolitan areas to Vegas, when if they really want to cover that market, they could do that by selling a brand new franchise and pocketing that cash.

Simone Del Rosario: Okay, so here’s a super hypothetical question. Is there a situation where the Adelsons are getting into the Mavericks right now so they have their foot in the door with the NBA and can possibly be involved with that NBA expansion team in Vegas?

Victor Matheson: So that’s certainly possible. You do see situations where people enter into sports deals for not necessarily the team they want, but as a stepping stone to the team they’re actually going to get. And so that could certainly be the sort of idea is, let’s make ourselves comfortable with the league in the first place. And then when it comes time, that kind of puts you in the driver’s seat to be a preferred buyer of that new franchise.

Obviously, she would have to divest her money in Dallas if she were to buy an expansion franchise in Vegas. None of the sports leagues allow owners to own a piece of more than one team at a time, that tends to be disastrous in our experience. But it does get you known and comfortable with other owners who are the ones who are going to decide who that new expansion franchise, should one come available, who they’re comfortable selling to. 

Simone Del Rosario: And Victor, back to the present now, do you see any issues with the NBA approving this deal?

Victor Matheson: Again, it’s fairly hard to imagine they do [have issues]. This is a person who’s got extremely deep pockets. Very well known, again, at least in the Nevada area. The NBA, certainly 20 years ago, would have been very reluctant to partner with a casino magnate. But that’s not at all the case now.

We’ve seen most of the leagues, and the NBA leading the pack, being very, very quick to embrace gambling over the last decade or two. I think this would have been a serious problem having a casino owner involved with the NBA 20 years ago. I don’t see that happening today.

Simone Del Rosario: It just speaks to how much sports gambling has evolved and has been accepted in all of this. Look, we’re in business. We like to call out who wins these deals. Who’s the winner here?

Victor Matheson: Mark Cuban for sure, right? He bought low and he’s selling high. And he still gets to continue in his dream, right? It’s been very clear with Mark Cuban, maybe more than almost any pro sports owner in the United States, that he’s in it for not just the money but for the fun.

Here, he’s now made all of the money, right? He came in at $285 million, he’s going out at at an evaluation of about $4 billion. So he’s made a ton of money. The fact that he still gets to be a managing partner in this deal means that he still gets to have the fun of being an NBA owner while also taking the cash from a silent owner.

He’s got everything. He’s got his cake and he gets to eat it, too. He’s got his money and he still gets to be sitting on the bench as an NBA owner. And again, I don’t think there’s anyone who’s ever had more fun managing an NBA team than Mark Cuban.

Simone Del Rosario: He couldn’t have scripted it better. Victor Matheson, thank you so much for your time today.

Victor Matheson: Thank you for having me.

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[Simone Del Rosario]

In a bombshell that shocked business and sports, billionaire Mark Cuban is reportedly selling a majority stake in the Dallas Mavericks to casino mogul Miriam Adelson, Sheldon Adelson’s widow. 

When news first came out that Adelson was selling $2 billion in Las Vegas Sands stock to buy a sports franchise, Cuban’s squad wasn’t high on the speculative list. The NBA is targeting Vegas for an expansion team, after all. In another twist, Cuban is keeping shares of his team and will still run basketball operations. 

Cuban first bought the Mavs in 2000 for $285 million. Adelson is reportedly paying $3.5 billion for majority share. But is this about more than just high time to sell? Is there more to Cuban’s decision to sell to a casino mogul? This interview from a few weeks ago may hold a big clue.

Mark Cuban, Mavericks Owner

There’s no real destination you save up for and that’s a problem. And I think resort gaming would have a huge impact and so we’re trying to push in that direction. And I think we’d be able to turn Dallas into the No. 1 tourist destination in the country. And that’s a big bet, but that’s our goal. 

[Simone Del Rosario]

Victor Matheson is joining us now, Victor is a sports business economist and professor at College of the Holy Cross. 

Victor it appears this deal is a lot more than just Mark Cuban deciding now is the right time to sell. Tell me a little bit about what we’re learning about this potential merger between the Mavs and gambling.

Victor Matheson 

Right. So what it looks like is we have Mark Cuban selling a bunch of shares, but not all of his fears to the widow of Sheldon Adelson, Sheldon Adelson. One a one of the richest casino owners in Las Vegas, also owner of the major newspaper in Las Vegas, instrumental in getting the stadium built that moved the Raiders to Las Vegas several years ago. And so what it looks like here is that this is not just a random sale, but this is a sale to someone heavily involved in the casino industry, potentially looking ahead to a time where the Mavs would build a new arena that would be associated with a casino Now mind you, that’s way off in the future. But I think we’re laying some foundation right now.

Simone Del Rosario 

What happens if that vision doesn’t come to fruition? We know right now, this isn’t a proposal that would be even legal in Texas.

Victor Matheson

Right so let’s be very clear about Texas and their and their relationship with gambling. No casinos in Texas. Also very important that sports gambling isn’t even legal in Texas. It’s one of the handful of holdout states that have not legalized gambling since the Supreme Court gave the go ahead for states to legalize gambling back in in 2018. Strangely, Texas, Florida and California three of the biggest states are our three of the holdouts while most of the rest of the country has legalized sports gambling. So this is this is certainly something that’s looking way ahead. I think probably what’s going on is mark cuban is saying at the at the very worst, I’m selling a portion of my franchise, it’s now over $4 billion in value, cashing out some nice value. And if we get some sort of synergy with a, with a casino in the future, all the better. But let’s just be very clear, Mark Cuban has done very, very well as well as any owner of an NBA franchise has done pretty spectacularly well over the last decade or two.

Simone Del Rosario

Yeah. So while this might have more to do with this casino merger in this new relationship with the Adelsons, yes, because investment itself from $285 million to now has has done very well. How unusual is this deal structure that you’re going to have Mark Cuban’s staying on with the Mavs running basketball operations. It’s unprecedented, right?

Victor Matheson

Well, so yes. And no, we certainly do see ownership groups very commonly in the NBA and in Major League Baseball, where there are multiple owners, one of whom is the face of the organization, while you have other people with significant investments behind the scenes. And so it’s not necessarily that unusual to see a person who is a minority investor is the face and owner of the operations. For example, right there in in Dallas Fort Worth, the way George W. Bush got his kind of first fame and start other than being the son of the president is by being a minority owner of the Rangers. He owned a very, very tiny percentage of that of that operation, but was the Faceman the frontman of that it made him fabulously wealthy and also made him famous and turned him into governor and later, later President. So it is not unusual necessarily for ownership groups to have to own NBA teams or major league baseball teams, and have one person who’s not necessarily the biggest owner, be the person who’s running the show.

Simone Del Rosario

Yeah. Where does Miriam Adelson and the family get from this? So I was running through the list when when it came out that she was selling 2 billion in stock on what sports team she was going to buy the Mavs not on my list. I really thought that she was going to be picking something in Vegas that seemed to make a little bit more sense to me. Is this just a good investment right now? Is this the way of sports franchises?

Victor Matheson 

Well, well, so certainly, we’ve seen a gigantic explosion in the price of franchises, particularly in the NBA over the last decade or two decades. The most obvious example is in 2014, the Milwaukee Bucks sold for $550 million they just sold earlier this year for over $4 billion. That’d be roughly the same sort of franchise value that is implied by the Dallas Mavericks deal here. So again, gigantic explosion in franchise values. I don’t know whether that’s going to continue. If the if it continues like that, obviously, investing money in the Dallas Mavericks is a pretty good investment. Of course it remains to be seen whether franchise values continue exploding. The other of course interesting thing related to this is Las Vegas itself has gone from kind of a sports desert to a sports Mecca. As recently as 10 years ago, they were the largest city in the United States without a major league sports franchise. It looks like they are poised to become the smallest city in the United States with three major sports franchises with now an NHL team in NFL team and it looks like the the A’s and Major League Baseball will be moving there as well. They also have this spectacular new venue that some people have suggested is just meant to try to attract a basketball team. But it’s hard to believe a basketball team moving out of one of the nation’s 10 largest metropolitan areas in Dallas and relocating relocating to Las Vegas. So you know that certainly if this was a smaller franchise and a smaller city, you know, you could see that writing on the wall maybe, but it’s hard to imagine that that Mark Cuban and the Mavericks depart the metroplex?

Simone Del Rosario  

Yeah, so you’re a no on rumors about the Mavs eventually being that Las Vegas expansion team or moving over there.

Victor Matheson 

It it seems wildly unlikely that that’s the case, much more likely that they are actually awarded a an expansion franchise in Vegas. Again, the NBA could make probably three or $4 billion dollars right now selling a brand new expansion franchise to Las Vegas, that would mean $100 million in every owners pockets just immediately just for granting a franchise. So it’s hard to imagine them allowing a team to move again out of one of the 10 largest metropolitan areas to Vegas, when if they really want to cover that market, they could do that by selling a brand new franchise and pocketing that cash.

Simone Del Rosario 

Okay, so super hypothetical, then, is what I would label this question under, is there a situation where the Adelsons are getting into the Mavericks right now so they have their foot in the door with the NBA and can possibly be involved in that NBA expansion team in Vegas.

Victor Matheson 

So that’s certainly possible you, you do see situations where people enter into enter into sports deals for not necessarily the team they want, but as a stepping stone to the team that are actually going to get and so that could certainly be the sort of idea is let’s let’s make ourselves comfortable with the league in the first place. And then when it comes time, that kind of puts you in the driver’s seat to be a preferred buyer of that new franchise. Obviously, she would have to divest her money in Dallas, if she were to buy an expansion franchise in Vegas, none of the sports leagues allow owners to own a piece of more than one team at a time, that tends to be disastrous, in our experience, but it does get you known and comfortable with other owners, who are the ones who are going to decide who that new expansion franchise should one come come available. Who who they’re comfortable selling to. 

Simone Del Rosario 

Victor back to the present. Now, do you see any issues with the NBA approving this deal?

Victor Matheson  

Again, it’s fairly hard to imagine they do. This is this is a person who’s got extremely deep pockets. Very well known again, at least in the in the in the Nevada area. The NBA certainly 20 years ago would have been very reluctant to partner with a with a casino magnate. But that’s not at all the case. Now we’ve seen most of the league’s and the NBA leading the pack being very, very quick to embrace gambling over the last decade or two. And so again, I think this would have been a serious problem having a casino owner involved with the NBA 20 years ago. I don’t see that happening today.

Simone Del Rosario  

It’s just speaks to how much sports gambling has evolved and been accepted in all of this. I’m lucky we’re in business. We like to call out who wins these deals. Who’s the winner here?

Victor Matheson

Mark Cuban for sure. Right? He bought a product. He bought low and he’s selling high. And he still gets to kind of continue with his dream, right? It’s been very clear with Mark Cuban, maybe more than almost any pro sports owner in the United States that he’s in it for not just the money but For the fun here, he’s now made all of the money, right? He’s, he’s came in at 285 million he’s going out at at an evaluation of about $4 billion. So he’s made a ton of money. The fact that he still gets to be a managing partner in this deal means that he still gets to have the fun of being an NBA owner, while also taking the cash from a silent owner. So it’s kind of, he’s got everything. He’s got his cake and he gets to eat it, too. He’s got his money, and he still gets to be sitting on the bench as an NBA owner. And again, I don’t think there’s anyone who’s ever had more fun managing an NBA team than Mark Cuban.

Simone Del Rosario

Couldn’t have scripted it better. Victor Matheson, thank you so much for your time today.

Victor Matheson

Thank you for having me.