The sales of most professional sports teams are fairly predictable.
It happens because owners die or can’t figure out how to pass the team on to their families. They run out of money, focus more on other activities, or get fired for misbehavior.
Once the decision to sell is made, the process is relatively public. Bankers are appointed, potential buyers register interest, an auction is held, and weeks or months of reporting in the news media follow.
So it came as a complete surprise last month when the families that control the Las Vegas Sands casino empire announced, without warning, that they had reached a binding agreement to buy a controlling stake in the National Basketball Association’s Dallas Mavericks from Mark Cuban. The only thing that made sense was that the situation involved Mr. Cuban, who had long managed the Mavericks in an unconventional manner.
However, more than two weeks later, the key question surrounding the sale is: Why did Mr. Cuban do it? – remains mostly unanswered. Mr. Cuban, chatty and authoritative, who always seemed to have more fun than any other owner, declined to speak on the record for this article. The Adelson and Dumont families, who are concerned about moving forward with the NBA’s approval process that includes due diligence and votes on the sale by other team owners, declined to comment beyond a statement expressing their excitement.
But what is clear is that the sale represents a window into the rapidly changing nature of the sports business.
When Cuban bought the Mavericks in 2000, with deep pockets from the sale of Broadcast.com before the dot-com bubble burst, professional sports teams were still essentially just teams.
Now they are the anchor for larger commercial enterprises. Major tenants of arenas that represent the beating heart of vast entertainment complexes, such as in Sacramento. Prime content for regional sports networks or other media conglomerates, as in the case of Washington, D.C., brands for millions of fans newly allowed to bet on sports, as in the case of Phoenix.
Mr. Cuban is also many things — a dot-com billionaire, the owner of a company trying to lower prescription drug prices, and, for another season, one of the lead investors on the reality show “Shark Tank” — but what he’s not is a real estate mogul, which provides a potential incentive to sell.
The Dallas Mavericks partially own the American Airlines Center, where they play their games in the Victory Park development just north of downtown. But while the owners of the charter team, the National Hockey League’s Dallas Stars, have invested in land near the stadium, Cuban has mostly expressed annoyance that it takes away fan parking lots. Now he’s changing his tune.
“Maybe Cuban wants to copy what has worked, take control of the ownership he doesn’t have in Victory Park, and take it to a new level with a casino and resort integration,” said Robert Soroka, a sports management professor at Georgia State University. Sports venue development consultant.
Last year, Mr. Cuban told the Dallas Morning News of his intention to collaborate with Sands on this new development and casino complex.
“In partnership with Sands, there is no reason why we cannot build a huge resort in Dallas,” he said.
A piece of a destination like this would mean a lot more money to Mr. Cuban than the sums generated from game tickets and stadium concessions. However, the plan faces a major hurdle – along with obtaining land, obtaining financing when interest rates are high, and obtaining building approvals. Almost all forms of gambling are illegal in Texas, and there is no clear sign of that changing.
The Texas House of Representatives this year passed a bill that would legalize sports betting, but Lieutenant Governor Dan Patrick declined to take it up for debate in the Senate. Even if this bill is approved in the Senate, Texans will still need to vote on it.
The bill allowing casinos faced stiffer opposition, especially from influential conservative religious leaders, and never made it out of the House of Representatives. While sports betting, if legalized in Texas, could be profitable for teams, it is actually a casino bill that must pass if Mr. Cuban’s vision as a sports and gambling destination is to be realized. The Sands, which has a number of casinos in Macau and Singapore but none currently in the United States, has hired dozens of lobbyists to obtain a license in recent years.
Mr. Cuban owns about three-quarters of the Mavericks’ shares, with the rest owned by a handful of minority owners. After the sale, the Adelson and Dumont families would own about a quarter, with the rest distributed among some minority owners, according to two people familiar with the terms, who spoke on the condition of anonymity because they were not. Authorized to be disclosed publicly.
Some people believe the reported $3.5 billion valuation Mr. Cuban is selling for is less than what he could have gotten had the Mavericks gone to the open market. Just last week, for example, a small stake was purchased from the Indiana Pacers for a reported valuation of $3.47 billion. Indianapolis is a much smaller market than Dallas, and minority stakes are usually discounted. So, according to the thinking, the sale price of the majority stake in Mavericks should have been much higher.
But the sale to the Adelson and DuMont families includes an unusual condition: Mr. Cuban will continue to run the team’s basketball operations.
Officially, Patrick Dumont, son-in-law of Miriam Adelson and the late Sheldon Adelson, will be what the NBA calls the team’s governor and will vote on league-wide matters. But Mr. Cuban will run his own basketball operations.
The bet appears to be this: Mr. Cuban will make billions from a team that paid him $285 million two decades ago; He will continue to participate in his preferred portion of team ownership; If the Adelsons and Las Vegas Sands can land a new arena and casino complex, a quarter of his team could one day be worth as much as the three-quarters he owned.
This could also help offset the money Mr. Cuban expects to lose in the team’s local media rights agreement. The holder of these rights, Diamond Sports Groups, is going through bankruptcy.
“I believe the new arena, real estate area and hopefully future resort casino will replace what we are losing in media, funding and funding for the current and future Mavs,” Cuban said in an email to a local TV station last month.
More than a thousand miles west of Dallas, the sale opened up the race to own an NBA franchise in Las Vegas wide, as the Adelson family was widely assumed to be the front-runner if the city acquired a team.
Officially, there’s no guarantee there will be an NBA team in Las Vegas, but the league is widely expected to soon expand to 32 teams from 30. This summer, league commissioner Adam Silver said the league will turn to the question of expansion. After he completes new media deals, sometime in 2024. He said it’s not certain the league will expand, but he mentioned Las Vegas and Seattle as two cities that would be considered.
“A lot happens behind the scenes,” said Steve Sisolak, the former governor of Nevada. “A lot of groups that have interest. It remains to be seen who the frontrunner is.”
Currently, the only arena in Las Vegas close to the facilities required for an NBA team is T-Mobile Arena, jointly owned by arena developer AEG and MGM Resorts International, with Bill Foley, owner of the NHL’s Vegas Golden Knights, owning a minority stake.
But Oak View Group, another arena developer and operator, announced plans for a $10 billion resort south of the Strip that would include an arena where an NBA team could play. Interestingly, the land on which the arena will be built is owned by Scott Goldstein. , son of Rob Goldstein, CEO of Las Vegas Sands. Sands is not currently involved in this project.
Susan Beachy Contributed to research.
The Mavericks, a professional basketball team in the NBA, have recently been the subject of major financial news. Originally purchased for a relatively modest amount, the team is now being sold for a significantly higher price, reflecting the growth and success of the franchise. This sale has sparked widespread interest and speculation within the sports community, as it represents the ever-increasing value and profitability of professional sports teams in the current market. With its dedicated fan base and impressive track record, the Mavericks’ sale is a testament to the enduring appeal and financial potential of the NBA.