Mark Cuban's Blueprint For Winning The NBA

I told myself going in,

I wasn't gonna try to fit in,

I was gonna be myself,

and if they liked me, great,

if they didn't like me, great,

if they wanted to force me out, great.

I'm Mark Cuban and I'm gonna break down everything

that goes into running an NBA team.

[bright music]

So I bought the Mavs January of 2000.

It was $285 million.

I had just sold my company for $5.7 billion in stock,

so I thought, why not?

I didn't buy it as an investment.

I bought it 'cause I'm a basketball junkie,

basketball was life.

I played pickup then,

I played pickup now as the season ticket holder,

so I put my money where my mouth is, bought the team

and have had a blast ever since,

but it was never because it was an investment,

although it did turn out to be a pretty good one.

[bright music]

My first goal when I bought the Mavericks

was to change the culture.

When you go into an organization, whether it's a company

or basketball that has sucked for a decade plus,

you can't just let things go on as they were.

I remember meeting with the players

and asking them what are the things that you would change?

There was a guy by the name of Gary Trent

and he was like, Mark, we get into some towns

after a game, 2:00, 3:00, 4:00 in the morning.

Have you ever tried to go get something to eat

in Oakland, California at 3:00 in the morning?

No disrespect to Oakland, doesn't matter what the city was,

but the reality was the hotels we stayed at

at that time didn't have room service,

they just got the cheapest price.

And I was like, This is ridiculous.

And that really helped me set the tone.

We upgraded immediately,

so we stayed at nothing but the best hotels.

We made sure they had not only room service

but healthy foods.

We brought in nutritionists.

Dirk Nowitzki used to say that he would eat chips

and candy bars before a game.

We gave him the opportunity to be healthy.

But the other thing that I did

that completely changed the NBA,

when I bought the team,

we had four coaches, head coach, an assistant coach

and two other coaches that did things like work

with the guys to develop skills, rebound

for them when they wanted

to get shots up and those types of things.

I realized that we were spending more money

to train our office employees how to use Excel

and Microsoft Word than we were on developing our players

to improve their skills, despite the fact

that we were paying those players 100s of 1,000s

and millions of dollars each.

I went out

and found former Mavericks Morlon Wiley, Greg Riley,

and a long, long list

and said, We wanna bring you in

and give you each an individual player to work with.

And it was up and running within weeks.

It also changes the culture so that they understand

that I'm ready to do whatever it takes to win.

[upbeat music]

When I got to the NBA in 2000,

they thought they were in the basketball business.

Anything they did that wasn't considered old school,

classic basketball was frowned upon.

Back when David Stern rest in peace.

David was the commissioner

and Adam Silver was second in charge,

I used to say NBA, nothing but attorneys

because that's how they thought,

just like a bunch of lawyers.

They didn't really think

as entrepreneurs, you always have to know

as a business what business you're in.

The NBA and all the professional sports is in the business

of creating experiences that are memorable forever.

And professional sports are so unique

because it's the one form of entertainment

where that ball is in the air,

you're down one

and if it goes in, you're screaming and yelling.

If you miss, it's the worst feeling,

that's so different

than any other form of entertainment.

And if your team is good enough

and you win a championship, they throw a parade.

Google has a good quarter, ain't nobody throwing a parade.

So the hardest part,

when I took over the Dallas Mavericks

were the other owners, they hated me.

The Board of Governors are the 30 owners of NBA franchises

and we each own a third of the NBA entity itself.

And we get together two

or three times a year to discuss everything

that's going on from the business

and basketball side of the league.

All the other 28 teams sat in a room

and started grilling me with questions, grilling me,

are you gonna be like Jerry Jones?

What are your goals?

Are you gonna be George Steinbrenner?

Whoever, they wanted me to be like them.

They wanted me to sit up in the suites and sign the checks.

I literally remember walking into

one of my first Board of Governor's meetings

and asking David afterwards, Are we allowed to talk?

You know?

And he's like, Yeah, I want you to talk.

I'm like, Are you sure?

Because doesn't look like anybody else here

is going to talk.

He goes, No, Mark, that's one of the reasons you're here,

you know, you're a tech guy, you're a media guy,

you understand things that these guys don't know.

So I'm like, Okay, you asked for it.

Everybody else was in a suit and tie.

I'm walking in in jeans and a T-shirt,

and they're all staring at me,

and I didn't shut up for 24 years.

I got fined a lot, but I didn't shut up.

David Stern was a visionary for sure,

and he was smarter than me in a lot of ways.

You know, there would be rules

like setting up our own website.

No, you can't set up your own team website,

you gotta use nba.com.

I set up our own website

because the thing with David is he had to deal

with the other owners cursing him out saying,

Why are you letting Cuban get away with this stuff?

And so he had to take on that burden for me and he did.

He was a first class guy

and despite our differences in what was fineable

and what should not be fineable,

he always had my best interest

and the best interest of the NBA at heart.

[bright music]

Different owners have different goals.

My mission was to win championships,

I really didn't care about the rest.

I didn't try to maximize revenue.

In fact, at one point we had $2 tickets,

then they got scalped too much,

but I always wanted to make things affordable.

I didn't want it to be about anything

but fans having fun in the arena

and the Mavs winning championships.

What's changed dramatically over the years

is the valuation of teams.

It went from individuals being able to buy them,

to then corporations buying them as the prices trickled up,

to getting to the point now

where there are ownership groups that are buying teams,

'cause it's really difficult

for any one person to afford them.

When you represent an ownership group instead

of just yourself,

you're probably not gonna be as vocal.

You're probably gonna be a little bit more conservative

in how you spend money

because your partners don't want to have capital calls

where they have to write checks because the team lost money,

'cause I remember my first 10 years,

I never thought of the valuation of the team,

it's changed dramatically.

[bright music]

So in terms of my day-to-day responsibilities,

when I first bought the team, I had a lot to learn.

And so I was in there every single day

just absorbing everything that I could,

trying to figure out the best ways

to market, to sell tickets.

I let the CEO of the business side

just run the business side

because I wasn't as focused on making money,

I just wanted to make sure.

the tickets were sold,

on the basketball side I was always involved

because that's where the real money came into play,

the big money.

I mean, I remember in 2001 we traded for Juwan Howard

and he had a $21 million a year contract.

That's a lot of money now,

that was incredible amounts of money then

to be able to say yes to a trade,

you have to know the insides

and outs of the Collective Bargaining Agreement,

the impact in your ability to make future trades,

your draft picks, your cap room,

all these little nuanced details matter,

and so early on I had to spend time doing that.

[bright music]

When you have a team

that hasn't made the playoffs in a decade

and was voted

the worst professional sports franchise of the 90s,

it's not what you would call a destination franchise.

Players looked at it as a intermediary station,

a stop before you went somewhere else

and that's really what I had to change.

Fortunately, we're getting ready to open up a new arena,

the American Airline Center in 2001,

I went and just completely changed

the design of team locker rooms.

I made it so that every locker had a PlayStation

and a TV screens, headphones, you know, stereos,

whatever they wanted to put, the locker was set.

I also bought a plane

and we literally designed it

so that Sean Bradley, who was seven foot six,

had enough leg room that he could lean back

and fall asleep without crushing the person behind them.

But that wasn't the fun part about the plane.

The fun part about the plane was lying about it

because what I decided to do was get together

with all the guys and say,

Look, we're the only ones

that are gonna be on here.

It's not like media or other people are coming on.

I want everybody to tell everybody

we have a weight room on the plane,

that we have a movie room,

and anything else you wanna make up, I'm fine with,

just, you know, embellish as widely as you can.

And I can't tell you

how many times players over the next three years

do you guys really have a weight room on the plane,

so you get a workout in.

Yes, it's amazing, you know,

just you gotta check it out,

but you have to play for the Mavs in order to see it.

[bright music]

General managers talk to each other

and they're throwing out trade deals all the time.

It's almost like fantasy basketball,

but then maybe something happens, somebody gets hurt

or the style of the play, you get a new coach

and the style of play changes

and all of a sudden it is,

remember when you said you had interest in this player?

Well, there might be an opportunity,

and that's typically how it starts.

When both teams get to the point where they have a need,

they start discussing what the details of the trade will be

and then also it has to work within the constraints

of the Collective Bargaining Agreement.

There are very literal and specific trade rules.

If your salary for your team is above X amount,

that means it's above the first apron.

If it's above a larger amount,

that means it's above the second apron.

If you're above the second apron,

then you cannot make a sign and trade.

If you're above the first apron,

you can't make a sign and trade,

but you can trade your minimum players as part of a deal.

There's all these little details

that I don't wanna bore you with,

but you have to go through all that,

and the league has evolved so that you have cap experts,

you have people who literally are on staff

because they learned the salary cap

and the Collective Bargaining Agreement in detail

and look for every little angle that they can find.

And back in the day when I was doing it

and there weren't those cap experts,

oh my God, it was so much easier to fleece the team

and then once you agree to the deal, you have

to call the league

and do what's known as a trade call.

The crazy part is you still weren't sure

it's going to leak to the media.

I mean, I literally have had trades where

here's the trade call

[phone banging]

and before the trade calls even hung up on,

the word is out

and that's how a trade works.

[bright music]

The Mavs are probably 25 to 30% TV

and broadcast, 20% of ticket sales,

30% sponsorships, and 25% merchandise and other.

When I bought the Mavs,

I immediately took the TV row seats,

the seats where you're gonna be seen on television

and jacked them up to $2,500.

Across period of time, I've had $2 seats,

but they always got scalped.

We had $10 seats up until about five years ago,

but now to this day we have at least 4,000 seats

that are $29 or less.

You always wanna make it affordable,

relative to everything else.

Season ticket holders are incredibly important.

They obviously have the greatest commitment to your team,

but from a financial perspective,

they're your revenue base.

They're the ones that you know, you have your 10,000

or 12,000 or 14,000 tickets already sold

and also allows you to more easily set number

of tickets you make available to the buying public.

How does revenue share work?

That's a good question.

I'm not quite sure anymore

'cause it keeps on changing.

We'll see what happens now

because of the new TV deal.

You know, every time there's a new TV deal

over the past 25 years,

we always hope that teams don't lose money,

but they still do,

because it's so competitive

and you want to win so badly,

sometimes you're willing to pay that luxury tax

and whatever other taxes

and take the restrictions

of the Collective Bargaining Agreement,

your organization doesn't do a good job selling sponsorships

or tickets and you lose money.

The NBA always benefited

from a TV contract perspective from competition.

Once things really took off in competition

between TV networks like ESPN

and TBS, that's when the numbers really started

to get a whole lot bigger.

And then fast forward to 2023 in particular

and you started to get interest from streaming companies,

which created a really difficult situation

for linear television

because the best viewed events were sports,

linear television needed the NBA in particular

'cause the NFL had already signed a big deal,

and so that put the NBA in a great position to negotiate.

To their credit, they put together

a phenomenal 77 million, 11 year deal

is going to jack up revenues not only for teams,

but the way

the Collective Bargaining Agreement is organized,

players get 51% of that revenue

and so they're gonna come out really, really well.

[bright music]

So I sold the majority stake for a couple reasons.

First and foremost, I can talk tech, I can talk media,

entertainment all day every day,

but the world is changing

and revenue sources are changing dramatically

for professional sports

and now it's become as much a real estate business

with the arena that you have being the center point

for the real estate that you're gonna build around it.

I just don't know real estate at all,

and so I made sure I sold to somebody,

the Dumont family who runs The Sands,

who knows that stuff cold

and just as important, you know,

in a social media world today,

the critics of the ownership

of any professional sports team can be brutal.

I don't want my kids potentially feeling the pressure

to walk into my spot as owner

and have to deal with that.

When I bought the Mavs,

it wasn't a financial investment

and honestly selling it

wasn't something I was excited to do,

but I thought it was the right time to do.

None of this was about economics,

it was and is about matters of the heart.

[bright music]

In terms of what's next,

while I'm still involved with the Mavs, so that's not gone,

but really where my focus has shifted

other than spending more time with my family

is costplusdrugs.com.

I'm really on a mission to change healthcare in general,

but the whole pharmacy industry,

pharmaceutical industry specifically.

We launched January 22nd, 2022

and have already completely turned

the pharmaceutical industry upside down.

When you go to costplusdrugs.com

and you put in the name

of one of the 2,500 medications we carry,

we show you our cost,

we show you our 15% markup,

you can either pick it up at a local pharmacy

or for $10, we'll have the pharmacist review it

and we'll mail it to you.

As a result of that, we've seen the prices

for pharmaceuticals drop.

The ability to have a company

that I co-founded, changed the entire healthcare industry,

that's like winning an NBA championship

and that's where my focus is now.

My name is Mark Cuban

and now you know everything there is

to know about owning an NBA franchise.

[bright music]