Sales of most professional sports teams are fairly predictable.
They happen because owners die or don’t know how to pass the equipment on to their families. They run out of money, focus more on other activities, or are expelled for bad behavior.
Once the decision to sell is made, the process unfolds relatively publicly. Bankers are hired, potential buyers show interest, an auction is held, and weeks or months of media reports follow.
So it came as a complete surprise last month when, without warning, the families who control the Las Vegas Sands casino empire announced that they had reached a binding agreement to buy a majority stake in the Dallas Mavericks of the National Basketball Association from Mark Cuban. The only thing that made sense was that the situation involved Mr. Cuban, who has long led the Mavericks in an unconventional way.
Still, more than two weeks later, the basic question surrounding the sale: Why did Cuban do it? – remains largely unanswered. The reliably talkative Mr. Cuban, who always seemed to be having more fun than any other owner, declined to speak on the record for this article. The Adelson and Dumont families, fearful of getting ahead of an NBA approval process that includes due diligence and a vote on the sale by other team owners, declined to comment beyond a statement expressing their enthusiasm.
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, flush with cash from the sale of Broadcast.com just before the dot-com bubble burst, professional sports teams were still mostly just teams.
They are now anchors for larger commercial enterprises. Anchor tenants for stadiums that are the heart of vast entertainment complexes, as in Sacrament. Pin content for regional sports networks or other media conglomerates, as in WashingtonDC Anchor brands for millions of fans who were recently allowed to bet on sports, such as on Phoenix.
Mr. Cuban is also many things: a dot-com billionaire, a company owner trying to reduce the price of prescription drugs and, one more season, one of the main investors on the reality show “Shark Tank”, but what he is not is a real estate magnate, which is a possible motivation for the sale.
The Dallas Mavericks are part owners of the American Airlines Center, where they play their games in the Victory Park development just north of downtown. But while the owners of his co-tenant, the Dallas Stars of the National Hockey League, have invested in land near the arena, Cuban has primarily expressed his annoyance that he takes away space from fans in the parking lot. . He now he’s changing his tune.
“Cuban probably wants to emulate what has worked, have the ownership control that it doesn’t have in Victory Park and take it to a new level with the integration of casinos and resorts,” said Robert Sroka, professor of sports management at Washington State University. Georgia. and a sports facility development consultant.
Last year Cuban gentleman told The Dallas Morning News of its intention to partner with Sands on precisely that, a new arena and casino complex.
“By partnering with Sands Corporation, there is literally no reason we can’t build a great tourist destination in the city of Dallas itself,” he said.
Such a destination would mean much more money for Cuban than the sums generated by game tickets and stadium concessions. However, the plan faces a major hurdle: in addition to acquiring land, obtaining financing when interest rates are high and receiving construction approvals. Almost all forms of gambling are illegal in Texas and there are no clear signs that that will change.
A bill that would legalize sports betting passed the Texas House of Representatives this year, but Dan Patrick, the lieutenant governor, refused to bring it up for discussion in the Senate. Even if such a bill passed the Senate, Texas residents would still have to vote on it.
A bill allowing casinos faced even fiercer opposition, particularly from influential conservative religious leaders, and never made it out of the House. And while sports betting, if legalized in Texas, could be lucrative for teams, it is actually a casino bill that must pass if Mr. Cuban’s vision of a sports and betting destination is to be realized. . The Sands, which has several casinos in Macau and Singapore but currently none in the United States, has hired dozens of lobbyists to approve one in recent years.
Cuban owns about three-quarters of the Mavericks, with the rest held by a handful of minority owners. After the sale, he will own about a quarter, and the Adelson and Dumont families about three-quarters, with the rest split among some minority owners, according to two people familiar with the terms, who spoke on condition of anonymity. because they were not authorized to disclose them publicly.
Some people believe that Reported valuation of $3.5 billion. The price Mr. Cuban is selling for is less than what he could have received if the Mavericks had gone on the open market. Last week, for example, he bought a small part of the Indiana Pacers at a price reported valuation of 3,470 million dollars. Indianapolis is a much smaller market than Dallas and minority stakes are often discounted. So, the thinking goes, the sale of a majority stake in the Mavericks should have been for a much higher price.
But the sale to the Adelson and Dumont families includes an unusual stipulation: 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 governor and will vote on league-wide matters. But Cuban will run its basketball operations.
The bet, then, seems to be the following: Cuban will earn billions with a team for which he paid $285 million two decades ago; He will continue to participate in the ownership part of the team that he likes the most; And if the Adelsons and Las Vegas Sands can build a new stadium and casino complex, his quarter of the team could someday be worth as much as the three-quarters he used to own.
This could also help offset the money Mr. Cuban expect to lose regarding the team’s local media rights deal. The owner of those rights, Diamond Sports Groups, is bankrupt.
“I think a new stadium, real estate area and hopefully a future casino resort can replace what we lose in the media and fund the current and future Mavs,” Cuban said. he said in an email to a local television station last month.
More than a thousand miles west of Dallas, the sale has left open the race to own an NBA franchise in Las Vegas, as the Adelson family was presumed to be the favorite if the city landed a team.
Officially, there’s no guarantee there will ever be an NBA team in Las Vegas, but the league is expected to soon expand from 30 to 32 teams. This summer, Adam Silver, its commissioner, said the league would address the expansion issue after completing new media deals, sometime in 2024. He said he wasn’t sure the league would expand, but named Las Vegas and Seattle as cities that would be considered.
“There’s a lot going on behind the scenes,” said Steve Sisolak, former governor of Nevada. “There are many groups that have interest. It remains to be seen who is the favorite.”
Currently, the only arena in Las Vegas that has anywhere near the facilities required for an NBA team is T-Mobile Arena, which is co-owned by arena developer AEG and MGM Resorts International, with Bill Foley, the owner of the NHL. . Vegas Golden Knights, with a minority stake.
But Oak View Group, another stadium developer and operator, has announced plans for a $10 billion resort south of the Strip that would include an arena that could host an NBA team. Interestingly, the land on which that stadium would be built is owned by Scott Goldstein, the son of Rob Goldstein, the CEO of Las Vegas. Beach. Arenas is currently not involved in that project.
Susan Beachy contributed to the research.
Audio produced by Tally Abecassis.
