Mark Cuban shocked the sports world on Tuesday when it was announced that he was selling majority ownership of the Dallas Mavericks to billionaire Miriam Adelson.
Cuban sold stake for a valuation worth $3.5 billion — a massive increase over the $285 million he paid to buy the Mavericks in 2000 — but much less than the $4.5 billion that Forbes had measured as the team's value just last month.
Unlike most sales, the former Shark Tank judge did create a unique agreement that could've kept the price lower than Forbes' valuation: Cuban will continue to maintain control over the basketball operations side of the Mavericks.
But Amin Elhassan, a former assistant director for basketball operations on the Phoenix Suns and now a sports media personality on Meadowlark Media, said he thinks Cuban's sale is a bad sign for the NBA. Elhassan spoke on his podcast, "Oddball with Amin Elhassan and Charlotte Wilder," and said he thinks Cuban is reading the signs that the money may no longer be there in the sports and streaming world.
"I think this is a massive red flag," Elhassan said. "Mark Cuban is looking at the future, he's looking at the upcoming TV deal, the dollars getting tighter, the streamers who have had their own little comeuppance in the last 12 to 18 months where once it was a rocket ship to the stars."
Sports team valuations have shot up enormously over the last few decades. Cuban's Mavericks are one example of the growth stretching over two decades, but there are even some recent sales that have already proven to be worthy investments.
The NBA's Utah Jazz and Minnesota Timberwolves were both sold within the last three years, and both team's valuations on Forbes are at least 66.7% higher than they were when they were sold.
Sports media rights have also seen steep growth as of late. The NFL signed its media rights deal in 2020 for $110 billion over 10 years, growing at least 35% for each of its media partners. The NBA is expecting to double or even triple its media rights deal with incumbents ESPN and TNT or potential new partners like Amazon.
Elhassan is looking at things the other way though. He thinks that Cuban sees a "bubble" that is "about to burst," and he points at a notable move Cuban made in the past that may indicate similar behavior.
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"It's incredibly important to note that it's Mark Cuban who's doing this and not any other owner," Elhassan said. "He founded this thing called Broadcast.com. They pioneered this technology that allows people to stream anything on the internet ... He founded it, he sold it, and within a few months, the dot com bubble crashed, and he made out like a bandit."
Elhassan was referring to Cuban selling Broadcast.com to Yahoo in 1999 for $5.6 billion, which is what ultimately led him to buying the Mavericks less than a year later.
The former front office exec and ESPN analyst's take is a contrarian look at how many are viewing the sports world. Elhassan himself acknowledged that it's very likely that Adelson purchased the Mavericks from Cuban because of the notion that sports teams seem to be a good investment right now and not due to a love for basketball.
But while some believe Cuban is gearing up for a presidential run — which Cuban has denied — Elhassan's approach looks more about the business acumen of Cuban and his willingness to zag when many are zigging.
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