Love him or hate him - this is awesome (Mark Cuban)

dumbasses, lets see them wanting to sell the stock

 

lol...

I agree, from a fans perspective, you would want Cuban as an owner...that lawsuit is hilarious...

 

Look what most of you don't understand is that investing in a franchise means you tie up money in it. 5% might not seem like much being a minority owner and all but that if the total value of the franchise is something like 500M dollars then we're talking about 25M, which is probably like 90% of this guy's net worth or something. Sure this is all just paper losses, but if the value keeps going down then he's trapped with the stock since if he sells his 5% he'll incur all of the losses. Not only that he also lost the opportunity cost of having put his money in safer investments like T-bills and getting the interest. Even if Cuban's the one who pays for all operating expenses and debt, if the value is still going down (which what this dude is complaining) then he'll be losing money when/if he does sell his stock.

Seeing Cuban care about winning so much that he'll bury the Mavs under mountains of debt is nice if you're a fan, but I would be cursing Cuban day and night if I had money tied up with the Mavs. As for Cuban, I'll never understand him. He has tons of dough, but he never buys picks. If he likes the Mavs so much, why even bother having minority owners in the first place? You're already covering all operating losses, why not buy the entire thing so you won't have minority owners calling you out in the media.

 

Actually Ross P. is worth a cool $4,000,000,000.00. So a few million probably means nothing to him, but I agree with you in principal.

 

The Mavs have lost value in 4 out of the last 5 years.

 

According to what? Their publicly traded stock?

Whatever value they lost is probably gained back completely due to winning the championship.

There was a sports economist at the MIT conference (who was an expert testifying as to franchise value in a lawsuit involving the ATL Braves and advised the current Celtics owners when they bought the team), who stated that the biggest mover of franchise value, in purely economic $$ terms, is winning a title. You can find the presentation on the conference's website, I'm sure. It costs money to compete for a title, just like it costs money to do R&D when you are a drug company, but the return on your investment can definitely be worth it if you spend the money correctly.

 

Most people that are rich got rich by turning investments into profit.
You realize that right? Everyone here thinks the average rich person that invests in a sports team is some super-passionate sports fan. LMAO. Are you kidding me?

 

Forbes ranking of franchise values.

I would say that winning is far behind getting a new venue to play in in terms of franchise value. Winning is temporary and fans give you credit for a few years. Venues increase revenue for 20+ years.

 

Forbes ranking is one magazine's estimate.

Also, even according to the Forbes estimate, the team's value topped off in 2008, at $466 million. It declined to about $438 mil in the latest estimate.

In 2008, the Mavs were ranked 7th in the league in terms of team value. In the latest estimate, they were ranked 7th in the league in terms of team value.

Accordingly any "decline" in value most likely reflects things that are happening league-wide (e.g. the economy went into the tank in 2008) rather than anything that went on with the Mavs themselves.

Besides, the Mavs are worth much much more than when Cuban bought them back in 2000, see below.


As for "winning is temporary"-- it isn't, according to the speaker at the MIT conference. He stated that winning a title has a real economic impact for a couple of decades.

 

F Dallas, hope they all go broke. Watching Houstonians cheer for these ***** made me ill.

 

LOL This reminds me of my MBA coursework. Casey, it doesn't matter if Cuban is running the Franchise into the ground. As long as he is not doing anything illegal, Perot has absolutely ZERO grounds to say anything. He can sell his stock that no one is forcing him to hold. If I own 5% of Microsoft, I can't go to the courts and force Bill Gates to be replaced becasue the stock value fell. My options would be to sell my stake in the company, buy a proportionate share that is higher than his, or keep my mouth shut. That is it. Period.

 

I have never commented on his legal ability to change anything. I am just saying Cuban isn't some super genius. He is a fan spending whatever it takes to win. Unlike the Yankees though, the mavs don't really have the funds for that.

 

I agree the economic decline plays a role, but the rockets have increased in value in 4 out of the last 5 years.

As for the Mavs being worth more now than in 2000, they stated playing in the AAC for the 2001-2002 season.

Also could you just make new posts instead of edit old ones? It is hard to reply when you do that.

 

right, and if true this would have probably been a better response.

The problem with everyone continuing to throw out the word value, is that it hasn't been defined here. Team value, which I assume your chart refers to, does not equate to investment value, or Perot's equity value.

I can borrow a bunch of money and way overspend on an add-on to my house, which would certainly increase the value of the house, but since I overspent would decrease the value of my investment in the house.

You know this of course, not Rocket science.

The issues here are (1) was there a reasonable expectation for Perot to continue to receive dividends off the minority stake he kept, and (2) has the value of his investment in the team (in other words Perot's stake in the equity value of the team) gone down. In both cases, one would have to know the specific details of what is documented. If he has any semblance of a case, I can see the argument that the value of his investment might have dropped.

Despite Cuban's claims that ""So [Perot] is saying I can't pay back the money to me.", if it's structured as debt, it's structured as debt (or some kind of preferred stake, whatever), and Perot's stake is still behind it. What if Cuban put it in as high yielding sub debt? Back to the house analogy. Now you own 5% of my house. And not only have I potentially decreased your equity value by borrowing to overspend on an addition, but I borrowed that money from myself, and am charging a 15% interest rate on the money. Of course you'd be pissed.

Not saying any of the above happened, as none of us know the facts... but Cuban's lawyers response isn't really all that helpful... though definitely hilarious. The urinal picture would have been a nice add.

 

If you want control of how a franchise is run, don't sell it to another person and retain just 5% of it. When you're a 5% stakeholder, and you sell the rest to a guy who is a fan and just wants to win, you really shouldn't expect anything different than what happened. But even with that, I imagine the franchise value today is substantially higher than it was when he sold it, so even then, he's made a profit. He's just b****ing that he wanted MORE profit.