Mark Cuban

♪ [Statick popping] ♪ This is my kitchen table and also my filing system.

Over much of the past 3 decades, I've been an investor.

The highest calling of mankind, I've often thought, was private equity.

[Laughter] Rubenstein, voice-over: And then I started interviewing.

I watched your interview because I know how to do some interviewing.

I've learned in doing my interviews how leaders make it to the top...

I asked him how much he wanted.

He said, "250."

I said, "Fine."

I didn't negotiate with him, and I did no due diligence.

I have something I'd like to sell.

Rubenstein, voice-over: and how they stay there.

You don't feel inadequate now because being only the second wealthiest man in the world.

Is that right?

[Laughter] I'm a graduate of Duke University.

I got a scholarship to go there but not a basketball scholarship, I assure you... but I really would like to own an NBA team.

I've never actually had the chance to do so, but Mark Cuban is somebody that did that at an early age.

As a young man, he bought an NBA basketball team, and he won a national championship with it, and because of that, I've always admired his sports prowess, his knowledge, and his business acumen.

My children always told me "Dad, you've done OK, but Mark Cuban's a lot better."

Mark, let me ask you this.

You have at an early age made some money, and then you made enormous amount of money when you sold Broadcast.com to Yahoo!, made, you know, over a billion dollars, and then you bought a basketball team.

Then you have a "Shark Tank" series that's very successful, won an Emmy Award.

You're well-regarded by entrepreneurs all over the world.

Presidents of the United States call you for advice.

What is wrong with this life?

I mean is there something about your life that isn't perfect?

I have kids.

Ha ha ha!

I have a 16-year-old daughter and a 14-year-old daughter.

It's all any parent needs to hear.

It doesn't matter what you have or what you don't have.

The minute my oldest daughter turned 15, my wife and I got really stupid, lost half our brain capacity, and are beholden to our kids for their whims.

You know, being a parent is the challenge, and it's very humbling as everybody knows.

Well, I have 3 children, as well, and I agree.

So you grew up in Pittsburgh but not from a wealthy-- in a wealthy family, is that right?

No.

My dad did upholstery on cars.

My mom did odd jobs.

You went to University of Pittsburgh?

I was always in into business, just how I've been since, as long as I can remember, and my high school wouldn't let me take business classes, and so as a junior-- as a sophomore, junior, there were only senior level economics classes, and so just to spite them, I started taking classes at night my junior year and then dropped out of high school for my senior year, went to the University of Pittsburgh and took classes there.

But then you went to Indiana University.

Why did you go to Indiana?

Cuban: Because Pitt didn't have a full undergrad business program, and I saw a list of the top 10 undergrad programs and picked out the cheapest one, and it was Indiana and I went there sight unseen.

Rubenstein: Now when you were there, you started a bar, and it was a very successful bar?

Cuban: Well, kind of successful.

So my--I always--like, my parents didn't pay for my school.

My dad sent me 20 bucks a month, and I had to figure out how to pay for things one way or the other.

Sometimes, I was able to get scholarships.

Other times, you know, just saving money from jobs I had.

Other times, it was a hustle.

You know, my junior year, I paid for a semester by doing a chain letter, and that got my second semester of my junior year paid for.

My senior year--and we also used to throw parties my junior year, and so I made a lot of money doing that as a party promoter, and then one of the bars where we used to throw parties, a place called the Silver Dollar, we went to them.

They were struggling, and the only time they made money is when we would throw parties.

And so I was like, "Let me take it over."

A friend and I-- I put up my student loans that I took in, and he put up some money, and we opened a bar called Motley's Pub, which was killing it.

We were the, you know, the hot bar for college kids because I--when I started it, I wasn't 21, and by the time it ended I was 21, but I would let all my underage friends in, and that worked until we got busted and they closed us down.

Rubenstein: What year did you graduate?

Cuban: I graduated officially in 1981.

Rubenstein: So when you graduated, you moved to Dallas.

Why did you move to Dallas?

Cuban: I had a bunch of buddies down there that were living that gone to Indiana and moved to Dallas, and I was talking to one, my buddy Greg Schiffer on the phone, and he's like, "Mark, the weather's great, the women are beautiful, the economy's good."

And I'm like, "Wait.

Back up."

Ha ha ha!

"I'm coming."

But you ultimately only started a--kind of a technology consulting firm.

Is that what it was?

Cuban: Well, what happened was when I first got there and I was sleeping in the-- we called it the Hill Hotel with my 5 roommates, I got a job at night working as a bartender/barback, and then during the day, I applied for jobs and finally got a job selling software at this company called Your Business Software, which I did for 9 months until I got fired, and so I started my own company MicroSolutions, which at the time was-- when we started was just a PC consulting company.

And you ultimately sold that for a couple million dollars or so?

Well, I sold it 7 years later for $6 million of which a million went to all the employees, two million went to a partner that I brought in, and two million came to me and then some for taxes.

All right.

So you got $2 million, which is a king's ransom in those days for somebody your age right?

Yeah.

I was 29.

Actually by the time it closed, I was 30, and so I just thought I was the luckiest guy and the richest guy in the world.

This was 1989.

In my mind, I was just going to take time off.

My driving force was I wanted to retire by the time I was 35 because, you know, one thing that my dad had always really, you know, taught me and really emphasized to me is the one asset you can never own or get back is time, and so, you know, enjoy the time while you're young, take advantage of it.

You know, his job was backbreaking.

He lost an eye in an accident at work.

You know, he did upholstery, and a staple broke and destroyed his eye-- his right eye, and so, you know-- and he would take me to work sometimes and make me sweep the floor because he wanted me to see the type of work he did not want me to do, and so when I--you know, my goal was to retire so I can just enjoy my life, and so we sold MicroSolutions, and I literally retired, bought the lifetime pass on American Airlines, just traveled the world and partied like a rock star, you know, for the next few years.

So when you buy a lifetime pass on American Airlines, which you still own-- is that right?

Yeah, officially, I still own it.

Rubenstein: So those I forget what it cost in those days, 100,000 or 200,000?

Cuban: $125,000.

Yeah.

So do they ever call you up and say they want to buy it back from you or not?

Cuban: No, because I was their best customer.

Once I started--once I bought my own plane 10 years later, you know, I wasn't a heavy user.

I actually gave it to my dad while he was still alive, and he used it every now and then, and then since I still own it, they allowed me to-- since we're not a heavy user-- to have one of my employees use it, but, yeah, they actually discontinued the program because a lot of people arbed the mileage out of it and used it, you know, really took advantage of it.

For me, It was just for the fun of it.

I wasn't trying to, you know, make sure I got my money's worth.

So after you retired at the age of 30 or so, you ultimately came up with an idea, which was to listen to Indiana University basketball games on I guess, a kind of streaming process.

Is that right?

By the time I sold MicroSolutions, you know, I was really tech-heavy.

I mean, we were one of the largest systems integrators.

I taught myself to program, we did local and wide area networks, so I got to understand networking and technology really well.

I made a lot of money actually afterwards just trading technology stocks because back then it was so much easier.

You know, I'd call up Rick Sherlund at Goldman Sachs or, you know, Lee Ainslie before he was even at Maverick Capital, and we would just swap ideas, and I knew more about all the details of tech and what worked and what didn't work and what companies were doing well and ended up making tens of millions of dollars doing that.

I then got together with my buddy Todd Wagner, who I knew from Indiana.

He actually came to me with the idea.

He was like, "This new Internet thing.

"You understand technology.

"Is there any way that we can listen to Indiana basketball using the Internet?"

And I was like, "That's a cool idea."

This was 1995, early 1995, and I'm like, "Let's try to figure it out," and literally starting with a Packard Bell PC that I bought for, like, 4 grand, 3 or 4 grand at Best Buy or something or CompUSA, in the second bedroom of my house, I just sat there and tried to figure out how we would do this.

And it went from, you know, 10 people the first week to 100 to 1,000 to thousands, and we knew we had something within 30 days.

But you took the company public, is that right?

Yeah, July 18th of 1998.

Rubenstein: And the stock zoomed-- hate to use the word zoom, but it went up a lot from-- It was the largest one-day-- largest first-day IPO bump in the history of the stock market at the time.

Right.

So did you say, "I'm going to build this company forever," and just keep growing it, or did somebody come along and say, "I'll buy it from you"?

Cuban: Well, the goal was to dominate because-- you know, we called it netcasting at the time, and this was pre YouTube, and literally, we were the dominant force in streaming.

You know, we had rights to all the major sports leagues.

We had, you know, hundreds of radio stations.

By 1999, we were doing video, as well, and we bought 10% of what turned out to be Lionsgate Studios.

We bought, you know, video rights to all these libraries, and so, you know, we were making acquisitions.

We really were on the path to dominate, and we had--Yahoo!

had invested in us the previous year and came to us and said, "You know, we want to buy you.

"We need to get into multimedia, and you're the leader.

Let's combine forces," and they made us an offer we couldn't refuse.

So they offered, I think, roughly 5-- or you ultimately did the deal at $5.7 billion.

Cuban: In stock, yeah.

So you didn't own all 5.7 billion yourself.

I guess you had some outside investors and other people, but you had a lot of-- I ended up with about 33% of it, and it and was taxable.

The way it was structured, it ended up being taxable on the gains but, yeah, it turned out-- it turned out well.

Yeah.

Rubenstein: Here's a question I've always had.

Why is it that you had the foresight or how did you have the foresight to sell the Yahoo!

stock at a time when the markets were going up?

People thought Yahoo!

would be going up forever.

You sold your Yahoo!

stock and cashed out before Yahoo!

went down by 90%.

Well, I actually hedged it, right?

So remember I mentioned that I traded stocks between the time I sold my first company and did really, really, really well, and I watched complete industries just skyrocket and then collapse.

You know, there were companies-- when Dell Computer went public, there were 10 other PC companies that crashed and burned.

I'd seen it multiple times, and I made money going up, and I made money shorting them on the way down, and so I was very clear to Goldman Sachs at the time that I wanted to do a hedge, and so the first thing I did because I had a 6-month moratorium where I couldn't do anything, and so I took literally almost every penny I had, $20-some million, and bought puts on an index, an Internet index, and I lost all my money on that hedge.

Literally just all gone, which was good because that got me to the point where Yahoo!

was still a high flyer, and I sold covered calls and bought puts over the next 3 years, and that hedge saved me and actually made me money.

You lost the first 20 million?

Cuban: Yep.

Gladly.

What did your wife say?

Oh, no, I wasn't married at the time.

Ha ha ha!

And it was--it was--you know, but the whole-- but it was timed out right.

So I got through the 6 months.

Even though I lost the money on that hedge, I already knew approximately, you know, based off of where the Yahoo!

stock was, how I'd be able to-- what the volatility levels were, how I was going to be able to sell calls on my Yahoo!

stock and use that money to buy puts on the Yahoo!

stock, and when the stock collapsed, my puts were worth a fortune.

You bought the Dallas basketball team, the Mavericks, for roughly $280 million, which at the time was thought to be a lot of money.

Today, it's a fraction of what it's worth.

What propelled you to buy a basketball team?

So I've always been a basketball junkie as long as I can remember, and so I was a Dallas Mavericks season ticket holder, and during that time that I owned season tickets, they were awful.

I mean, all the nineties-- they were voted the worst professional sports franchise of the nineties, and I'll never forget it was the 1999-2000 season opener, and we're undefeated, right?

I mean, I'm a season ticket holder.

I'm excited to go to the game.

It wasn't a sellout.

There was no energy in the crowd, and, you know, I'd just sold Broadcast.com, and I thought, "I can do better than this," and then it dawned on me.

"Wait.

I can put my money where my mouth is finally, and, you know, not just say it but inquire about buying it," and from late October, when it first--the concept first came up, it took till January 4 to close the deal, and honestly, I didn't even care about price.

They told me "Here's the price."

I said yes because realize that I still had my hedge on for Yahoo!

and I still benefited when Yahoo!

stock went up, so there were days still then when--this is before the Internet bubble collapsed-- I remember being on the team bus in January, talking to the coaches, and they were like, "Why did you spend so much money?

"This is the worst franchise and all the NBA, you know, the revenues are lower than everybody else."

I'm like, "Let me--you know, let me just show you "the price of Yahoo!

"it went up $100 or $200 today, and that paid for the whole team."

Ha ha ha!

So when you, when you buy a basketball team you get to play with the players?

Can you work out with them, or they don't really like you to do that?

Up until obviously the changes with this season, before every home game, I would go-- I go on the court and get shots up.

There's nothing, you know, crazier to me as a basketball junkie exciting than to have, you know, an arena, and you're out there shooting, and, you know, there were a lot of times over the years where I'd play one-on-one with the players or I'd shoot for money with the players and shoot 3s-- Rubenstein: They don't ease up?

When you're playing with them, they don't ease up a little bit to let you win because you're the owner?

Cuban: No.

Hell, no.

These are--you know, because realize the other side of it.

If I beat them, they'll never hear the end of it, and, you know, there's just no way, no way.

Rubenstein: Now in your early years as an owner-- you're owning the team now for 20 years.

In your early years as the owner and maybe even recently you've been fined a lot by the league, maybe more than any other owner, for criticizing the referees, criticizing the league.

What was all that about?

Did you do that on purpose because you wanted attention, or you just couldn't constrain yourself?

Cuban: No it was because I wanted to improve the league.

I mean, when I first got to the NBA, they didn't know what product-- what their product was.

They always thought that we sold basketball, and I was very clear to them that we don't sell basketball.

We sell experiences.

You know, if you think about the sporting events that you've gone to, you know, you don't remember the score, the touchdown, the dunks, the jumpers.

You remember who you were with, you know, the first time a parent took you, the first time you went with, you know, your friends, or, you know, the time, you know, you had your buddy's bachelor party or the first date there.

The NBA didn't realize that's what we sold, and so, you know, it took a lot of, you know, aggression, I guess, from both sides.

You know, a lot of-- a lot of going back and forth with then commissioner David Stern, you know, but to his credit while he had to fine me, you know, privately he would agree with me on a lot of those things, you know, and so to me, I was just being a good partner even I though a lot of my partners didn't really appreciate it.

Rubenstein: Well, in the early days, you were very young owner.

Now you've been an owner for 20 years.

You may be one of the more experienced owners.

Do you get people now listening to you more than they did 20 years ago?

Cuban: Yeah.

They're used to me.

Like you said, I'm one of the longer-term owners, and so, you know, I'll still raise hell and speak up, but now they're kind of used to me, and they've changed a lot.

A lot of things have changed, you know, whether how we approach officiating to how we market our games to what we do for broadcasts.

There's just so much that has changed over the 20 years for the better.

Rubenstein: Now the Black Lives Matter issue.

Obviously, the NBA has been deeply affected by it.

Most of the players there-- more than a majority are Black.

You have said you would kneel with your players if they chose to kneel.

Is that still your view?

Oh, absolutely.

Yeah.

I truly believe we're in an inflection point in racial relations.

You know, I've learned a lot over the years.

I always thought I knew more than I did, but, you know, with George Floyd's death and talking to our players and staff who are African-American, there were a lot of things I didn't know, and it really just made me understand in a much deeper way than I ever had before.

So, you know, the hope is that this is an inflection point, and if I can contribute just a little bit to improve race relations in this country, that's a step forward and something I'd be proud of.

Rubenstein: Dirk Nowitzki was one of your star players for a long time, a European.

You have a couple other Europeans now who are stars, as well.

One of them, you traded, you got from the New York Knicks, I think, in a trade that President Trump commended you on, -as I recall.

-Yeah.

Yeah.

So let me ask you this, though.

When are you going to recruit more Jewish basketball players in the NBA?

Yeah.

Hey.

I don't care if they're from Mars, right?

You know, if they wear a kippah during the game, I'm fine with that, too.

I don't care.

You know, just whatever, ever, ever works.

I just want to win.

Rubenstein: You know, you have a very much of an everyman image, where you're like an average Joe, you're a basketball fan, so forth, but the truth is you have a lot of technology background, a lot of sophisticated financial background, so you have been kind of portrayed that the way-- you know, Bill Gates is seen as a technology guy and maybe Jeff Bezos is, but you have a lot of technology knowledge, but you don't kind of advertise as much, but clearly, you know the technology world pretty well-- Cuban: I put in the time, right?

When I worked at Your Business Software before I got fired, it became very clear to me that when it came to technology there were two people, two types of people.

There are the people who created the technology, and then there was everybody else, and I was tied with everybody else in terms of knowledge of any new technology that came out, and if I put in the time and, you know, put in the effort to learn about that technology, No matter what it was, I was going to move ahead of the 99%, maybe never catch the person-- or the people who created the tech, but I'd be ahead of everybody else, and that's always been my mantra, and I try to stick to that today.

You know, this morning, I'm reading about artificial intelligence.

You know, I'm reading about fast AI and fast ML and, you know, new tools that are coming out now because AI is very hard for companies.

It's hard, you know.

Very few companies are successful in using it, and so trying to figure out ways that small- to medium-sized companies can implement AI, I think, is a necessity right now, and it's something I need to learn.

So that's where I'm putting in my time.

Well, so for people who want to be like Mark Cuban, were you a great student in technology or science, or did you learn it later?

Cuban: I didn't take any tech classes at all.

Actually that's not true.

I took one Fortran programming class, and this was so long ago, you had to type in the key punch cards, and I was such a horrible typist, it never worked.

I understood it, but I had to actually borrow a copy of someone else's cards in order to get through the class.

Rubenstein: So as you are talking to us today, you have many different businesses, but you have a big investment business, and you've said publicly that you're a gigantic investor in Amazon and Netflix and other companies, and do you just have advisors that help advise you on these, or you just make your own decisions?

Pretty much make my own decisions.

Yeah.

I mean I used to trade as I mentioned-- I used to trade a lot.

I used to be very, very active as a trader, and, you know, back--you know, back in the nineties and early 2000s, there was a lot less money chasing more stocks, and now there's a lot more money chasing fewer stocks, so it's harder to trade and be successful.

So I just stick to the companies I believe in.

You know, I've owned Netflix since it was 50, and Amazon, I was buying between 500 and 700 and actually bought some more in the high thousands, just under 2,000, but I've got some scattered things, you know, beyond that that I've owned over the years that I've held onto, but I don't-- I no longer trade.

You know, that fed put is strong.

You know, that fed inflation of financial assets kind of gives us a tailwind.

No COVID, you have said, has changed the world in terms of opportunities.

It's obviously hurt people, but it's obviously helped people who are entrepreneurial.

So you've said this is a good time to actually figure out new businesses, new areas of business.

Is that a fair statement?

Yeah.

You know, it's so unfortunate, but it's true.

I mean, you know, we've heard Warren Buffett say you know, by when there's blood in the streets, and it's almost analogous here.

So many small businesses are closing.

So many, you know, retail stores are closing, malls are, you know, going bankrupt.

Companies that are unable to transition to selling digitally or really taking a full advantage of e-commerce are struggling.

Big companies don't understand- don't--really aren't sure about how to protect their legacy businesses.

That type of uncertainty creates a lot of opportunity, and combine that with people becoming far more comfortable with purchasing online and living a digital lifestyle, I think there is a lot of unique opportunities that are available to people who are creative, who have a vision for the future.

I think, you know, in 10, 15, 20 years, we'll look back, and there'll be 10, 20, 30 world-class companies that were created by people who we probably are thinking are crazy right about now.

So you had a relationship with President Trump at one point, I think, when he was first thinking of running.

This is after he announced, and thinking he had no chance to win whatsoever, I made a public statement saying, "I think Donald Trump's the best thing "to ever happen to politics.

"He's not a traditional politician, and he says what's on his mind," and that got picked up everywhere, and I became his new best friend, and so he would call me all the time, all the time, and just, you know, that's who he is.

Until I said, one day that I didn't think he was qualified, and then it was all downhill from there.

Rubenstein: So he never invited you to the White House?

Cuban: No, he actually, he did recently--ha ha ha!

But, you know, everything Donald Trump touches, you know, turns into a mess, so I didn't accept the offer.

Rubenstein: Now you've said you might consider running for president.

In fact, you had a pollster look at it.

Why did you decide not to run for president this time?

Primarily because my family said no.

I mean, you can't--you know, given the nastiness of politics right now and just the hate and the social media destructiveness, you know, your family has got to really be up for it, and so that was the primary reason, and the secondary reason was in the polling that I did do I couldn't get more than 25% of the votes.

I could dominate with independents, but I couldn't, you know, pull enough Republicans or Democrats from Biden or Trump.

Would you consider running in the future for president?

I hope not.

You know, the only reason I considered it now is just because things are so partisan and people are putting party over country, and I thought as an independent and somebody who, you know, was not dogmatic about anything for that matter except trying to serve the American people that the timing might have been good, but it's not my ultimate dream job.

So if somebody's watching this and says, "All right, I want to be like Mark Cuban.

"I want to be a leader in many different areas, be successful," what would you say?

are the 1 or 2 or 3 traits that are necessary to be a successful leader?

Find something that you love to do and be great at it.

You know, most people the one thing in life you can control is your effort, and most people don't put in the effort.

They think it comes to them, and it doesn't as you know.

You know, there's lots of competition no matter what you choose, and you have just got to put in the effort.

So behind you.

It looks like is one of the-- a replica of a basketball championship trophy, Cuban: That's not a replica.

That's--that's the real deal.

All right.

That's the real deal.

All right.

So you look like you need another one to match it up.

Are you hopeful of getting another one someday?

Oh, absolutely.

You know, hopefully this year, but, yeah, that's the goal with the Mavs.

You know, there's 1 winner and 29 people tied for last place in the NBA, and this one is almost 10 years old, so Larry O'Brien back there, needs some friends.

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