Cuban has sold the Mavs to Adelson-Dumont Family

[DanSchwartzgan]

The only one that makes all the claims legit is that Adelson will be NBA Governor, but will give Cuban actual in-house control over all the basketball part as long as he wants, which then creates as many questions as answers. How far would that control extend? Who makes the decisions on spending? What if Cuban screws it up? It somewhat implies  they have no real interest in the team (which is possible), but owning a $3.5B plaything that you just have on the side and don't control seems unlikely, even for someone who is ultra-rich.

First, let me say that outside of your original "maybe he's going broke" assumption, your thoughts on this topic have been fantastic and advanced everyone's thinking and knowledge of this tremendously.  I think the real estate angle using eminent domain to establish an anchor of further development makes a great deal of sense.  The camel is putting its nose under the tent.  Even your assumptions (possibly knowledge) about the location is also probably spot on.

A couple of further thoughts...It has been reported that Mrs. A. liquidated 10% of her LVS holdings for this.  so, 2 of 20?  She's reported to be worth $31 billion.  If you break it down to real world terms, I think it is easier to think about this (ultra-rich or not).  Imagine you are a retiree from some local company.  You've got $1mm in the bank and you've built up $2mm of company stock through options.  Mark Cuban is willing to sell you a majority interest in his company for $200,000.  He's willing (anxious) to continue running things.  The books don't look bad on a year to year basis.  The ROI for the last 15 years is good and you are also taking out all minority partners in the deal.

a. As you know from your profession, minority partners are often the managing partner of an enterprise.  Even if Cuban is nothing more than a useful fool from an operational standpoint, he probably brings local credibility (which is probably useful in a development based around Cuban's team that uses eminent domain). 

b. PE firms often leave the seller with an interest in the company as a way to align their interests.  I've seen a good number of instances (in my limited experience with a client selling to a PE firm) where the seller continues to run the operation.  I've got one recent case where the seller was allowed to participate in add-on transactions with the PE firm (using money from the original sale).  

I think if one is posting here one probably looks at Cuban from a mostly basketball standpoint.  In the context of this deal though, I think he's valued differently.  I also don't think the structure is all that unusual (outside of basketball).  The kicker, back to our retiree with $3mm, is that the $200,000 investment is a ticket to a really big payoff from real estate down the road (and front row seats at an occasional game).  Mr/Mrs Retiree has always loved real estate and would love to diversify some of their single-stock exposure into that at some point.  This deal provides an anchor (at mostly public expense) that you just can't buy outside of owning a team.  If you think back to the money that has been made on the land around AAC, I don't think a casino is necessary for this to go well for Mr/Mrs Retiree.  If it happens, all the better.