Mark Cuban: How I Became a Billionaire

entrepreneur Mark Cuban never calls time out I always look at business as a sport and football you play 60 minutes basketball you play 48 minutes in business it's 24 by 7 by 365 and the whole world's trying to kick your ass I will never forget talking to mark about you know where are you going with this broadcast thing and he goes I'm going to the BBC billionaire boys club Mark Cuban parlayed his passion for Indiana basketball into a company worth five point seven billion dollars the day that broadcast.com was sold to Yahoo I think a lot of folks felt like we had hit the lottery twice the unorthodox entrepreneur has disrupted every business he touched he said never blow the stuff this is not what I want rip everything I always start again he's been slammed eliminated and investigated Mark Cuban order to appear before the SEC but almost always comes out on top he is smart being one of the smartest people but he goes ooh you could make the argument it was one of the luckiest people in the age of the Internet somebody has got to be the luckiest person in the world nobody's got it it appears that they are facility game-by-game basis but I can't feel - Mark Cuban got in at the beginning of the internet boom and it served him well his gold mine was called broadcast comm one of the first internet sites to stream events live everything from Victoria's Secret models to countless sporting events we were the first ones to scale internet broadcasting you know to take five hundred radio stations and broadcast them on the Internet a hundred television stations earnings calls product launches college football games deals with the NHL Major League Baseball mean we had really become a broadcast network on the Internet the fiercely independent entrepreneur has blazed a trail into TV movies NBA ownership and he even stars on a TV show though he declined to participate in this one mark has been an entrepreneur from the moment the word was invented before it meant drug deal Mark Cuban was born in Pittsburgh Pennsylvania and grew up in a suburb called Mount Lebanon from the get-go Cuban was a money maker selling trash bags newspapers and even postage stamps I started a stamp company I started with a quarter and bought a stamp and left with $50 thinking hey if I could do this I could do anything by the time he was 16 he had already built a reputation Brian Cuban is his younger brother I remember mark being given $5,000 by one of our neighbors to go buy stamps in New York with my father now he was always the entrepreneur a stamp shows but that just shows you at that age what people thought of his ability to make money that skill only grew at Indiana University the tireless business major taught disco started a chain letter and decided to run a bar if he could come up with $15,000 Evan Williams was an engineer at General Motors who played on the school rugby club with Mark Cuban he was at my house one day he was calling banks to try to get a loan so I could buy this bar so on my way out said hey mark if you have any problems getting that loan just give me a call two days later he goes hey EV so I ended up late 1979 loaning mark fifteen thousand dollars so he could buy a bar in Bloomington Kuban awarded Williams stock certificate number one and within months opened his bar Motley's Wayne Winston teaches graduate statistics at Indiana University in my over 35 years of teaching I've never had a student really start a business while they were an undergrad or an MBA here on campus and he started Motley's which became by far I think the best bar in town the business model he used in Motley's is very close to the same business models he used in his next two or three businesses he always would have 51% of it even though he didn't put up any of his own money but no one really complained because he was the one that built up the business until it came crashing down after a wet t-shirt contest it's pretty common knowledge around town and underage girl won a wet t-shirt contest and so I think that hurt the future of the bar let's put it that way Kuban graduated and soon landed in Dallas within a year the born entrepreneur launched micro solutions providing software hardware and training to businesses at the dawn of the PC revolution it was a family affair Marko's you come work for me so I said fine so my first day at work you're not a big lawyer I show up with my suit and tie and he goes why are you wearing that well you know come to work for you at micro solutions no go home and change put on crappy clothes and your jeans you're in the stockroom mark doesn't give you anything you have to learn it and earn it Mark Cuban learned the computer business fast and in seven years sold his company to CompuServe for six million dollars I retired and you retired and what did you do with that money your biggest purchase my biggest purchase I bought a lifetime pass on American Airlines and I had one mission in mind I wanted to be already go to as many countries around the world as I could and get drunk with as many people as I possibly could and I was so good in 1995 Mark Cuban came out of early retirement to reinvent radio according to Cuban college friend Todd Wagner brought him the concept it's a story that Hoosiers basketball fan has told often as in this interview on 60 minutes he sat me down he said look I've got this idea where I think we can listen to Indiana basketball sporting events you know anywhere in the world by using the Internet so mark and I just basically said let's find out if this is a business or not so we set up shop in his upstairs bedroom of his house and you know got us a computer got the software and started playing with it and that is the birth of audio net what eventually became broadcast comm but another young entrepreneur tells a different story Chris jabe says he was also a founder of the company when I was pretty young I was a Minnesota Twins fan I moved to Texas oh it's a displaced fan I was always trying to figure out how to get access to those games that I couldn't see on regular TV when the internet came along it's like it was a slam dunk because now it was just a matter of querying broadcast rights he took his plan to investors one of them was Cuban I probably had this pitch dyed given to maybe 150 people over the previous year and a half to two years and so I'm getting into my pitch this shoots about a 20-minute pitch and within three minutes he goes I'm in I'll do it Jeb asked for a million dollars and said that Cuban wrote a check for 10,000 and months later tried to cut him out completely mark said Chris I really don't need you you really don't have that much to add I can pretty much do or get people to do what you're doing so I was a little bummed to say the least and I really give Todd a lot of credit when he came to me and said you know we can work a deal with you know for 2,500 a month and 10% of the company in the way he described it in the Ray he showed me the paperwork I knew it was real and it really made me feel really good actually even though it was hard to take 10% of a company that I developed 100% from scratch cuban became the driving force of audio net mark overall really wanted to see it as his company he had made it gone from really idea to reality he never really want to acknowledge me as a founder but co-founder Todd Wagner does acknowledge Jeb's participation he was there for a very brief period of time and then he went on to the next thing he owned the slug of equity and did just fine audio net did better than just fine you go back in there and all they did was have all these servers with all these different sporting events going on and people trying to keep the server's up virtually what is going on in here they're planning a nuclear strike you know but it was controlled chaos and they're keeping all those servers up and all the game streaming it was pretty cool Kuban and Wagner changed the name from audio net to broadcast comm in 1998 and positioned the company to go public the internet boom was in full swing and on July 17th the stock hit the market priced at $18 a share the first trade pops up and it was you know $63 or whatever it was I mean it was just through the roof nada Oh Cena led the sports properties and marketing departments at the company I recall our head of HR popping her head out of a cube like a game of whack-a-mole and saying we opened at whatever the number was and everyone looked up and we thought she missed by a decimal she must be wrong and we all started a look and you could just see heads popping out and the excitement in the room it was literally like a parade went off the stock closed at 60 to 75 at the time it's set a record for the highest percentage increase on an opening day I'm the first to realize that luck plays a huge part in it I happen to have a company broadcast comm that went public at the right time when the internet stock market was going nuts Cuban wanted to expand their content and was looking for a breakout event he founded in lingerie there were a lot of pinnacle events for broadcast comm and one of those was certainly the Victoria's Secret webcast rapping high-tech with high-fashion the webcast was a phenomenon millions of people tuned in and it became the largest viewed event ever on the web we like to position it as the first sold-out event on the Internet it helped to cement us as the go-to place if you wanted to do something multimedia on the Internet Jeff Sweeney is an entrepreneur and friend of Cubans from Dallas I will never forget talking to Marc about you know where are you going with this broadcast thing and he goes I'm going to the BBC billionaire boys club you're not gonna make a billion dollars on this thing I mean you're gonna make one hundred million dollars no no no dude no BBC dude that's what I'm doing in pursuit of that billion Cuban and Wagner led the charge straight to the executive offices of Yahoo I remember mark and I going into the conference room and basically just saying look we're where you guys need to be so you're either gonna have to compete with us or you're gonna have to buy us because we are big players in what we think the Internet's gonna go Yahoo felt the breadth of competition according to Paul Sappho a leading technology forecaster it's a moment where there's a sense of the rise of the machines algorithms the form of Google are really taking over the search space and it's beginning to dawn on people that in fact there is a lot of volatility and customer loyalty around place as you visit on the web I can remember going to Yahoo and you could just feel the anxiety at the company how do we bulk up our technology side looking for an answer in April 1999 Yahoo grabbed broadcast.com for a staggering sum 5.7 billion dollars in stock the deal secured Cubans membership in that billionaires Club I think a lot of folks felt like we had hit the lottery twice you had this tremendous IPO and to top it off one of the the great companies in Silicon Valley Yahoo comes in and acquires this little old company that was set up in Deep Ellum Dallas Texas it couldn't have been frankly scripted any better but not scripted all that well for Yahoo it is so easy to quarterback this thing and as people say it's one of the stupidest moves in the history of the internet but there was so much stupidity in that period it was like a single note in a vast symphony of stupidity yahoo struggled with their new acquisition it's pretty simple to see what happened if you're on the inside you had a five billion dollar acquisition handed to a number of NBA's who had never actually integrated anything before we ah who really took a pounding they took their eye off the ball of search which opened the door for Google who smoked them within months of the buyout Kuban protected a stock by buying puts and calls against his interest and began to cash out buying a twenty four thousand square foot mansion and a forty 1 million dollar jet but his next purchase would be the billionaire's prized possession you in January 2000 sports fanatic Mark Cuban bought majority ownership in the Dallas Mavericks from Ross Perot jr. it was the crowning purchase for the billionaire with the insatiable desire to win except that the franchise had one of the worst win-loss records of any team in the NBA you've gotta start giving these guys who have been in damage programs let's call him the thought process that they can win that they are expected to win Cuban was going to change everything his way terr Dima Ussery the buttoned-up CEO of the Dallas Mavericks recalled his first meeting I didn't need the whole day because we're having dinner at his house that night and I want to be a great guest and I was in suit and tie and you know tell my Sunday best is my mom called it he opened doors and jeans and no shoes him t-shirt and we sat on this floor and watch basketball for four or five hours and eight I think anything was cocoa puffs and Doritos is what we had in bottled waters so it was it was just a new reality that new reality took effect the moment Cubans saw the traditional wood paneled locker room in the Mavericks new arena he said you've got to blow this up this is not what I want I want a law of come on open ceilings I want the guys to fly kits a clubhouse the place they hang out and we got to get a pool table in here and we got to get the DVDs rip everything out and start again in the clubhouse the radical new owner booked first-class hotels for road games and went by a team jet with legroom for seven footers all that stuff was noon none of that stuff had been done in the league before nor had an owner worn a Mavs fan for life t-shirt or put his email address on the jumbotron or broken custom by ditching the skybox for courtside seats and yelling at the referees mark is the plenty that's gotten him in trouble Scot sosnick reports on sports business for Bloomberg News my favorite one is when he said that a referee wasn't qualified to manage a Dairy Queen but when he said that Dairy Queen got upset but they wanted mark to know what their managers were highly trained highly skilled folks and so the guy challenged mark to come down and serve ice cream and to see how difficult it really was there were probably six helicopters hovering above at this poor Dairy Queen there were probably 3,000 people outside and he was there additional ice cream he's a very very smart marketing guy and if he can turn a negative into a positive he will but Cubans courtside criticism was a negative for David Stern the longtime Commissioner of the NBA I think mark was very impatient when he first became an owner because he strives for perfection and he expressed his views in that regard it wasn't a constructive enterprise to publicly criticize our officials and it's prohibited by our rules those rules resulted in Cubans first fine of $5,000 followed by fines of 15,000 25,000 250,000 100,000 10,000 and 100,000 again all in his first full season as an owner my job is to stand up for my my guys enough I think something's wrong I'm gonna do something about it reporter John Swartz followed Cubans career for 13 years that connects with people you don't see that among many billionaires they think they have to act a certain way now that he cares I think you honestly just could give a damn what anyone thinks about him Cubans hands-on involvement brought immediate success attendance shot up more than 35% the estimated teen value left fifty million dollars and the Mavericks went to the playoffs in 2001 for the first time in over ten years before he owned the Dallas Mavericks they were the laughingstock of the NBA they were winning 15 games a year once he took over their winning percentages got to be one of the best it's done being the top five despite their surging success that year the Mavericks fell short of the championship and success for Cuban in the film and TV business was also proving elusive at the dawn of HDTV in 2001 he launched the first high-definition television network called HD net as he explained to Charlie Rose we're available on cable were available on satellite but viewers can go knowing that not only they're gonna get great entertainment but they're gonna get great entertainment and the best possible picture quality the network sputtered barely reaching 350,000 homes in its first year Cuban hit pause long enough to marry longtime girlfriend Tiffany Stewart throwing a reception bash on his home court the American Airlines Center by 2003 he reteamed with Todd Wagner and plunged into the movie business we bought Landmark Theatres which was a national independent theater chain we invested and then bought Magnolia Pictures a theatrical distribution company we built on a home entertainment unit as well to that and all of a sudden we had built a vertically integrated media company meaning with production distribution and exhibition all under one roof in a way that frankly we had not seen done before it gave Cuban the pieces to shake up the movie business by releasing a film in theaters on DVD and TV simultaneously Andy fix mer is an entertainment reporter for Bloomberg News back then nobody was doing this nobody even thought that you would dare put a movie on television before it was released in theaters it just wasn't done Cubans movies met with mixed success some films like good night and good luck had found critical acclaim and a niche audience while others struggled and there was a disappointment again on the basketball court star Dirk Nowitzki led the team into the finals in 2006 the Mavs were up two games to none when momentum suddenly shifted and the team dropped three straight Cuban was livid when he was pissed he may as well have been Satan the players literally ran the other way in the locker room after their collapse in the championship Nowitzki publicly called for Cuban to control his temper for the owner who hated to lose the loss was pure devastation I believe he didn't leave the house for three weeks and he became a shut-in so what did it cost him it cost him his dream really his dream was to turn the Mavericks into Champions Mark Cuban the former disco teacher returned to dancing in 2007 in front of millions mark likes as much air time as he can get as long as it's fun and it's entertainment for him he's going to do it he appeared on almost anything even hosting his own reality show the benefactor canceled after one season viewers were also in short supply on his own network with it's strange blend of bikini themed programming mixed martial arts and dan Rather dan Rather and Dan Rather reports on HDNet is kind of my own personal indulgence you know I'm a news junky and always have been dan Rather was doing his show for them which was actually very good but the rest of it was just like a Sargasso Sea of just crap Cuban had more troubles looming the Securities and Exchange Commission filed a suit against him we return now to the crackdown on insider trading and it has ensnared billionaire the SEC alleged that Cuban dumped 600,000 shares of mama calm as an insider trade the 2008 lawsuit from the SEC says he sold shares the company ahead of the company's own plans to sell more discounted shares to investors and avoided three-quarters of a million dollars worth of losses on his blog Cuban stated the claims were false the suit was dismissed in District Court but the SEC appealed and the case was reinstated in 2010 while Cuban battled in the courtroom he also prepared for battle on the basketball court he dealt for key players hired a new coach and in 2011 the Mavericks fought their way back to the fighters surprising everyone the loudmouth behind the team bench went silent it was different I mean still people went up and talked to him but he said not today not me talk to the players with Mark in the background it was this other guy Dirk Nowitzki and the team that Mark had assembled that in the end was able to live off what he's always dreamed of we've had the ceremony inside the building and all of a sudden chant broke out thank you Mark thank you Mark thank you mark how many times have you heard of a building chanting thank you to the owner that's pretty unique with a championship banner finally in place Cuban rebranded HDNet calling it access TV in addition to Ryan Seacrest Cuban partnered with two of the most powerful names in music and entertainment he lives in Dallas with his wife and three children on his personal blog he sounds off on everything from executive compensation to personal health weather brilliant are just plain lucky Mark Cuban will always be looking for his next big move is going to challenge conventions he's gonna change how people think he's definitely a guy to always keep your eye on he's brash he's not afraid of controversy but he's also one of the most brilliant strategic thinkers I've ever met is the glass of water half-full or half-empty Mark's gonna be the guy asking whose porn you can look at things and say this is the way they've always been done I like to look at and said well if everybody's doing this way that's not where the future is you have to look somewhere else and you know if that pisses people off that's their problem

Channel: Bloomberg

Views: 5,908,603

Rating: 4.7888284 out of 5

Keywords: Bloomberg, Mark Cuban (Sport Club Owner), Billionaire, Dallas Mavericks, credit, entrepreneur, business, Venture Capital (Industry), sports, investing, wealth, money, Game Changer (TV Episode), small business loans, Mark Cuban (Organization Founder), Reality Television (TV Genre), Trading, Success

Id: vrl5PFB35Ec

Length: 25min 7sec (1507 seconds)

Published: Wed Apr 23 2014