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Cuban-Adelson Deal Could Hold Implications Far Beyond NBA

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Asked last week to identify a sleeper candidate for next fall’s presidential election, Chuck Todd enumerated the qualities of a shrewd entrepreneur who recently left the shark-infested waters of a popular reality TV show.

Hours after reports surfaced of a groundbreaking sale of the Dallas Mavericks, Mark Cuban received a call last Wednesday from Todd, NBC News’ chief political analyst. The former moderator of NBC’s Meet The Press wanted to gauge Cuban’s interest in running for the presidency.

“He gave a very political answer to me — he said he had no plans at this time,” Todd recalled at the Sports Business Journal Dealmakers conference in Washington, D.C. “I said, ‘No plans, that’s the biggest copout you can give to a reporter.’”

Before the conference ended, the Adelson and Dumont families announced that they had entered into a binding purchase agreement to acquire majority ownership in Cuban’s NBA franchise. The purchase by Miriam Adelson and her son-in-law, Las Vegas Sands Corp. President and COO Patrick Dumont, values the NBA franchise at $3.5 billion, according to multiple outlets.

Cuban reportedly is expected to retain operational control of the team. During the two-day conference, Sports Handle spoke to more than a dozen attendees about the proposed transaction, ranging from financiers and M&A attorneys to team executives from other NBA clubs.

In the halls outside the Salamander DC grand ballroom, the attendees opined on Cuban’s motives for the sale. Since Cuban has already outlined a vision to open a new Mavs arena inside a mega Texas casino resort, the deal may increase the possibility that the parties involved could partner on a $1 billion-plus privately financed arena.

Cuban can also reinvest the proceeds into other entities, namely an online pharmacy he launched last year. Or, Cuban may be unloading the stake with an eye on a White House run. The general consensus, however, is that it is too early to determine the true extent of Cuban’s plans.

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Speaking with Sports Handle on the sidelines of the conference, Todd noted that his conversation with Cuban focused more on the political side of the transaction than the business one. Nevertheless, Todd indicated that Cuban’s sale makes a good amount of sense given how franchise valuations have skyrocketed recently.

The nation’s most prominent GOP donor

As one of the nation’s most recognizable political commentators, Todd views the deal from a different lens than most. Todd has maintained a relationship with Cuban for about five years since the former Shark Tank personality floated a potential run for the presidency ahead of the 2020 election. While the sports industry is focused on Cuban’s end of the deal, people should consider Miriam Adelson’s stature in lobbying circles, Todd indicated.

The widow of late casino magnate Sheldon Adelson is the “single, most important” GOP donor in the nation, Todd told the assembled crowd. During the 2020 election cycle, the Adelsons gave at least $170 million to outside spending groups, according to Open Secrets, including $75 million to Preserve America PAC, a political action committee that backed former U.S. President Donald Trump.

While Adelson cut back on political donations following her husband’s death in 2021, she still ranks among the nation’s most influential donors. In Todd’s estimations, the Republicans would not have won the House of Representatives last year without her support.

“It’s interesting that suddenly Mark Cuban has her as a business partner,” Todd said.

A political action committee formed by Las Vegas Sands last January, Texas Sands PAC, received $2.3 million in initial funding from Adelson, according to a Texas Ethics Commission report. Earlier that month, the casino company employed at least 63 Texas lobbyists, the Dallas Morning News reported, citing state lobbying records. Sands previously launched a multi-million-dollar lobbying and advertising campaign during the 2021 Texas legislative session in an effort to push a gambling initiative. Sands is projected to spend $5.9 million on Texas lobbyists in 2023, down from about $6.7 million two years ago.

In May, the Texas House of Representatives narrowly passed HB 2843, a Sands-backed bill that sought to legalize casino gambling. Two days later, the House passed a separate bill, HB 1942, that aimed to legalize sports betting for operators providing sports betting apps.

A legislative analysis cited an estimate by George Zodrow, an economics professor at Rice University, that by authorizing destination resorts that include casino gambling, sports betting, hotel accommodations, and other amenities, the state of Texas could generate gross domestic product of some $8.3 billion. Neither bill, though, gained traction in the Senate.

In partnering with the Adelson family, Cuban’s business instincts came into play, Todd explains. Before the sale, the odds were ostensibly low that a project led by Cuban, a multi-billionaire, could receive hundreds of millions in public financing. But Todd says it’s interesting to consider the idea that Adelson may turn the Mavs’ purchase into a deal to persuade the Texas legislature to legalize gambling in connection with casino-arena projects like what Cuban envisions.

NBA franchise inflation

If consummated, the Mavs’ sale will be one of the largest in NBA history, just behind last year’s purchase of the Phoenix Suns. United Wholesale Mortgage CEO Mat Ishbia purchased a majority stake in the Suns and the WNBA’s Phoenix Mercury in 2022 for a record $4 billion. In April, former Milwaukee Bucks part-owner Marc Lasry completed a sale of his 25% stake in the franchise at a valuation of $3.5 billion.

“Sports franchises have proven to be the ultimate trophy asset,” Gabelli Funds wrote in a recent research note on the current landscape of the sports industry.

As of October, the average NBA franchise is worth $3.85 billion, according to Forbes, an increase of 35% from the previous year. On the second day of the Dealmakers conference, NBA Deputy Commissioner Mark Tatum appeared on a panel with league executives from the NHL and MLS.

While addressing franchise inflation, Tatum said a primary factor is the increased value of live-sports content. NBA Commissioner Adam Silver has repeatedly credited sports betting for bolstering fan engagement.

On a separate panel, sports banking pioneer Sal Galatioto spoke briefly on the proposed Mavs sale. His Galatioto Sports Partners is a financial services firm that provides advisory services on valuations, capital restructuring, and dispute resolution, among other consulting. The financier considers himself to be close friends with Cuban. Admittedly shocked by the deal, Galatioto polled the audience on the Mavs’ valuation. Several attendees responded that the price was too low.

That depends. Will Adelson be able to leverage the deal to open a mega casino in the Dallas-Fort Worth area? If Cuban partners with the Adelson-Dumont families on an arena inside a casino, there are enough carrots to attract every rabbit in Oklahoma. From a revenue-sharing perspective, Cuban could receive a chunk of table-game revenue, sports betting revenue, slots revenue, and potentially food and beverage sales.

There are other potential perks, in that Cuban could reward season-ticket holders with loyalty points and VIP amenities on the casino floor. Cuban has ambitions to turn Dallas into an entertainment destination, but can it become the Las Vegas of the South?

Recall that Cuban telegraphed plans to partner with Sands late last year, ahead of the Texas legislative session. The casino integrations may give Cuban a “second bite of the apple” after receiving around $2 billion from selling a stake in the Mavs.

“My goal, and we’d partner with Las Vegas Sands, is when we build a new arena, it’ll be in the middle of a resort and casino,” Cuban told The Dallas Morning News last December. “That’s the mission. … For anyone who lives outside of Texas, what is the one place that they plan a vacation to visit in Texas? There is none. There’s no destination resort in Texas where, if you’re living in Pittsburgh or Indiana or Chicago, you say, ‘Hey, honey, we’re saving money to take the family to Texas.’”

NBA arena protocols

As with any franchise sale, the Mavericks ownership group will undergo a considerable suitability review before the transaction is approved. The vetting process will go before an NBA Board of Governors committee, which will conduct a financial review and personal business checks. From there, the transaction requires three-fourths approval from the league’s owners.

The opening of any new NBA arena would also be subject to league approval. League protocols on the opening of a new arena are covered explicitly in the NBA’s constitution and bylaws. Although the WNBA’s Las Vegas Aces play their home games at a venue adjacent to the Mandalay Bay Expo Center, the facility is far removed from the casino floor of the resort.

(B) the Member shall obtain a written determination from the Commissioner (or the Commissioner’s designee) prior to holding any practice, exhibition, or game involving NBA players at the newly-constructed or renovated arena that the construction or renovation of the arena has been completed in substantial compliance with the minimum arena standards of the Association.

   (iv) For purposes of this Article 8, “substantial compliance” with the NBA’s minimum arena standards shall be solely determined by the Commissioner (or the Commissioner’s designee). 

–NBA Constitution, 2.8 Arenas 

More than two decades have passed since Cuban purchased a majority stake in the Mavericks from Ross Perot for $285 million. Forbes ranks the Mavericks as the NBA’s seventh-most valuable franchise at a valuation of $4.5 billion. Still, the sale to the Adelson will represent a return of nearly 12x on Cuban’s initial investment.

The NBA is expected to begin negotiations on a new media rights contract next year, a deal that could land the league $75 billion over the life of the contract. As with other recent franchise sales, perhaps Cuban determined that the timing is right to cash out. Cuban’s proposed sale comes at a period of rising geopolitical tensions throughout the world. While the NFL is the largest domestic league in the U.S., the NBA is arguably more popular globally.

“If you’re Cuban, if you don’t do this now, you might not be able to do it in three years,” Todd told Sports Handle.



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