On Wednesday, Forbes Magazine published its annual valuations report on the state of NBA franchises. NBA teams and the league itself wouldn’t open its books to Forbes, but based on myriad factors and research, the publication concluded that three teams – the New York Knicks, Los Angeles Lakers, and Chicago Bulls – were worth over a billion dollars. The Knicks and Lakers earned their profit with lucrative arena deals for New York and a massive cable television partnership for Los Angeles while Chicago kept its profits and heightened its valuation by steering clear of the luxury tax in every one of the tax’s seasons save for 2012-13. Every NBA team has seen its value shoot way up due to the owner-friendly Collective Bargaining Agreement that was signed in 2011.
The Dallas Mavericks? A one-time obsessive taxpayer, it has tailed off in recent years as the taxes become more punitive. Not so much because owner Mark Cuban has suddenly gone cheap, but because bad timing on the free agent market has inspired Cuban to (relatively) limit his payroll to keep flexibility from year to year – he’s done it for actual basketball reasons. Because of this, the 2011 NBA champions were first round fodder the next season, they missed the playoffs last year, and they’re at the bottom of the Western Conference playoff bracket currently.
The Mavs have been stuck in a self-prescribed purgatory for a few years, and while we agree with most of the post-2011 moves on basketball terms, it hasn’t been the easiest thing to work through for the front office, the fans, or players and coaching staff. This is part of the reason Dallas “only” came in eighth on Forbes’ list, with the franchise’s valuation pegged at $765 million.
Mark Cuban, as you’d expect, thinks his baby is worth a bit more. From Eddie Sefko at the Dallas Morning News:
“They’re way too low,” he said.
So if somebody showed up with $765 million in his pocket and wanted the team he’s owned since 2000, what would Cuban do?
“I’d laugh at them,” he said. “I think we’re worth well over a billion. I think within the next five years, and this is just a guess, if the economy continues to get a little better and sports still stays in demand, every NBA franchise will be worth at least a billion dollars.”
Cuban was asked what it would take to get his attention for the team that Forbes values as the eighth-priciest in the NBA. He went into his Dr. Evil impersonation from Mike Myers’ Austin Powers movie series.
“Everything’s for sale, but it’s going to take 100 trillion dollars,” Cuban said.
There’s a lot to consider here.
For one, this is Forbes’ (very) educated guess, one coming on the heels of the NBA’s worst franchise, the Sacramento Kings, being sold for $534 million less than a year ago. That team plays in a terrible, money-hemorrhaging arena, it has yet to break ground on a new arena, and it is filled with wasted lottery picks and one dubious go-to star that nobody knows what to make of.
And they sold for $534 million.
This, combined with the owner-friendly CBA and the ever increasing revenue streams (many of which Mark Cuban helped spearhead in his 14 years as an NBA owner) are reasons why many think that some of these valuations are too low. MSG would likely laugh off anyone who offered $1.5 billion for their $1.4 billion-valuated Knicks, but would ownership groups in Minnesota (valued at $430 million) or Charlotte ($410 million) laugh off a $450 million dollar offer for either team?
Such wide disparities no doubt worry the league, which is two years away from locking its players and fans out once again in order to secure more perks for owners that spend hundreds of millions of dollars on rosters’ like New York’s and Brooklyn’s (ranked fifth by Forbes, despite a terrible record and nearly $200 million player and coach payroll after taxes).
For all their terrible basketball choices (Brooklyn) and/or insipid and petulant administrative choices (New York), at the heart of their swingin’ checkbooks beats one of a competitor (Chicago, reputed to not want to pay a luxury tax even if it could secure a winner in this era, sometimes feels as if it is after something else). Even though Brooklyn and Dallas are in similar situations standings-wise, if not record-wise, Cuban is a different sort of competitor.
You may have been able to quibble with some of his personnel moves in the first three years of his time with the Mavericks, but by and large Cuban lets his basketball front office personnel do the work, while making sure that he hires the right sort of basketball personnel, all while immersing himself in the various streams of information that this league keeps producing. He’s smart-competitive. Not paranoid-competitive, or “pay anything”-competitive.
He does look like a brat when he’s feuding with referees, and his Mavs are going to turn in three (Western Conference-relative) mediocre seasons in the wake of a championship, but Mark Cuban knows what he’s doing. Even if the vicissitudes of the free agent market sometimes get in his way.
It’s overcoming those vicissitudes that keeps Cuban going, looking forward to attempt one more shot to surround Dirk Nowitzki with the teammates that he deserves. Nothing against the Mavericks’ current core, all filled with solid-enough players and good guys, but this team is on pace to win “just” 47 wins, and that’s not what Cuban and Dirk are after. They want another ring.
That challenge, and to a far lesser extent the chance to be recognized as a billion dollar franchise, are what keeps Cuban going. Then, and maybe then, can you make him that $100 trillion offer.
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