The NBA playoffs are in full swing, and if you catch the Dallas Mavericks in action, it's hard to miss owner and maverick businessman Mark Cuban, who has owned the Dallas Mavericks since January 2000. His team sports one of the best records in the NBA this year. Cuban sports another type of record, too -- racking up over $1 million in fines for badgering NBA officials over the last two years.
Prior to buying the Mavericks, Cuban was the co-founder of broadcast.com, which he sold to Yahoo! for nearly $6 billion in stock during the Internet boom in 1999. David and Tom Gardner recently played "Buy, Sell, or Hold?" with him.
David: It's the most popular search engine in the world and it's a competitor to Yahoo! Buy, sell, or hold not Koogle, but Google?
Mark Cuban: Buy. Strong buy. I think they are doing it right. Right now, the big revenue push comes from sponsored advertising and pay per ad. Because they've created such a strong search engine that encompasses not just the traditional search engine but discussion groups, images, and because Yahoo, even though they are trying to compete otherwise, has a dependency on them, I think Google is in a strong position.
They always have the option of "Yahooing" themselves if they get to that point by adding smaller features where they get micro-transactions per user. That's always going to be an option. Right now, they're profitable, or they appear to be profitable. They definitely got the momentum: They have a simple, easy-to-use product and they haven't been polluted yet. They don't have all the junk that Yahoo! has on there, and that's not a knock on Yahoo! Yahoo! is a public company. They've got to squeeze every penny they can to make and increase numbers. Google doesn't have that pressure yet. So I would buy it, but I'd also tell the people at Google not to go public.
Tom: Buy, sell, or hold paying college athletes?
Cuban: Buy. I think it's the right thing to do. I think if not, particularly in the basketball world, you're going to see athletes, rather than going to college, going off to Europe where they can get paid and attend school. There are so many arcane rules associated with the NCAA, and with high school athletics for that matter. You know, a high school athlete can't play with his teammates over the summer, so they're forced to join AAU teams, and that whole system is a little bit corrupt.
And then it's the same with college athletes, if someone really is geared toward being a professional in any manner or in any occupation, they should be allowed to focus on it. Unfortunately, the NCAA has such rules that you know someone who wants to be a professional basketball player is limited in the number of hours they can practice, number of hours they can spend with their coach, the number of opportunities they have to be with their teammates. That hypocrisy does not take place in Europe.
So, not only can you go to Europe and pick a school you want to go to, but you can also get paid, and spend as much time practicing as you like. If the NCAA doesn't change, you are going to see a migration of athletes who aren't ready to go direct to the pros, direct to the NBA from high school go to Europe and so the NCAA has to change just to protect itself.
David: You're going to have a hefty one one day. Buy, sell, or hold the estate tax?
Cuban: Ugh. Sell. It's crazy. The least efficient distribution of capital is through the government. Obviously, we have to take care of all of the primary infrastructure needs and support needs that our country has, but there are far more efficient ways than sending a dollar to the government and getting 20% in resources back.
Tom: Buy, sell, or hold NBA officiating?
Cuban: Sell -- I'll just leave it at that.
David: What a huge surprise.
Cuban: Yeah.
Tom: You know, one of our statistical curiosities, as we've studied sports as much as we've studied business at times, in particular my brother Dave has noticed, is that there's a real strong home court advantage in the NBA that sometimes doesn't make sense to us. Is that the NBA officials favoring home teams to build attendance in the league.
Cuban: No, no. It's a lack of accountability on the part of their bosses. You know, people always go back to the saying that "refs are human" and obviously that's the case. When you're officiating in a building that has a loud crowd and really is intense, the refs get influenced by it. Just like players get nervous in front of big crowds sometimes and in front of crowds making lots of noise, so do officials. I mean, that's human nature.
Tom: It's Leslie Nielsen in The Naked Gun.
Cuban: Exactly, exactly. What a great analogy. The more important part from my perspective as a business person is accountability. I keep stats because I want to know if the people we're paying (and the refs are people I pay directly) or indirectly -- I say through the NBA -- are doing their job. Unfortunately, there's not the same level of accountability in that department via the NBA in terms of standards as I tend to hold, and that's where it gets frustrating.
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