An investment-savvy FBer points out that the Mavericks may not be such a good investment after all, unless your last name is Cuban and your goals are something other than financial:
What many don’t appreciate is that the Mavericks have never made money on Cuban’s watch: and further, that the losses associated with Cuban’s management of the Mavericks have ranged to as much as $40 million in annual losses over the past six years. It is estimated that Cuban and his fellow owners (Mark is not the 100% owner of the team; there are legacy partnership interests still held by Don Carter and others) have infused the team with as much as $150 million towards satisfying operating deficits since 2000.
As to the figure appearing in Forbes as to the hypothetical value of the Mavericks, the reality is that the worth of the team is anybody’s guess: what is the value to a billionaire of owning a marquee — but perennially money-losing — franchise and brand (and together with the high-profile status associated with such role)? In Mark’s case, that value is obviously fairly dear.
Nonetheless —- and assuming that the Forbes valuation is in the Reality Ballpark -— a residual value of $400-ish million for the Mavericks on a trade and resulting from a $260 million equity purchase and $150 million of accumulated cash infusions hardly qualifies as any substantive investor’s concept of a rational investment.