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Cover Story

CEO of the Year: Mark Cuban

His business savvy—and his NBA championship—earn the ultimate Maverick the nod among Dallas-Fort Worth business leaders.
photography courtesy of David Yellen/Corbis Outline

Mark Cuban may have purchased the Dallas Mavericks as a frustrated fan. And, considering his passion for the game, he may have a “basketball heart.” But it’s his business acumen—with its emphasis on the steadfastness of his front-office team—that many CEOs can relate to.

Local business leaders have recognized Cuban, 53, as Dallas-Fort Worth’s 2011 CEO of the Year. The recognition came in response to a question on the annual Sentiment Survey conducted by Southern Methodist University’s Cox School of Business.

Because C-level types are often avid sports fans, they can especially appreciate one of their own applying business principles in a soar to the top. Cuban refers to it as “the Sport of Business.”

Asked what he believes might have impressed the local CEOs and other C-level executives, other than winning the NBA championship this summer, Cuban replies: “I love the Sport of Business. It is the ultimate competition, and I think any CEO can relate to the idea that if you love what you do, the rest is easy.”

But, the Mavericks’ first NBA title in 31 seasons did not come easily. Cuban had a big hand in the championship run by refusing to shake up an aging roster, thus avoiding the knee-jerk strategy common among fidgety professional sports owners.

The Mavericks had reached the NBA Finals after the 2005-06 season and led that championship series, three games to two, over the Miami Heat. One victory shy of the title, Dallas imploded under then-coach Avery Johnson, whose public panic seemed to impact rattled players as they dropped the final two games.

The following season, the Mavs breezed to the league’s best record (67-15), only to be swept, staggeringly, in the first round of the playoffs by the Golden State Warrriors and the Mavs’ former coach, Don Nelson.

Cuban sent Johnson packing and brought in Rick Carlisle as coach. But Cuban only modestly tweaked the aging roster, stocking the team with a few extra basketball junkies who helped overcome the more noted superstar teams in Los Angeles and in Miami. It was the Miami “Dream Team” that the Mavericks polished off in six games of the NBA Finals in June for the title.

“If anything, I think the most important element this year was the fact that we didn’t change anything,” Cuban writes in an email—his standard way of conducting interviews with the print media. “We stuck with the same approach that had gotten us so close so many times, and trusted that we were doing the right thing. In the sports business, with all the media scrutiny and attention, that is often not easy to do.”

Later Cuban adds: “I think more than patience, it was continuously re-evaluating our tactics, strategy, and results and recognizing that we were on the right path and that the smart thing to do was to stay the course. Fortunately, it brought us a championship.

“It has also worked in my other businesses,” Cuban says. “A constant feedback loop is a key element in how I approach business, and so far it has worked out fairly well.”

The Maverick nickname suits Cuban like no other. He has openly criticized NBA Commissioner David Stern, the league front office, opposing players, opposing fans, game referees—perhaps even a hot dog vendor or two at some point. His league fines (at least 13) are creeping upward toward $2 million (some $1.7 million and counting). Cuban says he matches each fine with a charitable donation.

It seems to be his style in everything he does.

Outspoken and Ornery
No place in America has such visible sports executives as North Texas’ Big Three—Jerry Jones of the Dallas Cowboys, Nolan Ryan of the Texas Rangers, and Cuban. Each enjoys more national media attention than their teams’ players. But Jones and Ryan, other than starring in their share of local TV commercials, focus on the plight of their teams, essentially spending their time “talking ball.”

Cuban, in contrast, has no qualms about going public with his views on the economy (he thinks the wealthy should pay more taxes), the Occupy Wall Street protestors (he empathizes with them), or politics (he is neither Democratic nor Republican, seemingly Libertarian). Cuban has been a guest on HBO: Real Time with Bill Maher, The Colbert Report and other TV shows that covet his highly-opinionated nature.

Courtroom battles have been no different. When in June 2004 Cuban sold his shares in the Internet search company, the U.S. Securities and Exchange Commission filed suit for insider trading after the company’s stock fell dramatically shortly after Cuban’s sell. Rather than keep mum, Cuban openly fought back, insisting he was a victim of his fame and political stances, labeling the accusations “a gross abuse of prosecutorial discretions.” The charges against Cuban were dismissed, but a report by the inspector general has rejected his claims.

Cuban has also been embroiled in a bitter, high-profile legal dispute with former Mavericks majority owner Ross Perot Jr., with each suing the other over various business decisions. 

Cuban can also appear to be ornery just for ornery’s sake. Asked what it’s like to be cited as CEO of the Year by his peers in the Dallas-Fort Worth area, Cuban answered, “I guess it feels nice. I’m not one that pays that much attention to awards and honors.” Most winners say how flattered they are.

On the other hand, Cuban probably means it. His insistence on conducting most print media interviews via email borders on petty, considering the millions of dollars of free advertising that daily sports pages provide his team in game stories, features, statistics, and columns. Just before this year’s playoffs began, Cuban threatened to ban Internet reporters from the locker room, comparing their access to handing out needles to heroin addicts.

And yet, the Internet is what made him a billionaire. So he can’t very well be accused of playing favorites. Before he hit it really big, Cuban could often be found sitting at a table at Deep Ellum’s Café Brazil, pen and pad in hand, as he puts it, “Reading, working, strategizing, stressing, trying to think about everything and anything that could give me an edge.”

With Todd Wagner, a buddy from their Indiana University days, Cuban created what would become, a uniquely creative pioneer of streaming audio and video online. Four years later, in 1999, they sold it to Yahoo! for $5.7 billion during the height of the “dot-com” boom. Only a few months later, in January 2000, Cuban purchased the Mavericks from Perot Jr. for $280 million. He had never given a thought to owning a sports franchise.

“Never crossed my mind, until the opening day of the Mavs’ 99-00 season,” he says. “I was a season ticket holder and was upset that the stands were half empty. I thought to myself that I could do a better job than this, and that was the genesis of it all.”

According to a January story in Forbes magazine, before the Mavericks went on their championship run, the team was the sixth most valuable franchise in the NBA at $438 million. Of the NBA’s 30 franchises, the average worth was $369 million. The Mavericks trailed only the New York Knicks, Los Angeles Lakers, Chicago Bulls, Boston Celtics, and Houston Rockets.

While owning the Mavericks, Cuban has also purchased the 58 Landmark Theaters and, with Wagner, film distributor Magnolia Pictures. He is also chair of HDNet, an HDTV cable network. Of Forbes’ 400 Richest Americans (September 2011), Cuban ranks 171st, with a net worth of $2.3 billion. Forbes also says he is 459th in the world.

It’s the Mavericks who have afforded him such a high profile. (How many of us know who Todd Wagner is?)

Nelson, Cuban’s first coach, had probably turned the proverbial corner for a ghastly, decade-long franchise of failure only a couple of months before Cuban took over. The Mavericks finished that 1999-2000 season with a 40-42 record. Cuban converted the locker room into a player paradise for video, sound, and all forms of modern-day envy from the rest of the league. And with the timing so perfect, he has always received a huge chunk of the credit for the Mavericks’ turnaround.

Since then, the team has run off 11 consecutive 50-win seasons, one of the bars for measuring NBA success. Since the league went to an 82-game format in 1967, only the Lakers (1979-91; 12 seasons), San Antonio Spurs (1999-present, 12 seasons) and the Mavs have strung together as many as 11 consecutive 50-win seasons.

None of it would mean nearly as much, however, without the championship.

“I try to continuously learn and get smarter at any job I take on, and I encourage everyone in the organization to do the same,” Cuban says. “I think this year we had a coach who was more open to enhancing his toolbox and finding ways to complement his skill-set. I think this time around the players also trusted the approach. So we all were wiser in our approach. That combined with the fact we hit our open jumpers made everyone look smarter [smiley face inserted here].”

Again, Cuban merits his share of praise for sticking with the coach and players he believed in. But he downplays the patience he showed.

“I thought we were going to get one five years ago, so I wouldn’t say my patience or experience was the issue,” Cuban says. “I think it again goes back to the constant feedback loop. We were just smarter as an organization this year.”

The most notable change he made during the championship season? Replies Cuban: “I would say the most radical thing we did this year was fully incorporate a team psychologist [sports psychologist Don Kalkstein] into our daily routine for both players and coaches. A somewhat unique thing about the NBA is that every player thinks they should be playing the entire 48 minutes, and only the coach and playing time allocation stands between him and stardom.

“Having a team psychologist gave players an outlet to direct their frustrations to, without impacting team chemistry. Our Doc also acted as a sounding board and advisor to enable our coaches to more effectively communicate with the players. When you combine it all, it created a team that continuously learned more about itself on an individual and aggregate basis. We don’t win without Doc being part of the team. A corporate analogy would be that you need someone that everyone can trust who can help a company break down all the barriers that corporate politics create.”

Who would have thought it: The NBA’s mad owner, he who shouts down and verbally shoots down all who oppose him, pays tribute to a shrink?

Or, for that matter, who would have thought the NBA owner perhaps most in love with his own voice and public persona would end the e-mail interview like this:

“I guess the last thing would be for me to make sure that everyone knows that none of this ever happens without surrounding myself with people a lot smarter than me.”

Modesty from the ultimate Maverick, Dallas-Fort Worth’s 2011 CEO of the Year.