The Journal. - Mark Cuban on ‘Shark Tank,’ the Mavs and Elon Musk

Episode Date: February 6, 2024

Mark Cuban is best known as a panelist on the reality TV show “Shark Tank” and for his ownership of the NBA’s Dallas Mavericks. Now, the billionaire investor is switching gears. This will be his last season on “Shark Tank,'' and he recently sold a majority stake in the Mavericks. Instead, he’s focusing more on an industry he wants to disrupt: healthcare.   Further Reading: -Mark Cuban Enters Elon Musk’s Echoverse of Madness -Mark Cuban Is Set to Sell Majority Stake in Dallas Mavericks to Adelson Family  -Mark Cuban Has a New Job: Working at an Online Discount Pharmacy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Mark Cuban is known for a lot of different things. If you're a basketball fan, like me, you've probably known him as the owner of the NBA's Dallas Mavericks. This team has so much heart, so much determination. If you love business, also like me, you've surely seen him on the show Shark Tank, where he's been striking deals and crushing dreams for 15 years. Look, we all make mistakes as entrepreneurs,

but I just really don't think you have your act together on this. For those reasons, I'm out. But now, he's taking a step back from the things he's been most known for. This year will be his last season on Shark Tank. And he just recently sold the majority stake in the Mavericks. I wanted to ask him about these decisions. So yesterday, Mark and I got on a video call. Are you like in a spaceship?

Just in a plane. Ah, is this your private plane? My private plane, yep. Nice, it's a great place to do an interview. It's a great place to do anything. These days, Mark, who turned 66 this year, is giving more of his attention to a new arena, healthcare,

with a startup that sells cheap prescription medication online. He says it has the potential to disrupt the industry. It's actually, and this is going to sound crazy, it's been the easiest business I've ever had to grow. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudson. It's Tuesday, February 6th. Coming up on the show,

a conversation with billionaire investor Mark Cuban. We'll see you next time. So you can live a more extraordinary life. Live more with Liquid IV Hydration Multiplier. Available in refreshing lemon, lime, passion fruit, and strawberry flavors. Buy a stick in store at Costco, Walmart, Amazon, and other Canadian retailers. There's a lot that I want to talk to you about. The first thing I feel like I have to ask you is that I understand the first time you dunked a basketball was when you were 37 years old. I'll be turning 37 this year. I think you and I are the same height, so I got to know how you did it. I worked out every day.

I had just sold my company, so I had time. And so I was in a mission to get in great shape. I was ripped. I mean, like ripped, like people giving me a hard time about working out too much. And so I, you know, I was doing legs, something I'd never done and I got it to go. Was that your goal after you sold your company was like, I need to be able to dunk a basketball now. No, it was just, I needed to get in shape because I'd worked so much. I was out of shape. You know, it's funny now at my age, I look back 37, I was young, but every milestone you hit 35, 40, 45, whatever it is, you start thinking you're old. Oh, I'm finally old. I'm fine.

And you know, back then I felt the same way. And so it was like, okay, if I don't get in shape now, I'm never going to get in shape, that type of thing. And so I just, just made it a goal to try to get in great shape. And I did. And so I just made it a goal to try to get in great shape, and I did. And when was the last time you dunked? When I was 37. I had to try again after that. I got it and walked off the court. This will be your last year participating in Shark Tank, and the show's 16th season. So the first thing I want to talk to you about is why you're deciding to walk away. I mean, I love the show. I love what it stands for. It still holds true to the reason that I joined, which was to send a message to as many people as possible that the American dream is

alive and well, and that still holds. But my kids are 14, 17, and 20. And it used to be when they were younger, my wife and I could control their schedule. Now we can't, I have to, I have to play to their schedule. And so, you know, Shark Tank shoots a couple of weeks in June, it's a couple of weeks in September. And I just wanted to be available when they're available to me. And that was the whole reason. Are you going to miss it? Oh, of course. You know, I'll miss the shooting. The shooting was a blast. You know, it was easy, went by fast. I love the other sharks, the guest sharks. I love the whole pitch process. Sometimes after you close the deal, it's a little bit, you know, it can be aggravating. It can be hard because all entrepreneurs are different.

That part I won't miss as much, but the shooting I'll miss a lot. Mark has invested in dozens of companies during his years on Shark Tank. He's been on the show so long, he says he can't even remember exactly how many. I have no idea. I have no idea. I know I've invested 23, 24, 25 million, maybe it was 29 million, but I mean, I've got multiple companies that have 100, $200 million market valuations

where I own 10, 20, 30%. So if I've only invested 29 million in total, I'm way up. Do you have any advice for entrepreneurs, whether either making a successful pitch or just starting a company? Yeah, be prepared. You know, it's not about your dream. You know, the market doesn't care about your dreams, right? The market doesn't care if you think you're special. The market cares about your product or service and how well you can sell it and how happy you make your customers.

And when it comes to pitching investors, I've heard you say the longer the backstory, the worse the deal. Yeah, that's a 100% fact. Because if you start telling me about grandma and grandpa and how they came over to this country or how, you know, your dog died when you were six and it scarred you for life, any of those things that's not specific to the business, the potential investor is just going to tune out. They want to know about you now and what you can do and about the company now and what it can do. and what it can do. Arguably one of Mark's best investments has been the Dallas Mavericks.

He bought the team for around $285 million in 2000. And late last year, he agreed to sell 73% of it for $3.5 billion. He sold it to Miriam Adelson and Patrick Dumont, who own the Las Vegas Sands Casino. He'll retain a 27% stake. A lot of people saw your sale of the majority stake of the Mavericks, though, and took that as a warning sign that you think it may be time to sell at the top of the market when it comes to

NBA franchise ownership. No, I'm not trying to call it top. Do you think there are some challenges the league is going to face? Oh, of course. The entire media landscape, we all know that the media landscape is changing. I think the NBA as an entertainment property is still second most valuable to the NFL and on social media, far more valuable than the NFL and globally, far more valuable than maybe anybody but Premier League. So there's plenty of value for our content. It's just a question of who can pay it. And I think there's some uncertainty there, but I still think that the NBA valuations are going to keep on going up. Over the past decade, the NBA, like most sports leagues, has made most of its money from TV deals. Cable providers and broadcasters pay billions of dollars every year to carry

basketball games. Right now, the NBA is in the process of renegotiating that deal. Mark says he thinks the league will make more money in the short term because cable companies are so reliant on live sports. But cable companies are on the decline. So in the long run, Mark says it's unclear whether streaming platforms will be able to pay as much. We went from, in the past three years, every major entertainment company thinking streaming was the way

to Netflix dominating, Disney and ESPN doing pretty well, and everybody else trying to figure out what the hell is going to happen next. And so that's uncertainty. And so, you know, I'm not going to tell you, oh, it's, you know, a slam dunk that the media rights are always going to go up. They may not because our customers, we saw that with local media, with Bally's declaring bankruptcy.

There's always that risk. And it's not quantifiable per se, but it's certainly greater than zero. quantifiable per se, but it's certainly greater than zero. Mark has a different idea for how NBA teams can make money, by developing the real estate around their arenas. He says that's why he wanted to sell the Mavericks specifically to people who have experience developing casinos. Let's just say if we're able to get a resort destination casino in Dallas, Texas, with a Mavs arena in it, you're talking about a whole different level of economics. But do you think you'll be able to get a casino? I mean, Texas legislature has not approved a bill there to legalize it. Yeah, but things change, right? You know, Texas legislature only meets every two years. And we're not talking about online sports

betting like a lot of states are. We're talking about destination resort casino, which could immediately turn Texas into one of the top three to five tourist destinations in the States, if not in the world. I mean, could you imagine putting a Venetian next to the convention center in downtown Dallas? It would change everything. But so then why are you more bearish on the media revenue than you are on like the casino and real estate opportunity? Just the uncertainty. I can guess. I can give you these great guesses, right? But how they play out, I don't know. Look, when I first got into the NBA in 2000, when we had NBC, NBC was telling us that they wanted to take less games because they wanted more scarcity. They thought with more scarcity, ratings would go up. And I stood up in a meeting and everybody like

rolled their eyes at me saying, look, someone just paid a million dollars per episode for Seinfeld for repeats, right? Our cost per game is far less. So we want tonnage out there so we can get more money. There was a point being, there was a transition in media at that point in time. Now it's kind of gone the other way where there's a transition again. I just don't know what's next. You know, trying to figure out what was next before was easy. Now it's much harder. While Mark is moving away from Shark Tank and the Mavericks,

he's been putting a lot more attention into a new project, what he calls dunking on the pharma industry. That's next. Seth and Riley's Garage Hard Lemonade, a delicious classic with a vibrant taste of fresh lemons. The perfect balance of sweet and sour with a crisp, zesty edge. Welcome to the garage, the place of refreshing hard lemonade. Available at the LCBO. Must be legal drinking age. Please enjoy responsibly. Discover more value than ever at Loblaws, like Price Drop. Hear that? Loblaws lowers prices every four weeks on a selection of items, so you can save more. Whether it's pantry staples or seasonal favorites, you can look forward to new discounts throughout the aisles at Loblaws to get your essentials at great prices.

It's your cue to stock up and save. Look for new value programs when you shop at Loblaws, in-store and online. All right, so I want to obviously talk about Cost Plus Drugs, this new pharmacy company that you've been working on. First, can you tell us kind of just, you know, quickly how you got involved in this company? You got a cold email pitch one day. Yeah. How often do you get those and respond to them? Every day. Every day. The email was from a doctor named Alex Oshmayinsky, who wanted to pitch Mark on the idea of starting a pharmacy. And so we started talking and emailing and we did meet. And I was like, look, nobody likes the healthcare system and

particularly nobody likes the way pharmacy is handled. What if we just made it completely transparent and easy to understand and see what happens? Cost Plus Drugs is basically a really cheap pharmacy. It's a website that sells prescription medication directly to consumers. You go to costplusdrugs.com, put in the name of the drug. We have like, you know, approaching 2,500 different medications. And when your medication comes up, you'll see exactly what we pay for it, our 15% markup, and what it would cost to get it sold to you. And by doing so, turns out we were a whole lot cheaper than pretty much anybody else

for the drugs that we sell. And we continue to grow, grow, grow, grow, grow all by word of mouth. How much are you growing? How much revenue are you doing right now? Or do you project in 2024? We're not putting out our revenue, but we're growing 28% last month, right? And we expect that we'll grow the same amount this month. And our biggest challenge, really, we could grow faster if we could keep up with the volume.

That's our biggest challenge right now, just keeping up with the volume. You know, it's actually, and this is gonna sound crazy, it's been the easiest business I've ever had to grow. The easiest business you've ever had to grow? By far, not even close. In the healthcare sector, that seems really surprising. It's not even close because it is so obtuse, so opaque, so closed, and we work outside the system.

One challenge for Cost Plus Drugs is that it doesn't sell every drug. Right now, it mostly provides generics and hardly any of the more expensive brand name drugs. It's something Mark says the company is working on. What makes you so optimistic that this business will succeed? I mean, the healthcare space is not a normal marketplace. I mean, people aren't going out and price checking things. They're sort of just being told what they need by their doctor. And there are also, there's a long list of companies that have tried and failed, a lot of big ones, to disrupt the healthcare sector.

So what makes you optimistic? We're not trying to compete with anything other than transparency and price. And that transparency brings price. And traditionally, people haven't shopped because you couldn't. You know, particularly for medications. You know, you go to their doctor. They say, okay, I need to prescribe this for medications. You know, you go to their doctor, they say, okay, I need to prescribe this for you. What pharmacy do you use? And that's the last of it,

right? Well, now all of a sudden they can go to costplusdrugs.com, put in their medication, and you might be on Medicare, you might have an ACA plan, you might have company insurance, and they're seeing that we're cheaper than their copay or their deductible. You know, they may have had a $25 copay and our price is $5 plus shipping. It's just now with that transparency, people can and do shop. So I wanted to also ask you about diversity, equity, and inclusion. Early this month, of course, you called out Elon Musk on X. Musk had this tweet where he said, discrimination on the basis of race, which DEI does, is literally the definition of racism. And you responded to him by explaining why you felt that a diverse workforce was actually helpful in making companies succeed and that it should be a factor in hiring decisions.

Why did you feel the need to engage with him on that? in hiring decisions. Why did you feel the need to engage with him on that? Because X is kind of started teetering in a certain direction. And I think it's gotten so loud, it's drowned out a lot of voice of what I consider reason. You know, whether there's a lot of anti-Semitism, there's a lot of racism, there's a lot of more one direction than another politically. racism. There's a lot of more one direction than another politically. And who else is going to like walk into that echo chamber and say, you're wrong. And to me, I wanted to do it because it's what I believe. I mean, you know, put me as the only guy when the stadium was 60,000 and everybody yelling and screaming at me. And I think I'm in the right because I think I had the facts behind me. I'll do that every time. So you just sort of felt like that X is sort of becoming an echo chamber of more

right-leaning, right-wing views, and you kind of wanted to just go in there and pick a fight, basically. Pretty much. Because it's fun. What do you think of the changes that Elon Musk has made to now X? And what might you do differently if you own the platform? I think technologically, from a performance perspective, they're better, right? You know, I forget the exact nomenclature, but it's like, you go through a thread and it says see more, and it takes you to another thread that's similar. That's great. That didn't exist before.

And then I think operational with fewer people, you know, I don't see any problems and kudos to him for doing it with a lot fewer people. But then there are the issues with the algorithm. It basically is geared towards whoever has the greatest following, Elon Musk, whoever has the biggest count, you know, influences the reach and the direction Elon has gone with his tweets. You know, the best thing that if I were going to change it, I would say, Elon, tweet all you want to your followers, but we're taking you out of the algorithm because it influences the reach and what happens. And I said this to somebody who's working at Twitter. I think now it's gone so far right, and there's so much anti-Semitism. I don't know if you saw that I tweeted a lot of the anti-Semitic posts that I got. I retweeted them. It's crowding out the people who just want to participate, but are afraid to. Who wants to be next to that stuff? You know, I don't want to go on there. And every time I post something and my replies is Jew this, Jew that, you're not really white, you're Jewish, you're Semitic, all this stuff, you know, nobody wants that. My skin is thick enough these days that

I can deal with it, but most people are not going to. Last year, Musk said he's against anti-Semitism, and Exxon said it's working to combat anti-Semitism on his platform. Your name often comes up on presidential candidate lists. You've repeatedly said, no, it's not something that you're interested in, but you know, you engage in fights like DEI, the healthcare industry. Why not run for president? My family, somebody once, somebody said to me, and it was not an original quote, I would never vote for anybody who wants to run for president. You know, it's just, you have to be crazy. Who wants to put their family, three teenagers through that stuff? It makes no sense whatsoever. And it's not like, you know,

maybe I'm arrogant, but I think particularly with healthcare, I can have an impact. And so why not do that? And if I can do that, why not go on to the next thing and the next thing, as opposed to trying to be a politician, which I am not. So have you thought about running for president? Yeah, I thought about it. You know, 2020, I even had somebody do a poll, you know, where I would have gotten 25% of an, as an independent, I've had people talk to me and ask me, but I mean, I had the conversation because I'm curious and I'm vain, you know, but not serious.

Will you make an endorsement this year? Look, I'm not a Trump fan. That's nothing new to anybody who knows what I say. So I'm open to anybody not named Donald Trump. I mean, if Trump is the nominee, then I'll endorse whoever's running against them. If there's a ham sandwich at the independent party that I thought is a good ham sandwich, I'll, you know, I don't care. I just don't think Donald Trump is good for this country. That's all. You're somebody that looks at industries, looks at systems, looks at businesses, and sort of understands or tries to see at least what's wrong with them. What do you think is wrong with the U.S. political system right now, which doesn't

seem to be delivering outcomes that most Americans think are working? I mean, any industry that has two dominant players is going to be a mess. The power associated with that is beyond what anybody can overcome. Look, I've looked at things like, okay, is there an antitrust lawsuit where we can nail the two, both parties, not just one, but both parties? Because I think we need to disable the two parties. But I don't think it's a third party like a No Labels who just acts like a traditional party, because it's just the problem is there's a base of power associated with being at the top of any party, whether there's one, two, three or four of them. And those people are going to act like politicians. What I think is

the best impact is if we went to ranked choice voting. Ranked choice voting is a system where instead of just choosing one candidate, voters rank their top picks. And that process continues until there's a clear winner. Mark says this system would discourage extremist candidates and push politicians more toward the center. I think ranked choice voting could have a huge impact and make politics in this country more humane and better for the entire country and for voters and citizens, you know, for all of us. So your view is the best way to change or to improve the system

is to change the system. Yeah. I mean, it's just not working. So you're saying you're not going to run for president. You also did in the past say that you would never sell the Dallas Mavericks. The Mavs. Yeah, but a little bit different, right? Yeah. When you're younger, you look at things differently. You know, when your kids are six years old and seven years old and eight years old, you might have one vision, but then they hit 14, 17 and 20. And it's not about my vision. It's about their vision.

That's a lot more important to me than anything else. Well, great. Was there anything else you'd like to say while I've got you here? No, that was cool. I really enjoyed it. Yeah, you got me all riled up, which was fun. Great. Awesome.

Well, thanks so much, Mark, for taking the time to talk with us today. Thanks, Ryan. I hope you enjoyed it too. That's all for today, Tuesday, February 6th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.