Bought as an N.B.A. Team, the Mavericks Are Being Sold as Much More

The sales of most professional sports teams are fairly predictable.

They happen because owners die or cannot figure out how to pass the team on to their families. They run out of money, are more focused on other pursuits or are pushed out because of misconduct.

Once the decision to sell is made, the process plays out in a relatively public way. Bankers are hired, potential purchasers register interest, an auction occurs, and weeks or months of reports in the news media follow.

So it was a complete surprise last month when, with no warning, the families that control the Las Vegas Sands casino empire announced that they had reached a binding agreement to buy a controlling interest in the National Basketball Association’s Dallas Mavericks from Mark Cuban. The only thing that made sense was that the situation involved Mr. Cuban, who has long run the Mavericks in an unconventional manner.

Still, more than two weeks later, the basic question surrounding the sale — Why did Mr. Cuban do it? — remains mostly unanswered. The reliably loquacious Mr. Cuban, who always seemed to be having more fun than any other owner, declined to speak on the record for this article. The Adelson and Dumont families, wary of getting ahead of an N.B.A. approval process that includes due diligence and a vote on the sale by other team owners, declined to comment beyond a statement expressing their excitement.

But what is clear is that the sale represents a window into the rapidly changing nature of the business of sports.

When Mr. Cuban bought the Mavericks in 2000, flush with cash from selling Broadcast.com just before the dot-come bubble popped, professional sports teams were still mainly just teams.

Now they are anchors for larger business enterprises. Anchor tenants for arenas that are the beating heart of vast entertainment complexes, as in Sacramento. Anchor content for regional sports networks or other media conglomerates, as in Washington, D.C. Anchor brands for millions of fans newly allowed to bet on sports, as in Phoenix.

Mr. Cuban is also many things — a dot-com billionaire, an owner of a company trying to reduce the price of prescription drugs and, for one more season, one of the main investors in the reality show “Shark Tank” — but what he is not is a real estate mogul, providing a possible motivation for the sale.

The Dallas Mavericks partly own the American Airlines Center, where they play their games in the Victory Park development just north of downtown. But while the owners of their co-tenant, the National Hockey League’s Dallas Stars, have invested in land near the arena, Mr. Cuban has mostly expressed annoyance that it takes away from fan parking. Now he is changing his tune.

“Cuban probably wants to imitate what has worked, have the ownership control he doesn’t have in Victory Park, and push it to a new level with casino and resort integration,” said Robert Sroka, a professor of sport administration at Georgia State University and a sport venue development consultant.

Last year Mr. Cuban told The Dallas Morning News of his intention to team up with Sands on just that, a new arena and casino complex.

“Partnering with the Sands Corporation, literally there’s no reason we can’t build a huge resort destination in the city proper of Dallas,” he said.

A piece of a destination like that would mean a lot more money for Mr. Cuban than the sums generated by game tickets and arena concessions. The plan, however, faces a significant hurdle — besides acquiring land, obtaining financing when interest rates are high and receiving construction approvals. Almost all forms of gambling are illegal in Texas, and there is no clear sign of that changing.

A bill that would legalize sports betting passed the Texas House this year, but Dan Patrick, the lieutenant governor, refused to bring it up for discussion in the Senate. Even if such a bill passed the Senate, Texas residents would still need to vote on it.

A bill allowing casinos faced even fiercer opposition, particularly from influential conservative religious leaders, and never made it out of the House. And while sports betting, if it is legalized in Texas, can be lucrative for teams, it is really a casino bill that needs to pass if Mr. Cuban’s vision of a sports and gambling destination is to be realized. The Sands, which has a number of casinos in Macau and Singapore but currently none in the United States, has hired dozens of lobbyists to get one passed in recent years.

Mr. Cuban owns about three-quarters of the Mavericks, with the rest held by a handful of minority owners. After the sale he will own about a quarter, and the Adelson and Dumont families nearly three-quarters, with the rest spread among some minority owners, according to two people familiar with the terms, who spoke on the condition of anonymity because they were not authorized to disclose them publicly.

Some people believe the reported $3.5 billion valuation that Mr. Cuban is selling at is less than he could have received if the Mavericks had gone on the open market. Just last week, for instance, a small share of the Indiana Pacers was bought at a reported valuation of $3.47 billion. Indianapolis is a much smaller market than Dallas, and minority stakes are typically discounted. So, the thinking goes, the sale of a majority stake in the Mavericks should’ve been for much higher.

But the sale to the Adelson and Dumont families includes an unusual stipulation: Mr. Cuban will continue to run the basketball operations of the team.

Officially, Patrick Dumont, the son-in-law of Miriam Adelson and the late Sheldon Adelson, will be what the N.B.A. calls the team’s governor and vote on leaguewide matters. But Mr. Cuban will run its basketball operations.

The bet, then, seems to be this: Mr. Cuban will earn billions from a team he paid $285 million for two decades ago; he will continue to participate in the part of team ownership he likes the most; and if the Adelsons and Las Vegas Sands can muscle through a new arena and casino complex, one day his quarter of the team might be worth as much as the three-quarters he used to own.

This could also help make up for money Mr. Cuban expects to lose on the team’s local media rights agreement. The holder of those rights, Diamond Sports Groups, is going through bankruptcy.

“I think a new arena, real estate area and hopefully a future resort casino can replace what we lose in media, and fund current and future Mavs,” Mr. Cuban said in an email to a local television station last month.

Over a thousand miles west of Dallas, the sale has thrown the race to own an N.B.A. franchise in Las Vegas wide open, since the Adelson family was widely presumed to be a front-runner if the city got a team.

Officially, there is no guarantee there will ever be an N.B.A. team in Las Vegas, but the league is widely expected to soon expand to 32 teams from 30. This summer, Adam Silver, its commissioner, said the league would turn to the issue of expansion after it completed new media agreements, sometime in 2024. He said it was not certain the league would expand, but named Las Vegas and Seattle as cities that would be considered.

“A lot is happening behind the scenes,” said Steve Sisolak, a former governor of Nevada. “A lot of groups that have interest. It remains to be seen who is a front-runner.”

Currently, the only arena in Las Vegas that has close to the required facilities for an N.B.A. team is the T-Mobile Center, which is co-owned by the arena developer AEG and MGM Resorts International, with Bill Foley, the owner of the N.H.L.’s Las Vegas Golden Knights, holding a minority share.

But Oak View Group, another arena developer and operator, has announced plans for a $10 billion resort south of the Strip that would include an arena an N.B.A. team could play in. Intriguingly, the land that arena would be built on is owned by Scott Goldstein, the son of Rob Goldstein, the chief executive officer of Las Vegas Sands. Sands is not currently involved in that project.

Susan Beachy contributed research.