Mark Cuban Libre

November 21, 2008
By: Dave Zirin

Billionaire Dallas Mavericks owner Mark Cuban has been accused of insider trading. Is he guilty or just a target because of his larger-than-life persona and populist appeal? And is there such a thing as a "billionaire populist?" We explore.

It's amazing how an eight-minute phone call can cloud a charmed life. Dallas Mavericks owner Mark Cuban, like Martha Stewart before him, is officially in hot water with the SEC. They allege that Cuban sold 600,000 shares in the search engine Mamma.com Inc. in June 2004, saving him $750,000. Cuban has responded publicly and angrily on his blog that the entire imbroglio is "a product of gross abuse of prosecutorial discretion." The entire story has generated as much buzz as a battalion of mosquitoes. That's due to the Dancing With the Stars alumnus at the center of it all. To some, he is a hero--the only true fan/owner in existence. To others, such as sportswriter Tony Kornheiser, he's just a "preening schmo." But almost everyone in the basketball universe gives the flamboyant 50-year-old billionaire a measure of respect.

In the decade before Cuban took over the Mavericks, the team went 199-507, one of the most putrid records in all professional sports. They were owned, amid failure, by Ross Perot Jr. Texas money and a legacy of losing defined the franchise. Then came Cuban, a son of working-class parents who decided to wear Mavs jerseys to games, sit in the stands, scream at refs, rev up the fans, pamper his players and even e-mail with hoi polloi. Despite a slow start this season, the Mavericks have been perennial championship contenders.

"He took one of the worst teams in the NBA and made it one of the best," Nets point guard Devin Harris said recently. "He gutted everything, changed the whole culture. He's very hands-on, obviously very good taking an organization and remaking it." He also earned respect when he took the racist e-mails directed at Mavericks all-star Josh Howard and posted them on his own "blog maverick" site--with the actual e-mail addresses of the senders.

How did Cuban become the ultimate owner-fan? It's less a Horatio Alger story than Cuban's becoming, as USA Today wrote, "the luckiest man from the dot-com era." Cuban made his billions by getting out of the dot-coms before they bombed. He and partner Todd Wagner sold their company, Broadcast.com, to Yahoo! for billions of dollars, a ridiculously large amount for a company earning no more than $100 million in revenues. Cuban was smart enough to see how idiotic this inflation was and cashed out before his company, like most of the industry, saw its stock price plunge. Some would call this smart business, but most in the media choose to see it as dumb luck. Others see Cuban as just plain dumb. Rick Morrissey of the Chicago Tribune wrote that Cuban proves "it's OK to be vapid as long as you're loud."

He may be loud, but vapid he is not. Cuban was the executive producer of the Enron documentary The Smartest Guys in the Room. He was also behind George Clooney's Oscar-nominated McCarthyism drama Good Night and Good Luck, and the powerful look at sexism in Hollywood, Searching for Debra Winger. His independent-film streak earned him an enemy last year: David Horowitz, the radical turned reactionary. Horowitz's website FrontPage blared this headline about Cuban: "World's Most Annoying Sports Fan Now Jihadist Propaganda Producer." Bill O'Reilly called for people to boycott the Mavericks after the release of an antiwar film produced by Cuban called Redacted. And Cuban has taken on Senator Orrin Hatch (R-UT). Hatch raised Cuban's ire by sponsoring the Induce Act, a bill that would allow a company to be sued if it was found to have induced individuals to download Internet music illegally. Cuban also abhors Hatch for saying that computers storing pirated downloaded music should be destroyed. On Salt Lake City radio station KCPW, Cuban said that he thinks the senior Republican is "the digital Joe McCarthy."

Cuban embodies a peculiar blend of politics. He touts the credo of the wealthy: that anyone can make it in America with desire, moxie and elbow grease. The literary muse of bootstrap billionaires like him is Ayn Rand, the sleep-inducing author behind Atlas Shrugged and The Fountainhead. Cuban's favorite book is, you guessed it, The Fountainhead. As he said to Slate, "It was incredibly motivating to me. It encouraged me to think as an individual, take risks to reach my goals and responsibility for my successes and failures."

But this hyper-libertarian bootstrap mentality comes into conflict with Cuban's Pittsburgh populism. When Bush was planning the most expensive inauguration parties in history, in January 2005, Cuban wrote, "Could there be anything more confusing and shocking than to read that our country was offering $35 million in aid to the areas affected by the Tsunamis, but that the cost of inauguration parties would be about $40 million? Does anyone else think that this is wrong?"

Cuban has also bankrolled a website, Sharesleuth.com, the goal of which is "to create a new line of defense by using investigative journalism techniques and a worldwide network of amateur and professional stock detectives to identify suspect companies."

So far, so good. But he has also made clear that he could use information that the site uncovers to buy and sell stock. "A journalistic conflict you say?" Cuban wrote two years ago. "Not anymore. Not in this world. It will be fully disclosed and explained. This site is for the profit of its owners and we will buy and sell stocks that are discussed, before they are made available on the site...if we can uncover companies whose stock is public and that can be bought or sold and that allows us to pay for more in depth research and effort. I'm good with that."

Maybe it's this very confusion, or conflation, of populism and personal profit that has gotten him into trouble with the SEC. Maybe an aspect of this has finally caught up with Cuban--the idea that since he lives a fantasy life, the rules of reality just don't apply. Or maybe he's being targeted for lacking the bloodlines and birthright to skirt the law. Either way, Cuban finds himself in a world of trouble. But one thing is certain: when it comes to Cuban, we will all be able to follow the drama in digital real time.