Playboy Interview: Mark Cuban

Six years ago Mark Cuban was just another multimillionaire dot-commer largely unknown to the public. But after he sold Broadcast.com to Yahoo for $5.7 billion (pocketing $1.9 billion for himself), he went on a shopping spree. He bought a 24,000-square-foot Dallas mansion, a 6,000-square-foot New York condo and a $41 million Gulf stream jet. But cool toys don't make you famous. It took another of his purchases to achieve that: In 2000 he shelled out $280 million for the Dallas Mavericks-- at the time the highest price ever paid for a basketball team--and promptly became one of the most colorful owners in sports, ranting and raving at referees and being hit with more than $1 million in fines by the NBA.

Cuban paid a lot of money for a joke of a team that hadn't made the playoffs in 11 years, but he has turned the Mavs into contenders and introduced a new level of marketing savvy-- and in-your-face antics-- to a league that has been losing ground among fans. His crowning mouth-off came when he said of Ed Rush, the NBA director of officials, "I wouldn't hire him to manage a Dairy Queen," for which he was slapped with the biggest NBA fine ever, $500,000. In response, Dairy Queen invited Cuban to run one of its restaurants for a day.

Now Cuban is getting even more heat by taking on the Hollywood establishment. He has invested heavily in two high-definition TV networks, the Landmark movie theater chain and five independent movie companies, including Lions Gate Films and Rysher Entertainment. Armed with these new companies, he's rewriting the Hollywood rule book. He has partnered with Oscar-winning director Steven Soderbergh for six movies, one of which, Bubble, will be released simultaneously this month in Cuban's movie theaters, on DVD and on one of Cuban's HD networks. It will be the first time this has been attempted, and if it works, it could forever change the way movies are released.

The concept is risky and controversial. However, Cuban has made a fortune taking on difficult challenges. The son of a Mt. Lebanon, Pennsylvania car upholsterer, Cuban sold plastic garbage bags door-to-door at the age of 12; at 15 he attended stamp collectors shows, buying on one floor and selling at a profit on another. While majoring in business at Indiana University, he and some friends bought a pub and ran it until a wet T-shirt contest starring a 16-year-old got him in trouble with the authorities.

After graduating, Cuban drifted to Dallas and took a job servicing computers, which led to his first company, Micro Solutions, a systems-integration firm, which he sold seven years later to CompuServe. A multimillionaire at 31, Cuban dabbled in acting before cofounding Broadcast.com, an online gateway to the broadcasts of hundreds of college and professional athletic events and radio stations around the world. Video streaming came next. When Cuban and his partner took the company public, the price of a single share of stock jumped in an afternoon from $18 to $62, a Wall Street record at the time.

Now he has emerged as one of the nation's most influential movers and shakers in the fields of technology and--improbably--entertainment. playboy sent writer Diane K. Shah, who last interviewed Derek Jeter for the magazine, to Cuban's homes in Dallas and New York City to talk to the voluble tycoon. Shah reports she found him "the consummate salesman, aiming to please and easy to like. He comes across as affable, at times self-effacing-- a straight shooter but not the terror he sometimes appears to be at Mavs games."

[Q] Playboy: Of your many ongoing business roles, the one most people probably know is the crazy guy in the T-shirt who leaps out of a courtside seat at Mavericks games to scream at referees.

[A] Cuban: A lot of people say owners should sit in the skybox and chomp on a cigar. But when you build a company, there are organizational dynamics. Who are the leaders? How do people interact with each other? How do they deal with pressure? You can't get that sense from the skybox. If you're removed, you don't know how to make decisions.

[Q] Playboy: That may explain why you sit behind the Mavs bench, but not the $1.2 million you've been fined for yelling at refs.

[A] Cuban: I'm in the game. I'm in the game.

[Q] Playboy: But what do you have against the refs? Do you blame them for your team's losses?

[A] Cuban: Maybe at the beginning, but I learned very quickly. I learned that some officials call traveling and others don't. Some guys will call technical fouls more often, which will come through in the scouting reports for individual refs. That's not a deficiency; it's a personal proclivity. But when you see that somebody who never called defensive three-seconds is suddenly calling it a lot, and you see that a whole lot of refs across the league are doing it, you can tell they were instructed to do so. I asked why. That's how I got fined for the Dairy Queen remark. I thought we needed to have somebody come in and take an independent look at the system.

[Q] Playboy: How did the league react to that?

[A] Cuban: A common refrain is "Hey, we've made it this far without you." But I think it's my job as your partner to be aggressive. If I'm upset about something, I'll let you know. You can tell me you don't like the way I communicate--that's your privilege, and we can agree or disagree--but I would be a far worse partner if I shut up.

[Q] Playboy: Do you feel you've made any inroads?

[A] Cuban: Yes. A perfect example is the playoff series with Utah, right after I bought the team. John Stockton went to the line with 2.9 seconds left in the game and gave Utah the lead. When he finished shooting his free throws, there were 2.2 seconds left. The clock is stopped for free throws, so something was obviously wrong. I went and pounded the scorer's table--a lot was at stake. After the game the officials confirmed the mistake. These things happen, right? But people asked NBA commissioner David Stern if he was going to suspend or fine me for ranting and raving. He said, "No. Mark probably cost his team that game." That's the only time I've ever been mad at him. But to make a long story short, the next year, all of a sudden there were independent timekeepers. Imagine that.

[Q] Playboy: How do you get along with Stern now?

[A] Cuban: David's a master politician. When it's his idea and you're on his side, you're his best friend. When he doesn't feel the need to respond to something, he'll tell you to feel free to get the owners to vote him down, which he knows is very difficult. He's a master of divide and conquer.

[Q] Playboy: Have you achieved other changes in the NBA?

[A] Cuban: Remember how Shaquille O'Neal used to get away with stepping over the free throw line? I complained. All of a sudden they started watching for it. There are many other examples.

[Q] Playboy: Did O'Neal get pissed off?

[A] Cuban: At the time, I said, "Shaq should be on his hands and knees thanking me because if it weren't for my complaining, he'd still be stepping over the line and he'd go down in history as the best center ever except that he could never hit a free throw without doing that." A reporter told Shaq. He said, "Tell Mark I said thanks." Shaq's great. I love Shaq.

[Q] Playboy: Yet apparently you had a blowup doll made of him.

[A] Cuban: [Looking delighted] We did a thing when we played the Lakers a couple of years ago. We made a cartoon of a character like Fat Albert, put a Lakers 34--Shaq's number--and Shaq's head on him and played the video during the game. He said, "Hey, hey, hey, I'm Shaq Albert." It was hysterical. Shaq was bent over laughing.

[Q] Playboy: David Stern wasn't.

[A] Cuban: The league said, "You're not allowed to make fun of other players." I was fined $25,000. But it was such great entertainment, it was worth it.

[Q] Playboy: Over the years, the league has implemented a number of officiating changes that you lobbied for. Is the refereeing better?

[A] Cuban: It's run much more like a professional organization than an old boys club. But despite its adding strong people, some remain who probably shouldn't be there. Until that changes, there will still be a little too much politics and not enough professional management skills.

[Q] Playboy: The general opinion about you in the league office seems to be that you have good ideas but push too hard for immediate results. Given your background of running your own companies, you never had to be a team player. Is teamwork something you need to learn as one of 30 NBA owners?

[A] Cuban: I hope not. To me, a good partnership is one in which it's okay to say, "Shut the fuck up." I don't take it personally.

[Q] Playboy: Do you take it personally when Donald Trump spars with you? Is it done with a wink, or is there an ongoing competition between you two?

[A] Cuban: It started with a wink. When I got my show, The Benefactor, he called me, saying, "Hey, this is Donald Trump. I just wanted to say congratulations. If anybody can do it, you can." It was very nice. Then I read a story in which he called the show a copycat. "I already know it's going to be terrible," he said. That's when it started.

[Q] Playboy: Had you met him before that?

[A] Cuban: Yes. The first time was at a Super Bowl party at his place Mar-a-Lago in 1999. My company Broadcast.com had just gone public. It was the biggest IPO in the history of the stock market. I was there with someone from Yahoo, which was about to buy my company. Trump came over, and I was introduced. People were dining on a balcony above us, and he said, "Someday you'll be able to sit up there and eat with the rich people."

[Q] Playboy: Is it true you tried to pitch him your Internet services?

[A] Cuban: A mutual friend suggested Trump invite me to his office to talk about Internet stuff. I went. It was a normal business meeting, uneventful except for one thing. Now, I figure the over under on office pictures of yourself and your family is four or five. In his office, every inch of every wall was covered with pictures of himself. And I'm like, Note to self: If you ever make it big, don't ever be like this.

After the TV show was canceled, Trump sent me a letter, which I framed, by the way. It says, "I told you, you never should have done the show. I could have told you it would fail." Totally low-rent, right? But I had pissed him off by saying in one of the show's promos that I could write a bigger check than Donald Trump and not know it was missing. He threatened to sue me. The point was not net worth but cash. Most of my money's in cash. If everything comes crashing down, I have cash. I have no debt. I told my lawyer, "Let's pray to God he does sue," because how much fun would that be? He would have to disclose everything. It was "I'll show you mine; you show me yours." But he never pursued it.

[Q] Playboy: As Trump was eager to point out, The Benefactor, which aired in the fall of 2004, was canceled after six episodes. What went wrong?

[A] Cuban: I think it failed because I listened to the producers who created the show, rather than the people from ABC. The ABC folks told me to be myself and let it fly, but the producers kept telling me what to say. By the third episode I was like, Fuck it. I will do what ABC said--be myself and have fun. But it was too late.

[Q] Playboy: At the opposite extreme, some people have suggested that your latest venture is too early. How do you plan to pull off a company that delivers a movie to a person's home the same day it opens in theaters? It goes against the entire structure of the traditional movie business.

[A] Cuban: The idea is to give the consumer three choices: go to the movies, get the movie on pay TV or buy the DVD. All three would have the same distribution date. Here's how it came into being. Three years ago I started two high-definition networks, HDTV and HDNet Movies. They are both carried by most cable and satellite companies. That gives us content. Then we bought Landmark Theatres, which has 215 screens and gives us an outlet to show movies we produce. That led us to buy Magnolia Pictures, which distributes movies. We also bought Rysher Entertainment for its film and TV library.

[Q] Playboy: Your upcoming release will be Steven Soderbergh's Bubble. Will it be available in theaters, on DVD and on HDNet Movies all at once?

[A] Cuban: Yes. That will be our first. Here's the thinking. Some people don't want to rush to a movie the weekend it opens. They say they'll wait for the DVD, but some percentage of the time they blow it off because the excitement of watching it at the same time as everybody else is gone. Meanwhile, the film studio is spending a whole new advertising budget to promote the DVD. Why bother? Why not compress it and charge a premium of, say, five bucks to get the DVD right away?

[Q] Playboy: Because, according to the perspective of traditional movie studios, not to mention theater companies, you will lose money you would have made at the box office.

[A] Cuban: The difference is that we're putting the consumer first, whereas Hollywood puts itself first. Hollywood is saying a movie has to go to theaters first, then to DVD and finally to TV. That's just the way it works. We're saying, "Do you know what? That's not the way it works, because that's not what's best for the consumer."

[Q] Playboy: Theaters are threatened, though. They may lose considerable money from box-office receipts, as well as concession sales.

[A] Cuban: That's why we're willing to kick back a percentage of DVD sales to theaters.

[Q] Playboy: Why?

[A] Cuban: Because they are in essence creating more value for the DVD sales. So why not reward them?

[Q] Playboy: One studio head who has voiced some support for your idea is Disney's Robert Iger. Does this surprise you?

[A] Cuban: No, because every studio knows it makes more sense. They have to realize that they must return a percentage of DVD sales to theaters, though. Until they do, I don't expect theaters to let it happen. We can do it because we own a chain of theaters.

[Q] Playboy: You've already had one minor hit, the documentary Enron: The Smartest Guys in the Room, which has grossed more than $4 million so far. But in the Hollywood scheme of things, that's a pittance.

[A] Cuban: I'm not making movies for $100 million. I don't need blockbusters. I'm not going to make Spider-Man 3.

[Q] Playboy: Then what's the goal of your entertainment company?

[A] Cuban: It's to have a vertical company that gives consumers in the 25-to-54-year-old age group great content when and where they want it. Through my production company HDNet Films I can make movies I know will be geared to the demographic that Landmark Theatres fits. If you want the DVD, you can purchase it through our distribution company the same day the movie opens. You just pay a small premium price. I have all the parts. I just have to do it well.

[Q] Playboy: Are you doing it well enough yet to turn a profit?

[A] Cuban: Except for HDNet, all the parts of the company are profitable.

[Q] Playboy: How long are you willing to lose money on HDNet?

[A] Cuban: I'll last. When I started it in 2002 I expected to lose money at the beginning, which I wouldn't have done unless I thought I could finish it. I gave it five years, so two more years to go. But remember, you have to look at it relative to my net worth. I'm taking a smidgen of my net worth and risking it to create a TV network.

[Q] Playboy: In addition to Soderbergh's Bubble, what other films are in the works?

[A] Cuban: We have five more Soderbergh films coming, plus we had The War Within, which opened in the fall. One Last Thing will open next month. These three movies, by the way, were all accepted into the Toronto Film Festival. We've heard the only other start-up company that did as well is Miramax.

[Q] Playboy: How have you been accepted in Hollywood? Have you been impressed with the people you've met there?

[A] Cuban: A lot of great film and music people are incredibly impressive when you talk to them one-on-one. But so many of them just walk, talk and crap the company line when they actually have to make decisions. The smartest marketing person I ever met in L.A. is Paris Hilton. I put her up there with Dennis Rodman. They both know how to leverage the media and get what they need while pushing their own agenda. Amazingly brilliant. Between the two, I would have to give Paris the edge.

[Q] Playboy: How smart is the NBA when it comes to marketing?

[A] Cuban: We have a great product, our players are charismatic and exciting, but we can't market our way out of a paper bag. On the networks that carry our games you'll see lots of NBA promotions and teasers, but you're not going to see them anywhere else. We promote to the converted. I've tried to be very communicative with all media. I thought that if I opened the lines of communication, I could be a conveyer of stories instead of a reactor to stories. That has made a big difference. In a quick-response medium, like e-mail, you can leverage the media. I call that getting wide and fast, meaning if I think something is of value to a writer, I can pop him an e-mail.

[Q] Playboy: Have you discussed the idea with other team owners?

[A] Cuban: Other owners don't get it. They don't look at it as their responsibility. I politely suggested that we need to be more guerrilla-like. We need to have a sense of urgency. I think you have to re-earn your business every day. The studios are promoting a new movie every day that keeps somebody from going to a Mavs game on a Friday night, and we have to counter it. For a while every league was boasting how its revenue went from $400 million to $2 billion because TV rights were doubling every four to six years. I came in January 2000, right at the peak. Then things changed real quick. It's no longer a world of "Wait it out. Only good is going to happen." You can't just watch the revenue and valuations go up. You have to create value. You have to stand out. When I look at the NBA or sports in general, I don't think any of the professional leagues are standing out, working as if we're in an MTV Deathmatch, if you will, for attention.

[Q] Playboy: What else would you do to improve the business of basketball?

[A] Cuban: In any business you should have an understanding of what your optimal productivity is. In sales and marketing, in everything down to customer satisfaction and how fast tickets are processed and hot dogs are served, optimal productivity should be your goal. You need to figure out how close to your goal you can get this season if you work your ass off and everyone does his job. Those are called your benchmarks. In most businesses, if you exceed your benchmarks, you get rewarded. If you come close, you keep your job. If you fail, you're gone. The same should apply to how teams are subsidized by the league. Define goals and benchmarks for every team based on market size, stadium situation, etc.

[Q] Playboy: Have you proposed this to the league?

[A] Cuban: Two years ago. They're studying it. They're figuring out how to do revenue sharing for teams that have performed to all their benchmarks but whose markets aren't big enough for them to keep up. The teams that are drags won't get revenue sharing. How the league will deal with them remains to be seen, but at least the bad businessmen will be identified rather than swept under the rug.

[Q] Playboy: Which teams are poorly run?

[A] Cuban: Probably four of them. Probably another 11 are okay but could do a whole lot better. Maybe 10 are good. Five are great.

[Q] Playboy: Are you including the Mavericks?

[A] Cuban: I put us in the "good" category. We're trying to be great. The Lakers are great by default because they have a great cable-TV deal. Jerry Buss is incredibly smart. He's the one owner I look up to. The only one.

[Q] Playboy: Who else in the sports world do you admire?

[A] Cuban: Jerry Jones, Jim Dolan and David Stern. Dolan isn't afraid to take on anyone. You want to build a stadium that could impact my business in New York? Fuck you. Watch me muck it up by changing the game. That takes balls. Jones changed the economics of the NFL. He said, "The Cowboys are a national brand. We out-draw the home team in multiple cities. Watch me sign up Amex, Pepsi and others to big deals that all the other owners cry about." Hopefully I can get the Mavs to the point where we are an institutional brand with national impact too.

[Q] Playboy: Have you changed? It has been a while since you were fined for yelling at refs.

[A] Cuban: I'm still yelling at the refs. The only difference is they're getting used to me.

[Q] Playboy: The NBA is drafting more players from overseas. With so many U.S. kids playing hoops, why can't the NBA fill its rosters from home?

[A] Cuban: The NBA is Darwinian. We will go to Mars if there is a martian who can take on Shaq. The reason more players are coming from ROW--that's the rest of the world--is simple. If a kid from outside the States dreams of being a professional basketball player, he can, at any age, join programs dedicated to making him a pro. While going to school, he can practice as many hours a day with professional instruction as he wants. In the U.S. we pretend athletics are only a complement to academics. Limits are put on how much students can practice. Rather than getting instruction that enables him to have his best shot at the NBA, a kid becomes a piece of meat for college coaches to use to further their career and increase their bank balance. This pulls kids away from their academic responsibilities and puts the emphasis on the coach's success.

[Q] Playboy: Nevertheless, each year the NCAA seems to produce an impressive crop of top players.

[A] Cuban: What we get are kids who are six-foot-two or shorter and who have been the star of their team. Their coaches have ridden them trying to win games. They play them at shooting guard or small forward, anywhere but the position that will give them the best chance to succeed in the NBA. When the kids leave school, they realize that at their size, unless they are the next Allen Iverson, their chances of making the NBA are greatly diminished because they have never been trained to be a point guard. To make the switch while trying out for an NBA team is almost impossible. Winning at every level in the U.S. is more important than the kids' future.

[Q] Playboy: Is there a way to fix this system?

[A] Cuban: My hope is that four or more schools will drop out of the NCAA and start their own organization that would have stringent academic standards but also allow kids to major or minor in basketball. Each team would have NBA-experienced coaches, allow one or two former NBA players on the team and have full-time tutors to support the kids' academic needs. Bottom line: Colleges need to recognize that, to succeed, a guy who dreams of being an NBA player should have the same support as one who dreams of being a concert pianist.

[Q] Playboy: Do you approve of the NBA's requirement that players be 19 years old to enter the draft? Some have charged that it's a racist policy.

[A] Cuban: I completely support it. The difference between a high school senior and a 19-year-old with a year of college or the real world under his belt is huge. As for the racial stuff, anyone who says that is a moron. The only color the NBA sees is green.

[Q] Playboy: After last season's Indiana-Detroit game at which a brawl broke out between fans and players and led to Ron Artest's suspension for the rest of the season, what steps would you take to prevent another such episode?

[A] Cuban: I think it was a one-off event. I don't think the league has to take any specific precautions beyond the security measures we already have. I would be shocked if anything similar happened again.

[Q] Playboy: Should the emphasis be on controlling the fans or the players?

[A] Cuban: You can't control the fans. They can get nasty sometimes. I know--I get heckled far more than our players. I've had drunks come up and grab me or push me. We have to make sure our players know to get a security guard and not deal with the fan directly. If there is a problem on the players' side, it's because some like to think their manhood is being challenged when a fan says something overly critical. Even when fans are cruel, it's the most idiotic thing I have ever heard for a player to think his manhood is being attacked. Some players don't realize how stupid it is to give a loudmouth, dumbass fan the satisfaction that he got under their skin.

[Q] Playboy: Is the league tough enough on players who misbehave, break the law or have substance-abuse problems?

[A] Cuban: Yes. But you have to put it in context. If the NBA is a company with 450 employees and five of them get in trouble with the law and all but one apologize and go through treatment, that's the best company in the world.

[Q] Playboy: Athletes earn multimillion-dollar salaries and are viewed as role models. Don't they have additional responsibilities?

[A] Cuban: Just because the media is following people with problems around doesn't mean they can self-correct on a timetable equal to the season. But that's what we expect, and it's inhumane. So the first thing you have to do is try to eliminate the media. I would tell the media, "Look, we have an issue with this person. I'm going to communicate with you as best I can, but the bottom line is, I don't give a shit what you think. I have someone who works with me who I have to help." I don't think athletes have the responsibility to be role models, because nobody ever knows the athlete. We know the media's interpretation of the athlete, and it's not fair. We make a devil's bargain with the media. We've leveraged them because they're a great marketing tool for us, and we have to give them blood. We know that when chum is in the water, the sharks are going to come out.

[Q] Playboy: But shouldn't some lines not be crossed?

[A] Cuban: Yes, for human beings. I don't think there are separate rules for athletes.

[Q] Playboy: How about you? You're a guy who obviously plays by his own rules. Did success breed that kind of confidence, or were you always pushing the envelope?

[A] Cuban: Always. All the rules, the conventional wisdom, all the things that people said had to be done a certain way, I would test. Every chance I had and everyplace I went, I would put a toe in the water to see if those things were real. It taught me that just because something is the way everybody says it's supposed to be doesn't mean it shouldn't be questioned. More often than not, something is there, but most people simply take the path of least resistance.

My junior year in high school I wanted to take an economics class, but I wasn't allowed to because it was for seniors. So I dropped out of high school and took some night classes at the University of Pittsburgh. I did okay. The next year I enrolled and moved into a fraternity house when I was supposed to be a senior in high school. I remember I took my prom date to my fraternity house, and then we went to the prom. But I was always getting into arguments with teachers: "How do we know this is right?" I wasn't questioning did-we-land-on-the-moon types of things, but I always took the opposite side to try to understand. I drove a lot of teachers nuts.

[Q] Playboy: Being an alumnus of Indiana University, did you ever run into Bobby Knight?

[A] Cuban: The first time I met him was when former IU president Myles Brand had us in for this little tea, and I showed up in jeans and a sweater. Knight goes, "No suit? I like you already. We're going to get along." We kept in touch. After he got fired I stood up for him. My feeling was that he may not have been the right coach for IU, but this is not the way you handle firing somebody who's been with you 29 years. I don't care if it's the janitor. That's why I haven't given a nickel to the school since.

[Q] Playboy: You were 31 when you sold MicroSolutions in 1990. Then you went to Hollywood to become an actor. Was that your biggest failure?

[A] Cuban: Hell, no. It wasn't a failure. I did that to meet women.

[Q] Playboy: Did it work?

[A] Cuban: It was a huge success. I had no intention of going to work on my craft. I had no illusions about the actor in me who was dying to get out. It was "Oh my God, I could meet really good-looking women." I wasn't looking for real life. I was retired. I had a couple million bucks in the bank. To me, that meant I could live like a student for the rest of my life. I bought a lifetime American Airlines pass for $125, 000. It was cool. Let's go to Las Vegas! The next day I was in Barcelona for the Olympics. From my perspective I was living the life.

[Q] Playboy: Did you date any actresses?

[A] Cuban: I wish. There was a girl who was a backup singer for Mick Jagger and a couple who were cast in some movies. That was it. I was in a great acting class, though, taught by a guy named Aaron Speiser. With me were Kim Wayans, Shannon Sturges and Karyn Parsons, people who were all kicking ass on TV.

[A] Playboy: Your Hollywood phase lasted a couple of years, and then you gave it up. Why?

[Q] Cuban: I returned to Dallas to get back with a girlfriend. Todd Wagner, who I went to college with, had the idea of trying to get IU games through the Internet. Originally I was just going to give him some money. Then slowly I got more and more into it.

[Q] Playboy: It was Broadcast. com, one of the rarest of dot-com successes. What did you do differently?

[A] Cuban: A lot of stupid people with some of the stupidest money were doing the stupidest things. They thought the world had changed. It hadn't. It was still about profit and cash. Actually, Profit is a bad word because profits are very misleading. You can make a company look profitable on paper--see Enron--when it doesn't have any cash. We understood that, even more than profits, it was about generating cash flow. And that was our focus at Broadcast. com.

[Q] Playboy: But you lost money for a while.

[A] Cuban: True. When I started my first company, MicroSolutions, we never had a losing month, never lost a penny. So for me, starting Broadcast. com and losing money was painful. But remember, I funded it. It was my money. We had probably a year and a half when we invested in the company to get it bigger. Most of that money was invested in the sales force and hard assets. A lot of companies were buying tons of advertising. We never spent a nickel on advertising. When we went public, in 1998, we were at cash-flow breakeven.

[Q] Playboy: What was the difference between you and the dotcommers who failed: your products or the way you did business?

[A] Cuban: Lots of people had good products, but they got caught up in drinking the Kool-Aid, thinking this was a new economy. I was out there giving speeches, saying 95 percent or more of these dot-coms were going to go out of business. It was unfortunate that so many people got caught up in the stock market and forgot the business side. Any company that runs its business for the market is going to get into trouble. Our stock would go up $50 in one day and we'd be just as shocked as everybody else. We knew this was craziness, and that's one of the reasons we sold to Yahoo--liquidity.

[Q] Playboy: But this craziness fueled your success.

[A] Cuban: Sure. We and Netscape were the first dot-com companies to go ballistic. We would go to mutual funds that had billions of dollars under management. Our job was to explain our company in a 15-to-30-minute meeting on a road show to get them to consider investing. They could ask questions. They were clueless. There were guys who asked us how many CD players we had. Since we played music on the Net, they figured there had to be a CD player for every person who wanted to listen. They were the dumbest questions you ever heard. The people at some of these companies didn't even ask questions. Yet every single company we talked to placed an order, even though they had no idea what we did. From our perspective, we couldn't just stand up and scream, "Hey, you idiots, ask questions!"

[Q] Playboy: When you and Wagner sold the company to Yahoo in 1999 for $5.7 billion, people said you were lucky, selling right before the market collapsed. Does that bother you?

[A] Cuban: Hell, no. I was lucky. How could I have predicted the stock market would go nuts? But on the flip side, I had no doubt that the market was going to come back down, whereas other people thought it would go up forever.

[Q] Playboy: Internet companies are again on the rise. Are you seeing the same irrationality as during the last go-around?

[A] Cuban: There's only one area of idiot behavior right now. It's the all-time scam business of the moment. Here's how it works. Have you ever mistyped a website name and been taken to something else? That's called domain parking. People buy websites using misspelled names and set them up with Google. When you inadvertently go to that website and click on the ads, the owner gets paid. Let's say someone sets up a website called Tomcruse.com. People mistype Tom Cruise's name and there they are. The scheme gets more complicated, but basically if a person can make more than the 10 bucks a year it costs to maintain the site, he makes money. I know a guy who makes $150,000 a month--net! People are making all this money, and meanwhile advertisers think they're getting legitimate clicks when the clicks are accidental.

[Q] Playboy: How pervasive is this?

[A] Cuban: Let's call it the underground digital economy. There could be more than 1 million people making more than $1,000 a year. That's a billion-dollar economy.

[Q] Playboy: There's an irony here. To engage in domain parking, people often use companies you own.

[A] Cuban: I'm a big owner in a company called Register.com and another company called Tucows. Both do domain registration, which I think is going to be big. People have to register their domain names somewhere, and our companies do that.

[Q] Playboy: You call it a scam, but you're making money off it.

[A] Cuban: Not as much as I want to--yet. But yeah, basically.

[Q] Playboy: What kind of relationships do you have with other CEOs in the tech world?

[A] Cuban: I know some of them. The best story I have is about Bill Gates. After I sold Broadcast.com I decided not to give industry speeches anymore. Then I was asked to speak at some event right after Bill Gates. I got up there and said, "I've worked long and hard to finally get to the point where Bill Gates is my opening act." Being able to say that was the only reason I agreed to speak. Afterward his folks said he wasn't too happy about it.

[Q] Playboy: What about Google, arguably the hottest technology company? Can it maintain its dominance and its sky-high share price?

[A] Cuban: There are risks. Forty-five percent of its business comes from non-Google sites. More competition for that business will come from Yahoo, MSN and AOL. Part of it comes from ads by Google, and it has to keep that growing. If the competition reduces that business by 10 percent, that will have a huge impact on the stock price. Google would have to compensate for that in a big way. I don't have an answer, but to me, that's a risk factor in Google. It's not a slam dunk.

[Q] Playboy: What's your take on the future of AOL?

[A] Cuban: I think AOL will do great. It has recently become very aggressive. It understands what the business is now, that dial-up is not going to save it. AOL did Live 8, which was the largest streaming event ever. It's getting into original content and making its home page open for people. AOL is taking the best of Yahoo and Google and adding to it. It's not going to replace them, but it already has a built-in user base, so if it can make its users happy and attract to its site people who aren't dial-up AOL users, there's no reason it can't sell a whole lot of advertising.

[Q] Playboy: In your blogs you talk about the stock market as if it were the world's biggest scam. Why?

[A] Cuban: In a nutshell, I think the stock market is broken. It has become a collectibles market. Owning a share of stock that does not pay a dividend is not a whole lot different from owning a baseball card. The key to both is whether you can get someone else to give you more for it.

[Q] Playboy: What's new about that?

[A] Cuban: Actually, there was a time when the majority of companies paid dividends. But in the 1990s the intrinsic value of companies didn't push the market. It was the ability of mutual funds and brokerages to market stocks. I don't have proof, but I am willing to bet that the stock market basically correlates to the amount of money spent on marketing by the mutual-fund and brokerage industries. If you sell something hard enough, you create demand. In essence, the financial TV networks have become QVC for stocks. As long as you make it look good, you can find someone to buy it. I am trying not to be hypocritical, because I will buy stocks if I think they will go up. But that doesn't mean I don't think the stock market is broken. It's the ultimate Ponzi scheme. The stock market is the only time we give other people our money and don't expect to get any cash back. I'll tell you what: If interest rates go up to 10 percent, you could see the Dow, which is at 10,000 to 11,000, plunge to 5,000. That's the other thing. No one knows. Do you think anybody really knows?

[Q] Playboy: According to Forbes, you are the 164th richest American, with $1.8 billion. How much money does one need?

[A] Cuban: It depends on what kind of lifestyle you want. If I were single, $2 million in the bank would do me fine. Having a family now, I probably would want more.

[Q] Playboy: Is money a way of keeping score?

[A] Cuban: Absolutely. I mean, business is the ultimate competition. If you compete with me, my whole mission in life is to put you out of business. When we ran Broadcast.com, I was open in saying my goal was to stand in front of an antitrust committee. Yeah, you can split up my company. That just means I won and I will go do something different and do it all over again. To me, money is a scorecard. It lets you know how well you are doing. If you are in a particular industry, if you are getting the money and somebody is else is not, then you win. There's an old Andrew Carnegie article they made me read at Indiana University. I keep copies of it with me. It basically says it's patriotic to get rich.

[Q] Playboy: With your wealth, have you moved into new social circles?

[A] Cuban: Most of my friends are the same ones I had before I had anything. I'm still good friends with my high school and college buddies, as well as ones from when I first moved to Dallas.

[Q] Playboy: Tell us about your toys.

[A] Cuban: In Dallas, a yellow Hummer, a 2001 Ford Explorer and a 2004 Lexus coupe. I have a Lexus 450 truck in L.A. and the same in Miami.

[Q] Playboy: What do you consider your biggest extravagances?

[A] Cuban: My Gulfstream G550 by far. Nothing better than having a plane at my beck and call. But I guess the biggest extravagance is not having to look at the price tag on anything. Have credit card, will buy.

[Q] Playboy: What kind of boss are you? Do you tend to micromanage?

[A] Cuban: Typically, when I first get into an organization, I do because that's how I learn what people can do. But over time I'll fall off. Like now, from a management perspective, the Mavs for the most part run themselves. I have to devote only 30 percent of my time to them, and I can focus on the other things, such as marketing.

[Q] Playboy: Are the Mavericks profitable?

[A] Cuban: Not even close. It's because of my payroll. We have the second or third highest in the league, about $95 million this year out of revenue that will be $115 million. I didn't do it the right way. I listened to my basketball people a little too much.

[Q] Playboy: As far as whom to sign?

(concluded on page 170) Mark Cuban (continued from page 58)

[A] Cuban: And the price to pay. It's about building a team and what you do if you make a mistake. I was told, "This guy can put us over the top. Spend the money." To get those kinds of guys you often have to take their bad contract. So we got stuck with all these bad contracts and maybe paid too much. And maybe they weren't over-the-top guys. It added up and killed our flexibility. We're just getting out of that now.

[Q] Playboy: Last season the Mavs made it to the Western Conference semifinals and then lost to Phoenix. Is winning a championship proving tougher than you thought?

[A] Cuban: Not tougher, but it is more frustrating to get so close and blow it.

[Q] Playboy: What changes have you made this season?

[A] Cuban: Hopefully we're a defensive team, one of the better defensive teams in the league. Our big challenge is going from being all offensive all the time to being a team that can defend.

[Q] Playboy: Is it true that you're superstitious?

[A] Cuban: Yes.

[Q] Playboy: Don't tell us you never change your underwear.

[A] Cuban: I don't wear underwear.

[Q] Playboy: Okay, then what?

[A] Cuban: If I told you, I'd have to kill you.

[Q] Playboy: It's that bad?

[A] Cuban: No, it's just completely stupid. If I'm chewing a piece of bubble gum and we're winning, I don't care how nasty that piece of gum gets, I chew it. But it's going to last only one game. I don't wrap it up and put it in the freezer for the next game. One year I had to walk a certain way to my seat. Even in my house there were certain tiles I wouldn't step on. But I was seriously disgusted with myself for doing it. I was like, "Come on!" Then I'd sidestep it. It was completely stupid.

[Q] Playboy: You have a two-year-old daughter. Has being a dad changed the way you look at your life?

[A] Cuban: Dramatically. Now we can lose a game, but when my daughter comes running to the door and says, "Daddy, I love you," that's what matters. It's no longer "How am I going to feel when I'm 80?" It's "I hope my daughter's healthy." It's "Whose ass am I going to have to kick when she starts dating?" I tell my wife, "I don't care how pretty she is, but she has to have fat ankles." Fat ankles will at least cut the population chasing her in half. I'm sorry, but I want her to have fat ankles.

[Q] Playboy: What do you do when you're not working?

[A] Cuban: I love what I do, so I never look at it as work. But I love to play basketball, read, work out and, most of all, hang with my wife and daughter.

[Q] Playboy: We've spent a lot of time together in two different cities and not once have you behaved like the crazy guy at Mavs games. How do you explain the disconnect?

[A] Cuban: I have to let out the aggression somewhere. For whatever reason, when I play sports or watch basketball or rugby, I get really into it, over-the-top. Not football, not baseball--basketball and rugby. Go figure. Even before I bought the Mavs, when I was a season-ticket holder, my wife used to try to settle me down at games. In leagues at the gym I was always at the top in technical fouls. I was even in a fight every now and then. I became friends with the guy who became CFO of Broadcast.com when we got into a fight playing basketball.

[Q] Playboy: Would you change your temper if you could? In fact, is there anything you would like to change?

[A] Cuban: I'll paraphrase a quote from Allen Iverson: I'm working the job I always wanted. I'm living the life I've always dreamed of. I love what I do, and I'm having fun. Why would I want to change it?

The Lakers are great by default because they have a great cable-TV deal. Jerry Buss is incredibly smart. He's the one owner I look up to. The only one.

I don't think athletes have the responsibility to be role models, because nobody ever knows the athlete. We know the media's interpretation of the athlete.

Business is the ultimate competition. If you compete with me, my mission is to put you out of business. If you are getting the money and somebody else is not, you win.

Owning a share of stock is not a whole lot different from owning a baseball card.