BRIAN LAMB, HOST: Mark Cuban, how many times have you read "Fountainhead?"
MARK CUBAN, ENTREPRENEUR: Three complete times and untold number of little snippets and segments. And you know it's funny because I'll pick it up when I need motivation but then if I read too far I get too much motivation and I get too jittery so I have to put it down.
LAMB: Why? Why does it have this kind of impact on you?
CUBAN: You know that's a good - that's a good question but I think just the characters, you know - growing up you tend to find people you relate to and that you try to pattern yourself after. And Howard Roark was just that type of person to me.
It was, you know, you could be beaten down by anybody and by everybody and it doesn't matter what everybody else thinks it's how you see yourself and what your own dreams are. And, you know, anybody who started a business and build a business knows there's going to be lots of times when you feel beaten down and you need some motivation and that's when I turn to that book among others.
LAMB: When did you first read it?
CUBAN: In high school. In high school, I think it was my junior year. And I don't remember why. My mom was really into all the objectivist stuff and everything and I really kind of pooh-poohed. You know I was like, oh that's just another pop psychology.
And then I just picked it up. I'm not sure if I picked up here copy or bought a copy, I really don't remember but I read that and "Atlas Shrugged" and then I got to "We the Living" and then, you know, et cetera, et cetera, et cetera. So I became a fan.
LAMB: And you did this growing up where?
CUBAN: Pittsburgh, Pennsylvania. In a suburb called Scott Township and the Mount Lebanon and graduated from Mount Lebanon High School in 1976.
LAMB: What was the family like? I mean why would you mom be a reader of Ayn Rand?
CUBAN: That's a good question. My mom was really into the pop psychology of the moment. So one minute it was the objectivism and the next minute it was something else.
But my family life was good. I mean it was a middle-class upbringing. My mom was a housewife with a different job or different career goal every other week and my dad and my uncle worked in an upholstery shop. So if your car got a rip in the seat you took it to my dad. If you had a rip in your convertible top or you wanted to pimp out your ride back then you took it to my dad.
LAMB: How about brothers and sisters?
CUBAN: Two younger brothers, Brian and Jeff. Both work for me now. Brian is a lawyer and Jeff is in sales and management for me. And they both kind of - we all went our own direction but then after we sold Broadcast.com and I started some of these other companies I asked them to come work for me.
LAMB: So back in high school, if somebody knew you what would they have predicted you would have become?
CUBAN: Oh my goodness, they would have predicted either I would be in jail because I was always, you know, hustling and doing things and jobs and - or that I would be running my own business, an entrepreneur.
And you know, where I grew up, you know, most of our friends' parents and everything just had regular jobs, you know. And so the concept of being an entrepreneur was - wasn't something we were around all the time. It wasn't like OK so-and-so's dad started this company and that's just a natural course.
How I got bitten by the bug I'm not real sure but it's just the way that it turned out. So I was always - you know, I was buying and selling stamps when I was 16 years old and going to all these stamp shows. And my buddies were like, what are you doing, you know, going around and buying this stamp for 50 cents and selling it for $5. So they just thought I was just a hustler. And I figured - he's either going to be OK or he's going to be in jail.
LAMB: Did you sell garbage bags?
CUBAN: Door-to-door when I was 12 years old, yes. You know my dad - I've always been into basketball and I asked my dad, I said, you know, can I have a pair of - I forget what - (Beta) Bullets, whatever the fancy shoes were at the time. And like sneakers on your feet look like they work OK. You know when you have your own money you can buy whatever you want.
And it happened to be at a time when all his buddies were over playing poker and I'm 12 and I can't account for the sobriety or not at the time but one of my dad's buddies spoke up and said, "You know what, if you want a job I'll help you out. Why don't you sell garbage bags door-to-door?" I'm like, "OK, Dad, can I do it?"
So I still have one of the boxes. It was a box of a hundred of these nasty, skinny, you know, probably not very good garbage bags that I sold $6.00 a box. But who's going to say no to a 12-year-old kid walking up saying, "I know you need you need garbage bags, I know you need them everyday. Would you buy them from me?" So I learned a lot that way.
LAMB: Powdered milk?
CUBAN: Powdered milk was a disaster. You know I - it was after I graduated from college and I had a job selling franchise - it was a - one of those jobs that I think was like four months, five months. I was selling franchises for a company called Tronics 2000 (ph) which franchised TV repair shops. And I tried to get them to go into computer repairs and they didn't see a future in computers.
But at that point I left there and, you know, OK, what kind of business can I start? What kind of business? And I thought, well - I saw an ad for somebody selling powdered milk and I thought everybody needs milk like they need garbage bags, you know, little bit cheaper. And my taste test wasn't quite in line with other people's taste test and it didn't work out at all. You live and you learn.
LAMB: Was there back then somebody that you admired that you wanted to be like?
CUBAN: Not so much that I wanted to be like. I tried to take a lot f pieces from different people. You know my dad, I learned a lot about how to treat people and how to respect people and to have confidence in yourself.
I looked at, you know, a lot of young entrepreneurs that were in the computer business at the time, Michael Dell who was, you know, close to my age. And funny story there, I started this business MicroSolutions and we used to integrate PCs and local area networks.
And I - there was - one of the most ingenious things I've ever seen anybody do from a marketing perspective Michael Dell did. There used to be this magazine called PC Week. And every single week he took out a full-page add for these parts he was selling out of his dorm room in Austin, Texas.
But the unique thing about it is he was the first recognize that as prices were dropping because of economies of scale and new technology, rather than just putting that in your pocket let's lower prices. So every week people would start looking for PCs Limited and what their prices would be.
And so I drove down to Austin from Dallas one day and I said, you know, "I want to buy some stuff." And I got back and I wrote him a letter saying, "Boy, you've really got something going there. If you - if you well, Michael, if you keep on doing this I think you could do really well."
LAMB: What year was this?
CUBAN: This was - that was 1984.
LAMB: And today you're both billionaires.
CUBAN: Yes, it's crazy how it turns out and we laugh about it.
LAMB: What does it mean, for those of us who can't comprehend what, you know, that kind of wealth is like, what's it mean?
CUBAN: Two things probably. It means security, you know. I don't have - I mean I've woken up days and not known if I could pay my light bill. I've come home from work or come home at times and the lights have been turned off. And, you know, it's embarrassing and it's, you know - it's motivating. You know I've slept on the floor for six months in buddies' apartments when I first got to Dallas.
So, you know, I've been on both sides and not having to worry about those things anymore that's part.
And when I was single I would have told you there's nothing even remotely bad. But now I have a two-and-a-half-year-old daughter and it scares me. It scares me in how she's going to be raised because I grew up completely middle class and I think, you know, there's a lot of accountability involved in growing up where you are responsible for yourself. And you know, she'll figure it out at some point in time that there's a little cushion back there and that's what scares me. But other than that, you know, it's a beautiful thing.
You know it really is being able to wake up with a smile on my face and say, OK, what do I want to do today.
LAMB: How did you make the big money?
CUBAN: My partner and I, Todd Wagner, started a company called Audionet in 1995 and we - Todd came to me - we used to sit around and just, you know, discuss different business ideas and concepts. And one day he came to us and said, "Look, I've been talking to some people. What do you think about the idea of broadcasting sporting events over the Internet?"
And in 1995 the Internet was, you know, new to just about everybody but Al Gore. And so, you know what, that's a good idea. We both went to Indiana University. I've been in situations where we would sit with the speakerphone in Dallas while somebody held up the other side, the telephone hand set, to a radio in Indiana so we could listen to Indiana-Purdue basketball games. That could be a decent ideal. You know, I'm like, "OK, I'm the geek."
So I went out and bought a cheap computer, back then an ISD online and went online and started playing with all the software, came up with the name Audionet and went to different radio stations, different schools, and said, "Can we broadcast your stations and your games over the net?" Enough people said yes that we grew it to having an IPO in July 18th of 1998 for Broadcast.com that at the time was - had the largest single-day gain in the history of the stock market. It's since been surpassed. And then about a year later we sold it to Yahoo! for $5.7 billion.
LAMB: Was it worth 5.7 billion?
CUBAN: Well in cash, no; in stock, yes, because it was relative to Yahoo!'s pricing as well. So obviously all Internet stocks were inflated so I think it was like 23 million shares of stocks. So it would be the equivalent today of, you know, 690 - a sale price of $690 million in Yahoo! stock.
So it's, you know, relatively speaking it was inflated and that's why I made sure I hedged it the minute I could hedge it.
LAMB: So that was called Broadcast.com?
LAMB: What was it? I mean how many people worked there, and how - what kind of income were you getting?
CUBAN: We had 330 people when we sold and of those about 135 were salespeople. And basically we had two businesses. One was a content business where, as I mentioned earlier, we do audio or video of life events of sporting events like you might have seen during the NCAA basketball tournament. There was a big deal about CBS streaming all the games online for free for the first time. Well they said it was the first time. It wasn't really the first time because we had done it 10 years earlier, the audio.
But doing that, taking audio and video and streaming it over the net where our biggest sources of incomes were selling some advertising - that was probably 20 percent of our business. But 80 percent was in going to public companies and saying we want to stream your quarterly earnings conference calls. Because prior to that - prior to us doing the first one in 1996 a shareholder typically couldn't get - wasn't able to listen to the quarterly earnings conference call because they put it on a private call and only the analysts could get on and no shareholder could.
So with Inside Enterprises and I think it was January of '96 we did the very first one and obviously now it's commonplace, every quarterly earnings conference.
We also did corporate events. Prior to us doing streaming of corporate events you had to rent this big satellite environment and put everybody in a theater, and rent satellite time and do your thing. Well, you know, we go to Motorola, we go to Intel, Microsoft, Dell, all these major corporations and, you know, with the value of real-time communications with your employees would you rather send a note from Bill Gates or would you rather stream him standing in front of a camera saying here's what we're trying to accomplish as a company Microsoft employees and stream it to 30,000 people. Or Michael Dell doing the same thing to his customers, we used to have "Breakfast with Dell."
And so that was 80 percent of our business and that, you know, that still - that was a vital business back then and it's still a vital business on the Internet today.
LAMB: And back in those early days how much did you charge the customers?
CUBAN: Oh my goodness, as much as we could. We had - I mean I think like we did an all-hands complete corporate-wide event for Motorola and I think we charged them a half a million dollars per event. And so it wasn't - it wasn't easy to do and because it wasn't easy it wasn't cheap to do.
LAMB: What year did you sell?
CUBAN: We sold it in July of 2000 is when we closed it.
LAMB: You only had this company for five years â€¦
CUBAN: Five years.
LAMB: â€¦ and you went from zero to $5.7 billion?
CUBAN: From a $3,995 Packard Bell computer in the second bedroom of my house to $5.7 billion in stock in five years.
LAMB: And when you originally started the business what kind of capital did you have?
CUBAN: I put - well we started at - the original startup capital was just, you know, $4,000 for a computer and an ISDN line and a lot of time, a lot of sweat equity because we really didn't know if it would be a real business. But once we started to realize, you know, once we started getting radio stations and we started getting response from listeners from around the world saying wow, this is amazing. We knew we had the opportunity to accomplish something.
So I took proceeds from a previous company I had sold and I think I put in probably $2 million of my own money and Todd put in - and that's not immediately, that's over the course of the first two-and-a-half years. And Todd put in a couple hundred thousand dollars.
And then we let some of our friends in. We put a $3 million valuation on it and we let our friends in - put in only $30,000 apiece because the thing that scares me more than anything is losing a friend's money. And each of those $30,000 investments turned into $22 million when we sold.
LAMB: How many made $22 million?
CUBAN: There were I think eight of our buddies that invested with us.
LAMB: Are you still friends?
CUBAN: Oh, yes, all except for one.
LAMB: The one guy, what happened to that one?
CUBAN: Oh, it's a long story.
LAMB: What's the reaction of friends that make $22 million?
CUBAN: Let's party, that's exactly what we did. Yes, it was - I mean they were very congratulatory. I mean they - you know, they were my friends in advance. And, you know, it's an interesting - when I first sold my first company that's when I had the biggest adjustment with people because â€¦
LAMB: What was it, MicroSolutions?
CUBAN: MicroSolutions, right, and I was 30 years old basically and we sold it for just under $6 million. And after tax and with my partner I netted about $2.2 million I think it was. Which was, you know, a huge amount of money.
And so my friends at the time, even my girlfriend at the time was like you're going to change, you're going to change. And fortunately they'll tell you now I've change a little bit, obviously, but all that much. And because I'd been through it with those friends and, you know, they were my friends back then it wasn't a whole lot of a transition and it wasn't difficult like we thought it might be.
LAMB: Talking about change, I mean anybody that see you knows that here you're dressed in jeans â€¦
LAMB: â€¦ shirt and all that. I mean is that conscious or you just never changed?
CUBAN: Yes, I mean, you know, I wore a suite - with MicroSolutions I wore a suit every single day for seven years. I went seven years without taking a vacation. I went seven years where really the only fiction books I read were, you know, "Fountainhead" and "Atlas Shrugged." I mean I was reading software manuals.
And I told myself if I ever made it, if I ever made a lot of money I wouldn't wear and suit and I wouldn't wear a watch ever again. And â€¦
LAMB: No watch and you never wear a suit?
CUBAN: I've had to at various points in time but only kicking and screaming.
LAMB: Did you ever own a private jet?
CUBAN: Yes, I have a G550, Gulfstream G550 which is very nice.
LAMB: Well, let me go beyond the Broadcast.com and the money. You own the Dallas Mavericks, you paid 280-some million?
CUBAN: $285 million, right.
LAMB: It's all yours?
CUBAN: There's some partners from - it's 90-plus percent mine. Yes, for the most part it's mine.
LAMB: But what I want to talk to you about though is 2929 Entertainment.
LAMB: First of all, where did that name come from?
CUBAN: 2929 Elm Stream was the address for Audionet Broadcast.com's first office. So since Todd and I are partners in 2929 Entertainment we just kept the - decided to name it 2929.
LAMB: Is it a - is it a private company?
CUBAN: Yes and it will stay private.
LAMB: And what does it own?
CUBAN: Well, there's multiple companies that Todd and I are 50/50 partners in. And there's 2929 Entertainment which does co-productions with other companies like "Good Night and Good Luck" was a movie we produced that got nominated for six Oscars and we co-produced it with Participant Productions and Warner Brothers - Warner Independent Distributed; "The Jacket"; we have a moving coming out called "Aquilla and the Bee" (ph) that will be - that's in April that we think is going to be really huge. So it does co-productions for the most part and we'll do six or so per year.
Then we have another company called HDNet Films which produces movies shot in high-definition that are going to be released on a day-and-date basis. And we've done "Enron: The Smartest Guys in the Room," which was nominated for best documentary. We've done "The War Within" and we've done "Bubble" with Steven Soderbergh which was our first real day-and-date release which was released in theaters. And we own Landmark Theaters and it was released on DVD through Magnolia Home Entertainment, which is one of our companies, and it was shown on cable and satellite television through HDNet movies, which is one of our properties as well.
So basically the whole concept of 2929 in our associated companies is to be able to make content and then control the whole vertical distribution chain. So we can make it through 2929 or HDNet Films, we can show it on television through HDNet and HDNet movies, which is the first all high-definition TV network.
And we've got - we're in front of 55 million homes now. We're on DIRECTV, Dish, you know, Charter, Time Warner, et cetera. We have 2.6 million subs there. We have Magnolia Distribution which allows us to - and Magnolia Home Entertainment which allows us to sell the DVDs. And then we also own Landmark Theaters which is 59 locations and 267 screens, we keep on adding them so I think we're up to 267 screens across the country.
And Landmark is geared towards an art house/independent film market so it's a â€¦
LAMB: Landmark is 11 blocks from where we're sitting right here â€¦
LAMB: â€¦ and in this town of Washington, D.C. and a lot of other towns around the country that's the only place or one of the very few places you can go watch documentaries.
LAMB: And "Enron: The Smartest Guys in the Room" was there â€¦
LAMB: â€¦ and "Good Night and Good Luck." It's the politics though I want to ask you about.
LAMB: I mean first thing is that Enron is all based around Houston and you live in Dallas.
LAMB: I wondered when I saw the documentary whether it had anything to do with your feelings about Houston or about the Ken Lay group that got you moving into doing the documentary?
CUBAN: Not so much the geographic part of it but really the corporate ethics side of it definitely was the motivation because, you know - you know, we just had this conversation about going public and I mean I'm the luckiest guy in the world. I mean, you know, call it lucky, call it whatever you want, I'll take it.
But then on the flip side I saw so often, you know, people do this judgment in their head where, OK, if I get caught is it worth - how much is it worth to be paid to go to jail? Would you go to jail for one year for $1 million, $5 million?
And in dealing with those guys when we had Broadcast.com we dealt with the broadband group, it was slimy. I just didn't like the associations we had with them. And then when all of it fell apart and we got the rights to the book, "The Smartest Guys in the Room", I was like, you know what, if we can do a documentary and it's well done it will be an evergreen product that, you know, business classes and ethics classes and corporations will be able to look at forever and ever. And to me that was important.
LAMB: So you made a decision partly because of the way you felt about - I don't know if you call it the politics of it but the corporate governance of it?
CUBAN: No question about it.
LAMB: And you dealt with Enron people when you had Broadcast.com?
CUBAN: Yes, because Enron created this sham organization - that's the only way to call it - called Enron Broadband where they were going to buy and resell bandwidth. And one of their - one of their applications was going to be to stream, which was the business Broadcast.com was in - movies and other events and other content over this broadband scenario they were putting together. They even did a deal with Blockbuster and so they needed somebody to do the backbone, the infrastructure of it to make sure it worked.
So I went down there and actually we met at a consumer electronics show - and talked to these guys. And they were going with this solution, they're telling - I'm like, "That's not going to work." And they're like, "We'll make it work."
There was no way they were going to make it work. Now we never got to the light of day because it was all, you know, built on, you know, who knows what. But that was my first interaction with them. And then when everything collapsed and seeing what happened and I just - you know, I think corporate governance is a real issue right now, a big issue. And you know, that was my one little way to take a step towards helping.
LAMB: So it was a thank you then for the way they had treated you â€¦
CUBAN: Well, yes, in a lot of respects that's a great way to put it. It was a thank you.
LAMB: How far are you going to go with Landmark?
CUBAN: As far as we can take it. I don't see us trying to take it into every market but we want to be in the top 25 cities basically. And we've got - we're still short in probably three or four - no, three top 10 markets and an additional top 15 markets. So we've got some building to do and we'll grow with it.
I mean people now are really down on the movie industry and that's usually the best time to be aggressive and grow. We think that there's a - you know, you talk about going to see independent art house films that there's very few theaters yet there's a whole demographic that really enjoys seeing movies that aren't about someone cutting their arm off, or you know, some, you know, while imagination story. And we want to be able to deliver those movies and we want, you know, you, myself, our friends to be able to go to a Landmark theater and know exactly what you're going to expect, that - you know, not that there's anything wrong with a 16-year-old kid with blue hair blasting, you know, his stereo out of his car and, you know, texting his buddies. Well that's what they do when you go see "Saw II," which is great.
But when my wife and I go to a movie that's not where we want to be, right. If we're taking our daughter, great, we'll be around kids. But, you know, so we want to build something that's very demographic specific and we think that's unique in the movie industry. We think that everybody else is trying to be, you know, to try to make everybody happy and that's hurting the industry as a whole.
LAMB: I want to go back to Ayn Rand for a moment.
LAMB: If you get on Wikipedia and you punch in " The Fountainhead," up comes this quote, among other things from Ayn Rand. "Man's ego is the fountainhead of human progress." And that is her - that's how she got the name for the book "The Fountainhead."
Talk about your ego, how do you - I mean you've got a reputation as someone who says exactly what he thinks â€¦
LAMB: â€¦ and you're outspoken and you get in people's face and there's all this â€¦
CUBAN: Right is right, yes. Right is its own defense.
LAMB: But what about the ego, how do you deal with it?
CUBAN: I mean I don't - I mean obviously I have an ego and my ego is typically geared more towards what I'm trying to accomplish. And it's more towards just trying - just - you know, I don't know. I never - it's a great question. I never really thought about what's - what is it about my ego.
You know I don't - people think it's always about look at me, look at me, and ego from that perspective. But to me it's more about, you know, the juice that comes with the sport of business. You know anybody - if you've ever done anything athletic or - playing tennis that good shot, that good shot in basketball, there's a certain feeling there. Well I get a stronger feeling from the comparable specifics in a business environment. You know having the idea and then being able to take it to fruition. Being in a situation where no one sees what you see.
You know starting HDNet five years ago when everybody's saying hi-def is a bust, it's never going to happen, it's never going anywhere, you're crazy. Or, you know, streaming over the Internet, that's ridiculous. Or you start - you're investing in this blogging company and you're starting to blog. So, you know, for me I guess it's looking at scenarios and seeing things other people don't see and taking the pride that I was right five years later.
LAMB: On the same Wikipedia site they are talking about the main character from "Fountainhead," Howard Roark. And it says, "Howard Roark is the man who was as man should who lives for himself and his own creative power, indifferent to the opinions of others."
Does that - does that nail you?
CUBAN: Yes, it pretty much does. I mean - and you know, there's - she also has this quote the virtue of selfishness and that can be taken in a lot of different ways. And to me, you know, which embodies that quote, if you - if you love people and care about people, doing what's best for you means taking care of my daughter with no end, right, there's nothing that will ever get in my way of me doing whatever I can do for my family. That's being selfish and that's a virtue. And so I think that's really the embodiment of what they're trying to say.
LAMB: Where did you get the idea that business should be - now this sounds like a crazy question - should be honest and have integrity and going back to your old confrontation with the Enron people?
CUBAN: My dad, you know, what goes around comes around, what goes around comes back. You know and I've been around crooked guys. I've been, you know - and I'd be lying if I said, you know what there weren't situations when I was younger and struggling where it wasn't like - OK, you know, I've done a chain letter knowing it was illegal. I've seen people sell drugs. I never had. I've seen people sell drugs because that's the only way they could make money. I've seen people do gambling, that's the only way they can make money. And it always ends up bad, always.
Now you still might have money in the bank but it ends up bad in one way or the other whether it's stress, whether it's family, whether it's violence. And I just, you know - it was like the chain letter. Once I started this chain letter - and it was to pay for my junior year of school - and my rationalization was anybody I sold it to I'd never let them lose any money off of it. I made sure they got their money back.
Now downstream if I didn't know you that's your problem which, you know â€¦
LAMB: How much - how much did you make?
CUBAN: I probably made $1,100, which back in 1978 was a good amount of spending money for my junior year of college.
LAMB: Why did you pick Indiana University?
CUBAN: I saw a list of the top 10 business schools and it was the cheapest.
LAMB: Just that simple?
And why did you have to have the cheapest?
CUBAN: I mean I was pretty much paying for myself. I had to find hook or crook loans and Pell Grants and scholarships, anything I can get to pay for my own school.
LAMB: And was the business school worth it for you?
CUBAN: Oh, yes.
LAMB: And how much of your life is - revolves around the Dallas Mavericks?
CUBAN: I'd say a big part of my emotional well being. I'm sorry, I mean I'm very emotionally attached to them. But on a schedule basis probably about 30 percent of my time but about, you know, outside of family about 80 percent of my mood is attached to the Mavs. If we win I'm the happiest guy on the planet.
But, you know, since my - it used to take me three or - no it's probably two days to get over a loss. Now since my daughter was born I've cut it down to about three or four hours. My wife knows just let him go into his office and work on his email just to blow off the steam and you know. Yes, I know there's another day but it's just funny everybody's got one area in their life where, you know, they're just, you know, certain things are like scratching a blackboard. And to me losing a game is â€¦
LAMB: And this year you haven't lost very many?
CUBAN: We haven't fortunately so I've been in a good mood more often than not.
LAMB: On you're - first thing I want to ask you is how you have time to blog? I mean you have blog Mavericks â€¦
LAMB: â€¦ dot com is your blog. Where do you get the time?
CUBAN: Well it â€¦
LAMB: They're long. I mean a lot of - you say a lot of things.
CUBAN: Yes, and most of them are just stream of consciousness. You know I don't - I'll do my research what I think is necessary, you know, by linking to other sites or source material, whatever. But it's really just when something hits me that I think, you know, if it's the type of thing where anybody else would just call somebody up and say, "Can you believe this?" you know, or "What do you think about this?" or you're out to dinner with friends and it would be a topic you'd talk about then, you know, things I write about are things I would talk about and so it's just a way for me to express myself and get it out.
LAMB: I'm going to read one that you wrote about Commoncause.org is a spammer â€¦
CUBAN: Oh, they're killing me.
LAMB: And you start off by saying, "Commoncause.org has some very worthwhile efforts underway. In fact, I've always like that they have pushed discussion of issues. There is nothing better than open discussion about an issue to help both sides learn. As a libertarian at heart I actively support their published missions."
And I'll read the missions: to strengthen public participation and faith in our institutions of self-government, to ensure the government and political processes server the general interests rather than special interests, to curb the excessive influence of money on government decisions and elections, to promote fair elections and high ethical standards for high government officials, and the protect the civil rights and civil liberties of all Americans.
LAMB: First of all, what kind of a libertarian are you?
CUBAN: I mean I think there's room for government. I'm not an abolish-all-government type guy. But I think, you know, less is more; that we've gotten so big as a country that managing 300 million people and trying to make the movements that each administration that comes in every four years tries to make, you can't make them in four years anymore.
You know you couldn't turn around IBM or Microsoft in four years and have it go from left to right. And here we are trying to take a whole country and make seismic shifts because that's what a new administration feels like it's supposed to do.
And so, you know, and that I think just adds to the big ball of string that just makes it tougher and tougher. So personally I'd like to see a lot less.
You know you can talk anecdotally about individual scenarios that are being discussed in the media but it's really to me a bigger - a bigger picture. And what I think is even worse now it's gotten so big that people are feeling entitled, that we're enabling a sense of entitlement that if something goes wrong my government is going to be there as opposed to something's wrong let's use that American spirit and ingenuity to solve the problem.
The government's taking away - I mean New Orleans is going to be a perfect test case, you know, how much is going to be private people, you know, individuals being innovative and coming up with better ways and how much is going to be give me some money and let's rebuild and have the government back it. And I'd rather see, you know, smart people do smart things.
LAMB: Do you put a political label on, do you have a party you belong to?
CUBAN: No, no. I'll vote for - you know, I hate to say this on C-SPAN but I try to vote for the guy who I think will do the least. You know, you get out of the way and just don't do anything and I'm happy because like I said, it's hard, it's almost impossible for other than just legislating it to do a good job of implementing major programs and moving the country. It's just too big.
LAMB: Do you make statements in your blog about politicians? Like would you - would you â€¦
CUBAN: I have.
LAMB: â€¦ have an opinion of George Bush?
CUBAN: I haven't so much on George Bush but I have on Orrin Hatch and more because of the stance on copyright. He thinks he's the protector of all things musical and because he's a - or a songwriter at heart. And I just think, you know - he tried to introduce this thing called the Induce Act where, you know, he made - he made the statement one time that if people are stealing content maybe we should blow up their PCs.
And I just - you know, I just don't think he has a true grasp of copyright and the opportunity copyright creates in America for, you know, smart people do to smart things. I think he's creating - I think he's become - and I said in my blog, a pocket boy - a back pocket boy for the music industry. Whatever they think is right, and they haven't been too smart about copyright and they haven't been very smart about new technologies. And you know, he's implemented or pushed to implement things that help them but I think hurt America as a whole.
What did you think of Napster?
LAMB: Napster the ruling or Napster the company?
The company, I mean not the company per say but the idea â€¦
CUBAN: The idea of file sharing - I mean stealing is wrong, there's no question. But it was going to happen sooner or later. You know every single one of us has forwarded an article without permission. There's no less value in the intellectual property of when you write something and publish it or I write something versus a song.
You know and so it's a fact of life and I think Napster, you know, it was going to be shut down, you know, but music industry at the beginning had an opportunity to co-oped it and use it as opposed to just try to crush it. And they hurt themselves.
LAMB: Back to this commoncause.org â€¦
LAMB: â€¦ as a spammer, what were you getting at?
CUBAN: Well what I was getting - what happened was I started getting all these emails, I got 5,000 emails in probably two hours and it's happening again today as we speak actually where people were just - form letters - they weren't sending it they were going to commoncause.org, typing in their email and commoncause.org had put my picture alongside - my picture with a pair of horns on my head alongside these telecom executives. And they presented us on HDNet, Mark Cuban, as a telecom executive. So they're sending me - and so all these people are putting in their email address sending me, you know, "stay away from my Internet," and dah, dah, dah, dah.
You know, if 5,000 people want to communicate with me in their own individual opinion I'm fine with that, email@example.com is my email. I publish it everywhere all the time and I have no problem with that.
But when 5,000 just give an email address then I'm sent a form letter and it's sent from one computer all within as quickly as they can send them to me like they are doing again today, that's spam. That doesn't accomplish anything. I put a file filter on it and it just goes into the wastebasket and, you know, it's just wrong. You know it's a spam bomb somebody with a form letter from - that's spam.
LAMB: And when you do that kind of thing on your blog do you get a lot of response?
CUBAN: Oh yes, oh yes, I mean both sides. You know, commoncause is great and the other side is I'm quitting, I can't believe they did that. Another side was I've got a bunch of email - because I wrote back to these - some of these people. I took a sampling of them and I said, you know, if this issue is so important to you why won't you take the time to put this in your own words? Why won't you take the time to let me know and find out how I feel and then we could correspond about it? And I got a couple responses saying, "I never gave them my email address to send this email to you." And that's the definition of spam.
LAMB: So we've got the blogs and we've got 2929 Entertainment, and we've got the Dallas Mavericks, anything else?
CUBAN: You know, yes, actually I've got a company called IceRocket.com which is a blog search engine. So I use it - I needed a tool to keep up with what's happening in the world. Traditional search engine like Yahoo! or Google if I put in C-SPAN I get c-span.com every time. But if I wanted to know what people are saying about C-SPAN in the blogisphere I go to IceRocket.com and I put in C-SPAN and it lets me track on a daily basis.
So all the things that apply to all my other businesses, all the topics I'm interested in whether it's the Mavs, stocks, or whatever it may be, you know, there really wasn't a tool that I thought was any good so I hooked up with a guy names Blake Rhodes who went to Texas Christian University and we put this together. And so that's one company.
I've got another called GUI which is a front end for applications like IceRocket and then I've got another one called Box.net and FilesAnywhere which are file storage companies which enable all these things that we collect - you know, we're storing more and more and more and more on hard drives but, you know, if there's - we need a place to store them away from where we are in case something breaks or is stolen or whatever.
And then the last company is Redswoosh.net which does bit (INAUDIBLE) which is a way for peer-to-peer file sharing is illegal and I thought there was a specific need for sharing large files like our high-definition movies in a more bandwidth efficient manner.
So all those fit together so when you look at the big, big picture taking content and either making it digital or better yet, creating in a digital format and distributing it however people want to consume it, in a theater, hopefully projected digitally; on DVD, hopefully in high-definition format or regular DVD format; on the Internet; stored on Box.net, you know, consumed - viewed on GUI.com and found via IceRocket. All those kind of fit together.
LAMB: What's a day like for you?
CUBAN: Sitting in front of a computer for about eight hours - no, probably get up in the morning, have breakfast with my wife and daughter, get into the computer, go through email. I mean I rarely do meetings, I rarely take phone calls. I check my voicemail probably once a week at most and I just tell people if you want to reach me you reach me via email and I'm readily accessible.
And so my meetings tend to be email threads and so that I'll spend most of my time on my computer and I can have my daughter sitting on my lap and, you know, Barney playing on the TV over here. And, you know, and when I travel with the Mavs that's when I'll actually, you know, have any meetings that I need to have because people know where I'm going to be and when.
LAMB: Do you have an office?
CUBAN: I have an office and I'm there probably once a month at the most.
LAMB: So it's email.
CUBAN: Email, wherever I have my PC that's my office.
LAMB: What's your philosophy of money? At this stage in your life, you know, you've got a lot of money and what are you going to do with it and â€¦
CUBAN: That's a great question. You know I'm not like on this mad mission to make more, I have enough money. And, you know, I'm happy - you know I like the sport of business so that's kind of my juice so I stay active with all the things we just discussed.
But in terms of philanthropy and where it's going, I'm not quite sure yet. You know I tend to do - I have one charity that I'm - very actively I support called the Fallen Patriot Fund which my wife and I started when the - after September 11th and again, after we invaded Iraq where it really got - took off.
But the FallenPatriotFund.org and what it's about is providing financial support to the wives or actual soldiers - the wives of soldiers who were killed in Operation Iraqi Freedom or for those who have come back severely injured and can no longer work, providing financial assistance for them to help them until they can get back on their feet. And so we've been doing that for three years now, almost the three-year anniversary.
And beyond that's it more anecdotal where if I see a situation, you know, someone doesn't have enough money to get on a transplant list, I do a lot of those. So here's the money until you get to the point where insurance takes over.
But in terms of bigger things I don't know yet. You know I see what Bill Gates has done, I see what Michael Dell has done, I see what Ted Turner has done and I just don't have that one thing where I think you know what, this is really where I can make a difference.
And then there's also the fear factor that, you know, God forbid I ever blow it - I did that one crazy thing and more importantly taking care of my family. You know I have nephews and nieces and, you know, I don't know. I haven't figured it all out but it's something that I certainly think about.
LAMB: And do you notice that more people come after you for money?
CUBAN: Oh, yes, hundreds of times a day because my email is so readily available. I mean everything from, you know, shoes to braces to, you know, hair transplants. I mean it's crazy the stuff.
LAMB: Just asking you to pay for them?
CUBAN: Every day. And you know, I - the way I look at it, I mean what a great problem to have on my end, right, because I've been on the other end. But you know, everybody - I don't blame people for asking, you know, you never know until you try.
LAMB: Do you have somebody going through it? Do you do it all yourself?
CUBAN: Because there might be that one. I mean I've paid for things when I felt it was really, you know, there was a reason to - just from random emails. I've paid for a transplant just from somebody who sent me - and multiple times - people who have sent me an email.
You know you sit there and you read this email and someone is saying, "My son is going to die unless I get $250,000 to put him on a kidney transplant list." What am I going to do, say no? You know it's a lot of money but it's not going to change my life but obviously - and so, you know, there is - you know I've thought about putting together organizations that deal with that but then it gets so complicated and it becomes a slippery slope. And, you know, people are tending to find me now, doctors are recommending that they find me and that's OK, it works out better that way.
LAMB: And what - what's the reaction of people when you do these favors for them?
CUBAN: Mostly they don't know it's me.
LAMB: Oh, they don't?
CUBAN: Yes, yes, because I - it's too scary to me for - you know, I don't want to see them. I want to do it for the right reason. I don't want to - I don't want to get an emotional attachment to them. You know, it's just me. I mean I've built a barrier around myself but I just - I just want to do it because I think it's the right thing.
LAMB: How interested are you in ever running for office?
CUBAN: None, you know, I just don't like politics. I don't have the temperament for it. You know there's way too much compromise involved in politics and I'm just not very good at compromise.
LAMB: Well, go back to the comment about funding, you know, the wives and spouses of people who might have died in the war. What do you think of the war?
CUBAN: I think we're there for the right reasons. I think our execution is poor in how we're doing it. I'd rather see the war fought there than here for obvious reasons. I'd like to see democracy, you know, filter its way into the Middle East and there's a price that comes with trying to do it.
But at the same time, you know, I don't like the fact that WMD wasn't WMD, you know, and that, you know, you look at the structurally - the business person in me comes out and says what happened that you could have that kind of breakdown? If you have that breakdown there where else are breakdowns like that occurring?
And then you hear anecdotal stories all the time and it's just like, you know, let's just face the reality that there are people there, the insurgents, are going to, you know - throughout the country, not everywhere but in various hot spots and we're dealing with fighting insurgency, we're not fighting a war. We're dealing with people who don't care if they lose their lives, you know. And that is something that I don't know necessarily that we're prepared or know how to fight and unfortunately, people are dying for it.
Do I have the solution, no. But would I - would I just be brutally honest about the fact that we screwed up, yes. You know and whoever comes in next or hopefully over the next two years we recognize the fact that, you know, we're not fighting a war. It's not about planes, it's not about soldiers, it's not about building - it's about, you know, fighting bad guys popping out of mole holes and that's the only way we're going to be able to come to any type of conclusion.
LAMB: Don't have a lot of time left but I want to clean up some things that we haven't talked about. MicroSolutions, was that your first business?
CUBAN: My first real business, yes.
LAMB: And how did you start from the very beginning?
CUBAN: Very, very beginning I had never - I took one computer class in Indiana. It was Fortran back in the days when you had punch cards. And I couldn't type very well then so I cheated and I borrowed someone's cards. So I didn't have a computer background.
I got a job at Mellon Bank and I got turned on to computers, if you will. I worked there for about nine months, decided I wanted to move to Dallas. Got a job with a little company called Your Business Software, this was 1982. And they were the first software - PC software retailer in Dallas. And didn't have much of a PC - didn't have any PC background. Got in there, became their best salesperson.
One day - and this all leads to MicroSolutions - one day I called my - the president of the company, my boss, and said, "You know, I know my responsibilities are to sweep the floor before the stores open, wipe down the windows and open the store, but I've got someone to take care of that for me. I'm going to close a big deal and I'm going to make a $1,500 commission, it's a $10,000 sale for the company." But "No, I need you to open the store."
So I made the executive decision to go pick up the money because either way I'm going to have that $1,500 commission. He fired me.
And so I ended up taking that customer and another customer who actually fronted me the money on the software I was selling. I was still living on the floor at my buddy's house - and started MicroSolutions.
And we started off installing PCs and selling PCs and configuring PCs. And then I saw an opportunity that hey, someday I'm going to have to hook - they're going to have to hook these things together. And back in 1983 people are like, "No, you don't need to do that. You just carry this floppy over here," and they called it sneaker net.
And so I started educating myself, hooked up with this company called Novel which was the first local area networking company. Long story short, we became a systems integrator, local area network integrator, became one of the largest in the country, sold it seven years later in 1990 for about $6 to CompuServe, which is part of H&R Block.
And I quit after that. You know they wanted to just take it and run it and so I was retired up until we started Audionet.
LAMB: The year you sold Broadcast.com, how much revenue did your company generate?
CUBAN: I don't remember. I think we're doing like $20 million to $25 million per quarter.
LAMB: You mean you're talking $80 million a year?
CUBAN: $80 to $100 million.
LAMB: And you sold it for 5.7 billion?
CUBAN: Yes. Now remember again, it was in Yahoo! stock and Yahoo! stock at the time was trading for like $300 and it's, you know, $30 today. So â€¦
LAMB: How quickly did you get out of Yahoo! stock?
CUBAN: As soon as I could, soon as it was legally possible. I literally took every single cent I had and went to all the tax attorneys, went to Goldman Sachs, who I was working with, and said, "Within the letter of the law so I don't want to be the guy on the front street - front page of the Wall Street Journal at some point, you know, how can I hedge this?"
And they put together a whole program and I literally - because I was, you know, I wasn't stupid enough to think that the Internet stock market was going to stay where it was, like some people thought. There was no question in my mind, you know - I've traded stocks, I'd seen, you know, peaks and valleys.
And so I took - I literally every penny I had and hedged it just in case it cratered before I was able to sell it. Fortunately, I lost all that hedge money because I was able to sell it at what turned out to be a higher market price and put a lot of money in the bank and paid a whole lot in taxes.
LAMB: Legally when you do something like this how many months do you have to go before you can get out of it?
CUBAN: I think at that - I think it was six months but I don't remember to be honest with you. But the nature of the hedges was - the legal aspect of the hedges, if I remember right, was that the hedges then had to be another year. And so I was - it was six months before I knew what - how much I was going to be able to put in the bank and then I was able to actually receive the money in years after that.
LAMB: How much of the company did you own?
CUBAN: 33 percent when we sold it.
LAMB: So is there today inside of Yahoo! this same business?
LAMB: Is it - is it bigger than it was?
CUBAN: No, it's actually now just coming back to probably where it was. Everything that - if you read the Wall Street Journal every day and they're talking about streaming media, they're talking about video on the net, they're talking about user-created content, they're talking about broadband TV, they're talking about IP TV, people watching television over the Internet instead of over TV, that's exactly what we were doing now six years ago.
I mean everything that we sold Yahoo! on that this is what we are doing. You know we just put this company for user-generated content. You have a home movie you want to put it up there, you make your own little commercial you want to put it up there for everybody to see, this company's (INAUDIBLE) we just - we have it.
You know you want to stream television stations, we're already doing it. You want to take video content and license it, we did a deal - remember there was a TV show Judge Mills Lane, we licensed that, (INAUDIBLE), we're showing it. All these things now - you know, there was this big deal this week AOL TV showing all these old TV shows. We did that, you know, seven years ago. But Yahoo!, when the Internet stock market tanked they were looking for ways to cut cost before they brought in Terry Semel who had a little bit more vision in that area, they cut it way, way, way back.
LAMB: Five years from now how many people in this country will be watching high-definition television all the time?
CUBAN: Everybody - everybody. You know â€¦
LAMB: All the networks be hi-def?
CUBAN: Yes, well let me qualify that, everybody will have a hi-def set. Now there will still be their set in the kitchen or set in the wherever that may not be high-definition but every household will have a hi-def digital set and they'll be watching - most of the content will be hi-def.
But at the same time not every cable network will be able to convert to high-definition because there's just not enough bandwidth to go around. So I mean it's going to be an interesting scenario I'm sure you're discussing here because bandwidth is constrained. And you know, you're not seeing Comcast saying, "You know what, we're going to spend another $5 billion to upgrade all of our networks."
There's little tweaks you can do that are coming down the pike that will make things better. There's compression that, you know, might make things better but it's going to be a game of survivor and so not all cable networks will be there.
LAMB: Landmark Theaters, will you still own that platform â€¦
CUBAN: Oh, yes.
LAMB: â€¦ or you just setting it up to sell it?
CUBAN: No, I don't need to - you know, then I - you know, that was the homerun, I wasn't going to turn that down. But no, I don't - it's more I want to own a TV network like HDNet and HDNet Movies. I want to have that platform. I want to have the theaters so that, you know, we can make good movies like "Good Night and Good Luck," like "Enron" and other movies that we're making now and I know that they'll be seen.
LAMB: You'll be feeding those theaters over a satellite or over a fiber line?
CUBAN: At some point we will. Right now we just send big old hard drives, you know, because sending a 250 gigabyte overnight is 24 megabits a second and it's a lot cheaper to do it that way.
LAMB: And the politics of your documentaries, you going to do more documentaries?
CUBAN: Oh, yes, yes, and we'll go both ways. We really try to stay balanced so we're doing a Tom DeLay-Jack Abramoff documentary right now with the same guy who did, "Enron," Alex Gibney. And then we're going - we've got some that - you know, as each administration comes along there's going to be plenty of material but we'll try to stay balanced.
I mean I don't - the one thing I don't want to be is perceived as oh, he's always bashing the right, or he's always bashing the Democrats on the left. And you know, like I said, I'm a libertarian, I'm an equally opportunity basher when it comes to our documentaries.
LAMB: Did you ever think you were going to have all this?
CUBAN: No, never even crossed my mind when I was a kid. You know when I got to college I though, you know what, I'll have a business, I'll start a business and, you know, I'll be happy doing that. I think I can make some money where, you know, I can - you know to me ever since I've been in college - I bought this book, "How to Retire by the Time Your Are 35." And, you know, it talked about hey, if you can live like a student for the rest of your life this is, you know, you can live off a million dollars and let it - just let it, you know, compound interest do its thing and just live cheap. Because to me the most valuable asset wasn't the money it was the time, you know.
When I - after I sold MicroSolutions I bought a lifetime pass on American Airlines just so I could go, just so I could - you know, I wanted to have a beer with as many different people as I possibly could meet around the world. And I went to 11 countries in that one year.
So to me - and to this day time is always the most valuable asset whether I was sleeping on the floor or today, when - you know, my house is too big, I don't go into half the rooms, you know, the definition of success isn't your bank account, it's being able to wake up with a big old smile, give your wife and kids a kiss and just go into your day with, you know, knowing that you're going to enjoy yourself. That's what â€¦
LAMB: Mark Cuban, we are out of time. Thank you very much.
CUBAN: I really enjoyed it, thank you. That's fine.