E-commerce: How Mark Cuban bought a private jet online
After selling his tech startup, Broadcast.com to Yahoo in 1999, Cuban turned into a billionaire now worth over $3 billion. His first purchase - a Gulfstream V for which he paid $40 million in what became the largest internet transaction in history. Later, he expanded his private jet fleet with two more Boeing Business Jets.
In 1999, Cuban racked in close to $2 billion from the sale to Yahoo at the height of the dot-com bubble. For an entrepreneur that values time above all, a private jet became a necessity. "It means I have more hours in my day to spend with friends and family. It's a life - and game-changer" Cuban told the WSJ in 2010.
After online research, his choice fell on a Gulfstream V, a popular private jet that had been certified back in 1997. Priced at near $40 million, the private jet was built by Gulfstream Aerospace in the United States. Its interior was split into three sections with a lounge and bathroom in the back. "I talked to several pilots and asked them what they would love to fly. That got me to Gulfstream." Cuban said in an interview.
Impressive by itself, Cuban's purchase went on to make internet history thanks to the way he acquired it. "I did the research at the Gulfstream Web site and then sent an e-mail and asked to set up a demo flight for my pilot. He raved about it. So I sent another e-mail saying I wanted to buy it. I got the banking instructions, wired the money and that was it."
Cuban's rapidity was particularly impressive in that his first time flying in private jet was just a year earlier, during Broadcast's IPO roadshow. Part of the billionaire's club, Cuban set his eyes on another sector to compete in and acquired the Dallas Mavericks in 2000 to try and win an NBA championship, a decision that would also see his private jet fleet expand.
Part of his efforts in lifting the Dallas Mavericks and competing for key players was to purchase a Boeing 757 as the team's private jet. Used to shuttle the team in between games and cities, the jet has become a key part of the team's success according to Cuban.
"When you are on the road as much as an NBA team has to be, the ability to be comfortable, get rest and have enough room for basic treatment of physical problems gives us a competitive advantage." The purchase was part of a strategic move to offer the best off-court services to players in order to get better talent and win an NBA tittle.
Cuban's purchase of the Boeing 757 was, however, a more time-consuming project than the Gulfstream V he purchased without ever seeing it. In order to accommodate for the player's tall heights and long legs, Cuban built in special improvements to carry them and the staff in comfort. "I can't say exactly how we outfitted our Boeing 757 to make it so special. That's a trade secret. We don't want other teams to find out. But it's nice!" Cuban told Business Jet Online.
In addition to owning the team's Boeing 757 and his Gulfstream V, Cuban also purchased a second Boeing Business Jet. A modified version of a 767 with superior comfort, the billionaire rents it out for high-end charter. The Mavericks' private jet is also available for rent when it is not used by the team.
Whilst prices for these types of aircrafts vary significantly based on their age and interior design, building a new Boeing Business Jet would cost near $200 million. Revamping a former commercial model could however come in at around $40 million with the purchase and remodel price. Renting a BBJ from Los Angeles to New York would cost $150,000 according to current market rates.
An advocate of private jet travel for the time savings involved, Cuban told CEOs that have stepped away from business jet travel due to public appearance that they can make their own decisions. "I just hope I compete with them. I get to work while they get to stand in line at the airport." Back in 2010, Cuban was looking to upgrade his Gulfstream V in favour of a larger, more efficient aircraft.
Born in 1958, Cuban now stands as one of the 200 richest men in America with a net worth of $3.7 billion according to Forbes. First starting his career as a bartender whilst at university, Cuban set up his first company, MicroSolutions after being fired from his job. He sold that company in 1990 for $6 million.
After travelling the world and venturing into trading, Cuban set up Audionet in 1995 to stream sports events online along other types of webcasting. The company was later renamed to Broadcast.com and acquired for $5.7 billion by Yahoo in 1999. The deal was hailed as the largest of the dot-com era.
Following his exit, Cuban remained active in the movie space, acquiring Landmark Theatres and eventually creating a fully integrated production and distribution network. Apart from owning the Dallas Mavericks, Cuban became most famous for his role on Shark Tank, a TV show on small business investing.
Prior to Shark Tank, Cuban had already been active in the startup investment space. He was an investor in Travis Kalanick's RedSwoosh, Weblogs, Inc, the first investor in Box as well as a number of sports-focused startups. Under his ownership, the Dallas Mavericks ultimately won the NBA Finals in 2011.