Mark Cuban has disclosed that he turned nearly all of his employees into millionaires after selling one of his companies.
The American entrepreneur and investor has built, owned, and sold numerous companies over the years.
The question arises: what happens to his employees when these businesses are sold for substantial sums?
On June 5, a Twitter user sought advice on the platform regarding ‘selling underperforming businesses for $$$$’.
The user inquired: “Serious question: What do you do with the employees? Do you place the employees in jobs at other businesses you own, do they go with the sold business? Will that business pay a ‘living wage’?”
Cuban responded: “In every business I’ve sold I’ve paid out bonuses to every employee that was there more than a year. http://Broadcast.com, 300 out of 330 employees became millionaires.”
In 1999, Cuban sold Broadcast four years after founding it with his friend Todd Wagner.
The internet audio company, which allowed users to listen to sports games online, was sold to Yahoo for an astonishing $5.7 billion in stock.
This wasn’t the only instance where Cuban considered his employees before selling a business.
He mentioned: “Microsolutions, I paid out 20 pct to our 80 employees.”
In 1990, Cuban sold MicroSolutions to CompuServe for $6 million. If he allocated 20 percent of the sale price, he earmarked $1.2 million to distribute among the employees.
According to CNBC Make It, MicroSolutions had 80 employees, meaning each staff member received around $15,000.
Cuban noted that HDNet ‘wasn’t as big,’ but he still ‘paid out about 20pct of what [he] got’ for the company to its employees. He sold his majority shares in HDNet in 2019 to Leonard Asper’s Anthem Sports & Entertainment.
Last year, Cuban also sold his majority stake in the NBA team, the Dallas Mavericks, to Miriam Adelson and her family for $3.5 billion.
“Mavs wasn’t a total exit but we paid out more than 35m dollars to employees,” Cuban added. “And only HDNet had any layoffs right after the sale.”
Public reactions followed swiftly.
One Twitter user remarked: “That’s admirable Mark. Nice to know there are some who appreciate the work employees do for them.”
Another commented: “That’s a good record!”
A third user shared: “Agree or disagree with @mcuban but he at least understands it is the whole team and not just him that makes it all work.”
And a fourth user humorously asked: “Damn. You got a job opening at any of your companies you’re looking to sell in the next few years?”