‘It was life-changing money’: Mark Cuban gave $35M in bonuses to Mavs employees — here’s why
Selling a company is usually a life-changing financial event for the founder and owner of the firm. For the employees, not so much.
However, billionaire Mark Cuban has often shared his gains with the employees who enabled his success. Earlier this year he announced he was giving $35 million in bonuses to Dallas Mavericks employees after he sold a majority stake of the team.
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“It ended up being a lot more actually, but I’m not there without them,” he told ESPN analyst Shannon Sharpe on a recent episode of the “Club Shay Shay” podcast.
“I did it with MicroSolutions, you know, we had 80 employees, they all got paid. I did it with Broadcast.com — out of 330 employees, 300 became millionaires. And I wanted to do the same thing with the Mavs. You know, they were there for me the whole time … for those who were there 20 years or more it was life-changing money.”
Cuban isn’t the only billionaire with this philosophy. On the eve of wrapping up the U.S. leg of her “Eras” Tour in 2023, musical phenomenon Taylor Swift gave each member of the tour’s trucking staff $100,000 each, according to CNN.
“These men and women, they live on the road. They sleep during the day and work all night,” said Michael Scherkenbach, founder and CEO of Shomotion trucking company, told CNN. “It’s a grueling task. They leave their families, young children for weeks. For Swift’s tour, they’ve been away from home for 24 weeks.”
Swift and Cuban’s generosity demonstrates how the windfall effect can be harnessed for positive outcomes.
The windfall effect
Behavioral economists have observed the impact a sudden influx of cash could have on a person’s spending habits and their ability to make risky decisions. “We find a clear and systematic pattern that windfall gains increase risk tolerance,” says a study published in the Journal of Risk and Uncertainty last year.
Put simply, a quick and sudden increase in your spending power could prompt you to abandon the financial guardrails that have protected you from reckless spending.
Nearly three quarters of Americans (72%) lack the financial confidence needed to manage a large influx of money on their own, according to a Citizens survey.
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Being aware of the windfall effect could perhaps help you tackle it. But the next step could be to harness this effect to do some good for others and show your appreciation.
Using your windfall for good
Since a windfall of cash has the potential to eliminate your budget and spending barriers, you could harness this newfound freedom for good. For instance, selling Broadcast.com to Yahoo! In 1999 turned Cuban into a billionaire. He admits that some of this cash influx was spent on a private jet. However, this lack of spending restraint also enabled him to deliver seven-figure bonuses to employees of the firm.
Similarly, Swift’s “Eras” Tour generated $1.039 billion in ticket sales during 2023, according to Pollstar. We can assume this success enabled her to exceed the typical trucker bonus of $5,000 to $10,000 and deliver $100,000 to each driver.
You might never sell a tech firm or fill stadiums, but if you receive a windfall through an inheritance or lottery or bonus you could use that cash to do things that were previously considered either unconventional or impossible. For instance, paying off a relative’s student loans or helping your mother pay off her mortgage.
Indeed, 33% of Americans said they would use a windfall to finance a family member’s education, while 34% said they would use it to start a new business, according to Citizens.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.