Mark Cuban is finally opening up about the disagreement that nearly caused him to quit SHARK TANK.
The outspoken investor says he threatened to walk away from the red hot reality series back in June unless producers removed a clause from the show’s contract that required entrepreneurs to fork over a small percentage of their business (5%) or pay a percentage of profits (2%) — just for the privilege of appearing on camera.
“We had a couple of successful businesses where it came up and they discussed exercising their options,” Cuban tells me in an exclusive interview.
“I had thought they would reverse after I explained why it was a negative for all involved. They said they probably were going to go ahead and exercise it. That’s when I told them if they did I would quit. And that if they didn’t remove it from all deals I would quit.”
Cuban issued his ultimatum just weeks before filming was set to begin on season five. But he insists, “I wanted to come back.”
The billionaire owner of Landmark Theatres and the Dallas Mavericks has been a huge part of SHARK TANK’s success. The show has gained almost one million weekly viewers since he joined the panel of investors in 2011.
Now Cuban’s position on the equity-royalty issue (first reported by blogger Jason Cochran) has propelled him to folk hero status among aspiring entrepreneurs.
“Good for Mark! That clause is the main reason I decided against going out for the show myself,” one reader commented on Inc.com.
“Mark Cuban is a badass,” wrote another. “Beside the fact that easily 2/3 of the ‘success story recaps’ feature his involvement, I am constantly impressed by the moral stances that he takes (misuse of patents, etc).”
In a posting on Facebook, Cuban said he feared the quality of entrepreneurs on the show would suffer if they were forced to give up profits or equity.
To their credit all involved realizes the quality of companies and entrepreneurs would decline if they didn’t.
And in terms of valuations, no question the pr value of the show helps push them down some. But i would argue that the impact on sales and branding more than supercedes any arguments on valuation.
There is no other platform in the world, Kickstarter, Groupon or otherwise that has such a positive, enormous and immediate impact on a company’s sales and brand image.
In his post Cuban said the extra percentage stipulation had been “removed retroactively,” though it is unclear if those who have already paid up will receive a refund.
“I don’t think they are going to re paper the deals,” he told me. “But I was told that they won’t exercise those options.”
Cuban says “can’t disclose” the length of his current deal with show, but typically producers reserve the right to exercise options on talent services on a season-to-season basis.
As for any other changes he would like to make?
“I love the show the way it is,” he says. “I’m proud to be part of it.”
SHARK TANK airs Friday nights at 9:00 PM on ABC.
Do you think Cuban did the right thing? Let us know by leaving a comment below.
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