Some revealing numbers on the ASG come out in court today...

[DJ_Money]

If any of the legal experts here care to examine McDavid's case, I leave it to you to do so.

(I really don't believe that our used car salesman was prepared to pump that kind of money in here...nor do I think that has anything to do with the main argument of the case.)

But I'm figured some of you will have fun with some of the contract numbers that got revealed...

http://www.bizjournals.com/atlanta/stories...06/daily66.html

When Atlanta Spirit bought the Hawks, Thrashers and operating rights to Philips Arena in 2003 they were required only to put up a minimum of $8 million in cash on a $96-million sale, lawyers revealed today in the opening arguments of the lawsuit in which jilted buyer David McDavid is seeking $450 million from Turner Broadcasting System Inc.

McDavid’s bid would have put $17 million in cash into the same purchase price, as his lawyer Lamar “Mickey” Mixson of Bondurant, Mixson and Elmore argued Time Warner Inc. took a worse deal in choosing not to sell the teams to McDavid at the last moment.

Mixson argued a deal that Atlanta Spirit put into its negotiations forced Time Warner’s hands in approving the deal in Spirit’s favor. Time Warner’s board originally approved the sale to McDavid by a vote of 10-2 on Aug. 19, 2003, with Ted Turner casting one of the two dissenting votes.

The next day -- Aug. 20, 2003 -- Rutherford Seydel, Turner’s son-in-law and one of the principals in Spirit, met with another current Spirit owner Michael Gearon Jr. in the office of Jim McCaffrey, who was Turner’s lead negotiator in the deal. Within days, Spirit had signed a negotiating agreement that would have paid Spirit $10 million if Time Warner’s board ultimately approved a final sale to McDavid. Mixson said that provision eventually made the decision easy for Time Warner’s board.

McDavid, Mixson said, would have put $60 million into operating capital for the teams as required by the deal. However, Atlanta Spirit was not required to put any capital into the teams and put only $8 million in initially.

Prior to Wednesday, documents detailing such financial transactions had been placed under seal.

Arguing on behalf of Turner Broadcasting, Jim Lamberth of Troutman Sanders said Time Warner wanted to unload the entities because they were hemorrhaging money. He said Time Warner lost $40 million on the teams in 2002 and expected to lose $55 million on them in 2003 – a combined loss that was only $1 million less than the final sale price.

The negotiations were so close to being complete that McDavid’s lawyers showed e-mail correspondence from former Hawks president Stan Kasten to his superiors indicating that he was including McDavid’s representative, Steve Dieb, on negotiations with the team’s new general manager and coach.

Billy Knight was offered a two-year deal at $750,000 per season and coach Terry Stotts was offered a two-year, $1-million deal. Another memo from Kasten showed that trainer Wally Blasé was offered a three-year deal averaging $125,000.

One other interesting financial fact to come out of the arguments was that TBS valued Hawks’ television rights at $155,000 per game.

McDavid’s lawyers contend he had a valid oral contract and that he was told multiple times by Turner executives, including CEO Phil Kent, that “we have a deal.” Turner lawyers argue that the deal was never complete, as final written documents were never signed and that key portions of the deal were not completed.

[DJ_Money]

...and here's another article from the AJC.

http://www.ajc.com/business/content/busine...ks_lawsuit.html

I'll just post one piece of it...

McDavid, a former part-owner of the Dallas Mavericks, signed a letter of intent with Turner in April 2003. The letter of intent that said Turner would negotiate exclusively with McDavid expired that July. Turner announced its deal with the Spirit two months later.

If all McDavid has is an expired Letter of Intent and an "oral agreement", how does he even have a case?

[DrReality]

CEO: I never talked to Turner about Hawks, Thrashers sale

Trial continues in Texas mogul’s breach-of-contract lawsuit

By KRISTI E. SWARTZ

The Atlanta Journal-Constitution

Monday, November 03, 2008

Turner Broadcasting System CEO Phil Kent testified Monday he never talked to company founder Ted Turner about a potential sale of the Atlanta Hawks, Thrashers and Philips Arena operating rights to Texas businessman David McDavid.

He also never spoke to any of the team’s eventual owners — who include Turner’s son, Beau, and son-in-law Rutherford Seydel — about the potential deal, Kent said in Fulton County Superior Court.

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And Kent said, as far as he knows, Turner didn’t assist Seydel and the others, who formed a group known as the Atlanta Spirit, in buying the professional teams and arena rights in a deal that closed in 2004.

“I always perceived Rutherford’s participation to be very minor,” he told the jury.

But McDavid signed a letter of intent to buy them in 2003. The letter expired that July, but the parties continued to negotiate for months.

Turner announced in September of that year it instead would sell the teams to the Spirit group. McDavid later filed a $450 million breach-of-contract lawsuit against the company. The trial, which started in early October, is expected to last another three weeks.

Ted Turner is not a witness for this trial and no longer works for the Atlanta-based media company or its parent, Time Warner. But his name has started to come up in court.

Turner was the vice chairman of Time Warner’s board in 2003. He voted against the sale to McDavid. So did Steve Case, founder of AOL — which merged with Time Warner in 2001. Case was also a board member at the time of the sale.

Attorneys for McDavid on Monday presented a June 23, 2003, e-mail that Case sent to Time Warner Chairman and CEO Richard Parsons saying he was “confused” about the proposed sports teams sale.

Case referred to it as a “fire sale” and suggested that perhaps it “might be appropriate to postpone the sale until the market improves,” the e-mail said.

In the last sentence of the e-mail, Case wrote, “I am copying Ted on this as he knows a lot more about this than I do and I am particularly curious to understand his view.”

Last Friday, Jim McCaffrey, an Turner executive, testified that he also never spoke with Ted Turner about the company’s decision to sell the teams and arena operating rights. While in court on Monday, McCaffrey said he did not know until months later — Aug. 17 — after that e-mail exchange between Case and Parsons that others were interested in buying the teams.

Mike Gearon Sr., a former general manager and president of the Hawks, had contacted Time Warner and said his son, Mike Gearon Jr., had been following the issue in the press and wanted to know “what any buyer would have to think about,” McCaffrey told the jury.

That information was passed onto McCaffrey, who testified that Gearon Jr. and Seydel met in his office a couple of days later. Gearon Jr. brought in bank documents to show he had more than $200 million to help pay for the teams and arena operating rights.

[Admin]

I can't stand McDavid, the guy is a snake and he's not thought highly of here in Houston. His damn "Daaavid MaacDaaavid" jingle gets on my damn nerves too LOL.

I will sure be glad when we're out of all of these legal matters and focusing strictly on the positives about our team.

[gsuteke]

This just goes to show you these sports teams aren't flush with cash.

I think the money TW was losing on the Hawks speaks volumes albeit it a few years later in a positive manner about Atlanta's decisions to Acquire Mike Bibby, allow Josh Childress to sign a contract in Europe, and wait out Josh Smith in order to sign him to a fair market offer.

[Theeyo]

the name David McDavid sounds straight up like a fake name used by a sleezy 80s business man LOL

[HawkItus]

Mike Gearon has $200 Million in the Bank? No wonder he is the guy calling the shots.

[Admin]

the name David McDavid sounds straight up like a fake name used by a sleezy 80s business man LOL

And he's a car guy so that should tell you everything you need to know about him.

Man I wish that Wayne Huizenga would buy the Hawks, he has been a phenomenal owner of the Dolphins and now that he's selling almost all of the team by the end of the year he would have plenty of time and money. His net worth is 2.2 billion which makes him # 205 on the Forbes 400. By comparison Ted Turner is worth 2.3 billion ... and I'd be thrilled if he owned the team too.

Distribution of the Forbes 400 by U.S. State

Diameter of disc reflects size of fortune. The red disc indicates H Wayne Huizenga

[Dakin]

Man I wish that Wayne Huizenga would buy the Hawks, he has been a phenomenal owner of the Dolphins...

Huizenga?? he's awful!

[Admin]

Huizenga?? he's awful!

Awful how? He has given the GM every penny that he's wanted and I've never heard a player or coach say a negative thing about him.

[Duff_Man]

Another night of no HD feed. Hating this crap.

[DrReality]

Hawks suit testimony focuses on cash flow

By Kristi E. Swartz

The Atlanta Journal-Constitution

Friday, November 21, 2008

Whether Texas businessman David McDavid had enough cash on hand to support the money-losing Hawks would have been a concern for the NBA had the league received his application to buy the team, an NBA executive testified Thursday.

McDavid, who tried to buy the Hawks, Thrashers and Philips Arena’s operating rights from Atlanta-based Turner Broadcasting System in 2003, had a net worth of $181 million, according to court documents.

About $80 million of that was in cash —- $60 million of which McDavid said he would pay up front to buy the teams, the documents show. He planned to borrow additional money to finance the rest.

The remaining $20 million may not have been enough to bail out the Hawks given that the team lost $31.2 million during the 2002-03 season, said Joel Litvin, president of league and basketball operations.

“Given that the losses this team was certain to incur, losses that probably would exceed the $20 million he had remaining, that would have been a concern,” Litvin testified in Fulton County Superior Court. “We want to make sure that the owners of our franchises have the wherewithal to fund the teams in a first-class manner.”

McDavid negotiated with Turner for months in 2003 to buy the teams. He signed a letter of intent that April, but it expired while talks continued. Turner announced in September of that year it would sell to an eight-man investor group that called themselves the Atlanta Spirit. McDavid filed a $450 million breach-of-contract lawsuit against Turner.

The trial, which started in October, is expected to end early next week.

Attorneys for McDavid argued Thursday that his financial condition would have been no more troubling to the NBA than the Spirit group’s.

“McDavid actually committed to commit capital on the front end,” said Lamar Mixson, one of McDavid’s lawyers.

Turner executives have testified that the Spirit was a better deal for the media company, partly because the investors had the cash to do the deal. But the amount that the Spirit paid up front —- $8 million —- combined with the projected losses of the Hawks and Thrashers led to the NBA and NHL requiring the investors to put up $115 million in personal guarantees against the losses.

Internal financial projections from Turner —- shown earlier in the trial —- said the professional teams were on track to lose between $50 million to $55 million in 2002; $60 million in 2003; and more than $70 million a year in 2004 and 2005.

“The committee stated to the members of the Spirit Group quite directly that, given their concerns about the continued heavy losses and the relatively small amount of cash that people were paying for the team,” that they wanted some personal guarantees, Litvin said. “The concern was, ‘Gee, it’s harder to turn these teams around than we thought. Maybe we should just turn in the keys and walk away,’ and all they would lose is $8 million.”

The teams have continued to bleed for years, according to testimony and documents.

But the exact amount and number of years has never been made clear. With many financial documents in the case under seal, the full picture is lacking.