Sunday, May 16, 2010

Big Feud in Big D: Cuban versus Perot

By Henry Abbott

There are a couple of lawsuits going on down in Texas, and it's much ado about nothing -- except for one huge thing.

It began not as a fight about the Mavericks, but about the arena they play in. Mark Cuban owns the majority of American Airlines Arena. Unlike the Mavericks, the arena has made some money in recent years.

When you own a business that makes money, the nice thing is you typically get some of it. But not in this case. That led to the first lawsuit, last summer. Cuban took money from the arena and, instead of handing it out to arena ownership, loaned it to another business he owns most of: the Mavericks. Ross Perot Jr. (the son of the presidential candidate with the ears cartoonists loved) is Cuban's minority partner in both businesses. He didn't like that move, and sued, saying that loan was not it was fair and proper.

Cuban chastised Perot for whining about all that, especially with a great line about looking for some change in the couch cushions. The bad blood blossomed into a second lawsuit, this week, in which Perot accuses Cuban of running the Mavericks into the ground. He says they have lost a staggering amount of money, and are only still operating thanks to having borrowed around $200 million and counting.

Cuban tells TrueHoop Perot's numbers are inaccurate. "None of it is right," he e-mails. "He pretty much misrepresented the entire situation. His projections don't take into account a new CBA and he has no idea what player salaries we will have. So he just made up numbers to suit his claim."

Perot's legal filings somewhat confirm Cuban's notion that the actual financial picture of the team is murky, accusing him of refusing to open the team's books as required by their partnership agreement and the law. One of the things the lawsuit seeks is better information about how the team is doing.

Nevertheless, Perot takes the position that Cuban's mismanagement has been so staggering that a receiver ought to be appointed by the court to run the team in Cuban's place. (Perot also suggests, as Lester Munson explains, that the Mavericks may have been overly generous in their dealings with some other Cuban businesses.)

Cuban, a billionaire, says he has the money to pay everybody who needs to be paid, so what's the big deal? There is no chance, he says, the Mavericks will become insolvent.

Read the rest here.

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