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Love him or hate him - this is awesome (Mark Cuban)

Discussion in 'NBA Dish' started by ocelot4ark, Jun 22, 2011.

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  1. ocelot4ark

    ocelot4ark Member

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    Ross Perot Jr (former majority owner of the Mavs) filed a lawsuit over a year ago alleging that, under Cuban's leadership, his investment in the Mavericks has been severely tarnished and that the Mavs would be better off if placed in the hands of a receiver. He wanted control of the franchise taken from Cuban because the Mavs were "insolvent" or close to it.

    Cuban's lawyers filed a response today asking for summary judgment:
    http://www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ#ad_unit=Doc_Sideboard_MediumRectangle_BTF_300x250&url=http%3A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%23ad_unit%3DDoc_Sideboard_MediumRectangle_BTF_300x250%26url%3Dhttp%253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%2523ad_unit%253DDoc_Sideboard_MediumRectangle_BTF_300x250%2526url%253Dhttp%25253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%252523ad_unit%25253DDoc_Sideboard_MediumRectangle_BTF_300x250%252526url%25253Dhttp%2525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%25252523ad_unit%2525253DDoc_Sideboard_MediumRectangle_BTF_300x250%25252526url%2525253Dhttp%252525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%2525252523ad_unit%252525253DDoc_Sideboard_MediumRectangle_BTF_300x250%2525252526url%252525253Dhttp%25252525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%252525252523ad_unit%25252525253DDoc_Sideboard_MediumRectangle_BTF_300x250%252525252526url%25252525253Dhttp%2525252525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%25252525252523ad_unit%2525252525253DDoc_Sideboard_MediumRectangle_BTF_300x250%25252525252526url%2525252525253Dhttp%252525252525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%2525252525252523ad_unit%252525252525253DDoc_Sideboard_MediumRectangle_BTF_300x250%2525252525252526url%252525252525253Dhttp%25252525252525253A//www.scribd.com/doc/58470086/2011-06-22-WC-Mavs-and-Radical-Mavs-Mngt-MSJ%2525252525252526attributes%252525252525253DQuantSegs%25252525252525253DD%2525252525252525252CT%2525252525252525252C5517%2525252525252525252C5511%2525252525252525252C5510%2525252525252525252C5508%2525252525252525252C5506%2525252525252525252C5505%2525252525252525252C5501%2525252525252525252C5500%252525252525252526Extension%25252525252525253Dpdf%252525252525252526AdLayout%25252525252525253D-1472436212%252525252525252526DocUser%25252525252525253D3783775%252525252525252526Document%25252525252525253D58470086%252525252525252526FourGen%25252525252525253DTrue%2525252525252526skip%252525252525253D0%25252525252526attributes%2525252525253DQuantSegs%252525252525253DD%25252525252525252CT%25252525252525252C5517%25252525252525252C5511%25252525252525252C5510%25252525252525252C5508%25252525252525252C5506%25252525252525252C5505%25252525252525252C5501%25252525252525252C5500%2525252525252526Extension%252525252525253Dpdf%2525252525252526AdLayout%252525252525253D-1472436212%2525252525252526DocUser%252525252525253D3783775%2525252525252526Document%252525252525253D58470086%2525252525252526FourGen%252525252525253DTrue%25252525252526skip%2525252525253D0%252525252526attributes%25252525253DQuantSegs%2525252525253DD%252525252525252CT%252525252525252C5517%252525252525252C5511%252525252525252C5510%252525252525252C5508%252525252525252C5506%252525252525252C5505%252525252525252C5501%252525252525252C5500%25252525252526Extension%2525252525253Dpdf%25252525252526AdLayout%2525252525253D-1472436212%25252525252526DocUser%2525252525253D3783775%25252525252526Document%2525252525253D58470086%25252525252526FourGen%2525252525253DTrue%252525252526skip%25252525253D0%2525252526attributes%252525253DQuantSegs%25252525253DD%2525252525252CT%2525252525252C5517%2525252525252C5511%2525252525252C5510%2525252525252C5508%2525252525252C5506%2525252525252C5505%2525252525252C5501%2525252525252C5500%252525252526Extension%25252525253Dpdf%252525252526AdLayout%25252525253D-1472436212%252525252526DocUser%25252525253D3783775%252525252526Document%25252525253D58470086%252525252526FourGen%25252525253DTrue%2525252526skip%252525253D0%25252526attributes%2525253DQuantSegs%252525253DD%25252525252CT%25252525252C5517%25252525252C5511%25252525252C5510%25252525252C5508%25252525252C5506%25252525252C5505%25252525252C5501%25252525252C5500%2525252526Extension%252525253Dpdf%2525252526AdLayout%252525253D-1472436212%2525252526DocUser%252525253D3783775%2525252526Document%252525253D58470086%2525252526FourGen%252525253DTrue%25252526skip%2525253D0%252526attributes%25253DQuantSegs%2525253DD%252525252CT%252525252C5517%252525252C5511%252525252C5510%252525252C5508%252525252C5506%252525252C5505%252525252C5501%252525252C5500%25252526Extension%2525253Dpdf%25252526AdLayout%2525253D-1472436212%25252526DocUser%2525253D3783775%25252526Document%2525253D58470086%25252526FourGen%2525253DTrue%252526skip%25253D0%2526attributes%253DQuantSegs%25253DD%2525252CT%2525252C5517%2525252C5511%2525252C5510%2525252C5508%2525252C5506%2525252C5505%2525252C5501%2525252C5500%252526Extension%25253Dpdf%252526AdLayout%25253D-1472436212%252526DocUser%25253D3783775%252526Document%25253D58470086%252526FourGen%25253DTrue%2526skip%253D0%26attributes%3DQuantSegs%253DD%25252CT%25252C5517%25252C5511%25252C5510%25252C5508%25252C5506%25252C5505%25252C5501%25252C5500%2526Extension%253Dpdf%2526AdLayout%253D-14724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    
    #1 ocelot4ark, Jun 22, 2011
  2. A_3PO

    A_3PO Member

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    I hate to admit it, but that is awesome stuff.
     
    #2 A_3PO, Jun 22, 2011
  3. Bandwagoner

    Bandwagoner Member

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    They are probably losing 40-50 million per year and the minority owners are tired of writing those checks.
     
    #3 Bandwagoner, Jun 22, 2011
  4. HTown_TMac

    HTown_TMac Member

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    Mack Cuban >>>
     
    #4 HTown_TMac, Jun 22, 2011
  5. SunsRocketsfan

    SunsRocketsfan Member

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    haha that is pretty awesome.. Cuban is a great owner from a players and fans perspective. He is actually passionate about the team.
     
    #5 SunsRocketsfan, Jun 22, 2011
  6. MourningWood

    MourningWood Member

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    #Winning

    [​IMG]
     
    #6 MourningWood, Jun 23, 2011
    1 person likes this.
  7. arif1127

    arif1127 Member
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    The minority owners aren't writing any checks, Cuban covers it all. The minority owners are pissed b/c they aren't getting any dividend checks at the end of each season.
     
    #7 arif1127, Jun 23, 2011
  8. Bandwagoner

    Bandwagoner Member

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    Source?

    The mavs are over 200 million in debt and that is expected to rise to close to 300 in the next 2 years. Cuban only owns 76% of the team and I would guess only 76% of that debt.
     
    #8 Bandwagoner, Jun 23, 2011
  9. Carl Herrera

    Carl Herrera Member

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    I don't think you understand the concept of limited liability.

    Nobody can go after shareholders of a corporation for the corporation's debt unless the shareholder agrees to guarantee that debt. All that the creditors of the Mavs can do is to foreclose on its assets.

    http://en.wikipedia.org/wiki/Limited_liability

    If I owned shares of GM stock, GM's creditors could not come after me for a share of what GM owed them. I doubt anyone is going after Perot for 5% of what the Mavs owed them.

    I don't remember where the reports are, you can probably find it by google. However, I think the situation is that Cuban's been covering any and all operating losses of the Mavs. The advances Cuban made might have been recorded as a debt owed to Cuban. So, technically the Mavs corporate entity is in debt and isn't turning a profit or giving any shareholder dividends.

    However, I very much doubt that the value of the franchise, and the value of the 5% investment in the franchise, has gone down significantly since Cuban bought the team. In fact, the recent championship is going to probably result in a nice bump in franchise value.
     
    #9 Carl Herrera, Jun 23, 2011
  10. DaDakota

    DaDakota Balance wins
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    That is funny....the problem for minority owners in the way Cuban runs the franchise is they will not make their money until the franchise is sold.

    They should sell their 5% and stop whining, Cuban is a great owner.

    DD
     
    #10 DaDakota, Jun 23, 2011
  11. ocelot4ark

    ocelot4ark Member

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    What's funny is, according to Cuban, Perot Jr is the only minority owner that has a problem. The other guys just want to win.

    But like you said, these guys will recognize their returns when the franchise sells (if ever).

    To add to the other comments above, Cuban guarantees all debts of the Mavs. According to Forbes, Cuban is work something like $2.5 billion. I'm sure he has a lot of other contingent liabilities, but something tells me the Mavs franchise wouldn't actually lose much money if something bad ever did go down.
     
    #11 ocelot4ark, Jun 23, 2011
  12. Bandwagoner

    Bandwagoner Member

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    It doesn't really matter who holds the debt and it is increasing at a rapid rate. I would love to have Cuban as an owner but hate it if I was a minority owner.

    The value of the Mavericks has gone down 4 out of the last 5 years. The Rockets value has increased 4 out of the last 5 years. This is mostly due to their debt.
     
    #12 Bandwagoner, Jun 23, 2011
  13. ocelot4ark

    ocelot4ark Member

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    If Perot Jr is truly suing due to increased operating costs, and Cuban guarantees those debts, I'd say it does matter. If the Mavericks fail to generate enough revenue, he's going to have to step up and service that debt or the grantors will foreclose/repo whatever collateral they have.

    Like I mentioned above, Cuban believes that Perot Jr is the only guy who has a problem with the way things are going. The other guys, who I am assuming are not hurting for dough, don't care about dividends. They just want the mavs to be good. After just winning an nba championship? Yeah. Cuban has all the leverage he'll need for another decade.
     
    #13 ocelot4ark, Jun 23, 2011
  14. Aleron

    Aleron Member

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    I gained a newfound respect Cuban since i read his stuff about suits.

    Seriously, suits suck.
     
    #14 Aleron, Jun 23, 2011
  15. R0ckets03

    R0ckets03 Member

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    LOL...you don't like making money on your investments? :rolleyes:

    Cuban might be a great owner from a fans perspective. But IMO Ross P. has a legitimate beef.
     
    #15 R0ckets03, Jun 23, 2011
  16. ocelot4ark

    ocelot4ark Member

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    So if you were a super rich Rockets fan who decided one day to buy a minority stake in your favorite team, would you care more about wins and losses? Or dollars and cents? Ross Perot Jr never cared about wins/losses. He ONLY wanted to make as much money off of the Mavs as possible. I think I would be more like Cuban. Because your livelihood isn't going to depend on these dividends. This is f'ing play money to these people.

    For argument's sake, let's say the Mavericks were NOT in debt. Let's say that revenues equaled expenses. So no debt, but still no dividends. Would Perot Jr be suing still? His whole point of contention seems to be the presence of debt, not the absence of dividends. Well when Cuban has an obligation personally to ensure those debts get paid, I don't think there's much difference in the 2 scenarios.
     
    #16 ocelot4ark, Jun 23, 2011
  17. R0ckets03

    R0ckets03 Member

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    I am not a super rich dude who owns minority stake in any sports team, so for me its hard to relate. To me it makes more sense that one would wanna turn a profit in any investment they've made.
     
    #17 R0ckets03, Jun 23, 2011
  18. arif1127

    arif1127 Member
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    http://sports.espn.go.com/dallas/nba/news/story?id=5178972

    Hillwood contends that as a part-owner of the Mavericks, the rich spending "has substantially diminished" the value of its investment. It also alleges Cuban has refused to meet with the team's limited partners to provide information on the Mavericks' operations.

    In a statement issued Monday night, Cuban said he had "either personally guaranteed or provided funding" to finance team operations. "So [Perot] is saying I can't pay back the money to me.
     
    #18 arif1127, Jun 23, 2011
  19. Dubious

    Dubious Member

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    As I understand it, professional sports teams are owned by rich guys who use the team's annual operating losses as a deduction against their ordinary income, saving them money their income taxes so that it actually costs them very little on their annual bottom line. Later, when the team is sold, they make capital gains on the increased value of the team that are only taxed at the ridiculously low capital gains rate. (though all this depends on the type of corporation the team is owned under .... lawyers? accountants?)

    The real points of ownership are #1 the prestige, entertainment value, cross marketing and and networking opportunities and #2 the capital gains. The Ross Perot stuff is probably just the usual rich guy pissing match, his box may just not be a mid-court.
     
    #19 Dubious, Jun 23, 2011
  20. Aleron

    Aleron Member

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    If I invested in a sports team for the financial return, I should have worked for Lehman Brothers.
     
    #20 Aleron, Jun 23, 2011
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