Atlanta’s Basketball, Hockey Teams Overvalued, Executive Says 06/03/2009 |
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Steven Belkin, who’s suing his former co-owners of Atlanta’s professional basketball and hockey teams, received a valuation for the franchises that was too high and didn’t account for their losses, a defense witness said.
Belkin is seeking to recover $143 million for his 30 percent stake in Atlanta Spirit LLC, the group that owns the Atlanta Hawks of the National Basketball Association and the Atlanta Thrashers of the National Hockey League.
Bernie Mullin, former chief executive officer for the group, said in videotaped testimony in a Rockville, Maryland, court today that the Hawks’ revenue was among the NBA’s lowest in the 2004-2005 season, when the team lost 69 of its 82 games.
“We were in last place forever,” Mullin said in the last day of witness testimony in Belkin’s lawsuit against seven other owners who ousted him in 2005. “Only three other teams had worse ticket sales.”
The Hawks had a $13 million loss in the 2004-2005 season, and it could have been worse, Mullin said. Atlanta Spirit would have lost as much as $31 million had the Thrashers played that year, when the NHL season was canceled because of a labor dispute, he said.
Belkin, who was once the lead investor in the Atlanta Spirit, was forced out after he blocked the Hawks from acquiring a player in 2005. He sued United Communications Group co-founder Bruce Levenson and the other owners, demanding they pay him $143 million for his stake in the teams and in Philips Arena, where both teams play. The value of Belkins’s stake was calculated by JP Morgan Chase & Co.
Questionable Value
Robert Remar, a lawyer for the ownership group, presented testimony from Mullin and other former executives today to show the teams were losing money and had values that were far less than the $465 million JP Morgan calculated.
“The ownership spat made things even more difficult,” Mullin said. “You had to be careful about what you said on the phone, or in meetings. The negative morale filtered down to the staff.”
Closing arguments are scheduled for May 8.
The case is Belkin v. HTPA Holding Co., 266748-V, Montgomery County Circuit Court (Rockville, Maryland).
(Source: Bloomberg)
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