Atlanta Spirit lied to us about Thrashers? Go figure
Three of the Thrashers' caretakers (left to right): Ed Peskowitz, Michael Gearon and Bruce Levenson. (Curtis Compton)
They told you they cared. They lied.
They told you their biggest concern was putting out the best product for you, the fans. They lied.
They told you not to pay attention to any of those rumors of the Thrashers being for sale, although they eventually admitted begrudgingly that, yes, they were looking for “investors.” They lied.
The Atlanta Spirit is not looking for investors. They’re looking to sell the Thrashers. They’ve been looking to sell them for — ready for this? –six years.
Six . . . years.
Those are the caretakers of your franchise. Those are the ones who’ve pleaded with you since 2005 to support a mostly inferior product — and now they can’t figure out how they’ve burned so many bridges in this town why fans still feel too angry or worn down to show up for a pretty decent team. Reality never has been their strong suit.
Team Pinocchio (a.k.a. the Atlanta Spirit) has filed a $200 million malpractice suit against their former attorneys at King & Spalding. Within that suit, the often dysfunctional ownership group discloses it has been looking to sell the Thrashers since 2005.
The remaining seven heads of Team Pinocchio (Michael Gearon, Bruce Levenson, et al.) are suing King & Spalding for their perceived shoddy work in the original ownership agreement, which led to the protracted litigation and settlement between former partner Steve Belkin and the non-Belkins. Team Pinocchio members are trying to recoup some of the claimed nine-digit losses they say they incurred as a result of the litigation.
The problem with making such claims is you’ve got to make a case. Part of Team Pinocchio’s case is that it “incurred over $130 million in out-of-pocket losses” while operating the Thrashers, which it intended to sell. If that’s not clear enough, here are four bullet points from the 20-page, 75-point complaint:
♦ Point 53: “Plaintiffs’ inability to buy out Belkin’s interest in a timely manner and the resulting cloud on their title created by the Maryland litigation interfered with operation of the franchises and specifically prevented Plaintiffs from selling the Atlanta Thrashers.”
♦ Point 54: “Because of a dispute with the players, the National Hockey League suspended the 2004-2005 season. It was widely anticipated that the league would enter into a new labor contract that would inure to the financial benefit of smaller market franchises such as the Thrashers and thus increase their value. Plaintiffs expected that once the new labor agreement was finalized there would be substantial interest from potential buyers and that they would be able to sell the franchise.”
♦ Point 56: “Potential buyers talked with Plaintiffs about acquiring the Atlanta Thrashers. However, because they had been unable to acquire Belkin’s interest and were entangled in the Maryland litigation, Plaintiffs could not convey free and clear title to the franchise and thus were not in a position to sell. Indeed, during the period from June 2006, when the Maryland trial court entered summary judgment for Belkin, until the judgment was reversed on appeal in September, 2007, Plaintiffs were subject to a judicial decree specifying that Belkin, in fact, was entitled to buy out SSG and LPF.”
♦ Point 58: “In addition, the Thrashers have steadily lost money, requiring Plaintiffs to fund operations from their own pockets. Plaintiffs have incurred more than $130 million in out-of-pocket losses operating the franchise over this time period. Plaintiffs would not have incurred these losses if they had had free and clear title to the Thrashers and thus had the ability to sell or otherwise dispose of the franchise.”
Dispose of the franchise? They make it sound like it week-old lo-mein.
Makes you feel all warm and fuzzy, doesn’t it?
Team Pinocchio has shot down sell or sell-and-move rumors every time they’ve popped up. Sometimes, they put out statements. Sometimes, they scoffed and said a report didn’t dignify a response. Sometimes, as was the case in March 2010 after a New York Times story suggested both the Thrashers and Hawks were for sale, they didn’t even return reporters’ phone calls or emails to issue a denial.
In 2009, Thrashers president and former general manager Don Waddell — who has assumed the unenviable position of Team Pinocchio mouthpiece — stated: “In countless meetings with ownership, never once have we expressed any interest in selling the Thrashers or moving the Thrashers.”
He must’ve been out for coffee whenever the topic came up. I’ve heard better lies from “Baghdad Bob.”
I’ve stated this before but it bears repeating: If Atlanta loses its second NHL franchise, it won’t be because the sport failed here. It will be because ownership and management failed.
And right now, I wouldn’t even buy a hot dog to put a buck in these guys’ pockets.
By Jeff Schultz
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Previous posts:
– NCAA has lost sight of mission, needs to end ‘oversigning’
– Part I: A word about ‘oversigning’ (and revisiting Saban’s dance)
– Time to mock! Kiper, McShay say Falcons take . . .
– Stacy Searels leaving Georgia? Can I offer him a lift?
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342 comments Add your comment
Zombie Steve
January 21st, 2011
5:03 pm
Thrashers Rise Up……anyone???
Freddie's Falcon
January 21st, 2011
5:03 pm
I would LOVE to hear Don Wad’s explanation of this. Seriously.
Freddie's Falcon
January 21st, 2011
5:05 pm
Too Bad Dan Kamal is going to be out of a job. He was a good one.
jerry
January 21st, 2011
5:06 pm
Give Winnipeg 50 million dollars and they might take them.
Harry Redknapp
January 21st, 2011
5:09 pm
Gareth Bale,
Shouldn’t you be practicing and preparing yourself for the Newcastle Utd clash this weekend instead of posting on the AJC?
Love,
Your Favorite Manager,
Harry ‘Arry’ Redknapp
P.S. Please get another hat trick in the San Siro against AC Milan
Otter from Animal House
January 21st, 2011
5:11 pm
We gotta take these bastards. Now we could do it with conventional weapons, but that could take years and cost millions of lives. No, I think we have to go all out. I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!
Dejay
January 21st, 2011
5:12 pm
Wow. Just wow.
And I can hear it now. Once these morons finally sell the team to the next Nelson Scalbania in Winnepeg, the national media will bag on us bad Atlanta fans for never showing up and supporting an inferior product. Then, we will see the new owner(s) in Canada spend big $$$ and the team make deep playoff runs to a Stanley Cup; just like another NHL team that used to call Atlanta home 30 years ago.
Such a shame because hockey can work in this town, just like baseball did when Ted found someone competent to run the team in the early-’90s. But the fans just aren’t going to spend hard-earned $$$ on an inferior product, especially when their stewards were found to be trying to ditch the team for over half a decade. To do the opposite is pure madness, like going to a restaurant where the food is bad, the service is worse, and the manager hits on your wife in front of you and your kids.
Stuff like this makes me wonder if the sports venues here were built on some ancient Indian burial grounds or something. The only folks who I can think of who have it worse as a sports fan are in Cleveland and Seattle. And considering what they’ve gone through over the last few years (Sonic fans watching Durant tear it up in OKC, Cleveland with ‘The Decision’), that’s saying something…
Jeff Schultz
January 21st, 2011
5:16 pm
Dawg A — NHL’s had some bad ownerships in the past. You’re correct about them not screening good enough.
Ray Ferraro's Bobble Head Doll
January 21st, 2011
5:17 pm
My head is shaking. It won’t stop.
Jeff Schultz
January 21st, 2011
5:17 pm
JSS — Can we call it a tie? Or do we have to go to a shootout? (See how I did that?)
Acer
January 21st, 2011
5:17 pm
Is it a coincidence that the follow story comes out today? http://sports.nationalpost.com/2011/01/21/quebec-city-to-announce-construction-of-arena-within-month/
Smiling Jack
January 21st, 2011
5:18 pm
That’s telling him, Gwinnett Fred..I agreee with you.
Jeff Schultz
January 21st, 2011
5:19 pm
JSS (on lawsuit) — I think they’ve known for sometime this malpractice suit was coming. Actually, we all have. I’m sure they’ve been formulating strategy.
Jeff Schultz
January 21st, 2011
5:19 pm
LAC — I don’t have to send it to anybody. They read everything, trust me.
Rick
January 21st, 2011
5:21 pm
But isn’t this what pro sports is about? It is not really about the city, nor the fans. Rather, it is simply about the business.
This is another reason college sports are better. GT , UGA, etc… are not going to relocate.
Smiling Jack
January 21st, 2011
5:27 pm
agree
Tell the truth
January 21st, 2011
5:29 pm
I am sure their answer is “it was never personal- it’s just business”!
Tim
January 21st, 2011
5:34 pm
CAN SOMEONE TELL ARTHUR BLANK TO BUY THE THRASHERS?!
JSS
January 21st, 2011
5:35 pm
Jeff Schultz
January 21st, 2011
5:17 pm
“JSS — Can we call it a tie? Or do we have to go to a shootout? (See how I did that?)”
They all skate like Bob Probert and shoot like Stefan… No thanks to seeing that!
Jason
January 21st, 2011
5:37 pm
Does the NFL still have restrictions on owning other professional teams (other than Arena)?
JSS
January 21st, 2011
5:37 pm
Tim
January 21st, 2011
5:34 pm
“CAN SOMEONE TELL ARTHUR BLANK TO BUY THE THRASHERS?!”
Doesn’t he have enough to cry about already? Dang, you people are masochist! I’d never want y’all to have to get me out of hole!
Najeh Davenpoop
January 21st, 2011
5:38 pm
I don’t know anything about hockey, but as a Hawks fan, I can’t wait until the DASG sells the Thrashers to someone who actually wants to own them. It would free them up to spend money on the Hawks, and it would be better for the Thrashers to be owned by someone who wants them. Hopefully for Atlanta’s hockey fans (none of whom I have ever met in person) they are sold to someone who wants to keep them here.
Najeh Davenpoop
January 21st, 2011
5:39 pm
“Does the NFL still have restrictions on owning other professional teams (other than Arena)?”
They supposedly do, but somehow it hasn’t stopped Denver Nuggets owner Stan Kroenke from owning a controlling interest in the St. Louis Rams.
5150 P.O.A.D
January 21st, 2011
5:43 pm
Would anybody really be that sad it the Hawks and Thrasher just moved to another state? I am pretty sure most of the people in ATL wouldn’t even notice other than the cost of lost jobs and little revenue.
Casey
January 21st, 2011
5:45 pm
Dear Mr Blank, Please buy the thrasher. Do great work like you do with the falcons and Hockey fans will Love you for ever and ATL gets the cup. Thanks! A true Thrasher fan
P. Bull Terrier
January 21st, 2011
5:48 pm
To say the team is actually for sale is reading too much into the claims made in the lawsuit. On the surface, it seems like ASG might be able to prove the liability part of the case against the law firm, ie. the contract was flawed, it was the law firm’s fault that it was flawed, and that the law firm had a responsibility to write a legally binding contract. Proving liability is only half of the case.
If ASG can prove the law firm is liable for the flawed contract, they still have to prove that they suffered damages in order to collect any money in the case. Things like legal fees incurred trying to sort out the contract would be fairly easy to prove and collect, but those things only add up to a few million dollars. Other possible damages, like loss of revenue due to negative perception of the organization or the “stress” of the ongoing legal battle can reasonably be assumed to exist, but putting a price tag on those types of things is complex and uncertain.
Claiming that ASG intended to sell the Thrashers, but were prevented from doing so as a result of a flawed contract, adds tens of millions of dollars to the potential value of the case. In fact, it appears that damages linked to an inability to sell the franchise may comprise a majority of the $200 million the ASG is claiming in this case. Due to changes in the ecomomy if nothing else, the Thrashers franchise has likely lost value over the last 5 years. If the ASG was prevented from selling due to a flawed contract, that lost value could be included in the damages award. An inability to sell the franchise due to issues with the contract potentially allows the ASG to hold the law firm responsible for some $130 million in operating expenses that would otherwise be assumed to be just a normal part of doing business. The public statements that representatives of the ASG have made claiming that they had no intent to sell the Thrashers will almost certainly hurt their case on this point, maybe even making it unwinnable. Even so, throwing it in the suit significantly raises the stakes in the case.
With all that said, the main goal in claiming an intent to sell the franchise is to inflate the potential value of the case and encourage the law firm, and their insurance company, to settle the case. Law suits like this are a game of chicken. If the plaintiff can raise the stakes high enough, the defendant will often decide that fighting the suit in court isn’t worth the price of a potential loss.
I can’t see this one ever reaching trial. My guess is that there will be a confidential settlement somewhere down the road. The ASG won’t get anything close to $200 million, but may end up with something in the $25 – $50 million range. My other guess is that selling the Thrashers to raise money to operate the Hawks may have been the game plan from the beginning, but we’ll never really know the real truth in this story.
Dawg A
January 21st, 2011
5:48 pm
Jeff, You say they read these blogs…. Interesting!!!!! I hope everyone is paying attention! I will start it…… ASG we don’t want you here so please take your Jethro Bodine mindset and buy a team in another city! Atlanta deserves better and should not a have a ownership group that is clueless! We had that in the Smith Family! Something tells me they were your idols and you want to be as successful as them!
Well guess what….. you have already arrived!!!! YEA I SAID IT!!!
5150 P.O.A.D
January 21st, 2011
5:49 pm
Turn Philips into a Gladiator Pit. We have enough thugs in jail that we could watch fight to the death. It would be a perfect mix of Basketball and Hockey. You would have to only pay the few winners unlike the Hawks and Thrashers players.
moron owners
January 21st, 2011
5:57 pm
a bunch of rich, spoiled morons that own these teams and have run them into the ground. I hope they lose every dime they put up. I stopped going to hawks and thrashers games 3 years ago when the prices went up and quality was never good. Maybe both these sorry teams will move out of town.
Paul in RDU
January 21st, 2011
6:03 pm
Kristi Swartz’ report on the lawsuit has got some interesting points. My favorite is this little gem
“Besides accusing King & Spalding of malpractice, the lawsuit also says the firm acted in bad faith by continuing to represent the seven members after recognizing they may have a malpractice claim.”
I’ve never known of any lawyers representing anyone who didn’t pay them. The ASG people are complaining that the law firm continued to cash their cheques and represented them? There was a very easy way to stop them.
Michael
January 21st, 2011
6:04 pm
Having litigated a few things I know these public statements that they did not want to sell the team will come back to bite them and cause them to pay the $$attorney fees$$ for K&S. Tack that onto your losses.
P. Bull Terrier
January 21st, 2011
6:06 pm
Interesting idea 5150 P.O.A.D. I’m just surprised you missed the opportunity to add something about sending suspended UGA players into the ring. Too late now.
mark s
January 21st, 2011
6:18 pm
so what does this mean for the hawks and thrashers jeff? will both be gone soon? one? none?
steverino
January 21st, 2011
6:20 pm
So…I’m guessing the photo of the Three of the Thrashers’ caretakers was taken at a Hawks’ game…
5150 P.O.A.D
January 21st, 2011
6:20 pm
p Bull T
UGA players proved last year they don’t have any fight left in them. Nobody would pay to see them. HAHAH is that better?
Can’t stand the NBA and the NHL is just OK.
Jeff Schultz
January 21st, 2011
6:22 pm
Mark S — Hawks aren’t going anywhere. Philips needs a tenant and there are built-in TV revenue streams with an NBA team. Thrashers are less certain. That’s about all I can say right now.
Jeff Schultz
January 21st, 2011
6:22 pm
Steverino — Yep. That photo actually was taken the night the settlement of the Belkin suit was announced.
lanier
January 21st, 2011
6:23 pm
Shultize I think you just killed the Thrashers. Good job
Jeff Schultz
January 21st, 2011
6:25 pm
Lanier — Yeah, that was me.
Paul in RDU
January 21st, 2011
6:35 pm
I’ve read some comments about how the ASG have to be the worst sports owners in the world. Not a chance. The worst owner is Tom Hicks – a man who took one of the greatest clubs in the world and took them to the brink of bankruptcy not to mention relegation from the Premier League
native
January 21st, 2011
6:35 pm
Sad thing is, Atlanta will support a decent hockey team. Despite what most people think, the Flames didn’t leave because of poor attendance, they left because Nelson Skalbania (sp?) made the owners an offer they couldn’t refuse. It was in essence a real estate deal.
Whatever, once the Thrashers leave we’ll never get another team. I grew up in the south, but hockey’s a great sport and a going to the games is a blast…..
old smelly socks
January 21st, 2011
6:43 pm
The nerve that these a-holes invited the Thrashers Fan Club to a Hawks game for $5. Everyone is supposed to wear Thrasher jerseys. Well, the Club should go and yell “KNIGHTS” during the anthem, then WALK OUT and picket Team Pinocchio outside in the concourse.
DON’T GO TO ANY PHILIPS EVENTS EXCEPT HOCKEY GAMES if you want to send a message.
Cletus Dooley Earnhardt SR.
January 21st, 2011
6:49 pm
wHatt in the Same Hill is hokey? Jefrey Shulz, when doooes Gorgia Football Srping Practace start? Whhy aree we waisting time talkkin about stufff bessides UGA foootball?
-GO UGA!
Flagstaff
January 21st, 2011
6:50 pm
This is very, very unsettling news, to be certain… but the truth is that the front in Blueland is no different than it was yesterday. The team still has a winning record, is still in 8th place, and can still make the playoffs this year. While little is certain right now, let’s not start digging the grave just yet.
JSS
January 21st, 2011
6:52 pm
@ Davenpoop…
Regarding the Nuggets…
Najeh Davenpoop
January 21st, 2011
5:39 pm
“They supposedly do, but somehow it hasn’t stopped Denver Nuggets owner Stan Kroenke from owning a controlling interest in the St. Louis Rams.”
Kroenke transferred controlling interest in the NBA team to his Son Josh and some investors down to 40% himself when bought he the Rams to make the deal go through…. (According to Forbes)
I would link it, but that gets me in the filter on the blogs…
Worth $2.7 billion, #130 on the 2009 Forbes 400 list
“In August NFL owners approved Stanley Kroenke’s full purchase of the St. Louis Rams (he already had 40%); to comply with cross-ownership rules, he will transfer interests in the NHL’s Avalanche and NBA’s Nuggets to his son, Josh. Kroenke, who is named for 2 St. Louis Cardinals Hall of Famers, Enos Slaughter and Stan Musial, is also the largest shareholder in British soccer team Arsenal FC. Although married to Walton heiress Ann Walton Kroenke, Kroenke is self-made. Today his THF (as in “To Have Fun”) Realty operates shopping centers in nearly half the U.S., many anchored by Wal-Mart. Kroenke owns Canada’s largest cattle ranch and 2 wineries. The waiting list for his Screaming Eagle wine is 5,000-plus names long.”
JSS
January 21st, 2011
6:55 pm
That should have been “divested”
MF
January 21st, 2011
7:01 pm
Bring back the Knights!
Thomas Magnum
January 21st, 2011
7:03 pm
Amen Jeff!!! Preach it! Best thing that could happen is for this terrible group to finally sell and get an owner/owners who really want a hockey team.
Clay
January 21st, 2011
7:13 pm
We’ll be the game tomorrow night…wonder how many will be there with us…
Sean Grace
January 21st, 2011
7:36 pm
Fighting with Jeff isn’t going to solve our problem. Calling the ASG names isn’t going to either. If you’ve been following along for a few years you know that Mr. Schultz and Mr. Waddell and associates don’t go bowling on Tuesday nights. That being said, I have to take Jeff’s reporting with a grain of salt. In my opinion we still don’t know the whole truth and we never will.
I’ve heard a solution mentioned, a community purchase. Is it worth exploring? Is it possible? It’s worth looking into if the only other option is the team being moved.
What hurts the most is the damage this news will do to a team who is giving it’s all on the ice and a fan base that is fragile but recovering. The automatic reaction is boycott, stay home. In my opinion this is misdirected. The only thing you do by not showing up at Phillips arena is make the ASG’s alleged case, that Atlanta is not a viable market, stronger.
It’s time for Mr. Bettman to step in. Tomorrow night should be interesting at Philips!