Cuban Smoking
Mark Cuban is in trouble again. One would hope that with his recent legal shortcomings, he might straighten up. While he hasn’t always been the choir boy of NBA owners, he still has kept a fairly clean legal record up until these past few years. He was relieved of any wrongdoing by a judge in the insider trading case last Friday.
Cuban is now accused of wrongfully diverting millions of dollars in American Airlines Center revenue to a separate account used for Mavericks purposes in order to make up for profit losses incurred by the team in 2008. The lawsuit, brought upon by the company managed by fellow MFFL Ross Perot, Jr., is said to claim that Cuban borrowed $30+ million dollars in unauthorized money from the arena.
Perot still holds a minority interest in the Mavs, after selling the majority to Cuban in 2000. This situation is especially interesting given the proximity of familiarity between the two billionaires. Cuban and Perot have worked closely together ever since the Mavericks were sold to Cuban. Their personal luxury suites in the AAC are just across the hall from one another, and they have been known to be friendly with one another.
In an e-mail to press members, Cuban said that his legal team has been very honest with Perot about the money that was borrowed. He claims that it has been used “to put the best possible Mavericks team on the court,” while maximizing attendance and growing all surrounding businesses in the downtown area.
Cuban’s frustration from the lawsuit could stem from the information that he is well aware of, but the public may not know much about.
The Victory Project, which was begun by Perot in an attempt to develop the currently barren and somewhat boring area surrounding the arena, has been a failure to this point. Perot had envisioned the development of new retail and office space as a boon for his pocketbook. With the downturn economically, and the somewhat poor location that was being offered, Perot’s development company sold its stake in the project to a German investment group in April. Public records show that Perot personally incurred losses nearing $100 million.
Cuban said that he thinks Perot is “trying to find nickels in the sofa cushion.” Apparently Perot isn’t the only one pinching pennies these days. Wouldn’t it be nice if we could sue a billionaire when we were down in the dumps?
“I have to tell you that the biggest mistake I made in buying the Mavs was in not completely buying out [Perot's] interest,” Cuban wrote in the email.
Perot’s legal team (who, ironically enough, also handled Don Nelson’s $7 million deferred compensation suit) claims that they tried to resolve their dispute with Cuban prior to the filing, but to no avail.
What does this mean for the Mavs? At one time, Mark Cuban was known as one of the wealthiest (and most generous) owner in the NBA. That may or may not be true still be true, but what we do know is that Cuban is much worse off that he has been in a while. This scenario appears to be a pretty desperate attempt to make ends meet, which hasn’t been the norm for the owner in the past. Should this give Mavs fans reason to worry about the future spending in free agency, or Dirk’s potential extension next summer? Not really. It’s safe to say that if Dirk wants to stay in Dallas, Cuban is willing to compensate him to do so. He may even go over the cap to do it, although at this point the team could be well under the cap when that decision needs to be made.
This will probably all blow over within a month or so, since Cuban’s guilt would be a bit more obvious if he had refused to speak to the media. He may have to pay Perot off in order to get him off of his back, but either way, this will not wreck him or the Mavs’ chances at the championship in coming seasons.
The Associated Press contributed to this article.
Related posts:
