# The New York Times
May 11, 2010
Minority Owner Sues Cuban, Calls Mavericks ‘Insolvent’
By RICHARD SANDOMIR
Mark Cuban’s financial management of the Dallas Mavericks was described as “reckless” in a lawsuit filed Monday in Texas by a minority investor in the team who accused the flamboyant owner of amassing net losses of $273 million and debt of more than $200 million.
Ross Perot Jr., who sold Cuban control of the team in 2000 but retained a small stake, said in the state court filing that the team is essentially insolvent and lacks the revenue to pay its debts.
Perot is seeking damages, the naming of a receiver to take over the team and the appointment of a forensic accountant to investigate its finances. Perot said that Cuban’s actions have diminished the value of his investment in the team and violated his and other minority owners’ rights.
The lawsuit partly opens the Mavericks’ books, showing some results and projections. Perot said the team generated a net loss of more than $50 million in the year ended June 2009 and a net cash flow deficit of $176 million since 2001. Looking ahead, Perot said that internal projections show additional losses of $92 million through 2013 and debt rising to $281 million.
In an e-mail message to The Dallas Morning News, Cuban said: “The Mavs operations and debt are guaranteed by me. There is no risk of insolvency. Everyone always has been and will be paid on time.” He added that “being in business with Ross Perot is one of the worst experiences of my business life. He could care less about Mavs fans. He could care less about winning.”
Adam Silver, the deputy commissioner of the N.B.A., said the league has “absolutely no concern” about Cuban’s financial situation. In an e-mail message, he said, “We are in the process of addressing our teams’ ongoing losses through the collective bargaining process with our players.”
Cuban acquired the Mavericks for $285 million from Perot during the 1999-2000 season and quickly turned it into a winning franchise that has made the playoffs every year since 2001. The lawsuit said Cuban owns 76 percent of the team. He has become one of the most famous and boisterous owners in sports, sitting courtside at home games, wearing a T-shirt and acting like a passionate fan. He has ac ulated about $2 million in fines from the N.B.A., mostly for criticizing officiating.
The accusation that the Mavericks have too much debt and are insolvent is resonant in the Dallas area. Stung by the global credit crisis, Thomas O. Hicks’s sports company, which owns the Texas Rangers and the Dallas Stars, stopped paying interest on $525 million in debt in March 2009, and Hicks has put the Rangers and the Stars up for sale. A group led by Chuck Greenberg and Nolan Ryan has agreed to pay $575 million for the Rangers, but the sale is embroiled in a dispute among Hicks, his lenders and Major League Baseball.
Just sell your share you little ..Off course Mavericks are on the negative but who cares??Mark loves his boys and has the money to pay the debts..
He doesn't look to make money from the Mavs,he's trying to win with the team he loves...
Props to one of the most intelligent and passionate people in this planet
Cuban sure does get himself involved with a lot of asshats but I suppose thats the price you pay for being an outspoken billionaire.
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Just sell your share you little ..Off course Mavericks are on the negative but who cares??Mark loves his boys and has the money to pay the debts..
He doesn't look to make money from the Mavs,he's trying to win with the team he loves...
Props to one of the most intelligent and passionate people in this planet
Cuban knows how to work his fans.
His dealings with Cuban aside, Perot is a .
Nice work on the Victory Park dealings, asshole. That worked like a charm.
[[[who accused the flamboyant owner of amassing net losses of $273 million and debt of more than $200 million.]]]
That's a half billion dollars worth of bad paper. That's what Sarver lost in the Crash. What a coincidence.
Cuban is assuming his own "debt", it's out of his own pocket. Would Perot rather he'd borrow that instead?
As far as the net losses goes, Cuban has said he doesn't mind that. He's comfortable with losing money each year as long as the product on the floor and the brand remains compe ive.
Man, it's tough to compete with an owner who doesn't mind losing money.
But this is a classic example of a huge flaw in the NBA system. Not all teams can do this, so by definitiion it's not a level playing field.
Portlend is a good example - a small market team who happens to have a mutli-billionaire owner. Well, that's rare. Good for Portland fans, but what about Bucks fans, or Spurs fans? Fortunately for the Spurs, we have had a productive front office and a stellar run. And the Milwaukee front office has done an admirable job.
But there's a reason teams like the Lakers wil always have at least one superstar - they always have and they always will. When Bryant retires, a guy like Wade or LeBron will end up there - or whoever the new LeBron is.
As Timvp said in another post, it makes it that much more amazing that the Spurs have won four les. It practically defies reality.
From the 12/09 Forbes article, Portland is another team that's losing money.
Good grief, as long as Cuban has the money to pay his debts, he can do what he wants with the team. Ross Perot being a drama queen again.
Corporate governance says otherwise. Even if he owned 99% of the club, he has a fiduciary duty to the other 1% of shareholders. He treats the club like his play toy, but it's actually a corporation with other shareholders.
It would suck to own 5% of a company that does not care about making a profit though. Perot probably does not have to help much with the losses but it is hard for rich people to know their money is not working for them. Perot will just have to sell because other than harass Cuban he can't do much.
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