Ross Perot Jr. vs. Mark Cuban

Ross Perot Jr. and Mark Cuban

Credit: January 2000 / WFAA

Ross Perot Jr., left, sold his majority stake in the Dallas Mavericks to Mark Cuban in January, 2000.

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by TED MADDEN / WFAA-TV

wfaa.com

Posted on May 11, 2010 at 9:19 PM

The story we ran earlier this evening during the 6:00 newscast was a follow-up on the lawsuit that Ross Perot Jr.

I read the lawsuit. I like to read, but this felt more like homework. If you feel up to it, take your shot: http://www.scribd.com/full/31171654?access_key=key-b8x2xzyu1o2yfys1k1j

It's not too bad, just 13 pages, but you get a lot of legal jargon in there.

Anyway, these kinds of stories are not in my wheelhouse. Give me a good kid on a good high school team, and I'll knock that story out. But the approach I take with this kind of story is, How can I put this piece together so people like me can understand it?

Here's what I came up with. In the simplest form, this is about Ross Perot Junior wanting a better return on his investment. He owns 5% of the Mavericks; Mark Cuban of course in the majority owner, with a claim on 76% of the team. Perot's side claims that the Mavericks have lost upwards of $200 million dollars since Cuban took over day-to-day operations. That's causing his investment to lose value.

I talked with Dallas attorney Michael Hurst earlier today, who said, "This is pretty much a typical lawsuit as to how it relates to a minority shareholder who's displeased with the way his investment is being managed."

There are other things involved with the suit that I couldn't get into in my story for TV, because of time limitations. The suit alleges that the minority owners basically weren't kept in the loop, one example being that there weren't as many shareholder meetings as Perot wanted. Also there are claims that Cuban used the Mavericks in business agreements with a couple other companies that he owns, and that the Mavericks franchise didn't get value equal to what the other companies received. Also, the lawsuit is asking the court to have a third party step in and run the Mavericks for the duration of the lawsuit (good luck with that).

When I finished reading the lawsuit, my first thought was, There is absolutely no mention on the Mavericks' on-court performance. Don't get me wrong -- I get it. I understand that this suit has nothing to do with wins and losses. But the Mavericks, as a basketball team, are in the business of winning and losing, and Cuban has been a great owner for that. Say what you will about their playoff performances (and you have some ammo), but the fact is they've won 50 games each year over the past decade. This team is competitive every year. Unfortunately, that is not a defense in this lawsuit.

For Cuban's part, he is saying that it doesn't matter how much debt he accumulates -- he's on the hook for it, and he's good for it. We e-mailed him today asking for an interview. Cuban quickly responded, saying he was out of town, and then wrote the following:

"Tell mavs fans that I have personally guaranteed all the obligations of the mavs, so they are more than solvent. Perot wants me to run the team like he did in the nineties. I won't do it. He wants me to squeeze every penny out of mavs fans rather than lowering prices like have the last five years. I won't do it. Better yet, our other partners don't want me to either. Perot is just being Ross Perot."

Dale Hansen had an interesting fact after my story ran: Perot bought the team for $120 million, then sold it to Cuban four years later for $290 million. That's a pretty good return on investment after only four years.

It sounds like Perot is just beating the bushes, trying to see if he can get some money to shake out. Maybe he's angling for a buy-out; you think he wouldn't be thrilled if Cuban tried to buy him out? He owns a 5% share of the team; Forbes recently valued the franchise at about $450 million. 5% of that is about $22.5 million. Just in case you were wondering.

Like I said at the beginning ... this kind of story is not in my wheelhouse. But one thing I do know about lawsuits is that they drag on for a looooong time. So after the initial buzz dies down, we probably won't hear much about this for the next few months.

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