McDavid's Plans Disclosed For TBS Teams: Jury Told

((HT: Bloomberg.com/Howard Bloom SBN Daily))

The buyers of Turner Broadcasting System's basketball and hockey teams were shown rival bidder David McDavid's business plan before making their offer, one of them testified at the trial of McDavid's lawsuit against TBS. This article was written by Laurance Viele Davidson and David Beasley and appeared on Bloomberg.com.

Michael Gearon, a member of the partnership that bought the Atlanta Hawks and Atlanta Thrashers, yesterday told an Atlanta jury his group was sent the plan by its lawyer Michael Egan. McDavid sued TBS, claiming the cable company violated an oral contract to sell him the teams and keep his business plan secret.

Gearon, a partner in the group Atlanta Spirit, testified he wasn't aware of any information his group had on the McDavid deal. McDavid's lawyer Steven J. Rosenwasser showed him and the jury e-mail and other documents that Gearon received indicating it was McDavid's work.

``In fact you were told some of the details of the McDavid deal?'' Rosenwasser asked.
``That's right,'' Gearon said.

Gearon said today when questioned by defense lawyer June Ann Sauntry that he never discussed blocking the McDavid deal with Ted Turner, the TBS founder, whose son and son-in law were among the buyers. Gearon was in South America to manage a mobile-phone business as Atlanta Spirit negotiated with TBS, he said.

Negotiations continued for months after McDavid maintains he was cut out as the buyer, Gearon said.

Sauntry displayed an October 8, 2003, e-mail from Turner in- house attorney Louise Sams, who referred to the McDavid purchase plan as a ``target.''

Gearon's E-Mail

Gearon said he received 200 e-mail messages a day on a variety of subjects and didn't recall much about Atlanta Spirit's negotiations. His involvement with Atlanta Spirit stemmed from a friendship with Turner's son-in-law Rutherford Seydel. They shared a love of the Hawks and wanted to keep them in Atlanta, he testified.

McDavid, a Texan who was once a minority owner of the Dallas Mavericks, sued TBS for $500 million. He proposed to buy the teams for about $215 million. Atlanta Spirit bought the teams for about the same price, lawyers for McDavid said in opening statements.

TBS is an Atlanta-based unit of Time Warner Inc., based in New York, the world's largest media company. Its units include Cable News Network and Turner Classic Movies.

The $500 million damages request is 11 percent of New York- based Time Warner's $4.39billion net income last year.

Time Warner rose 31 cents, or 3.2 percent, to $9.91 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 46 percent in the past year.

The trial began October 9 and probably will last a month, McDavid's lawyers said.

The case is McDavid v. Turner Broadcasting System Inc., 2005-cv-101902, Fulton County Superior Court (Atlanta).