By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
For the past few years, however, pursuing lawsuits against the Tour is just about all Mitchell has done. Now 45 years old, still tennis-playing trim, Mitchell spends hours each day at his attorneys' offices, poring over thousands of documents that the Tour and others have had to produce during the litigation.
In the afternoons, Mitchell generally picks up his three daughters. His wife went back to work after Sportsband imploded, and supports the family with her job as director of medical records at the Aston Medical Center.
Mitchell's original partner, Theis Rice, has also found another job after losing "on the strong side of a million bucks" in the Sportsband deal. Rice is now senior corporate counsel for Trinity Industries.
That leaves Mitchell still carrying the Sportsband banner, trying to upend the Tour's monopoly board.
Motions, briefs, transcripts, and documents from the two lawsuits Frank Mitchell has filed against the PGA Tour now number easily into the tens of thousands of pages. Mitchell seems to have memorized every one of them, hunting for the evidence he needs to exact retribution from the Tour.
The years-long litigation is complex, but it can essentially be boiled down to this:
Mitchell believes that the Tour eventually realized it could make more money from Mitchell's idea if Sportsband simply wasn't around anymore. Sportsband had footed the bill for proving that its idea would work, but the contract allowed the company to recover its start-up costs before the Tour could realize much profit. If Sportsband could be made to go away, the Tour would be able to reap the profits without paying the initial tab.
The Tour, he believes, strung Sportsband along until the concept had been proven to work, and then pulled the rug out from under it.
"They wanted this whole thing for themselves, not even allowing us to recover our money," Mitchell says. "It's greed. That's all it is."
And when Mitchell tried to revive his company by signing up Anheuser-Busch to sponsor individual tournaments, the Tour sabotaged him again by wooing Busch away as a sponsor, he says.
Needless to say, the Tour vigorously contests Mitchell's assertions.
In trial testimony and sworn depositions related to Mitchell's first lawsuit, Tour officials maintained that Mitchell and Sportsband were the ones who squirreled the deal by trying to back out of some of the broadcasts scheduled for 1989. Sportsband, they testified, simply couldn't raise enough money to keep itself afloat. It wasn't the Tour's fault that Sportsband did not prove to be financially viable.
Basically, Tour officials blame Sportsband for failing to market its product, even though internal memos show that the Tour itself took over substantial responsibility for the marketing end of the deal.
"It turned out after the fact...that Sportsband did not have any expertise in the marketing area that they had suggested to us that they had," Commissioner Finchem testified in a deposition. "The effort by Sportsband had failed to secure financial underpinning."
During the course of his legal quest, however, Mitchell has unearthed documents that cast doubt on the Tour's version of events. Almost right up to the day it canceled Sportsband's contract, for instance, the Tour repeatedly and lavishly praised Sportsband and trumpeted its prospects for success.
But internal documents show that, during the same time period, the Tour did privately calculate how much profit it could earn from radio rights if it didn't have to wait while Sportsband recouped its start-up costs. One Tour memo prepared before the Tour canceled Sportsband's contract tallied the numbers and offered a range of options for Tour officials to consider. One option was cutting Sportsband out of the picture, a move which the memo noted would probably send the company into bankruptcy.
Mitchell's first lawsuit against the Tour went to trial in early 1996 before a jury in the Dallas courtroom of U.S. District Judge Robert Maloney. Finchem, commissioner by then, testified that Sportsband had a good idea, but failed as a business.
"The problem wasn't in the technical quality [of the broadcasts]," Finchem testified. "The problem was in the marketing and defects in the business plan."
In that first lawsuit, Mitchell and Rice accused the Tour of multiple wrongdoings, most importantly fraud, breach of fiduciary duty, and breach of contract. But Maloney threw out all but one of the counts before the case even went to jury. After Maloney's rulings, only the breach-of-contract claim remained for jurors to ponder.
The jury found for Sportsband, and awarded the company $979,000. Maloney, however, later set aside the jury's finding, ruling that there was no factual basis for awarding the damages.
Mitchell and his attorneys have appealed Maloney's ruling on the damages, and are also appealing Maloney's decision not to let the jury even deliberate on the fraud allegations. The Tour--represented during the case by the powerhouse law firm of Akin Gump--is contesting the appeal.
Randy Kucera--who has left Akin Gump since the trial but is still handling the Tour's defense against Mitchell's suits--says the first trial established a clear record of the weakness of Mitchell's claims.
"[Maloney] found no evidence of fraud or breach of fiduciary duty. In the end, he threw out everything," Kucera says. "Any time the judiciary has ruled on [Mitchell's] claims to this point in time, they've found they're not valid."