Judge tosses Spirit's deal to buy out Belkin

By SEKOU SMITH

The Atlanta Journal-Constitution

The feuding co-owners of the Hawks and Thrashers are still in business, after a Maryland judge scrapped a contract that outlined how seven of the partners could buy out the eighth.

Boston-based partner Steve Belkin had asked his Atlanta Spirit partners to buy out his 30 percent stake in the two teams back in August 2005, a process that was supposed to take 125 days. Ever since, the Spirit has been embroiled in a high-profile legal battle that has lasted nearly four years and earned the group a reputation as the most fractious ownership in North American professional sports.

Their arguments wound through the Maryland circuit court system and finally to the Maryland Court of Special Appeals, which overturned the lower court’s ruling as too vague.

The ruling, issued Monday afternoon, tossed out the initial purchase and sale agreement to buy out Belkin and keeps him in the partnership as a minority owner. The partners are now placed back in precisely the same position they were in before August 2005. The judge’s decision came after a trial that began in February and wrapped in early May.

“We won on every single point,” Spirit co-owner and NBA Governor Michael Gearon Jr. said in a statement released by the team. “The court did exactly what we asked it to do. We are back under the operating agreement which we think is a good agreement. We no longer have any obligation to buy out Belkin nor does Belkin have any right to purchase the Hawks and Thrashers.”

Belkin, however, does have the right to appeal Monday’s decision. Belkin did not respond to an e-mailed request for a comment.

NBA spokesman Tim Frank declined to comment when contacted by the AJC Monday afternoon. Calls to the NHL were not returned.

The eight-man ownership group bought the Hawks, Thrashers and Philips Arena operating rights from Atlanta-based Turner Broadcasting System in spring 2004.

Rather than having a single managing partner, the Spirit shares voting power equally among three subsets of owners: Atlanta-based partners Gearon Jr., Michael Gearon Sr., Rutherford Seydel and Beau Turner; Washington-based partners Levenson, Ed Peskowitz and Todd Foreman; and the Boston-based Belkin.

The celebration was short-lived.

The group began squabbling over things such as who would speak publicly at events. Belkin at one point wouldn’t let the other owners into the Hawks’ locker room or fly on the team plane.

The warring came to a head over a trade for then Phoenix Suns’ guard Joe Johnson, who has since become a three-time All-Star for the Hawks and is currently deciding if he wants to sign a contract extension with the team.

Belkin, who previously accused Levenson of player tampering, stepped down as the team’s representative to the NBA and then asked that the seven others buy out his 30 percent share.

In the ensuing years, both the NBA and NHL teams have affected by the ownership dispute. The chaos eventually raised doubts about the Spirit’s ability to financially support two professional teams. According to court documents, the Hawks and Thrashers have lost more than $174 million since the 2002-03 season, including $50 million in the past two years alone.

The owners have denied that wither team would be sold, but sports business experts have said previously that the viability of the Thrashers is in doubt. Unlike the Hawks, the Thrashers are not tied to a 30-year bond payment-agreement for Philips Arena and could be moved.

-- Staff writers Kristi E. Swartz and Chris Vivlamore contributed to this report.