McLane’s countersuit cites ‘tanking’ by Crane
Former Astros owner Drayton McLane Jr. has ramped up his legal squabble with current owner Jim Crane, filing a countersuit that accuses the Astros of tanking their seasons in 2012-13 in an attempt to undermine Comcast SportsNet Houston, the regional sports network that was forced into Chapter 11 bankruptcy in 2013.
The breach of contract countersuit was filed last week in Harris County District Court along with a response to Crane’s 2013 lawsuit against McLane, from whom he purchased the Astros for $615 million in 2011.
The countersuit, in fact, includes a copy of the 133page sales contract as an exhibit, providing a rare look into the issues involved between millionaires engaged in the billiondollar big league baseball industry.
McLane’s countersuit seeks damages of at least $25 million, the amount of money McLane said he would have received if CSN Houston had succeeded financially, plus attorney’s fees. The case has been assigned to 80th state District Judge Larry Weiman.
The Crane-McLane legal dispute has been a longrunning sidebar to the fate of CSN Houston, which was owned by the Astros, Rockets and Comcast but was forced into bankruptcy when it could not arrange carriage by most major cable and satellite providers and was unable to meet its rights fees obligations to the Astros.
The network was placed into involuntary Chapter 11 bankruptcy in late 2013 and sold in 2014 to AT&T and DirecTV, which now operate it as AT&T SportsNet Southwest. The teams and Comcast lost their equity in the network, which was initially valued at $700 million, and the Astros do not have an ownership stake in AT&T SportsNet Southwest, which is not involved in the litigation.
Turning the tables
In last week’s latest development, McLane’s attorneys are attempting to turn the legal tables on Crane, who said in his 2013 lawsuit that he was defrauded by Comcast and McLane because the parties did not make it clear before he bought the team that CSN Houston would face carriage and financial difficulties when it launched in late 2012.
Now, it is McLane who accuses Crane and his Houston Baseball Partners ownership group of skullduggery by tearing down the Astros in 2012-13, during which the team lost more than 100 games each season, and thus decreasing the possibility that carriers would subscribe to CSN Houston.
“(Houston Baseball Partners) proceeded to intentionally and deliberately destroy the network, which it accomplished, in part, by ‘tanking’ the baseball team,” attorneys wrote. “The destruction of the network was undertaken so HBP could recapture what it believed were undercompensated Astros broadcast fees.
“In short, HBP thought its television rights agreement with the network was a bad deal which it could escape if the network defaulted. That plan was thwarted when Comcast threw the network into bankruptcy.”
McLane’s attorneys say the Astros damaged the network by refusing to approve carriage offers because they would not provide enough revenue. The team also turned down Comcast’s offer to purchase Crane’s 46 percent interest in the network.
“Unquestionably, it was HBP Team’s plan from the very moment it acquired an interest in the network to use its veto power … to hobble the network, causing a payment default which allowed (it) to terminate the media rights agreement with the network,” the countersuit says.
The suit expands on the “tanking” allegation by saying the Astros were “the worst team in baseball … after years of success on the field” during McLane’s ownership.
The Astros’ teardown in 2012-13 has now become standard operating procedure for many Major League Baseball teams, and the Astros have gone on to unprecedented success under the Crane group’s ownership, with a World Series title in 2017 and three consecutive 100-win seasons, including a franchise-best 107-55 entering this week’s playoffs.
“We’re very proud of how Jim Crane was able to overcome the pervasive difficulties that the Astros were facing in 2012,” Giles Kibbe, the team’s general counsel, said in an e-mail. “We look forward to presenting our evidence in this case. Right now, we’re focused on making another postseason run.”
Crane’s suit against McLane has been on hold since 2014 because of a dispute regarding whether it should be heard in state or federal court. U.S. District Judge Lynn Hughes in August returned the case to state court, the Crane group’s preferred destination.
Motion to dismiss filed
Along with the counterclaim against Crane, McLane’s attorneys also filed a motion to dismiss the Crane lawsuit, citing the Texas Citizens Participation Act as grounds.
The TPCA allows a judge to dismiss a case when it is determined that one of the parties — in this case, the Astros, Comcast and former Rockets owner Leslie Alexander, who together started the failed CSN Houston — were exercising their right of free speech, right to petition or right of association when they had discussions on a particular matter that involves a public figure or entity such as the Astros.
Crane’s suit accused Comcast, NBC Universal and McLane of fraud, negligent misrepresentation or omission and civil conspiracy and said the Comcast network partners were selling an asset (the TV network) “they knew at the time to be overpriced and broken.”
Houston attorney Adam Milasinsic with the Ammons Law Firm said that in ruling on McLane’s motion to dismiss, the judge must decide if the motion was filed in a timely fashion, since motions of this type usually are required to be submitted within six months of the lawsuit being filed.
If McLane’s argument clears that hurdle, given that the suit was delayed in federal court for more than five years, the judge then must determine if it falls under a more restrictive version of the Texas Citizens Participation Act that took effect this year or a more permissive version that was in place in 2011-12, when the Astros sales talks took place.
From there, Milasinsic said, the judge must determine if the comments among Comcast, McLane and Alexander involved free speech issues. If so, the burden then will fall upon Crane’s attorneys to prove otherwise and allow the lawsuit to proceed.
“Question one is whether dismissal is available, and question two is should it be dismissed,” Milasinsic said.