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SBJ/November 17 - 23, 2003/Other News
Milwaukee owners sue over AFL fee
Published November 17, 2003
Owners of the defunct Arena Football League franchise in Milwaukee have filed a lawsuit contending they are owed nearly two-thirds of the $16 million expansion fee paid by the new ownership group in Philadelphia.
According to the complaint, filed this summer in Cook County, Ill., by the owners of the defunct Milwaukee Mustangs, the AFL signed an exclusive sales agreement giving the first $5 million of the team's sale to Andrew Vallozzi, owner of the Mustangs. In addition, the agreement stated that all proceeds above the initial $5 million would be split evenly between the AFL and the Mustangs. The AFL contracted the Mustangs in 2002, citing arena difficulties at the Bradley Center.
In August, the league completed a deal to expand into Philadelphia with a franchise sold to a group led by rock singer Jon Bon Jovi and former Philadelphia Eagles quarterback Ron Jaworski. The group paid $16 million for the Philadelphia franchise, and lawyers for the Mustangs franchise claim that deal falls under the terms of the sale agreement with Vallozzi.
"We believe that the AFL essentially sold the Mustangs when the AFL expanded into Philadelphia, and they don't want to pay us the fee," said Vallozzi's attorney, Kevin Finger.
Mustangs lawyers also state that because they think AFL Commissioner David Baker receives 5 percent of any expansion fees as part of his employment contract, Baker had no interest in selling the Mustangs because he wouldn't have received any money from the sale.
Chris McCloskey, AFL vice president of communications, wouldn't comment on the lawsuit, other than to say that its claims are baseless. Regarding the claim that Baker's contract awards him 5 percent of expansion fees, McCloskey would only say, "It is one of the many inaccuracies in this lawsuit."