Joe's Comments to a Prospective Owner that Asked the Hard Questions

[LASportsFan]

I have an acquantaince that has been looking at investing in a minor league basketball team out here in California. He has a business background (and investment background) and actually teaches business classes at a university out here. He's been a huge college basketball fan all his life but did not know a lot about the history of each of the current minor league basketball leagues.

He called me up a few weeks ago to let me know that he was thinking about either investing in a current team or starting up a new francise. He wanted to pick my brain about what I knew about each of the minor leagues. I told him to stay as far away as possible from the ABA. I told him of the throngs of teams that fold every year, of the ABA CEO's incompetance and arrogance, etc. He still decided to do his own investigation and proceeded to contact several leagues, including the ABA.

Well, I got an email from my acquantaince this morning expressing his shock at how Joe treated him during their email conversations. He was gracious enough to share them with me. Here are a few excerpts from them:

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[From Joe - 3/21/07]
**Name**. Thank you for your email and interest in the ABA. As you have seen, the league is growing rapidly and we anticipate over 60 teams next season with a great group of teams in California. We would certainly welcome a team in **Name of Market**; it would fit well into our divisional plans. Right now, we have teams set for San Diego, Hollywood, Maywood, LA (Beijing), Orange County, Long Beach and Fresno and Sacramento. We are talking with a couple of additional teams. Travel will be very easy.

One of the reasons for the rapid growth of the ABA is our business model and also it is easier to own and operate an ABA team than any other when the model is followed.

[From Acquaintance - 4/2/07]
Joe,

I would like to review a copy of your business model/plan. As a business professor, I would like to see what you have in place as well as speak with you about some of my concerns before making any decision on ownership in the ABA.

Could you please provide me with a Word or PDF copy of your business model/plan? I would like to see your cost model, in particular. I have no problem with signing a non-disclosure agreement.

I have some concerns about the ABA. I've noticed that many teams have folded midseason. I also have concerns about your playoff structure and what your ideas are to eliminate all the problems experienced this year.

What procedures will you have in place next year to ensure each team plays their complete schedule as annouced at the beginning of the season? I hope to see in your business plan a section on due dilligence.

I look forward to reviewing your business plan in the next few days. I would then like to set up a phone call to talk with you before the owner's meeting. If all goes well, I'd then like to attend the owner's meeting.

[From Joe - 4/2/07]
Many teams have not folded midseason. Teams have been suspended for failure to meet league standards and requirements and it takes about 20 minutes to replace them with new ownership. The replacement teams generally do meet league standards and requirements.

The ABA went public in December. From that day until about two weeks ago, a group of owners tried to sabotage the league with a hostile takeover. They failed, but they disrupted the entire league and the playoffs. They are now gone. We are confident in our playoff structure for next season. I think the next best step would be for us to have a conversation and I will be happy to answer any questions you have.


[From Joe - 4/3/07]
**Name**. Thank you for the email. I appreciate your interest and candor. The system for expansion we use has helped make the ABA the largest professional sports league in the US; it works. As stated, we have no problem with your attending the ABA meeting, meeting with owners and getting the best that the ABA has to offer. But we do not send out our Business Plans. Period. So I guess we won't be in **Name of Market**.


[From Acquaintance - 4/3/07]
Joe,

Why should I blindly believe that your business model works when many teams have been suspended by the league for failing to meet league standards? Why should I or anyone invest in an entity without this information?


[From Joe - 4/3/07]
Due diligence is very important which is why you were invited here. We do not charge replacement teams another market reservation fee and in fact, finance most of the market reservation fees. The CBA charges $150,000 for a franchise fee and the NBDL charges $250,000 for a franchise fee. And percentage wise, both leagues have a higher rate of attrition than the ABA. Further, both of those leagues charge dues and assessments; the ABA has neither. Teams keep 100% of their revenues - and actually receive revenue sharing from the league.

We are totally committed to our owners and provide more help, guidance and financial assistance to our teams than the next three leagues combined. Shame on you.
Joe Newman
ABA CEO
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All of you can come to your own conclusions.

I do have a question for cglue. Have you ever seen this mysterious business plan?

[Sam Hill]

What.

A.

Complete.

Dick.

[preeths]

[From Joe - 4/3/07]
Due diligence is very important which is why you were invited here. We do not charge replacement teams another market reservation fee and in fact, finance most of the market reservation fees.

That's very interesting. Mother Williams took over the Mississippi Miracles last season and Mr. Newman tried to place the blame on her for their playoff travails (see Chris Fells' recent article), emailing ABA owners that she had never paid the market reservation fee. But according to the above, she never owed one in the first place!

[Fells]

That's very interesting. Mother Williams took over the Mississippi Miracles last season and Mr. Newman tried to place the blame on her for their playoff travails (see Chris Fells' recent article), emailing ABA owners that she had never paid the market reservation fee. But according to the above, she never owed one in the first place!

Yup!! Talk about a TOTAL contradiction.

[tbayz1]

cool post LaSportsFan

Joe is a loser, nuff said

[LASportsFan]

Joe does read these boards. I know for a fact that he's read this thread.

[Sam Hill]

Joe does read these boards. I know for a fact that he's read this thread.

Good.

My dear Mr. Newman, have you ever stopped to consider that the way in which you interact with potential business partners/franchisees/fans may be seen by some as lacking sufficient interpersonal skills?












Barring that, do you know what a total jerk you are to people?

[Fells]

Good.

My dear Mr. Newman, have you ever stopped to consider that the way in which you interact with potential business partners/franchisees/fans may be seen by some as lacking sufficient interpersonal skills?












Barring that, do you know what a total jerk you are to people?

You should see the e-mail he sent to me. That would fall under how dealing with the media makes one seem to others........

[Minor League Man]

You should see the e-mail he sent to me. That would fall under how dealing with the media makes one seem to others........
I wonder why Joe hasn't signed up then?

And by the way Fells, check your personal messages.

[LASportsFan]

Fells, I don't doubt you for a second. The minute you stop talking about butterflies, lollipops, and unicorns with Joe, he immediately says "shame on you" or other phrases that are worse.


The thing that amazes me is that I really think Joe believes his own B.S. I think that he actually believes he's 100% right and that the world is out to get him. Does that make him insane and a little looney? Sure.

Joe, I've got a solution for ya: check in to the nut house. They'll medicate you up real nice, and you can watch Sponge Bob and Rainbow Brite all day long.

[Sam Hill]

The thing that amazes me is that I really think Joe believes his own B.S. I think that he actually believes he's 100% right and that the world is out to get him.


Yes, he does.

Does that make him insane and a little looney?

Yes, it does.

[TheHulk]

I've contacted the league before about placing a team in either Tallahassee or Dothan, AL. As soon as I asked about the possibility of doing that the ABA was ringing my phone off the hook. The first thing they asked for was a market reservation. I quickly figured that out to be....Joe needs some money for his pockets and left it at that. If this area even considers minor league sports is not going to be the ABA.

Oh, let's not forget about how the ABA wanted to go into Pensacola. That's a whole new thread by itself.

[Fells]

I've contacted the league before about placing a team in either Tallahassee or Dothan, AL. As soon as I asked about the possibility of doing that the ABA was ringing my phone off the hook. The first thing they asked for was a market reservation. I quickly figured that out to be....Joe needs some money for his pockets and left it at that. If this area even considers minor league sports is not going to be the ABA.

Oh, let's not forget about how the ABA wanted to go into Pensacola. That's a whole new thread by itself.

Oh, please elaborate.

[TheHulk]

Please read the next post.

[TheHulk]

I'll try my best. When I did contact the league it was shortly after I gave controlling interest in my NAFL team to a friend of mine. Now, I'm not the most wealthiest man in town, but I seem to be the one with the sports background here in the Destin/Fort Walton Beach, FL area.

Well, I was not involved with the dealings with Pensacola, but a former Pensacola Tornado (CBA) player was hoping to place a team in the city. (Pensacola is about 35 miles west of FWB.) The only place other than the Pensacola Civic Center is the arena on the campus of the University of West Florida. Well, to make a long story short UWF didn't want to touch the ABA with a ten foot poll and the Civic Center was under an exclusive contract with the Ice Pilots (ECHL). (You can research that by logging onto the Pensacola News Journal website.)

Now, as for me, it seemed really sketchy for a league to instantly want to grant a franchise to me sight unseen. When I filled out the information form on the website I was approched by the league immediately. That is what struck me as odd. I did not have a direct conversation with Joe, but did exchange emails. They did leave one message on my phone but that was it. If I were going to go further I was going to ask about a business model. Because that's what I got from the NAFL before I got involved. What I'm trying to say is that...the first thing they wanted from me right away was $10,000 for a market reservation. That is what scared me away. What other leagues do that without doing a background check. Now, I've owned a semi-pro football team...how does that qualify me for an ABA team? Anyway, that's what my dealings were. I know it's not as detailed as you'd like but it's the truth so help me God.

[The Magician]

Check you PM's - Thanks!

[Minor League Man]

I'll try my best. When I did contact the league it was shortly after I gave controlling interest in my NAFL team to a friend of mine. Now, I'm not the most wealthiest man in town, but I seem to be the one with the sports background here in the Destin/Fort Walton Beach, FL area.

Well, I was not involved with the dealings with Pensacola, but a former Pensacola Tornado (CBA) player was hoping to place a team in the city. (Pensacola is about 35 miles west of FWB.) The only place other than the Pensacola Civic Center is the arena on the campus of the University of West Florida. Well, to make a long story short UWF didn't want to touch the ABA with a ten foot poll and the Civic Center was under an exclusive contract with the Ice Pilots (ECHL). (You can research that by logging onto the Pensacola News Journal website.)

Now, as for me, it seemed really sketchy for a league to instantly want to grant a franchise to me sight unseen. When I filled out the information form on the website I was approched by the league immediately. That is what struck me as odd. I did not have a direct conversation with Joe, but did exchange emails. They did leave one message on my phone but that was it. If I were going to go further I was going to ask about a business model. Because that's what I got from the NAFL before I got involved. What I'm trying to say is that...the first thing they wanted from me right away was $10,000 for a market reservation. That is what scared me away. What other leagues do that without doing a background check. Now, I've owned a semi-pro football team...how does that qualify me for an ABA team? Anyway, that's what my dealings were. I know it's not as detailed as you'd like but it's the truth so help me God.
Well, the IcePilots are near death, so you could try getting another league in Pensacola this fall!

[LASportsFan]

Well, the IcePilots are near death, so you could try getting another league in Pensacola this fall!

Knowing that Joe reads the boards, Hulk you can expect a call in the near future!!! Ice Pilots are out, so congratulations!!! You've just been selected to own an ABA franchise.

[TheHulk]

Besides, it will interfere with my time in the weight room and Strength Competitions.

[LASportsFan]

I actually saw the Hulk (Hogan) at a few Long Beach Jam games back when they were in existence. You're not him, are ya?

[TheHulk]

Well, the IcePilots are near death, so you could try getting another league in Pensacola this fall!

I'd rather have a bench press with 1000 pounds fall on my chest than have to deal with that circus called the ABA. JN can take a high hard one for all I care.

[TheHulk]

Gosh no. Although I do wish I had his millions and that weight room he has in his Miami home now.

[Minor League Man]

I'd rather have a bench press with 1000 pounds fall on my chest than have to deal with that circus called the ABA. JN can take a high hard one for all I care.
I meant you could try another league OTHER THAN the ABA.

CBA would work, or if you prefer spring, I'd try WBA.

[rams80]

I meant you could try another league OTHER THAN the ABA.

CBA would work, or if you prefer spring, I'd try WBA.

WBA...

The list of CBA teams within bus range of Pensacola are the iffy Atlanta team.

[TheHulk]

The WBA seems to be okay. I need to do some research on them. If you look though, all the teams are in the Atlanta area. The season is shorter too. I think. Not that it is a bad thing. I just need to do more research. I mean Murfeesboro, TN has a team. That place is smaller then Fort Walton Beach and they have a team.

[Minor League Man]

The WBA seems to be okay. I need to do some research on them. If you look though, all the teams are in the Atlanta area. The season is shorter too. I think. Not that it is a bad thing. I just need to do more research. I mean Murfeesboro, TN has a team. That place is smaller then Fort Walton Beach and they have a team.
Would you consider Dallas and Knoxville to be in the Atlanta area?

[TheHulk]

Like I said I'd have to do my research. Don't be a wise donkey. lol

[Minor League Man]

I'm sorry.

[TheHulk]

I'm sorry.

No harm no foul my good man.

[Sam Hill]

How about this idea: stocks and bonds? Mutual funds?

How about a savings account?

[panchess]

1) Get whatever check you can from the owner.

2) Announce the franchise as soon as the check clears the bank.

3) Have the franchisee announce "tryouts" for the team and the dance team as soon as possible to get 'walking around money' for the franchise.

4) Book a gym with the lowest possible rent.

5) Brag to your friends that you own a team, but don't do any other marketing.

6) Enjoy the one practice you rented the gym for before the season begins.

7) Be surprised when 50 people or so (most of whom are people you know) show for the first two games, especially that you don't make enough money to pay the players and make the rent on the gym.

8) Be more surprised when the local papers and TV stations don't show up to cover the game, as you told your friends they would all be on TV.

9) Be even more surprised when the gym locks you out for non-payment of the rent.

10) Fold, blaming the media, "the man" or anybody else you can think of.

My favorite ABA story is the Ohio Aviators. The owner of that woebegon franchise had a few stories in the media, bragging that he was going to have the Canton Fire Marshal at the first game to officially cut off ticket sales for the Standing Room Only crowd.

After three games, the Civic Arena tossed the Aviators for non-payment of rent, after "crowds" of 100 or so. The coach ended up driving the players to road games in his van, where they routinely got beat by 50-60 points.

Halfway through the season, the owner got his team into the local community college through a connection. A few more games, no rent, and the connection (who had coached there for 20 years) got fired for promising the arena at the school for free.

I believe the Aviators ended up making the playoffs as the #24 seed with like a 2-18 record, and got bombed. They never got "suspended" for failing to meet league requirements, but Arkansas and Rochester did. Go figure.

[QC_Hawks_fan]

After three games, the Civic Arena tossed the Aviators for non-payment of rent, after "crowds" of 100 or so. The coach ended up driving the players to road games in his van, where they routinely got beat by 50-60 points."They ended up being a Road Team after they played a few more games at the local High Schools"

Halfway through the season, the owner got his team into the local community college through a connection. A few more games, no rent, and the connection (who had coached there for 20 years) got fired for promising the arena at the school for free. " that was the Toledo Ice team"

I believe the Aviators ended up making the playoffs as the #24 seed with like a 2-18 record, and got bombed. They never got "suspended" for failing to meet league requirements, but Arkansas and Rochester did. Go figure." as bad as the team was, it was the owners son and a handful of his rec league pals, they did make each game on their schedule, road games and YES they were given a 24 seed in the playoffs."

[TheHulk]

That I am doing right now....thank God for E*Trade!!! (not a paid endorsement)

[panchess]

..as ABA teams theoretically play 18 home and 18 road games, how does playing 16 games constitute playing a full road schedule. They played a few home games too, before getting the boot from their arena.

I did confuse the Ice and the Aviators on the community college scam. It's hard to keep them straight without a scorecard.

Montreal beat them in the playoffs, 140-83. Pittsburgh got 163-116 and 170-97 wins against them.

The Aviators put out this line in an October 2005 press release:

This writer was never very good at predicting the future. But this is one prediction that I will make in a heartbeat. In Canton, Massillon and Cleveland, there are going to be a few fathers, and for that matter, a few mothers, who are going to gently and tenderly place next to their newborn son (or daughter) not only a football, but an Ohio Aviator red, white and blue ABA basketball. They're going to put it there, not because they want their children to be basketball players (though some will), but because of what it stands for. Character, compassion, charity.

Sure.

Unlike teams like Arkansas, who actually played all their games and got "suspended" by Joe once they left the league, the Aviators remain as a potential "expansion" team for 2007 on the ABA web site.

The owner said several times the team would "sell out every night" at the 4,000 seat Canton Memorial Civic Center. The reality was they couldn't sell out a phone booth.

[LASportsFan]

Cglue, have you ever seen this mystical business plan that Joe touts as the best in the business? Since you're an owner, he must have provided you with a copy and given you training on how to use it.

[TheStandard]

Larry aka Cglue never got a copy its in another post. he was like oh ok great info and then he was told dude that is the socalled model.

Joe talks about the model many times. and my conversations with him have all been the same but i ask him about a copy of the model and he comes back with market reservation in which three times it was 10 then 20 then 50k. 50 k was asked basically after the hawaii megaforce fiasco maybe he was really thinking that it would cost that much to have a real financially secure team??? no. just more money to him. basically after seeing that i had to pay all transportation costs im like helll no.

[LASportsFan]

Larry aka Cglue never got a copy its in another post. he was like oh ok great info and then he was told dude that is the socalled model.

Joe talks about the model many times. and my conversations with him have all been the same but i ask him about a copy of the model and he comes back with market reservation in which three times it was 10 then 20 then 50k. 50 k was asked basically after the hawaii megaforce fiasco maybe he was really thinking that it would cost that much to have a real financially secure team??? no. just more money to him. basically after seeing that i had to pay all transportation costs im like helll no.

The story that Joe told my friend was that he doesn't give out the business model to anyone because two other leagues got their fingers on it in the past and are now using it themselves!!! He said that even though these owners that have since jumped to other leagues signed non-disclosure agreements, the legal costs would be too great to try to fight it in court.

Who honestly believes that BS ?

[LASportsFan]

Some of the current ABA owners had an owners-only conference call today. It should be interesting to find out what occurs at the league meeting next week.

My guesses as to what was discussed today:

1) If this group of owners intends on staying in the ABA, I believe they discussed formulating a strategy to oust Joe Newman once and for all.

2) If they don't plan on staying, they obviously discussed either moving to the PBL or an existing league (CBA or D-League) and when to make such an announcement. Perhaps they'd tell Joe in person at the league meeting next week?

[tbayz1]

someone else said that the owners were having a conference also in another thread

anyone know how many owners were involved? if so any names/teams?

anyone know what they were discussing?

[besl]

someone else said that the owners were having a conference also in another thread

anyone know how many owners were involved? if so any names/teams?

anyone know what they were discussing?

There were 14 teams that identified themselves on the call. Of course there were probably more listening in that didn't. The teams that identified themselves were: Texas, Atlanta, Strong Island, Halifax, Rio Grande Valley, Miami, Palm Beach, St. Louis, Orange County, Buffalo, Redding PA, Minnesota, Syracuse, & Michigan.

The call was led by Dan Imperato, the weird guy who is trying to run for president as an independent.

There wasn't much discussed except how much money teams lost, and how to best confront Joe and fix the problems. But Imperato insisted on talking over everyone so there wasn't a whole lot of dialogue. Eventually one caller began criticizing Joe, which led to someone else holding down the buttons on their phone to try and drown them out (maybe Joe was listening in?). The conference call pretty much ended at that point. Overall very unproductive.

[preeths]

I heard the same reports, and it also struck me as unproductive at first. But maybe it's a start. I don't see Imperato as the man the owners rally behind, but at least some of these men and women are talking with each other. Nearly everyone is losing a lot of money, and now they all know that. They may have suspected it before, but some were probably too embarrassed to ask for help.

With all due respect for the viewpoint of the Buffalo owner, the ABA isn't NASCAR 20 years ago, and minor league basketball doesn't have the same potential NASCAR did. Buying stock to be heard as stockholders does no good, because two people and their allies control more than 50 percent of the league. The ABA is nothing but a pile of papers without the owners, and it is time the league management realized it.

I believe a stable minor league circuit that plays all scheduled games is possible. I'll even allow that it can be fan-friendly and affordable. Whether they own stock or not, every one of the owners has bought into the ABA and deserves to be heard. Now the really question is will the only man who has the power to do anything about the problems listen to them and implement their suggestions?

[tbayz1]

I heard the same reports, and it also struck me as unproductive at first. But maybe it's a start. I don't see Imperato as the man the owners rally behind, but at least some of these men and women are talking with each other. Nearly everyone is losing a lot of money, and now they all know that. They may have suspected it before, but some were probably too embarrassed to ask for help.

With all due respect for the viewpoint of the Buffalo owner, the ABA isn't NASCAR 20 years ago, and minor league basketball doesn't have the same potential NASCAR did. Buying stock to be heard as stockholders does no good, because two people and their allies control more than 50 percent of the league. The ABA is nothing but a pile of papers without the owners, and it is time the league management realized it.

I believe a stable minor league circuit that plays all scheduled games is possible. I'll even allow that it can be fan-friendly and affordable. Whether they own stock or not, every one of the owners has bought into the ABA and deserves to be heard. Now the really question is will the only man who has the power to do anything about the problems listen to them and implement their suggestions?


why was the owner of the Silverbacks mentioned, is that what he said, that you (preeths) stated above?

im jus wondering why u mentioned him