Abe Pollin did not request money from his partners in the Washington Capitals to assist the financially struggling hockey team in June 1982 because he was "embarrassed, concerned and terribly reluctant to ask anyone for help," Jerry Sachs, president of Capital Centre, said yesterday.
Testifying in Prince George's County Circuit Court in a civil suit filed against Pollin, general partner of the Centre and owner of the Capitals and Washington Bullets basketball team, Sachs said Pollin did not exercise the option of making a cash call to his partners at a time when the Capitals were losing about $3 million a year. Pollin said in late 1983 that he had lost $27 million in 10 years on the teams, and that the Centre had turned a $2.3 million profit in 1982; in evidence introduced last week, it was revealed he lent the team more than $3 million in fiscal year 1982.
Sachs also said that Arnold Heft, a limited partner in Capital Centre who is suing Pollin, was not approached for financial help, even though he had an investment in the Capitals of $700,000. "Arnold Heft knew what Abe Pollin was going through," Sachs said in sometimes emotional testimony. "As Abe suffered, he (Heft) benefited . . . but he didn't even give an expression of concern."
Under occasionally heated cross-examination by Stephen Grafman, one of Heft's attorneys, Sachs maintained, "I don't think Mr. Heft lifted a finger during the Save the Caps campaign (in 1982) except to buy a couple of season tickets."
The suit alleges that Pollin, without Heft's knowledge, made in late June 1982 several adjustments in licensing agreements between the Centre and the teams that, in effect, returned more than $860,000. These changes included charging the arena for formerly complimentary tickets and giving retroactive payments to the teams for such arrangements as Telscreen user fees.
Heft asks that the adjustments be rescinded and that a full accounting of their effects be made.
Sachs, who also is executive vice president of the Bullets and a salaried but untitled employe of the Capitals, testified in the sixth day of the trial that Pollin had let some associates become partners as a way of "giving them a chance to invest in a very profitable entity."
But, Sachs said, "It turned 180 degrees the other way . . . What was supposed to be a sensational investment turned absolutely sour. That may be one reason he didn't turn to his partners."
Instead, Pollin, Sachs and David Osnos, legal counsel to the teams and to Capital Centre as well as a limited partner in the Capitals, negotiated several adjustments in licensing agreements between Washington National Arena Ltd., which operates the arena, and the teams.
Sachs said the adjustments were made because certain practices had developed that were not covered in the licensing agreements. These practices "left the teams unfairly penalized," he testified.
Sachs testified Monday that documents called "working papers" had been drawn up in 1980 and 1981 to establish the practices, in order to present them to any prospective buyers of the teams. He testified then that Pollin actively was attempting to sell one or both teams, and that the working papers were attempts to ensure that the practices, which he admitted favored WNA, would continue under new ownership.
Yesterday, he said a third working paper had been drawn up in May 1982 that applied to the Capitals. Sachs testified that when Osnos returned from a National Hockey League meeting late that month and said negotiations with a prospective buyer for the team had ended, the Centre's focus changed to helping stave off the teams' losses.
Accordingly, Sachs said, a meeting was held to discuss ways to stem the losses, which led to Pollin making the adjustments.
Sachs was asked how the decision was made to make the adjustments retroactive to 1980. "We came up with a general concept of what would be fair for both sides," Sachs said.
Grafman, noting the teams at that point owed more than $1 million, above the $400,000 limit established in WNA's bond agreement, asked if their finances played any part in their decision to make the adjustments.
"These were two teams in great distress," Sachs acknowledged.
"The Capitals were in great distress since the mid '70s," Grafman said. "Why wasn't any action taken then?"
"We should have, but didn't," Sachs said.