What began, as one observer put it, as a "marriage of convenience" now carries a pervasive strain of resentment and animosity. Abe Pollin and Arnold Heft, the partners in Capital Centre, have not spoken to each other for more than a year. A month-long, often acrimonious trial in which testimony concluded last Tuesday makes it even more likely the estrangement will continue.
During the trial, one of Pollin's attorneys said Heft had two motives in filing a civil suit against his partner: "unquenchable greed" and "an overwhelming compulsion of seeking out recognition." Further, the attorney said, "When one traces the relationship . . . Abe has played the benefactor to Arnold Heft at every turn . . . Arnold Heft has been an opportunist at every turn."
Heft's attorney wondered aloud of Pollin, "Does he even give any consideration that Mr. Heft even exists?" And Pollin, who repeatedly testified that he tried and failed for more than two years to sell the Washington Bullets and Washington Capitals, heard a Northern Virginia auto dealer allege on the stand in Prince George's Circuit Court that in March 1980, Pollin had agreed to sell him the hockey team for $5 million.
Pollin angrily denied agreeing to a sale of the team to Jacques Moore, a Cadillac dealer near Tysons Corner.
On May 21, the trial judge, Albert T. Blackwell Jr., will hear oral arguments. Attorneys for Heft, who owns 33 percent in Capital Centre as a limited partner, will argue they have proved the suit's allegations: that Pollin, by making changes in license agreements between the Centre and the Bullets and Capitals in June 1982, secretly and improperly diverted more than $860,000 from the profitable arena to the then financially struggling teams, which he also owns.
They will argue that as general partner in the arena, Pollin had a duty to inform Heft of the changes, and that Pollin also violated advisory clauses in two written agreements between the men. They will ask that the adjustments be rescinded and an accounting of their effects be made.
The opposition attorneys will contend that Pollin, one of the most powerful and influential sports figures in the country, acted "fairly and reasonably" in making the changes. They will argue that the license practices regarding complimentary tickets and box-office and Telscreen fees needed adjusting because they had, for many years, unfairly favored the Centre at the expense of the teams. They will say Heft's attorneys did not prove the suit's allegation that Pollin acted "willfully and maliciously."
Blackwell has several options. He can find for either party or else make a ruling that, in effect, gives something to each. But no matter what his decision is -- and observers say he could rule immediately or take several weeks, or even months -- two ironies will remain.
First, the source of the conflict was Capital Centre, by all accounts the favorite son born of the marriage of convenience. It was Heft, a real estate developer and former basketball referee, who secured the lease to the site in 1971 and needed a professional team to play in his projected arena. It was Pollin, a leading builder in the area, who needed a place for his Baltimore Bullets, the basketball team in which he and Heft had been partners from 1964 to 1968. The two formed a partnership in 1972 in which Pollin became general partner, responsible for the prospective Centre's financing and day-to-day operation.
While both teams' losses mounted in the late 1970s and into the 1980s, the arena became one of the most profitable in the country. Even before Capital Centre opened its doors on Dec. 2, 1973, testimony revealed, it became accepted policy that the No. 1 priority was the arena. In almost every dealing with the teams -- as well as with such outside interests as rock promoters -- Capital Centre asked for, and usually got, more than its fair share.
As Pollin testified, "I wanted to build an arena that I would be proud of for the rest of my life."
Second, no matter whom the ruling favors, Heft and Pollin -- two proud, sensitive men who grew up in the 1930s within blocks of each other in Northwest Washington -- still will be partners. Despite their estrangement, despite hundreds of thousands of dollars in lawyers' fees each will spend to settle this dispute, there is no indication either will relinquish his share in Capital Centre.
As of Dec. 31, 1984, it earned Pollin more than $9.7 million and Heft more than $4.9 million, according to documents entered during the trial. No one on either side is willing to predict what their business relationship will be after the decision, although it seems safe to say they won't start speaking to each other again any time soon.
"I think it's a shame that it has come down to this," said a former Capitals player who said he knows and likes both men. "Life's too short. I think it's a real tragedy."
With a backdrop of divided loyalties, sharp exchanges between witnesses and lawyers and bitter fights to include or exclude documents and testimony, the finances of Capital Centre and the teams were matter-of-factly revealed. Pollin and his associates traditionally have been reluctant to reveal almost any financial information regarding the three entities, other than to concede the Capitals were losing a lot of money. As the trial developed, however, one financial document after another was introduced by Pollin's attorneys.
There was a reason, of course. They argued that had the Capitals been folded, moved or sold -- as Pollin suggested throughout the Save the Caps campaign of the summer of 1982 -- Capital Centre ultimately would have suffered, along with Heft's interest in it. The adjustments in license practices, as well as a reduction in the Capitals' rent later that year, were needed both to keep the team and preserve Capital Centre, the attorneys argued.
Coupled with testimony from Capital Centre employes, the documents detailed such information as advertising contracts, sky suite-leasing arrangements, loans to rock promoters and the financial status of the arena and teams. Some of the information that came out included:
* For the 1984-85 season, Capital Centre is receiving $1.1 million in arena advertising (Telscreen and other scoreboards, as well as numerous other displays within the building). Coca-Cola is the largest single advertiser, paying Capital Centre more than $150,000. "We have become perhaps the most profitable arena in the country regarding income generated by advertising," testified Jerry Sachs, president of Capital Centre and a close friend of Pollin.
* During this time, the arena is receiving about the same amount from special seating (sky suites, loges and portal boxes).
* Capital Centre averages about $6,000 per game for providing television feeds to cable TV and out-of-town stations through its Telscreen facilities. That means about $600,000 a year, it was testified.
* Capital Centre routinely advances hundreds of thousands of dollars to its major rock-concert promoter, Cellar Door Productions, in order to secure top acts. The Centre's comptroller said this was done because although a performer such as Neil Diamond might demand $150,000 up front, the arenamight realize a profit of more than $100,000.
* The Bullets and Capitals each are guaranteed $1 million this year from Home Team Sports, the regional cable-television operation. It came out during the trial that HTS, exercising a window clause in its contract, wants to renegotiate with Capital Centre.
* Perhaps most significant, bottom-line figures were revealed for Capital Centre and the teams.
As of June 30, 1984, it was shown, the Centre had realized a gross profit of $21.6 million. After amortization and depreciation, the arena's net profit was $8.6 million.
The Bullets, meanwhile, had lost money in nine of 12 years of operation despite winning the NBA championship in 1978 and gaining the finals the next season. By June 1984, Pollin's documents said, the team's total cash loss was slightly less than $4.1 million and he had lent the team more than $4.6 million.
The Capitals' losses, which had been estimated at $20 million, were substantially higher. In its 10 years of operation, Pollin's documents stated, the team had a cash loss of $22.8 million; with depreciation and amortization, the net loss was $27.7 million.
Not surprisingly, each side took a different view of the figures. Witnesses for Pollin, and his attorneys, said they showed his considerable sacrifice and commitment to the arena, the teams, and the Washington area.
"He broke his health and nearly bankrupted himself while Heft was amassing a fortune," said John Miles, an attorney for Pollin.
Pollin emotionally described his thoughts and actions during the Save the Caps campaign of the summer of 1982. He decided to make an effort to save the hockey team despite its mounting losses, he testified, "because I am not a quitter. I have never quit in my life . . . I had created something that I thought was very special to the Washington area."
Stephen Grafman, a former member of the U.S. Attorney's office in the District who was Heft's chief attorney, repeatedly asked Pollin and others at Capital Centre about its license arrangements regarding the teams. If everyone knew at least by June 1980 that the arrangements were unfair to the Bullets and Capitals, he asked, why weren't they changed until two years later?
Grafman argued they were made solely to get the teams' deficits of more than 90 days under $400,000, as specified by the arena's bond agreement. Pollin and others at Capital Centre said the changes were not made for two years because Pollin was trying to sell one or both teams and protect the arena at the same time. When the adjustments were made, they said, it was because no buyers were on the horizon and they implemented the changes without considering their financial impact.
Grafman also asked if, indeed, the unfair license practices were maintained while trying to sell the teams, they might have deterred a potential buyer. Sachs conceded that the terms so favorable to the Centre "didn't enhance" sale possibilities, and Pollin testified that one possible buyer of the Bullets balked at the terms in 1981.
On the key element of notification of Heft, there was conflicting testimony. Heft, a blunt, plain-spoken man, testified in a deposition that he spoke to Pollin on June 8, 1982, on "accounting matters," then said in court he could not recall the substance of the discussion. He also said that "never in 1982" did Pollin talk to him about the adjustments.
When asked in a March 13 deposition if he had consulted Heft, Pollin said, "I was working 18 to 20 hours a day" on the Save the Caps campaign, and "frankly, it slipped my mind." But on April 29, the next-to-last day of the court sessions, he said hearing Heft's testimony on the stand had jogged his memory, and that he remembered a June 9, 1982 meeting between the two.
Pollin said, "I can't swear to it on the stand, but I think there's a good chance I did tell him" then of the adjustments because "there were no other accounting matters taking place at this time." As Grafman angrily challenged his assertations, Pollin conceded, "I will not be dishonest and tell you I told him when I'm not sure I did."
Without looking at Heft, Pollin also said of consulting his partner, "If I didn't, I should have and I apologize."
By that point, so deep into the trial, such a sentiment was too late. Heft and Pollin had failed to reach a settlement before the suit was filed; Judge Blackwell's attempt in the second week of the trial to bring the sides together for another attempt at settlement likewise failed because, one source said, "They were just too far apart."
So the case ended its run late last Tuesday afternoon in Room 202 of the Prince George's County Courthouse. The attorneys shook hands with each other and chatted with clients and others who had been a part of the trial from the beginning. Burton Schwalb, an attorney for Pollin whose trademark was persistent but respectful questioning, came over to Heft and offered his hand.
Heft took it reluctantly. "If you think the way John Miles does . . . that 'fat, dumb and happy' stuff . . ." Heft's eyes betrayed hurt and he did not finish.
Schwalb, uncomfortable, said nothing. There was nothing else to say.