A Harris County jury on Thursday will begin the job of determining whether Jim Crane was duped into paying too much to buy the Houston Astros from the prior owner in 2011.
Jury selection began this week, and opening statements are expected to come Thursday morning in the trial, which is scheduled to last three weeks. Houston Baseball Partners, the entity created to buy the Astros, sued former owner Drayton McLane, his company McLane Champions and media giant Comcast in 2013, claiming the defendants’ lies and deceptions caused them to pay far too much when they bought the Major League Baseball team and a stake in Houston Regional Sports Network in for $615 million.
As of March, Forbes valued the team that’s been one of baseball’s best for a decade at $2.8 billion. Harris County District Judge Sonya L. Aston will preside over the case, which was delayed for years because of bankruptcy proceedings and numerous appeals.
Crane is seeking damages for the difference between what he paid for the network stake, $332 million, and its actual value, which he alleges is zero. He argues HBP was misled about what affiliate rates the Houston Regional Sports Network would be able to charge distributors of its programming.
Jason McManis, a Houston trial lawyer at Ahmad, Zavitsanos & Mensing who has followed the case but is not involved, said one element he’s interested in seeing play out at trial is how the damages argument will be presented to the jury.
“We’re talking about Monopoly money for jurors,” he said, referencing the huge amount in dispute in this case. “And over a three-week trial, I think it’s really going to be interesting to see if the plaintiffs can make the jury care in a way to want to hand over hundreds of millions of dollars. There’s been a trend in recent years of so-called ‘nuclear verdicts’ but those are almost all personal injury cases, and there’s a reason why jurors get motivated to help someone who has been wronged.”
“And here we’ve got one rich guy fighting another rich guy. Do they end up with 10 people in the jury who care about that? That’s going to be tough.”
McManis also speculated that the popularity of the Astros in Houston could make jury selection a challenging proposition.
“Sports are one of those things where people have a lot of irrational and unmovable opinions,” he said.
What cleared the way for this trial — which may be the first centered on the sale or purchase of a professional sports team — to take place is a June 2023 ruling from a divided Texas Supreme Court. In a 7-2 ruling, the court determined the Texas Citizens Participation Act, a state law intended to bring an early end to baseless lawsuits that seek to chill free speech, did not apply to the case, as McLane argued.
McLane argued that the purchase and sale of the team and the regional sports network was clearly “a matter of public concern” for Astros fans everywhere, which would bring the suit under the TCPA’s protections.
But the majority of the state’s high court justices saw it differently, characterizing the dispute as one based on negotiations subject to a nondisclosure agreement between private parties in a private business transaction “that later generated public interest.”
“In sum, the alleged misrepresentations were made in connection with negotiations to close the purchase and sale of the Astros and its interest in the network at a favorable price,” the court held. “And the result is a garden-variety fraud and breach-of-contract dispute between a private buyer and a private seller regarding statements made during a private negotiation that have nothing to do with ‘the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law.’
“That the subject of the purchase agreement – a professional sports team – is generally of public interest does not render the specific communications at issue relevant to a public audience when they were made. As a result, we hold that the communications were not ‘made in connection with a matter of public concern’ under the TCPA.”
The Texas Supreme Court’s ruling affirmed that a Harris County trial judge in January 2020 and the Fourteenth Court of Appeals in June 2021 made the right call in declining to dismiss the case.
In December 2022, the Texas Supreme Court granted a motion that let NBC Universal and Comcast out of the lawsuit, leaving only the claims involving the current and former owners of the team to be decided.
According to court documents, the Houston Regional Sports Network was formed in 2003 by the Houston Astros and the Houston Rockets to broadcast games in the greater Houston area. Comcast bought a $157.5 million interest in the network in 2010 and signed an agreement to distribute the programming to its other affiliates for a fee.
The idea was, according to court documents, that HRSN would sign similar agreements with other distributors for the same rates.
Crane and his Houston Baseball Partners purchased the Astros and its stake in HRSN in November 2011. Not long after, the network became insolvent.
Litigation ensued.
Comcast filed an involuntary bankruptcy petition against HRSN in September 2013, and HBP sued the team’s former owner, McLane, as well as Comcast and others involved in the sale, alleging fraud, civil conspiracy and breach of contract.
HBP alleged that Comcast and McLane had lied in two specific ways: when Comcast vouched that the affiliate rates HRSN intended to charge were “reasonable” and “achievable” and when it was told that it was Comcast — not the Astros — that had come up with the affiliate rate figure.
The lawsuit languished for years after Comcast removed it to federal court, where the bankruptcy was pending, and it was subsequently abated for five years. After it was remanded to Harris County District Court in 2019, McLane and Comcast asked for dismissal under the TCPA.
When the Texas Supreme Court heard oral arguments in this dispute, Justice Jimmy Blacklock, who is now the court’s chief justice, asked whether Crane was harmed by the deal to buy the team, and whether he had any damages as a result, noting the value of his investment has climbed nearly 600 percent since he purchased the Astros more than a decade ago.
Houston Baseball Partners is represented by Thomas M. Farrell and Charles B. Hampton of McGuireWoods and Ronald G. Franklin of Houston.
McLane Champions is represented by Paul J. Dobrowski, Shane L. Kotlarsky and Jared A. McHazlett of Dobrowski Stafford & Pierce and Harris J. Huguenard of Jackson Walker. McLane is represented by David J. Beck, Geoff Gannaway and Cassie Maneen of Beck Redden.
The case is Houston Baseball Partners v. McLane Champions et al., case number 2013-70769, in the 80th District Court of Harris County.