Billy Corgan Suing Dixie Carter: The Battle for Ownership of TNA

[It's Damn Real!]

Jeff Jarrett also nearly drove NWA-TNA into the ground before Carter stepped in and saved him.

It's not easy to start a wrestling company and succeed in today's market. I'm not saying he can't or won't start new, but I think he also had visions of actually saving TNA. That was part of the draw, IMO.

 

[stingray11214]

What Corgan should have done is buy TNA's debts. Then, force Dixie to pay up, or give up the company and walk away/ If she played games, Corgan could have had TNA's offices padlocked under a court injunction. Get Dixie and her attorneys into a room, and tell her how the real world operated. Corgan would have owned TNA right now if he had taken it prior to BFG. Think about it: TNA's offices padlocked on the Friday before BFG. Corgan could have basically told Dixie "it is either me or the Bankruptcy judge, and it will be me afterwards, with you still owing me millions."

 

[therockiswwf]

What Corgan should have done is buy TNA's debts. Then, force Dixie to pay up, or give up the company and walk away/ If she played games, Corgan could have had TNA's offices padlocked under a court injunction. Get Dixie and her attorneys into a room, and tell her how the real world operated. Corgan would have owned TNA right now if he had taken it prior to BFG. Think about it: TNA's offices padlocked on the Friday before BFG. Corgan could have basically told Dixie "it is either me or the Bankruptcy judge, and it will be me afterwards, with you still owing me millions."

The simple flaw is Corgan would have to pay millions of dollars. Millions he is not promised to make back.

 

[Tastycles]

They say the only thing that will survive a nuclear holocaust is cockroaches. I'm fairly confident TNA would survive too. It doesn't matter how much of a monumental cluster fuck everything is, the wheel keeps on turning. This is the latest of what should be fatal blows to TNA, but it'll keep going with an ever dwindling audience on the Polish State News channel or wherever it can get a deal, and some guy who was a minor figure in WWE in the 90s will be front and centre. Gangrel or someone.

 

[stingray11214]

The simple flaw is Corgan would have to pay millions of dollars. Millions he is not promised to make back.

What do you think he is doing now? He is shelling out cash, and he does not even own the thing! Buy the debt, and then give Dixie a simple choice: Walk away clean or go to Bankruptcy Court, get it taken from you, and then have debt collectors on your ass the rest of your life. Fairly simple choice for the intelligent.

 

[rmp0012002]

I'm sure Corgan would have gone about it differently if he had known about the tax issue. He couldn't satisfy a tax lien that he didn't know about. I don't know how much the liens are in relation to the value of the company so I don't know if works like a sheriffs sale on a property where the person that paid the lien took ownership. How that is handled on something containing contracts and intellectual property rather than physical property I'm not familiar with.

 

[johnbragg]

What do you think he is doing now? He is shelling out cash, and he does not even own the thing! Buy the debt, and then give Dixie a simple choice: Walk away clean or go to Bankruptcy Court, get it taken from you, and then have debt collectors on your ass the rest of your life. Fairly simple choice for the intelligent.

I suspect that Billy Corgan, Aroluxe MArketing and the Canadian Fight TV group are all trying to work that plan; and that Dixie Carter/TNA have probably borrowed money from all three while signaling that the loan could turn into a purchase of the company.

For all the criticism of Dixie CArter as a "money mark", she ain't the only one.

 

[TDFG]

The simple flaw is Corgan would have to pay millions of dollars. Millions he is not promised to make back.

Didn't Dixie Carter want $4million for her stake in the company?

If so, if Corgan (& Aroluxe) offers to buy the $3.2-3.5m debt the company is in then they could use that bargaining chip to force Dixie Carter's hand and get rid of her once and for all.

Once lawyers get involved then things get extra messy, this sounds like it's going to run for a while.

 

[johnbragg]

Didn't Dixie Carter want $4million for her stake in the company?

That number is an offhand guess by (I think) Dave Meltzer.
The New York Post (I think) valued TNA at $40M, based on
1. WWE's price/revenue ratio (2:1) and
2. TNA's revenue of $20M

I have no idea how reliable or current the $20M number for TNA's revenue is. And it's a big stretch to value TNA and WWE at the same price/revenue ratio--they're as different as Walmart and the main street mom-n-pop grocery store.

Meltzer made what seemed to me an offhand comment "$40M? Knock a zero off that."

Which is where the $4M number came from.

EDIT: Oh, and there's no reason to believe that Corgan, Aroluxe and Canada's Fight Network (which owns some stake in the TNA library apparently) are any more cooperative than Corgan and Carter.

 

[Rayne]

So, this is bad.

Tennessee filed their lien on September 8th; Billy Corgan sued Dixie Carter sometime in late September to early October. It is not any stretch of the imagination to say that given the timing and the fact that the matter is under seal, that the subject of the lawsuit is misrepresentation of TNA's financial state to a potential investor. (Failing to tell someone that you haven't paid business taxes in a few years is, well, a crime if you do it so that they invest money in your company.) Both Corgan and Carter and all the lawyers would want this case under seal, as the matter being made public would cause pretty serious damage to TNA.

Because good luck selling your company to anyone when one of your investors is suing you for misrepresentation; and good luck finding other investors in that situation if you don't have the money to do it all yourself. If you're doing your due diligence on a potential purchase (HI, BILLY!), you aren't in a position to assume that a very likely scenario just couldn't be true based on a hunch.

So TNA's in debt to the State enough to make Tennessee decide they should come collect, their production partners are in court to try to resolve $3.4 million in claims, and Billy Corgan doesn't have enough money of his own to purchase TNA, with the prospect of selling a real stinker to anyone who would co-invest, even before you start thinking about potential financial fraud scenarios.

The only reason you would even keep TNA alive right now as a potential purchaser is that they have a reputation as a thing that has existed on television. That is the only reason I'm still not breaking out the 'TNA will die' line at this point; if you really, really, really, really want to run a professional wrestling promotion that more than a few hundred people watch, you can't start from scratch unless you feel like waiting a decade. Billy Corgan may have that kind of insane passion. It's extremely unlikely, but possible, that other 'investors' might be willing to make what would be considered a terrible financial investment for the sake of a passion for professional wrestling. These are prayer scenarios, but they exist as possibilities.

And during all of this, TNA still has to find a way to pay for tapings, the bare minimum to exist as a televised professional wrestling company. AND they have about eight-ten months before PoPTV will have to decide to keep going with TNA or to start searching for backup programming.

There's no happy news here. Unless you're a Smashing Pumpkins fan, in that case all this could mean Billy needs to turn over some fast cash and he finishes the Tiergarten by Kalideyscope project.

 

[johnbragg]

So, this is bad.

Yes. Quibbles to follow.

So TNA's in debt to the State enough to make Tennessee decide they should come collect, their production partners are in court to try to resolve $3.4 million in claims, and Billy Corgan doesn't have enough money of his own to purchase TNA,

This may or may not be true. We haven't heard anything about Corgan having a cash-flow or ready-cash problem, just that he wasn't going to finance yet another round of tapings/BFG without resolving the ownership situation. Nobody doubts that Vince McMahon/WWE have enough cash to buy TNA, but if Dixie Carter isn't willing then there's no sale. (Setting aside a forced sale in bankruptcy court.)

My hunch is that Dixie Carter has been stringing along all three partners--Corgan, Aroluxe and the Fight Network--with the same/similar "put up the cash to cover these tapings/Slammiversary/BFG as a down payment on maybe buying control of TNA" wink-and-a-nod lure.

Not that that's any better, or that it adds any time to TNA's clock.

The only reason you would even keep TNA alive right now as a potential purchaser is that they have a reputation as a thing that has existed on television.

And TV deals for US basic cable, and deals for UK and India TV that apparently bring in significant money. At least for now. The Challenge TV deal started as a 2-year deal in 2012, ran through 2013, then was a "multi-year deal" starting in 2014. It's been three years, 2014-15-16, so who knows how long the "multi-year deal" runs. The 2016 UK tour did a lot less business than 2015, and there's nothing scheduled for 2017. And according to some dude on the internet I read at some point, the Sony Six India TV deal includes a TNA tour of India that was supposed to happen in 2015, hasn't happen and isn't scheduled.

But the other reason to keep TNA alive right now is that, worthless as it is as an operating company, it's even more worthless if you force a liquidation. We thought that liquidation would mean selling the tape library to WWE, but apparently Canada's Fight NEtwork has gotten their hands on it.

The State of Tennessee might shut them down anyway, seizing and selling off the warehouse full of Best of Raven DVDs and Aces and Eights t-shirts to the cast of Storage Wars, just to make an example of what happens if you don't pay taxes.

And during all of this, TNA still has to find a way to pay for tapings, the bare minimum to exist as a televised professional wrestling company. AND they have about eight-ten months before PoPTV will have to decide to keep going with TNA or to start searching for backup programming.

That's one of the two biggest immediate dangers to TNA. Who exactly is going to put up the money for Tag Team Apocalypto and the next round of tapings, when there's almost no chance that money gets repaid.

The other immediate threat is that the legal wrangling between Carter, Corgan, ARoluxe and the Fight Network means that nobody is authorized to borrow money on TNA's behalf, and there are no more tapings.

And I suppose you could count Challenge or Sony Six pulling the plug as an immediate danger.

 

[It's Damn Real!]

Court documents in Billy Corgan's lawsuit against TNA and others were unsealed today. One such document, a temporary restraining order against the defendants (TNA, TNA's parent company Impact Ventures LLC, Dixie Carter, her husband Serg Salinas, and TNA Chief Financial Officer Dean Broadhead), revealed that Corgan claims that Impact Ventures is "insolvent."

In part, the order provides that Corgan "is likely to prevail on the merits of its claims because Impact Ventures LLC is insolvent, and, as a result, plaintiff is entitled to exercise controlling voting rights in the company."
Also, the order dictates that TNA and Impact Ventures are prohibited from taking any action without Corgan's consent. Essentially, this means that TNA cannot enter into any new business deals without Corgan's approval.

Additionally, neither side of the litigation may sell TNA or its tape library until ordered by the Court. This development may put TNA in a difficult position; however, it also prevents Corgan from selling his claim to TNA to a third party.

http://www.wrestlinginc.com/wi/news...says-tna-is-insolvent-corgan-to-approval-new/

--

Can someone who actually speaks legalese explain this to me?

 

[Weems2k]

http://www.wrestlinginc.com/wi/news...says-tna-is-insolvent-corgan-to-approval-new/

--

Can someone who actually speaks legalese explain this to me?

From what I'm gathering from it. It would seem that TNA ala Dixie totally screwed Corgan out some big cash. It sounds like TNA is broke, so the courts put every operational decision in Billy's hands? The restraining order possibly bans Dixie from anything TNA related? I'm no lawyer, so I'm just going by the article, and trying to put 2 and 2 together.

I think either way, this isn't looking good at all for Dixie, and even further damages her already bad rep.

 

[Rayne]

Short, short version, based on available details - Corgan is claiming that the Carters are so incompetent that allowing them to continue exercising ownership control would cause him material damage. He is also claiming that since Impact Ventures is broke, the Carters will be unable to exercise functional control over the company, meaning their voting share in the company would be meaningless- and Corgan should be permitted to execute his minority share as a controlling share.

Short, short, short version - The argument of whether Dixie Carter is a shitty businesswoman has gone from message boards to the court.

 

[Starkist]

Makes sense now. So, Dixie is finally being proven right that she is an idiot.

Seems that Corgan now has control over business deals according to the front page.

 

[ShinChan]

Every day is just increasing the already big mess created in TNA, thanks to Miss Dixie.

What I hope is that TNA should survive. Whether as TNA or as any other new promotion but It surely needs to survive as it has until now.

This promotion's survival is good for everyone involved. Be it fans or TNA employees or even WWE itself.

Expecting this mess to be cleared in this year itself and then a new beginning in the new year i.e 2017.

 

[Rayne]

I certainly wouldn't expect this mess to be cleaned up in the next two months, let alone two years. We're now moving at government speed, not storyline speed.

There doesn't appear to be a path forward where Dixie Carter stays on as a controlling owner and TNA continues to exist; she doesn't have the money to operate the company. (We are emphatically done with the 'but magic Panda Energy money' posts, right?) The solution professional wrestling fans are hoping for is that as soon as possible, Dixie folds up her hands, takes an existing buyout deal, and the remaining parties who control parts of TNA are able to make a deal resulting in one group having control over the parts of TNA that allow them to produce a television show.

Unfortunately, Dixie Carter seems to be willing to let the value of her company decline indefinitely while she waits for a better offer- metaphorically speaking, "give me my money or I'll kill us all."

Right now, it appears that as a result of TNA's need for cash for operating expenses, several different parties have control over various parts of TNA, and TNA owes money to several other parties. This is a knot that won't get untangled quickly unless someone comes by with a very expensive cleaver.

 

[Starkist]

So what does or what can or what should TNA do to get out of this mess?

 

[Rayne]

Pray?

From appearances, Dixie Carter is either holding out for the best deal she can get (with the sale value of her company declining as she waits), or she wants a deal that lets her remain as controlling owner, which just isn't on the table.

You're hoping that a judge approves Corgan's injunction while the court case is resolved, which while we don't have enough information to speculate on that likelihood, isn't a given in any circumstance. Absent that, I guess you're hoping Dixie Carter stops breathing in her sleep.

 

[Alex]

Slightly unrelated note how can Dixie's parents be (seemingly) good at management and she's shitter than my dead cat?

Corgan's idea of rebranding seems the best idea. TNA's value as a name is declining rapidly helped by the stupidity of management (Dixie)

Would Corgan have to wait for the legal stuff to be resolved before he could use the talent, production team for a new company?

 

[Rayne]

Hey, power's back on! Trying to keep up with this thread on a mobile phone has been maddening.

Slightly unrelated note how can Dixie's parents be (seemingly) good at management and she's shitter than my dead cat?

Corgan's idea of rebranding seems the best idea. TNA's value as a name is declining rapidly helped by the stupidity of management (Dixie)

Would Corgan have to wait for the legal stuff to be resolved before he could use the talent, production team for a new company?

Maybe?

TNA's assets appeared to be tied up six ways from Sunday as a result of them selling a little bit here and a little bit there to cover operating expenses. So the question as to who actually owns control over what in TNA is somewhat in the air right now, or who could file an objection over what- there's quite a lot that could happen right now, including stuff that could be happening currently which we're entirely unaware of. Does TNA have some kind of exclusivity deal with their production company where there's an agreement not to produce another professional wrestling program while working with TNA?

There's nothing stopping Billy Corgan from giving up and starting fresh, but he'd lose the built up capital that TNA actually does have; namely, the one last valuable thing they have that Dixie can't sell, their familiar existence as a company on television. You can't just 'start over'; GFW is either still looking for a TV deal or probably isn't even a thing anymore. If TNA goes under, there's going to be a void where the WWE is the only thing going on television, and ROH isn't positioned to exploit that programming gap- much like their was after WCW folded.

In starting a new company, Billy Corgan and Investors would have to put up a fairly substantial amount of capital- and Corgan himself only has a net worth of around $50 million (which includes a lot of non-liquid assets, like his record label). That'll have to happen with TNA anyways, but without being able to 'start out' on national television, it's even more questionable of an investment than getting started with TNA in the first place.

 

[johnbragg]

There's nothing stopping Billy Corgan from giving up and starting fresh, but he'd lose the built up capital that TNA actually does have; namely, the one last valuable thing they have that Dixie can't sell, their familiar existence as a company on television.

More exactly, TNA's TV contracts, especially with Sony Six India, Challenge TV (UK), Pop TV (US) and Fight NEtwork (Canada.). Those bring in guaranteed revenue that has allowed TNA to stumble along for as long as it has without Spike TV's money.

 

[Starkist]

This seems deeper than just worrying about TV tapings being put out.

 

[johnbragg]

So what does or what can or what should TNA do to get out of this mess?

That's a really difficult question. It's apparent from 2016 that the money from PopTV, SonySix, Challenge and Fight Network isn't enough to pay the bills. Most of the debts we're hearing about are from late 2015 to 2016--Aroluxe and Anthem, Audience Of 1, AmEx Travel. (Maybe the American Express Travel debt was built up over a longer period of time, maybe not.)

IT's hard to see how they reduce production and travel expenses any further--they're already taping six weeks of Impacts at a time in the Impact Zone. (Looking at the Lordsofpain.net results, they did 8 sets of tapings last year, including the Maximum Impact tapings from the UK.)

It's hard to imagine there's much payroll to cut--the expensive big names from WCW and WWE are retired, the TNA Originals who worked their way up to the main event are gone to WWE or NXT. I don't think letting EC3 and Lashley and Abyss and Eddie Edwards and DAvid Richards go and replacing them with 5 new indy guys would save a lot of money.

TNA has a long record of not being able to turn live gates, merchandise, DVD sales and PPV buys into revenue. I don't have any bright ideas on how to turn that around.

 

[It's Damn Real!]

So I ran this past a lawyer friend (who admittedly is in cyber security, not business law), but he says from the sound of it to him, Corgan is trying to legally take over TNA by forcing Carter and Fite Network out via the insolvent claim. He'd then, upon acquisition, sell the library to WWE (once Carter and Fite were no longer involved) and re-brand in 2017.

Makes sense to me. Sounds like a workaround route to what he reportedly wanted to do prior to Bound For Glory.