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for 1 percent of gross profits, HSN had not begun operations.
The amount of the license fees was contingent upon the success of
HSN and, thus, was quite uncertain. Televised home shopping was
a new business outside the Tampa Bay area. The shareholders of
HSC viewed HSN as a risky venture. Even Mr. Speer and Mr.
Paxson, while hopeful, were unsure whether the concept of home
shopping, which had just started to become successful in a local
market, would catch on nationwide. In fact, HSN performed poorly
during its first couple of months of operation. The ultimate
success of HSN was beyond the wildest expectations of Mr. Speer
and Mr. Paxson.
Both parties presented expert testimony as to the value of
the Local Software as of June 21, 1985, the date of the License
Agreement. While expert opinions can assist the Court in
evaluating a claim, we are not bound by the opinion of any expert
witness and may reach a decision based on our own analysis of all
the evidence in the record. Helvering v. National Grocery Co.,
304 U.S. 282, 295 (1938); Silverman v. Commissioner, 538 F.2d
927, 933 (2d Cir. 1976), affg. T.C. Memo. 1974-285.
Robert F. Reilly, petitioners’ expert,10 utilized several
approaches to valuing the Local Software. First, he attempted to
perform a market analysis but concluded that there were no
available “off-the-shelf” computer software packages that were
10Petitioners also presented the report of Lawrence H.
Putnam, Sr., as an expert rebuttal report.
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