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Northwestern University, and the director of the Senior PGA tour.
Dr. DeMattia testified that, prior to entering into the
sponsorship agreements, and on the advice of an attorney, he
talked to numerous amateur players in order to determine the
content of similar sponsorship agreements. Based on these
conversations, he took a draft sponsorship agreement to his
attorney Pat Ledwidge. Petitioners also claim that Dr. DeMattia
made forecasts and estimates of the activity's likely expenses
and revenues, to include entry fees and motel costs. Second,
petitioners cite Dr. DeMattia's record-keeping system as evidence
that he conducted the activity in a businesslike manner. Third,
petitioners contend that Dr. DeMattia took numerous actions to
ensure the eventual profitability of his investment, including
consultations with advisers regarding his son's performance.
Petitioners have not persuaded us that Dr. DeMattia
conducted the sponsorship activity in a businesslike manner.
First, the agreements fail to set any goals or financial
conditions that had to be met. The agreements fail to specify
any minimum number of tournament entries by Constant or place a
cap on Dr. DeMattia's potential liability for Constant's yearly
expenses. Second, we find Dr. DeMattia's investigation into the
potential profitability of the golf sponsorship to be lacking.
Among other things, Dr. DeMattia testified that he had not
calculated what Constant's earnings would have to be in order for
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