SANTA MONICA, CALIFORNIA; THURSDAY, FEBRUARY 6, 1997 8:54 AM.

DEPARTMENT NO. WEQ HON. HIROSHI FUJISAKI, JUDGE

APPEARANCES: (PER COVER PAGE)

(REGINA D. CHAVEZ, OFFICIAL REPORTER)

(The following proceedings were held in open court outside the presence of the jury.)

THE COURT: Okay. Morning.

ALL COUNSEL: Morning, Your Honor.

MR. BAKER: Yesterday Mr. Gelblum mentioned to the Court that in -- In dissolutions, future value of value of future earnings is considered goodwill. He made that representation on the record. That's absolutely contrary to the law, as our research indicated. And the cases on those Witkins on community property section 71 in re the marriage of Fortier F-O-R-T-I-E-R, 34 Cal.Ap.3d, 384 at 388, in re the marriage of Foster 42 Cal.Ap.3d 577, 584, in re the marriage of Almov (phonetic), in re the marriage of Slater, in re the marriage of Reeves, in re the marriage of King. All of those cases hold that future earnings cannot be included in any claim for goodwill. So we would renew our motion that the purported future earnings of Mr. Simpson, which we suspect is speculative, should not be an item that is introduced to this jury.

MR. GELBLUM: Obviously, I haven't seen the cases. We're not arguing the future earnings themselves. It's goodwill measured by the risks and opportunities to obtain future earnings. As Your Honor noted yesterday, it's a well established concept in the law, goodwill. It's usually done in corporate cases, but there are celebrity goodwill cases as well that I cited to the court yesterday, and it's a readily acknowledged and accepted element of net worth. We'll have testimony on that subject.

MR. BAKER: It's not readily acknowledged or accepted. There's not a single California case that allows them to do what they're purporting to do here today.

THE COURT: All right. I stand on my ruling. Okay. We have jury instructions. The defendant submitted four separate instructions based upon Adams versus Muricomi 54 Cal.Ap 3d, 105. The Court looked at the instructions and also reread the Adams case. The language that the defendant seeks to have the Court instruct the jury on, it appears to me that the language is intended by the Supreme Court to describe the function of the reviewing court in terms of how they would view the damages that were awarded to ascertain whether or not it exceeded or failed to meet the various requirements and prongs that the appellate court uses to ascertain whether or not the damages were excessive. They don't speak of these criteria as criteria that the jury must weigh the evidence against, but it is rather an appellate court's function to ascertain whether the amount arrived at by the jury fits or doesn't fit that criteria. The jury instruction, on that basis, I think, is one that ought not to be given to the jury and the court will not give it. The plaintiffs' requested instructions are simply BAJI 50.55 and 14.72.2. That is the criteria that the appellate courts have held sufficient for the jury, so the Court will give that.

MR. BAKER: Your Honor, 14.72.2, paragraph 3, is not the law.

THE COURT: Excuse me.

MR. BAKER: It is not the law.

THE COURT: Oh. Was there some case that said that's no longer the law?

MR. BAKER: If you read what they said in there, paragraph 3, they're talking about injury, harm or damage actually suffered by Ron. That is not the law. It's the actual damage suffered by plaintiffs.

MR. PETROCELLI: This is a survival action.

THE COURT: Can you bring me the other volume that I have on my desk. (Clerk complies.) (Court reviews book.)

THE COURT: In Neal versus Farmers's Insurance Exchange 21 Cal 3d, 910, which is extensively quoted in Adams versus Muricomi at 929, the Supreme Court is talking about the proportionality of the damages to the damages suffered. And in this instance, the damaged party, the plaintiff, was suing the insurance company on the death of Mrs. Neal, and stated, quote, "Although the amount of compensatory damages legally recoverable was limited to a relatively modest amount, (no more than $10,000), by the fortuitous occurrence of Mrs. Neal's death prior to trial, we believe that absent this limitation, plaintiff would have recovered a substantial amount of compensation for emotional distress suffered by Mrs. Neal as a consequence of the insurer's breach of duty in these circumstances which we cannot allow the apparent disproportion between the recoverable compensatory damages and the total award as reduced to lead us to nullify the award." So it appears to me that the appellate court is looking toward the jury in determining the reasonable relationship of the punitive damages to the injured. So I think paragraph 3 is still the law. If that is an objection, the objection is overruled. Okay. Bring the jury in, please.

(Jurors resume their respective seats.)

THE COURT: Ladies and gentlemen, now that you've determined the first portion of the case, it is that stage of the trial where the plaintiff is proceeding by way of offering evidence to support a contention that you should award punitive damages. The Court will invite the counsel to make opening statements, if they wish, at this time.

MR. PETROCELLI: Thank you, Your Honor.

OPENING STATEMENT

MR. PETROCELLI: Good morning, ladies and gentlemen.

JURORS: Good morning.

MR. PETROCELLI: Well, you have now finally determined responsibility for the deaths of Ron and Nicole. And you have concluded that the defendant, Orenthal Simpson, is the man who took their lives away on June 12, 1994. You have concluded and determined that he acted with malice and he acted with oppression when he savagely attacked and killed Ron and Nicole. He did so by clear and convincing evidence. You have concluded that Mr. Simpson must pay compensatory damages to compensate Ron's parents, my client Fred Goldman, and Ronald's mother, Sharon Rufo, for the loss Mr. Simpson caused them by taking away their son forever. Now, you have one final duty to perform before you are all discharged from your seats on this historic jury, before you can get on with the rest of your lives that you all put on hold to do your duty as jurors. And that, as the judge has just said, is to decide whether and how much Mr. Simpson should be punished by paying an award of punitive damages; punitive damages to the estate of Ronald Goldman, and the estate of Nicole Brown Simpson, for the benefit of their heirs. Ronald's heirs are, again, Mr. Goldman and Ronald's mother, Sharon Rufo. Nicole's heirs are her two small children; Sydney and Justin. We are, as you all have come to learn, in a civil courtroom, in a civil case. We are not dealing with the criminal prosecution.

MR. BAKER: I would object, Your Honor. This is not an indication of what he is attempting to prove in this case -- of the case, it's more of a final argument.

THE COURT: Overruled.

MR. PETROCELLI: We don't have the power or liberty to take away a person's freedom or liberty when he violates the rights of another person. All we can do in this courtroom -- all we can do is pay them money. That's all we can do. There's no power to do anything else. And, of course, here, we're not just talking about any violation with you, but we are talking about the most unconscionable violation.

MR. BAKER: I object again, Your Honor, this is argument. This is not opening remarks.

THE COURT: That objection is sustained.

MR. PETROCELLI: We're talking about whether Mr. Simpson should pay and how much he should pay for taking the life -- taking the lives of two people. Now, under California law, ladies and gentlemen, when we talk about punitive damages, whether they should be awarded and how much, we are required to give you information about the defendant's financial condition. And the reason is simple: It takes a lot less to punish a poor man than it does a rich man. The law says we have to know something about the defendant's financial condition to determine the appropriate measurement of financial punishment. Do we know everything and can we know everything? We will not be able to tell you that in any kind of detail. Whatever we were able to get from the defendant we will present to you to try to give you some idea, some picture of this man's worth and his wealth, so that you can decide what is appropriate by way of punishment. Why do we have something called punitive damages; is it just to punish? No, it's also to make an example; make sure something like this never happens again. That is something that you will have to take into account after you hear some of this testimony. I will then come back, talk to you again, and discuss with you some of the evidence that we heard, and talk to you about why I believe in this case severe punitive damages are necessary to punish Mr. Simpson for what he did on June 12. Now, Mr. Gelblum is going to present the witnesses. We have two witnesses. And then Mr. Baker may present some witnesses. We will present evidence that Mr. Simpson has a lot of money, in the neighborhood of many millions of dollars. Mr. Simpson will present some witnesses to say that he is broke. And you will have to determine who is telling the truth. Thank you.

OPENING STATEMENT

MR. KELLY: Morning, ladies and gentlemen.

JURORS: Morning.

MR. KELLY: Thank you. This is going to be your one and only opportunity to act on behalf of Nicole's estate, for the benefit of her two small children, and provide some measure of punishment and deterrence to the man who murdered their mother. The one thing I'm going to urge you people to do is to not let Mr. Simpson hide behind these children. You've heard the testimony.

MR. BAKER: Your Honor, I'm going to object. This is not proper.

THE COURT: Sustained.

MR. KELLY: When I stand before you later on, and you've heard all the testimony at this phase in the trial, I'll ask you to act in such a manner as to ensure that no man, especially a man gifted with fame and fortune, will ever act with such malice, such oppression, and such a reckless disregard for human life, as Mr. Simpson did on June 12, 1994. And it's going to be that measure of punishment that you make a determination of, it will be the only protection these children have as they face the rest of their lives. Thank you.

THE COURT: Defense.

MR. BAKER: Good morning, ladies and gentlemen.

JURORS: Good morning.

OPENING STATEMENT

MR. BAKER: First of all, let me suggest to you that punitive damages is an element of damage that has been authorized by the legislature to punish wrong-doing and have the public be protected from future misconduct. The important question in punitive damages, and the question that you're going to be required to answer, is whether or not the amount you award is an amount that destroys the defendant. In other words, punitive damages are to punish, but they are not to destroy. So although the plaintiffs may assert to you that you should take away all his wealth, and we will present evidence by your award of Tuesday, Mr. Simpson has a negative net worth of over $9 million. And the evidence will be that he is without assets. He owes lawyers, he owes mortgage payments, he owes. If, in fact, they would come in and take all of his assets, he would owe multiple millions in taxes as well. So he is, in effect, without assets. He owes. He has no equity in his home. He has basically no savings. He has a pension plan, two pension plans, that he cannot access. He has basically an automobile and a residence that he gave his mother in 1969 when he was out of college. And that's, basically, his entire -- His entire net worth is made up of mostly bills including $188,000 that the Court has just ordered him to pay in the custody fight.

MR. KELLY: Objection, irrelevant to this action.

THE COURT: Overruled.

MR. BAKER: That the Orange County court has just ordered him to pay in Orange County. So he has assets that are exceeded by his liability to the tune, including the eight and a half million dollars that you awarded on Tuesday, he has a negative net worth of $9,356,000. And hence, since, as I suggested, you can't destroy Mr. Simpson, by basically your verdict of Tuesday, you have ensured that he has a significant net worth from which he can never recover. And hence, punitive damages are totally inappropriate in this case. That would be essentially piling on and attempting to destroy Mr. Simpson, which is not the idea or the rationale or the law relative to punitive damages. Second of all, you will hear that the punitive damages that you awarded have to bear some relation to the compensatory damages.

MR. PETROCELLI: That's not the law, Your Honor. It's the harm involved, which is death in this case.

THE COURT: Overruled.

MR. BAKER: And the compensatory damages for the Brown family of $250, that's for the Brown -- the estate of Nicole Brown Simpson, that was the -- as you know, you didn't fill out any amount in your verdict form. So any punitive damages to be awarded vis-a-vis the estate of Nicole Brown Simpson has to bear a relationship to the $250 that was stipulated to be the amount of damages she sustained as a result -- that is, the estate sustained because of the clothing that she was wearing. So that award --

THE COURT: Excuse me. That is not exactly the law. I will instruct you what the law is as to how you may apply it. Thank you.

MR. BAKER: All of your awards have to take into account the financial condition of the defendant in this case. The next two witnesses that you hear are going to have to do with only his financial condition, and the financial condition relative to whether he has the ability to earn a living. You will hear evidence that because of the criminal trial, and because of this trial, he has no ability to earn a living, he has no ability to -- all of his contracts would be canceled relative to what he did before June 12, 1994. All of his ability to earn a living selling sports memorabilia is gone. He has no ability in that regard. And even though you'll hear evidence that he could earn 2 to 3 million a year selling sports memorabilia, I think that you know, I know, and the evidence will be, that he can make absolutely nothing selling autographs, selling his personality, appearing in movies; that those days are finished for Mr. Simpson forever. And so the plaintiffs will attempt to suggest to you that his future earnings, which they have someone who will testify that he can make 2 to 3 million a year, and then you take that for the next 25 years, which we will suggest to you is total speculation, total speculation. The fact is that he will make nothing. They then want to take that 2 to 3 million a year for the next 25 years, reduce that number to what they call present cash value, and put that on his balance sheet as part of his net worth. And we will suggest to you that that's a totally improper method, that that isn't part of his net worth. To say that he could earn 5 cents over the next 25 years selling memorabilia, or autographs, or anything else, is pure speculation, after the notoriety and the verdict that you rendered on Tuesday. So we will suggest to you that he has no wealth and that you can't simply manufacture, by speculating for 25 years, what the public will buy of Mr. Simpson. For example, you will hear testimony of one expert that he would have to sell 20,000 to 30,000 autographs at $50 a piece for the next 25 years, and that would net him a million to a million and a half a year. The problem, of course, is there are no buyers for any of those autographs, much less 20 to 30,000 a year, for the next 25 years. So I would suggest to you that you cannot, and the law is that you cannot, speculate as to what his wealth will be. I think we have a pretty good idea it's not going to be very significant, and it's not going to be -- his ability to earn is virtually nil. So we will ask you at the conclusion to award zero punitive damages. You've already, by your award, punished Mr. Simpson and have indeed made his net worth negative and made him without any assets, whatsoever. Thank you very much.

MR. GELBLUM: Plaintiffs call Neill Freeman, Your Honor.

THE CLERK: You do solemnly swear that the testimony you may give in the cause now pending before this Court shall be the truth, the whole truth, and nothing but the truth, so help you God.

THE WITNESS: I do. NEILL FREEMAN, was called as a witness on behalf of the Plaintiffs, was duly sworn and testified as follows:

THE CLERK: Please state and spell both your first and your last names for the record.

THE WITNESS: My name is Neill, middle initial W., last name Freeman. Neill is spelled N-e-i-double L. Freeman is spelled F-r-e-e-m-a-n.

MR. GELBLUM: Morning, ladies and gentlemen.

JURORS: Morning.

DIRECT EXAMINATION BY MR. GELBLUM:
Q. Morning, Mr. Freeman.
A. Morning.
Q. What's you're occupation?
A. I'm a business consultant and certified public accountant.
Q. You work at a company?
A. Yes, I do.
Q. What company?
A. I work for Putnam, Hayes & Bartlett, Incorporated here in Los Angeles.
Q. What does that company do?
A. It's a consulting firm that really has three lines of business. We consult with companies in public policy and business strategy matters. We consult with companies in environmental matters, and we do special investigative projects in the financial transactions, both prospective and historic, and present the results to public bodies, to Congress, or to court's of law.
Q. Can you briefly review for the jury your education starting with college.
A. I graduated from the University of Washington in Seattle, Washington in 1966, and I received a Bachelor's of Arts in Business Administration with a major in accounting. I am a licensed and certified public accountant in California, in Washington, and in North Carolina. As a result of that licensure, I'm required each year to maintain continuing professional education, and I've done that virtually for the last 30 years.
Q. Have you testified as an expert witness before in court?
A. Yes, sir, I have.
Q. About how many times?
A. Several hundred times.
Q. Have you acted as a referee?
A. Yes, sir, I have.
Q. In what circumstances?
A. I operated as a referee in the Superior Court in the State of California dealing with the accounting and financial matters partnership dissolutions and disputes between business owners.
Q. Okay. Have you also acted as a Special Master for the courts?
A. Yes, I have.
Q. And what is that about?
A. A Special Master is something very similar to that in the federal court system, where an individual appointed by the Court to step into the shoes of the Court for a very limited purpose to understand the information to assist the Court with its role as a trier of fact.
Q. Okay. That's not what you're here for today?
A. That's not what I'm here for today, no, sir.
Q. Okay. And how long have you be a CPA?
A. I've been a CPA since 1968.

MR. GELBLUM: Next exhibit in order?

THE CLERK: 2409.

(The instrument herein described as Neill Freeman's curriculum vitae was marked Plaintiffs' Exhibit 2409 for identification.)
Q. (BY MR. GELBLUM) I'd like to show you what I'll mark as Exhibit 2409. Is that your curriculum vitae?
A. Yes, sir, it is.
Q. Now, were you asked to perform some services in this case by the plaintiffs?
A. Yes, sir, I was.
Q. What were you asked to do?
A. I was asked to review the financial information presented by defendant's counsel, to review information of a financial nature that was provided, to review deposition testimony, and to provide the Court and this jury with information relating to the financial condition or the net worth of Mr. Simpson.
Q. And did you determine what you believed to be Mr. Simpson's net worth as of December 31, 1996?
A. Yes, sir.
Q. What is that number?

MR. BAKER: Peter, do you have some updated documents?

MR. GELBLUM: Yes, I'm sorry. (Mr. Gelblum hands document to Mr. Baker.)
A. That amount is $15,703,529.
Q. (BY MR. GELBLUM) We'll go through in some detail how you got there. Before we do that, can you tell the jury what documents you reviewed, general categories of documents?
A. I reviewed Mr. Simpson's statements of net worth that were provided that were generally provided starting in December 1993 forward through December 31, 1996, and there were several different versions of the '96 financial statements. I reviewed the report of a Mr. Mark Roesler, financial information relating to O.J. Simpson Enterprises, Orenthal Productions, a company called Pig Skins Behind the Corner Stone Company. I reviewed bank loan applications, a loan and appraisal relating to the Rockingham residence. I've looked at actuarial statements relating to Mr. Simpson's pension plans. I've reviewed contracts. I've looked at miscellaneous documents relating to the combination of Orenthal Productions, and O.J. Simpson Enterprises, and the deposition testimony of Mr. Goodfriend, Mr. Taft.
Q. Who are Mr. Goodfriend and Mr. Taft?
A. His accountant and -- Mr. Simpson's accountant and lawyer, respectively. I've looked at some bank account records as of December 31 and other various dates.
Q. Okay. You said that you looked at -- well, first of all, this is all information, as you understand it, that was provided by the defense in this case?
A. Yes, sir, that's correct.
Q. Do you have any idea whether that information is complete?
A. I have asked for much more information, so at least I viewed it as incomplete.
Q. Okay. You mentioned that you looked at some net worth statements?
A. That's correct.
Q. And those were prepared, as you understand it, by Mr. Taft; is that right?
A. Yes, sir.
Q. You got that from his deposition?
A. Yes, sir.
Q. Okay. And you looked at statements that were prepared quarterly from December, 1993 through December, 1995; is that right?
A. That's correct.
Q. And did you review some deposition testimony by Mr. Taft for the purpose for which those statements were prepared?
A. Yes, sir.
Q. I'll just show to you testimony -- it's Mr. Taft's deposition, page -- the confidential portion, page 9, line 23, through page 10, line 23. Did you review this testimony?
A. Yes, sir, I did.
Q. And did you rely on that in rendering your opinion?
A. Yes, sir.

MR. GELBLUM: Steve, can we just put this on the Elmo so the jury can see.

MR. BAKER: I'm going to object to this, Your Honor. You can't use the deposition in this manner.

THE COURT: Whose deposition?

MR. GELBLUM: It's something relied ask.

THE COURT: Excuse me. Whose deposition?

MR. GELBLUM: Mr. Taft's deposition. It's his testimony relied on --

MR. PETROCELLI: He's a witness in this case.

THE COURT: Show me what it is before you put it up.

(A bench conference was held which was not reported.)

(The Court reviews document.)

(The following proceedings were held in open court, in the presence of the jury.)

THE COURT: Okay. Reporter, you want to come up.

(The following proceedings were held at the bench with the reporter.)

THE COURT: Okay. Now, what is your purpose of offering this?

MR. GELBLUM: Rather than have him parrot back what his understanding of the -- rather than have the witness just parrot back what his understanding is from Mr. Taft's deposition that these were prepared in the ordinary course of business, that they're accurate, get it from the horse's mouth and have the jury see exactly what Mr. Taft said. I can ask the witness what his understanding is, but it's based on his testimony which -- it's just more direct and accurate.

MR. BAKER: It's not a proper way to use a deposition, Your Honor. It's not impeachment and it's not --

MR. GELBLUM: It's what the witness relies on --

THE COURT: Frankly, if that -- what you're intending to do, it appears to me not to be probative to that point at all. Makes absolutely -- doesn't make any sense.

MR. GELBLUM: It describes what the statements were there for, that there -- they were there for his internal use, his financial use.

THE COURT: Who are you impeaching?

MR. GELBLUM: I'm not impeaching anybody. I'm going to compare these to the statements that we got that were prepared for the purpose of litigation.

THE COURT: I'll sustain the objection, 352. I'm reading it and I'm a judge, and if that's the purpose for which you're offering it, this confuses me, it doesn't help me; if it doesn't help me, how's it going to help the jury?

MR. GELBLUM: Maybe my -- let me make a different point. I'm sorry, I didn't make it clear. These statements, December, '93 through December, '95, were prepared for Mr. Simpson's internal business use, his financial planning purposes, as this says.

THE COURT: So?

MR. GELBLUM: So they show a net worth consistently 10 million, 9 million 80.

THE COURT: Fine.

MR. GELBLUM: The next statement, 45 days, which is prepared for purposes of litigation, as this shows, shows a net worth of $500,000. I think that's probative of the reliability of the statements that the defendants are offering.

THE COURT: You may elicit that from -- you may ask your client that or your witness that.

MR. GELBLUM: My point is, all he's going to say is he read Mr. Taft's deposition and he said -- and that's what his understanding is based on, Mr. Taft's deposition, that the earlier ones were prepared for that purpose. I just thought I'd show it to the jury --

THE COURT: Why don't you save it for when you examine Mr. Taft.

(The following proceedings were held in open court in the presence of the jury.)
Q. (BY MR. GELBLUM) Did you cause a chart to be prepared comparing various of the net worth statements that were produced by the defense?
A. Yes, sir, I did. (Counsel displays chart entitled "Orenthal James Simpson Net Worth Reported by Simpson.")
Q. Is this the chart you caused to be prepared?
A. Yes.

MR. GELBLUM: Mark next in order. We have a small copy.

THE CLERK: 2410.

(The instrument herein described as a chart entitled "Orenthal James Simpson Net Worth Reported by Simpson" was marked for identification as Plaintiffs' Exhibit No. 2410.)
Q. (BY MR. GELBLUM) Now, can you explain what's depicted on that chart, sir?
A. Yes, sir. Should I approach the chart?
Q. Sure. There should be a pointer up there. I think we found it.
A. This chart lists the financial statements that were provided by defendant's counsel in this matter at various dates. The first one was provided as of December 31, 1993, and they include financial statements through December 31, 1996. On the left-hand scale, the vertical scale, I've listed numbers which are in millions of dollars, and that's used against -- which you can measure the height of each of the bars representing a financial statement to determine approximately what the net worth reported on that financial statement was. So by way of example, December 31, 1993, the financial statement reported a net worth slightly in excess of $10 million. Another example is in December of 1994, after the murders, the financial statement reported a net worth of almost $11 million. After the acquittal, at December 31, 1995, the reported net worth in excess of $8 million.
Q. Again, it's your understanding that those statements from December, 1993 through December, 1995 were prepared for the internal financial uses of Mr. Simpson?

MR. BAKER: Leading and suggestive, Your Honor.

THE COURT: Overruled.
A. Yes, sir.
Q. (BY MR. GELBLUM) What's the basis of that understanding?
A. The basis is the deposition testimony that I read.
Q. Of who?
A. Of Mr. Taft.
Q. Okay. And then there's a sudden drop off in February, 1996. Is that the first statement that was produced in this litigation, as you understand it?
A. Yes, sir.
Q. And that drop off is to what?
A. That drop off is to about $538,000.
Q. Okay.
A. And that's as of February 15, 1996. So that's indicated by the small bar. And you would have to read across to the left scale to see that it's about $500,000.
Q. It's your understanding that in contrast to the ones from December, 1995 and previously, the ones to the right of that were not produced for Mr. Simpson's personal financial use but for protection from the plaintiffs in this litigation?
A. That's correct.
Q. And the last item on there is December 31, 1996, and what is the number that Mr. Simpson produced for his net worth for that statement?
A. This is the most recent statement, which was as of December 31, 1996, and it reports that he has a negative net worth of over $800,000.
Q. You can resume your seat. Did you also review -- you mentioned Mark Roesler before, and he'll be another expert witness that the ladies and gentlemen will hear from a little later. Did you review a report that Mr. Roesler prepared?
A. Yes, sir, I did.
Q. Okay. And what was the subject matter of that report?
A. The subject matter of that report was the earnings ability of Mr. Simpson into the future, and allowed me -- or gave me a basis for computing the present value in today's dollars of what that earnings capacity was.
Q. Okay. Have you also interviewed Mr. Roesler?
A. Yes, sir, I have.
Q. How many times?
A. On two occasions.
Q. Now, have you prepared summaries of the information shown on the various net worth statements Mr. Simpson has prepared and the other financial documents?
A. Yes, sir, I have.
Q. That's Exhibit 753.

(The instrument herein described as a chart was marked for identification as Plaintiffs' Exhibit No. 753.)
Q. (BY MR. GELBLUM) Mr. Freeman, could you briefly explain for the jury the format of Exhibit 753?
A. Yes, sir. It would be easier if I approached the chart.
Q. I think so. With the pointer, perhaps.
A. This Exhibit 753 reports several different pieces of financial information. It reports Mr. Simpson's assets, which are divided, as is their custom, into current assets, closely held investments, other assets and total assets and then reports liability. There are three columns, and the three columns represent that which was reported by the defendant at December 31, 1996 and the latest revision which was as of January 31, 1997 --
Q. That was one of the net worth statements that you were talking about earlier?
A. Yes, sir, that's correct.
Q. All right.
A. The adjustment column represents adjustments that I have made to the amounts reported in that most recent financial statement. And the last column shows the effect of those adjustments on Mr. Simpson's net worth.
Q. All right. Let's talk about the adjustments that you made, sir. First adjustment, so the jury's clear, because you said earlier it's $15 million, was roughly $15 million?
A. Yes, sir.
Q. And it was 28 -- is there a second page?
A. Yes, there is a second page.
Q. We'll get to that in a minute. First adjustment you made was in the loan receivable from Orenthal Productions, that's an adjustment of $265,726. Can you tell the jury why you made that adjustment?
A. Okay. If you look at financial statements of Orenthal Productions, you'll find that it lists as a debt to Mr. Simpson this amount, $265,000. The financial statements that were provided by the defendant list it as only $1, and the explanation is that Orenthal Productions owes more than it has in assets.
Q. That was the explanation that the defense gave for listing that as $1?
A. Yes, sir.
Q. Did you see Orenthal Productions' balance sheet?
A. Yes, sir, I did.
Q. As of December 31, 1996, did that show an account payable by Orenthal Productions to Mr. Simpson?
A. Yes, sir, it did.
Q. Of how much?
A. Of $265,000.
Q. The defense just wrote that off down to $1?
A. That's correct.
Q. Okay. And continue your explanation as to why you don't think it's appropriate?
A. However, looking at Orenthal Productions, early in the year they owed Mr. Simpson as much as a million dollars and they had been making payments on that, so the million dollars that they owed him in the February 15 financial statements by way of example has --
Q. Can you keep your voice up.
A. Excuse me. -- in the earlier financial statements has been paid down to $265,000. In addition, Orenthal Productions had a purported income of over $800,000 during the year, and since it's a conduit for his professional earnings, it appears that there is every prospect of having that paid in the future.
Q. So based on the information you have seen, that debt should be repaid in time by Orenthal Productions so it should remain as an asset on Mr. Simpson's balance sheet?
A. That's correct.
Q. The next adjustment you made was to the Apollo residence. Again, Mr. Simpson reported that on the most recent balance sheet at $1, and you made an approximately $250,000 adjustment, correct?
A. Yes, sir.
Q. Did Mr. Simpson list that asset at $1 before 1996?
A. Until 1996, on every financial statement produced, it was listed as $250,000. It was also listed at $250,000 on bank loan applications.
Q. Okay. And it's listed on bank loan applications as an asset of Mr. Simpson?
A. Yes, it was.
Q. At $250,000?
A. Yes, sir.
Q. And even on the February 15, 1996 net worth statement that was provided to us in this litigation for purposes of this litigation, was that listed at $250,000?
A. No, sir, it was listed at $1.
Q. Now, have you seen documents showing Mr. Simpson as the owner of that residence?
A. Yes, sir, I have.
Q. Okay. Is there another entry on this chart in another -- in another category that Mr. Simpson considers this to be his asset?
A. Yes, there is. The remaining mortgage on that Apollo residence first trust deed lists it as a liability.
Q. So he's taking a liability for a debt against that property?
A. He's taking a credit for the liability, yes, sir.
Q. Okay. And it would only be fair to include the full amount as an asset?
A. Yes, sir.
Q. Now, the next adjustment that you have is present value of NFL pension for $175,592?
A. Yes, sir.
Q. Can you explain that, please, why you made that adjustment?
A. Mr. Simpson, by virtue of his football career, is entitled to a pension from the NFL Players Association at age 55, and that was not listed on the financial statements in December. I have computed the present value of that based on life expectancy of 25 years -- or, excuse me, 24 years, and that amount is $175,592.
Q. How did you determine that he was entitled to that pension?
A. I called the NFL Players Association and talked to them on a no-name basis. They reported that players are entitled to a pension based upon their years of service in the league and the particular years that they played.
Q. And did you provide the information to them about the years that Mr. Simpson played?
A. Yes, sir, without disclosing his name.
Q. And did they tell you how much money he was to receive as a pension?
A. Yes.
Q. Somebody who played during those years?
A. Yes, sir.
Q. And you said that you raised this to present value --

MR. GELBLUM: Steve, would you put up the -- on the Elmo, put up on -- I had Mr. Foster put on the Elmo. We'll mark next in order, 2411.

(The instrument herein described as table was marked for identification as Plaintiffs' Exhibit No. 2411.)
Q. (BY MR. GELBLUM) Can you tell us what that is, please?
A. Yes. This is a table which lists the years out -- for the next 24 years of Mr. Simpson's life, and starting at his age 55 in the year 2002, it provides for a monthly income of $1,910 or a total for the year of $22,922 for the remainder of his life. What I have done is, utilizing a discount rate of 7 percent, computed what the value is today at the -- as of the end of January, 1997 of these future payments.
Q. Can you first of all explain to the jury what you mean by discount rate and how you arrived at it?
A. Well, it's kind of the opposite of a savings account. If you put a dollar in a savings account today and it earns 5 percent, at the end of a year you would have -- well, let's say $100, at 5 percent you'd have $105, the present value of $105 one year in the future is a dollar today. And so that's what a present value is. It's measuring in today's value something that you expect in the future.
Q. I think you misspoke. I think you said the present value of $105 is $1?
A. A hundred dollars, I'm sorry. Especially an example of a dollar and $100, it's $100.
Q. How do you arrive at the 7 percent rate that you used?
A. 7 percent rate is a rate that's slightly higher than the U.S. treasury rate -- deposit rate for long-term security and slightly less than one would get, for example, in investing in corporate bonds or preferred stocks.
Q. Okay. And the --

MR. GELBLUM: Steve, can you move that up a little bit.
Q. (BY MR. GELBLUM) Again, did you -- you said you used a life expectancy for Mr. Simpson, what, 24 years?
A. 24 years, yes, sir.
Q. How do you determine that?
A. There are a number of life expectancy tables that are available for any particular individual at a given age to estimate what the average life expectancy of that individual will be in the future. And one of those appears at the BAJI table at 14.7, and looking at those, they, for Mr. Simpson, project a life expectancy of anywhere from 24 to 26 years -- 23-1/2 to 26 years, and I used 24.
Q. These are tables commonly used in your business?
A. Yes, sir.
Q. Before we get to the next adjustment, I just want to make sure the jury understands, where you don't have an adjustment, you've just taken the assets that Mr. Simpson listed on the December 31, 1996 statement, the last revision of it, and carried it straight across to the column that you're going to end up using for your total; is that right?
A. Yes, sir, and that's true both of assets and of liabilities.
Q. Okay. Now, let's get to the next adjustment on this page, which is the big one there, the value of name and likeness and trademarks for $24,880,568.
A. Yes, sir.
Q. Can you explain to the jury very briefly what you -- what is meant by the value of name and likeness and trademarks?
A. The value of name and likeness and trademarks is the value measured in today's dollars of the exclusive use and right of exploitation of the name and likeness of Mr. Simpson plus any trademarks that he has of those names and likenesses.
Q. Is it another way of saying what a reasonable person would pay Mr. Simpson today for the exclusive right to exploit his name and likeness for the rest of his life?
A. Well, the actual right extends to life plus 50 years so it would extend beyond that. I've only measured it for his life span of -- estimated life span of 24 years. But that's the amount that a person today would pay to have absolute control over the use and distribution of his name and likeness into the future.
Q. Now, were you the one who figured out what Mr. Simpson would be able to make in the future off of his name and likeness?
A. No, sir, I was not.
Q. Who did that?
A. That was done by Mr. Roesler.
Q. You relied on him to do that?
A. I relied on him for that -- his computation what that was worth.
Q. Did you interview him to determine some of his background?
A. Yes, sir, I did.
Q. And is it your opinion as a forensic accountant that it is proper to include this number on a current net worth statement?
A. Yes, sir.
Q. Why is that?
A. Well, that gives a complete picture of what the prospects or financial condition of Mr. Simpson is. It's the same kind of concept that's used when people, for example, are financing movies or when corporations merge, there are things that under regular accounting principles, under income tax principles, for example, are not listed as -- as either, but people recognize that, in fact, they do exist, and are listed as an asset. So that's what -- good will is another name for this type of concept.
Q. Okay. And again, the concept is this is what the reasonable person would pay Mr. Simpson today?

MR. BAKER: Leading and suggestive.
Q. (BY MR. GELBLUM) For the right to exploit that name and likeness; is that right?

THE COURT: Overruled.
A. Yes, that's correct.
Q. (BY MR. GELBLUM) I want to show the jury how you calculated the present value. Can you put that up, please, Steve, on the Elmo. Document is displayed on Elmo.)

MR. GELBLUM: 2412.

(The instrument herein described as computation of NFL pension was marked for identification as Plaintiffs' Exhibit No. 2412.)
Q. (BY MR. GELBLUM) Can you explain to the jury what appears on 2412, Exhibit 2412?
A. Yes, sir. This is the same type of computation that I did for Mr. Simpson's -- the present value of his NFL pension. I've listed the years and I've listed 24 years here, and because the first year we're measuring, as of January, that it's only 11 -- 11/12ths of a year into the future. I have applied a discount rate of 7 percent, and by way of example, the receipt of income during the remainder of 1997 in the amount of $2,125,000 has a value at the end of January of a million $888,000. Another example, in the year 2000 the receipt of that amount of money, $2,125,000, has a present value of about 1 million, 681. So if -- somebody would pay today $1,681,000 for the right to receive that amount in the future.
Q. Why do the numbers in the far right column go down as the years pass by?
A. Because money more remote, that is the right to receive money further down the line, has less value in today's dollars. I would pay you less to receive $2 million in 2008 than I would pay you to receive $2 million in 2002.
Q. If you flip that around, the pass book example you used before, is that because I would need to invest less today to achieve 2 million 125, two years from now?
A. That's correct.
Q. How do you come up with the $2,125,000 annual number?
A. Mr. Roesler's report and his testimony at deposition, I assume his deposition here at court, will be that the earning powers of Mr. Simpson, on average, for the rest of his life will vary between 2 and $3 million a year. He cautioned me that some years will be extraordinarily high and some years will be low, but on average, year in and year out over the next 24 years it will average between 2 and $3 million. The average of those are the middle point, which would make -- which is used in this presentation, would be $2,500,000. But because of the nature of the exploitation of Mr. Simpson's name and likeness, he would most likely have to pay commissions to someone, and so I've measured commissions in this case -- well, Mr. Roesler told me the commissions could vary between 5 percent of the amount that the celebrity gains, and up to 20 percent. That the range is typically, for a living person, more in the neighborhood of 5 to 10 percent. For 15 percent, there would be extraordinary services for the person helping the individual. So I've allowed for 2 percent commission on two-and-a-half-million dollars' worth of annual earnings.

MR. GELBLUM: Steve, could you put up to the bottom there. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) Now, again, you only went out -- you went out to the year 2021. That's based on, as you discussed before, Mr. Simpson's life expectancy?
A. Yes, sir, a total of 24 years.
Q. You did not include any number there for the value of exploiting that name and likeness after his death?
A. No, sir I did not.
Q. If somebody were to pay Mr. Simpson today for the right and in perpetuity to exploit his name and his likeness, would that most likely include that right to do that after his death?
A. It would continue in the future beyond his life span.
Q. Would you be conservative in cutting it off at the end of Mr. Simpson's life expectancy?
A. Yes, sir.
Q. Now, you have one deduction there, less receivable reinstated. Can you just explain that to the jury?
A. Yes, sir. The total present value of the future extreme of earnings is $25,146,000. The conduit through which Mr. Simpson conducts his business is Orenthal Productions. And that was the receivable that they had written off to one dollar. I have reinstated it on the balance sheet. And a possible source of that would, of course, be about this earning stream. I've deducted it from this double earning stream to avoid double accounting and come up with a net amount of $24,880,000.
Q. Does that tie into the number on the big chart in front of the jury, this number that I used on Exhibit 753? Let's see. On the large chart in front of the jury, which I believe was 2410 --

THE CLERK: 753.

MR. GELBLUM: Oh, 753. I apologize.

(The instrument herein referred to as Summary of Defendant's financial condition by Neill Freeman, with exhibits was marked for identification as Plaintiffs' Exhibit No. 753.)
Q. (BY MR. GELBLUM) There's a large liability, actually, the last one listed there, for accounts payable, criminal/civil defense litigation, for almost $1,600,000. Do you see that?
A. Yes, sir, I do.
Q. All right. And you've reviewed certain documents relating to that liability?
A. Yes, sir, I have.
Q. And is that -- are these primarily for the exclusive liabilities from Mr. Simpson's criminal case?
A. Yes, sir, it is.
Q. And that ended in October 1995; is that right?
A. Yes, sir.
Q. Okay. In your experience, does the fact that that is as old as it is, almost a year and a half old, if not older, and the fact that it is a debt to professionals in large part, indicate anything to you about the probability of that would be paid in full?

MR. BAKER: I object. That calls for speculation on the part of this witness. There's no foundation.

THE COURT: Overruled.
A. Typically, when debts are outstanding for a long time, in accounting, most people consider debts 90 days old or older, 90 days past due or older, to be somewhat questionable. The likelihood of collecting them in full by the person to who they are owed decreases. And so it's likely at some point in time that Mr. Simpson would be able to compromise, that is, to pay those liabilities off for amounts less than are stated in this statement of net worth.
Q. Nevertheless, you've included the entire amount in your calculation?
A. Yes, sir, I have.
Q. Okay. And do you consider that to be a conservative process?
A. That is a conservative professional approach, that it gives Mr. Simpson the benefit of the full amount of the bill, even though he may not pay that in the future.
Q. So if he didn't pay all of that, then the total net worth would be higher; is that right?
A. That's correct.
Q. Okay. So the bottom line on the adjusted portion on this first page of Exhibit 753 is $28,837,236; is that right?
A. Yes, sir, that's correct.
Q. All right.

MR. GELBLUM: Steve, could we get the second page of this, the board for the second page. This is also part of 753. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) We've placed before the jury an enlargement of the second page of Exhibit 753, Mr. Roesler. This also something you prepared?
A. I'm Mr. Freeman.
Q. Mr. Freeman, looking ahead.
A. Now we're even.
Q. Good.
A. Yes. This is a continuation of that exhibit. And the amounts on the first line, assets and in excess of liability, are the same amounts that appeared on the bottom line of the page that we were just looking at. And then in Mr. Simpson's financial statements as of December 31, 1996, he provided for estimated income taxes and arrived, therefore, at the negative value or the negative net worth of $856,157.
Q. Right. Did -- was there any line item at all for these deferred taxes on any of the net worth statements that you saw from Mr. Simpson that were prepared for his own use, as opposed to for use in this litigation?
A. No, sir, there were not.
Q. He never listed those at all as a liability?
A. No, sir, he did not.
Q. And have you -- have you reviewed some documentation provided by Mr. Simpson that calculates that $4 million number?
A. Yes, sir, I have.
Q. Okay. Is there a component there for -- Well, first of all, I ask you, can you explain to the jury this concept of including deferred income taxes as a liability?
A. On the first page of Exhibit 753, there are assets that are listed at their fair market value: For example, the Rockingham estate. And those values are values that are greater than the tax basis or the amounts that Mr. Simpson paid in, invested in there. So if he were to sell that asset today and realize the $3.7 million, he would owe taxes on the difference between his tax basis and that property and the amount of money that he received to save his proceeds. So, in other words, in order -- in order to balance that out, the part of the computations that are made on this line are computations which you compute turns current tax rates, the amount of tax liability, were that $3.7 million to be realized.
Q. Now, is it certain that the taxes that Mr. Simpson listed on the net worth statements, that he's going to have to pay those taxes?
A. Not by any means. No, sir.
Q. For example, on the house, are there provisions in the tax laws that would allow Mr. Simpson not to pay any taxes at all on -- on the sale of that house?
A. Well, there are.

MR. BAKER: I'm going to object. This calls for speculation as to what Mr. Simpson will do in the future, if he has any dollars to do it with.

THE COURT: Overruled.
A. (Continuing.) There are tax provisions that allow homeowners to roll over any gain that they have on a principal residence. So he could, in effect, defer that for the balance of his lifetime, even if he were to sell the property. In addition, both last year and this year in Congress, there has been various proposals by both parties and the president to --

MR. BAKER: I'm going to object to any proposals. This is total speculation, whether any tax laws --

THE COURT: That's sustained.

MR. GELBLUM: Can you put up the page on the adjustments? Mr. Foster complies.)

MR. GELBLUM: Displayed on the Elmo is marked next in order as 2413.

THE CLERK: Correct.

(The instrument herein referred to as Calculation of Adjustment to Deferred Tax was marked for identification as Plaintiffs' Exhibit No. 2413.)
Q. (BY MR. GELBLUM) The page headed, Calculation of Adjustments to Defer Tax, we'll go through this item by item. Is this going to tie into the middle portion of the board that's before the jury now, the second page of 753?
A. Yes, sir. If you go down to the bottom of this page, you will see that the adjustment to the deferred tax computation is $9,012,199, which is the adjustment that I have made to computations provided by Mr. Simpson.
Q. Okay. Let's go back to 2413. And these are now -- these are adjustments to Mr. Simpson's computation of the deferred tax that he included as a liability on the most recent net worth statement; is that right?
A. Yes, sir, that's correct.

MR. GELBLUM: Would you go back to the top of the page, too, Steve. (Document adjusted on the Elmo screen by Mr. Foster.)
Q. (BY MR. GELBLUM) Let's start with the first one. Could you explain that to the jury, please.
A. Yes, sir. There are two pension accounts listed in Mr. Simpson's financial statements, and they have value of about $4.1 million.
Q. That's combined value?
A. Yes, sir.
Q. And that's in addition --
A. And that's in addition to the NFL pension that we discussed earlier.
Q. By the way, before you go on, Mr. Baker said to the jury a few minutes ago, that Mr. Simpson didn't have access to those pension accounts. Is that a true statement?
A. He ultimately will be drawing those out in another five years on a monthly basis. But in the interim, he uses them as collateral for loans, as part of his net worth financial statement. He has borrowed in the past from his pension plans.
Q. Okay. Going ahead with your calculation?
A. In computing the $4,121,000, Mr. Simpson's financial statements of December 31, they computed the task at 62 and a half percent, which includes a penalty rate for early disbursement from a pension account balance.
Q. Let me interrupt you one more time, sir. Just to avoid confusion, the numbers happen to be very similar between the $4,121,479, the balance in the pension accounts, and the 4,121,508 on the deferred taxes that Mr. Simpson listed. That's just coincidental?
A. That's just coincidental; those are completely separate numbers.
Q. Sorry to interrupt. Go ahead.
A. Instead, the actual federal and California rate that Mr. Simpson will pay on that income when he removes it from the pension plan is 45.22 percent, or slightly over 45 percent.
Q. That's if he removes it after age 55?
A. Yes, sir. And if he uses it as collateral as a part of his borrowing package, he would have no tax consequences.
Q. All right.
A. This overstates the tax liability on $4 million by 17.28 percent. And computing that amount, it's $712,000.
Q. That's 17.28 percent of the $4 million?
A. Yes, sir.
Q. So, under your computation, then, Mr. Simpson's representatives overstated this component of the liability by $712,000?
A. Yes, sir, that's correct.
Q. All right. Can we go on to the next one, May Medical.
A. The next one is the May Medical Societies.
Q. What's that?
A. A medical building.
Q. All right.
A. And Mr. Simpson has a negative basis in that property and a very, very low fair market value. The computation includes the fact by Mr. Simpson's representatives that if he were to sell that property now with a large negative tax basis, approximately $1,900,000, that this -- he would incur a large tax penalty. In looking at the K-1, which is a federal tax form related to that building, however, we find that Mr. Simpson purchased his interest in that building many years ago, to the extent of 49 and a half percent, and more recently purchased another 49 and a half percent. So the entire amount of that accrued negative value in the partnership distribution accounts is not Mr. Simpson's, and they overstated it for that reason. We don't know exactly what the dollars are because the information has not been given to us. And we don't know what the prior status of those losses are, if they have been used, or if they're, in fact, available for carryover, to offset any gain that might be recognized in the future. But assuming that indeed he did buy another essentially 50-percent interest, and that the amount of the deficit at the end of 1994 was a million 685, then at the capital gains tax rate, the $4 million in taxes have been overstated by about $295,000.
Q. Now, then, Mr. Simpson's representatives overstate a liability that reduces his net worth; is that right?
A. That's correct.
Q. Okay. So, then, you're adjusting the liability by decreasing the amount of liability, and that would increase the net worth; is that right?
A. That would increase the net worth; yes, sir.
Q. Do you want to go on to the next category called Deferred Tax Benefits?

THE WITNESS: It might help if we slide that up a little bit. (Elmo adjusted)
A. Another offset which was not taken into account in computing this $4 million is the tax effect of the civil defense attorney fees and the civil/criminal defense attorney fees that Mr. Simpson is attempting to deduct for tax purposes.
Q. What's the basis of your understanding for that?
A. That's Mr. Taft's testimony, also.
Q. That they were using those fees as a deduction, tax deduction?
A. Yes, sir.
Q. Okay.
A. The tax rate at 45 percent on the total of those fees, almost $3 million, is $1,310,000.
Q. Can you explain that a little more, how that works, how that tax benefit works?
A. Well, if you have an expense and that reduces your income, you pay taxes on lesser income, lesser net income. In this case, if they deduct these from his income, he'll pay lesser tax because of these deductions. And you measure that at the tax rate in effect, which is slightly in excess of 45 percent, combined state and federal.
Q. So that calculation would give Mr. Simpson a tax benefit of $1,300,000?
A. That's correct.
Q. Okay. That would increase his net worth by that much?
A. Yes, sir.
Q. On the calculations we're presenting here?
A. Yes, sir.
Q. Okay. Now, finally, the last category is taxes on undisclosed assets. Could you explain that calculation, please.
A. Yes, sir. On Exhibit 753, I had two entries for the present value of his NFL pension and the value of his name likeness and trademarks.
Q. Those are assets that you added to the net worth that Mr. Simpson hadn't included?
A. Yes.
Q. Why did you take off the taxes for that?
A. Well, in these particular instances, that's another present value of future income, that's income that Mr. Simpson would receive; and therefore, he would have to pay taxes on that income when he receives it. Because I've measured it at present value, it's appropriate to apply a current tax rate for that amount. And I've done that so that would result in an increase in the tax liability that Mr. Simpson would have, the deferred tax liability of $1,329,694.
Q. That 1 million or 11 million?
A. 11 million.
Q. All right.
A. Did I misstate?
Q. You said 1 million. So, adding these all together, you get to a net adjustment of how much?
A. Well, taking the reductions that I discussed earlier, and this addition, the net increase in taxes, adjusting the 4 million provided for in Mr. Simpson's statements, is $9,012,199.
Q. All right. And that's reflected on the second page of Exhibit 753 that's in front of the jury?
A. Yes, sir.
Q. So you've increased the tax liability by somewhat over $9 million, and that gives you a total tax liability of somewhere over $13 million?
A. Yes, sir, it does.
Q. And you subtracted that tax liability from the number we carried over from the first page, right?
A. Yes, sir. The excess of his assets over his liability of $28 million, reduced by $13 million in taxes, is $15,703,529.
Q. Is that your best opinion today of Mr. Simpson's net worth as of December 31, 1996?
A. Yes, sir, it is.
Q. Okay. Now, you can resume your seat.

MR. GELBLUM: You can take that off the Elmo. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) You did not include in the liability section the $8.5 million after compensatory damage awards that the jury rendered the other day. Why didn't you include that?
A. Because final judgment has not been entered in that amount. It's certainly something that the jury is aware of, but there's no final liability in that amount yet.
Q. Now, from all the documents that you have looked at in connection with Mr. Simpson's finances, do you have any reason to believe that the information that you have been provided with understates his assets?

MR. BAKER: Objection. Calls for speculation.

THE COURT: Overruled?
A. Yes, sir, I do.
Q. (BY MR. GELBLUM) And what reason is that?
A. Well, there was a lot of information about the flow of cash that we asked for that we did not receive. For example, we do understand that Mr. Simpson, during the year, received approximately $1,250,000 on his interest in the Honey Baked Ham investment. And he also received about $1,750,000 in insurance proceeds to cover his insurance claims in this matter. The total of those is about $3 million. Yet, during the year, I don't see a commensurate decline in the liability that he has, although certainly, he used them to pay some liability, and I don't understand where the cash went. So I have no confidence that I've seen everything.
Q. Did you see some bank statements?
A. Yes, sir, I did.
Q. Do you have those in your book?
A. Yes, sir, I do.
Q. Can you determine what the total amount of deposits that were made into those bank accounts in December 1996 alone?
A. I could, yes.
Q. Did you locate them?
A. Well, I've got one for O.J. Simpson Enterprises. And do you have a set of them, because they're spread throughout in my --
Q. Yes. (Counsel hands document to witness.)
A. Do you want the total?
Q. Yes.
A. Between those two accounts, one account had deposits of $68,000; the other one had deposits of $9,341; so it would be $77,341 dollars in deposits.
Q. That's just the month of December?
A. Yes, sir.
Q. Now, moving on to a somewhat different subject regarding Mr. Simpson's --

THE COURT: Ten-minute recess. Ladies and gentlemen, don't talk about the case. Don't form or express any opinions. We're still in session.

THE BAILIFF: Let's keep it quiet in the courtroom. The jury is still in the courtroom. The Judge is still on the bench. Quiet, please. Everybody have a seat, please, if you're going to stay in the room. Let's close those doors. The jury has left the room. The door is closing. (Indicating to back door.)

(The jury exited the courtroom.)

THE BAILIFF: We're in session.

THE COURT: Okay. After hearing Mr. Kelly's opening statement, it appears that the other plaintiff in this action is participating in these proceedings. I don't have the instructions with regards to the other plaintiff of any kind.

MR. KELLY: I understand that, Your Honor. We had just noticed that. We got -- I'm sorry.

THE COURT: And your verdict form has no reference to that, either. Just thought I'd call it to your attention.

MR. KELLY: We're aware of that, Your Honor. Thank you.

THE BAILIFF: Okay. We are in recess.

(Recess.)

(Jurors resume their respective seats.)

THE COURT: Okay. You may resume.

MR. GELBLUM: Thank you, Your Honor.

DIRECT EXAMINATION (continued) BY MR. GELBLUM:
Q. Mr. Freeman, did you also prepare from the documents that were provided by the defense a summary of the profits that Mr. Simpson gained from the murders in this case?
A. Yes, sir, I did.

MR. GELBLUM: Could you put that summary up on the Elmo, Steve. (Document displayed on Elmo.)

MR. GELBLUM: That will be next in order. 2414?

THE CLERK: Correct.

(The instrument herein described as a summary of profit gained by Mr. Simpson marked for identification as Plaintiffs' Exhibit No. 2414.)
Q. (BY MR. GELBLUM) Can you explain this exhibit to the jury, please, Mr. Freeman?
A. Yes, sir. I was provided -- should I approach the screen?
Q. Sure.
A. Defendant provided us with copies of checks for monies received, or copies of ledger pages which recorded monies received, and they were basically in five different categories; the book receipts for "I Want to Tell You" --
Q. That's the name of the book by Mr. Simpson?
A. Yes, sir. Video income.
Q. Was that the video Mr. Simpson distributed regarding his version of the events of the murders?
A. Yes, sir. The Star photos.
Q. The photographs that Mr. Simpson contracted -- had published in Star tabloid upon his release from jail?
A. That's my understanding, yes, sir. Proceeds --
Q. Okay.
A. Proceeds from interviews.
Q. Those are all interviews since his release from jail?
A. Yes, sir. And autographs, memorabilia, and all other categories.
Q. The autographs and memorabilia are all things that were done after Mr. Simpson was arrested for these murders?
A. That's my understanding, yes, sir.
Q. Okay. The dollar amounts listed are taken from where?
A. It's taken from the financial records provided by defendant or from copies of checks.

MR. GELBLUM: Steve, can you put up briefly the other two pages, just so the jury -- they'll get this in the jury room.
Q. (BY MR. GELBLUM) Tell the jury what's on the Elmo now.

MR. GELBLUM: That will be part of 2414.

(The instrument herein referred to as Summary of Defendant profit gained (murders) was marked for identification as Plaintiffs' Exhibit No. 2414.)
A. Whatever's done, the page's attached to Exhibit 2414 which listed the date that appeared on the check, or the date of the entry on the ledger, and the dollar amount that corresponds to that. And then for each category I've totalled that amount. So, for example, for the book, the total is $991,743. That's the amount that appears on the first page of Exhibit 2414. The total for the video as of January 16, 1996, and December 11, 1996, is $303,500. The total for the photographs between October 4, 1995, and December 1995, is $433,693.
Q. Those are dates of receipt of payment by Mr. Simpson?
A. That's correct.
Q. All right. And interviews?
A. The interviews between May 23, 1996, and September 12, 1996, a total amount $75,300.

MR. GELBLUM: The next page, Steve, please. (Document displayed on Elmo.)

MR. GELBLUM: You can just run it up slowly, Steve.
Q. (BY MR. GELBLUM) Again, these are the dates shown and the amount shown; these are all taken directly from information provided by Mr. Simpson?
A. Yes, sir, that's correct.
Q. Do you have any way of verifying whether this information is complete?
A. No, I do not.
Q. All right. Then your grand total is what?
A. The total for autographs, memorabilia, and other items, is $1,013,900. And the total for all categories is $2,818,136.

MR. GELBLUM: Steve, quickly go back to the top of this page. (Elmo adjusted.)
Q. (BY MR. GELBLUM) You said earlier all of these are -- the autographs and memorabilia are all for -- the autographs and memorabilia are all for activities Mr. Simpson engaged in after he was arrested for the murders; is that right?
A. Yes, sir.
Q. The dates reflect that?
A. Yes, sir.
Q. Go ahead down, Steve. July 8, '94 is the first one. And I believe Mr. Simpson was acquitted and released on October 3, 1995; is that your understanding?
A. Yes, sir.
Q. So there's a few after that date. Okay. Thank you very much.

MR. GELBLUM: I have no further questions, Your Honor.

THE COURT: Cross-examine.

MR. BAKER: You want to put that back on the board, please. I want you to go right to the bottom. (Elmo adjusted.) CROSS-EXAMINATION BY MR. BAKER:
Q. Now, in 1996, the total amount for autograph income Mr. Simpson has made is $600, right?
A. That's the only entry we were provided for '96, yes, sir.
Q. And in your calculations, Mr. Simpson would make at least a million to a million and a half a year off autographs alone, not including memorabilia, correct?
A. I don't know one way or the other.
Q. Well, you looked at Mr. Roesler's deposition, and you looked at his report, and you interviewed him twice in order to come to your opinions and conclusions relative to the largest entry on the balance sheet, that is the value of his name and likeness; isn't that true, sir?
A. That's correct. Yes, sir.
Q. And you saw where Mr. Roesler said that Mr. Simpson's name and likeness, and he categorized it in terms of income, that he would earn a million to a million five a year off autographs alone; isn't that true, sir?
A. I understand that's one of the things he took under consideration, yes, sir.
Q. That's totally contrary to what you've seen in terms of Mr. Simpson's autographs, is it not, sir?
A. It's contrary to whatever I've been provided, yes, sir.

MR. BAKER: Can you get the other sheet out now.
Q. (BY MR. BAKER) You reviewed Mr. Simpson's balance sheets, correct?
A. Yes, sir. Taking into account the fact that the word "reviewed" means certain things to accountants, I've not reviewed it in the sense of a particular use of that term. But the way most people use the term "reviewed," I have reviewed it.
Q. All right. And you reviewed his factual balance sheet, that is before balance sheets were ordered, written for his assets relative to this trial, correct?
A. Yes, sir.

MR. BAKER: Okay. You can take that down, Steve. (Elmo adjusted.)
Q. (BY MR. BAKER) Did you see in any balance sheet that Mr. Simpson had prepared whether he was trying to get a loan, whether he was preparing -- having his accountants and business manager prepare a balance sheet, or a statement of financial condition for internal purposes, did you ever see one entry for name, likeness, and trademark?
A. No, sir, I did not.
Q. Not a single one, even when he went to the bank, correct?
A. That's correct.
Q. And that is what you have included in a summary of his financial condition, and that was never in Mr. Simpson's history, as an individual, included in his financial condition, as far as you are aware, true?
A. That's correct. Yes, sir.
Q. And let's take it one step further. The present value of the NFL pension of 175, 5, that was never included at all by condition, was it?
A. That's correct.
Q. And, in fact, if Mr. Simpson doesn't live to be 55 or live out another 24 years, he may never get one cent of that, correct?
A. It depends on when he passes, that's correct.
Q. And although you have included 175, 5 as a present value of his pension that's not a salable asset because it's speculative whether he'll ever collect 5 cents of that; isn't that true, sir?
A. Let me correct --
Q. Can you answer my question?
A. Yes, sir, I can.
Q. Then answer it.
A. It's not speculative in that we do have statistics which tell us what the average life span of a person 50 years old is. And those are used as the basis for financial measurements every day of the year.
Q. That isn't an asset that a bank's going to loan money on because there's no guarantee, of course, that Mr. Simpson will ever collect 5 cents on it; you would agree with that?
A. If he passes before he's age 55 he will collect nothing. If he lives more than 24 years, of course, he'll collect far more.
Q. Maybe you didn't understand the question. Let me ask it again. That is not an asset that a bank would loan money on because it's not -- it's a contingent asset; isn't that true, sir?
A. Depends on the terms of the amortization. They will take into account income and that is a source of income.
Q. All right. In terms of the 24,800 -- $24,880,568, that is basically his entire net worth?
A. It's a substantial part of it.
Q. Well, it's about 90 percent of it, isn't it?
A. Yes, sir.
Q. That is an item that is made up of a contingent income that Mr. Simpson may never see, correct?
A. I don't have an opinion one way or the other.
Q. You know for a fact, Mr. Freeman, that you looked at Mr. Roesler's deposition, you looked at Mr. Roesler's report, and you know what the component parts of that are; isn't that true, sir?
A. Yes, sir, only by way of example.
Q. Well, you know what Mr. Roesler said. He's sitting here in the court room. He said that Mr. Simpson will get a million to a million and a half a year on autographs alone, that he could sell at $50 a piece, 20 to 30,000 autographs, correct?
A. I would review the report to see that. I think that's one of the things he did consider, however.
Q. And that he would have a book deal, that he had an income from movies an endorsements. That's all the component parts of the value of name and likeness, right?
A. I understand those are things he considered, yes, sir.
Q. And did you look at a single piece of paper to determine what Mr. Simpson made in the last six months for selling his name and likeness?
A. I've summarized in the prior exhibit the information that you've given us, so that's all I've looked at.
Q. Did you determine whether or not Mr. Simpson made over $600 for selling his name and likeness in the last six months?
A. I have no way of making any independent determination. I've only summarized what you've given me.
Q. My point is, sir, if your numbers based upon Mr. Roesler's opinions are correct, Mr. Simpson should have made in the last six months at least a million 250 selling his name and likeness, for your numbers to be valid, correct?
A. That's not correct at all, no, sir.
Q. Well, you have taken an amortized -- as I understand your testimony, you have taken as an average that he will make $2.5 million per year selling his name and likeness, correct?
A. That's correct.
Q. And if you have variation of that 2.5 million -- it could certainly be, for example, one year make 3 million, one year make 1 million, et cetera, correct?
A. That's correct.
Q. And you have figured out that in coming to your opinions and conclusion for 90 percent of what Mr. Simpson's financial value is, or financial worth is, you have averaged that he would make 2.5 million, correct?
A. That's correct.
Q. And do you know -- have you looked at any piece of paper to determine whether Mr. Simpson ever, when he was working for Hertz, NBC, and his image was not tarnished at all, had he ever made $2.5 million?
A. I don't know one way or the other.
Q. Well, wouldn't it be important for you, before you come on the witness stand, to tell this jury that he will have a value of $24,880,000 in the next 25 years, wouldn't it be important for you to determine what he had made in any given year, the highest amount that he'd ever made selling his name and likeness?
A. Well --
Q. Would it be important, sir?
A. I asked for that information, to review that, and was never provided it.
Q. You never asked us for any of that information, did you, sir?
A. I asked counsel. You're right.
Q. And you have never looked at one piece of paper relative to what his past earnings have been, have you?
A. No, sir, that's not true. In his loan application he listed his monthly income as $111,000 in '94, I believe. Maybe '93.
Q. Now, did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?
A. Other than what you provided, and which we've summarized here, no, sir.
Q. Let me read your deposition. Page 8, line 16 through 19.

MR. GELBLUM: Can you hold on one second, please.

MR. BAKER: (Reading.) (Mr. Baker read a portion of the transcript of Mr. Neill Freeman's deposition.)
Q. Did you ever see any document as to how much Mr. Simpson actually made based upon the sale of his name and likeness?
A. No, sir, I haven't.
Q. (BY MR. BAKER) Now, that's what you testified to, correct?
A. That's correct.
Q. And you still haven't?
A. That's correct. Other than to the extent that it's included in the income reported to the lending institution and, of course, the information that you most recently gave me.
Q. Mr. Freeman, the information that you saw as income doesn't have any breakdown as to what the income was, whether it was for name and likeness, or anything, isn't that true, sir?
A. That's correct.
Q. So you've never seen a piece of paper as to what Mr. Simpson has ever made based upon the sale of his name or likeness, correct?
A. Other than this most recent stuff that you've given us, correct.
Q. And what he made in the whole calendar year of 1996 was $600, right?
A. And of the two prior years, slightly over a million.
Q. Not on the sale of his name and likeness; is that true?
A. That's what autographs and memorabilia are about.
Q. All right. Let's go back to these numbers. Now, Orenthal Productions has to be able to sell and to pay the loan, has to have income, correct?
A. That's correct.
Q. It's your understanding that Orenthal Productions is, in fact, a solely owned corporation of Mr. Simpson's, correct?
A. Yes, sir. That's what I understand.
Q. And it has no assets?
A. Has very few assets, merely a conduit.
Q. It has no ability, unless Mr. Simpson can sell his name and likeness, it has no ability to pay Mr. Simpson; you would agree with that?
A. I would agree with that.
Q. And so if, in fact, there's is no ability of Mr. Simpson to sell his name and likeness, it would be appropriate to value the loan that Orenthal Productions owes Mr. Simpson at $1; you would agree with that?
A. No, sir, I wouldn't.
Q. All right. Now, under the Apollo residence, you saw the footnote on the Apollo residence, did you not, sir?
A. Yes, sir, I did.
Q. There's the residence of Mr. Simpson's mother since 1969, correct?
A. That's what the footnote says, yes, sir.
Q. And Mr. Simpson has indicated that he does not have a beneficial interest in that property, correct?
A. Other than the footnote, I don't know.
Q. Well, you were advised that that's where his mother has lived for the last almost 30 years?
A. Yes, sir.
Q. And she has the beneficial interest in that house?
A. I'm not prepared to make that legal conclusion.
Q. I see. You're prepared to make the jump of 25 million, but you're not prepared to make a conclusion that Mrs. Simpson has the beneficial interest in a house that she's been living in for 28 years; is that the way you want to leave it with the jury?

MR. GELBLUM: Objection, argumentative.

THE COURT: Sustained.
Q. (BY MR. BAKER) Now, you say a reasonable person would pay $25 million to Mr. Simpson for his name and likeness for the next 25 years, right?
A. That's correct.
Q. And did you try to contact any reasonable person to see if there is a reasonable person alive who would pay $25 million to have sole exclusive rights of Mr. Simpson's name and likeness?
A. That's not the basis of my testimony.
Q. Can you answer my question. Did you contact one person to see if they would pay anything for the name and likeness of Mr. Simpson, much less $25 million?
A. No, sir. That's not the basis of my testimony.
Q. Do you know any banker who would loan $5 million on this purported $25 million value of Mr. Simpson's name and likeness? If so, name one; we'll call him and get him on the witness stand.

MR. GELBLUM: Objection, relevance, whether he knows anybody.

THE COURT: Sustained. It as argumentative. Ask a question.
Q. (BY MR. BAKER) Do you know any banker who would loan $5 million based upon the $25 million value that you have placed on Mr. Simpson's name and likeness; a single banker?

MR. GELBLUM: Relevance, called for speculation.

THE COURT: Overruled.
A. I don't know any bankers.
Q. (BY MR. BAKER) You don't know any bankers, as a CPA?
A. I don't know any bankers that are in that business.
Q. You don't know a single person who would pay a million dollars for what you have based on adjustment in the value of his name and likeness in trademarks of $25 million; you would agree with that?
A. I haven't attempted to find anybody. I don't know whether I do or not.
Q. And when you were retained, sir, you were retained to increase the value of Mr. Simpson's financial condition before this jury, and you understood that to be the goal that you had in being retained for the plaintiffs, correct?

MR. GELBLUM: Objection, argumentative.

THE COURT: Sustained.
Q. (BY MR. BAKER) You were retained and you were instructed to increase the value of Mr. Simpson's financial condition, correct?
A. Absolutely not.
Q. Never happened?
A. No, sir.
Q. No. And let's go to the tax picture. So, as I understand it, based upon your figures, you think that Mr. Simpson has a net worth of 15,703 less 8.5 or 7.2 million, right?
A. It's 15 million 703. I'm not willing, at this point in time, to offer an opinion on the 8.5.
Q. I don't understand. You don't have any problem offering an opinion on $25 million of name and likeness. You don't think --

MR. GELBLUM: Objection, speculative, Your Honor, argumentative.

THE COURT: You may rephrase that.
Q. (BY MR. BAKER) You didn't have any problems basing your opinion on Mr. Roesler's report and your interview of him, that Mr. Simpson would earn 2 to $3 million a year for the next 25 years? You didn't have any problem with that?
A. That's correct.
Q. But you have a problem reducing the 15, 703 by the $8.5 million verdict that this jury rendered on Tuesday; is that correct?
A. Not at all.
Q. Okay.
A. That's not my testimony.
Q. So then, the net adjustment to his net worth under your numbers is 7,203,529?
A. If you give cognizance to the entire $8.5 million, assuming that that is rendered as a just judgment, ultimately, yes, sir.
Q. Now, let's go to taxes, your views of tax law.

MR. BAKER: What's the number of the calculation to adjustment to deferred tax?

THE CLERK: 2413.

MR. BAKER: You want to put that up, Steve.
Q. (BY MR. BAKER) Let me ask you a question before we do that. Let's say that Mr. Simpson earned $50,000 a year for the next 10 years selling memorabilia, autographs. What's the cash value of that?
A. The present cash value of that would be probably -- how much did you say, 50,000?
Q. Yes.
A. Probably something just slightly less than $250,000.
Q. Around 240, 230,000; around that neighborhood?
A. Round numbers, yes, sir.
Q. That would be contrasted to the adjustment that you have placed of $25 million, correct?
A. Yes, sir. That's correct.
Q. And indeed, the $25 million adjustment assumes that Mr. Simpson will, right up to the day he dies, be making 2 to $3 million?
A. That's exploiting his name and likeness, and the trademarks that he owns, for the rest of his life, yes, sir.
Q. Even when most of the people who are in the memorabilia market wouldn't have been alive when he ever played football, correct?
A. That may be true. I don't know.

MR. BAKER: All right. Now, can we put that 2413 up, please. (Exhibit 2413 displayed.)
Q. (BY MR. BAKER) Now, under the vested pension plan of 4,121,479, if that was levied upon and removed from the pension plan itself, there is a 62.50 percent tax, right?
A. That's the tax including penalties, yes, sir.
Q. So that this tax that was indicated in the balance sheet by Mr. Taft and Mr. Goodfriend is, in fact, an accurate indication that if that tax is removed currently, correct?
A. If in fact the pension plans are invaded and the money is distributed to Mr. Simpson, that would be an accurate reflection.
Q. And that would indicate that the 712,307 is not an overstatement of tax liability if the pension plans are eliminated presently, true?
A. If the pension plans are invaded, the money removed, that's correct.
Q. It's your opinion they just flat figured incorrect the May Medical Associates tax. And have you seen any documentation relative to May Medical Associates other than line items?
A. Other than?
Q. The line items that are seen on balance sheets?
A. Yes, sir, I have. We have the K1 for 1994, and that's one of the sources of the inconsistencies in the information.
Q. And you don't believe that Mr. Goodfriend, a CPA, would know more about the tax liability than you, who's been doing Mr. Simpson's taxes?
A. I don't know. He hasn't shared with us that information. I couldn't form a conclusion on that.
Q. You didn't ask him, did you?
A. That's correct.
Q. Now, on the deferred tax benefit offset on the attorney fees -- you want to move that up please, Steve. (Elmo is adjusted.)
Q. (BY MR. BAKER) There has to be an income to take them off as a deduction, correct?
A. That's correct. Although business expenses can be carried over.
Q. And that may or may not be construed as a business expense; you would agree with that?
A. Yes, sir, I would agree with that.
Q. And so you have taken -- in your $1,310,229 deferred tax benefit, you have assumed two things: One, that Mr. Simpson has enough income to write off 2.8 million, and two, that the IRS would conclude that this is a business expense as contrasted to a personal expense, correct?
A. That's correct.
Q. And if, of course, either of those premises that you have used are incorrect, your 1,310,229 is incorrect and invalid?
A. Well, if -- if the basis -- the hypothesis that one would use varies in any number of ways, the number will change, the computation is what it is.
Q. Maybe you didn't understand my question and I'll ask it again. If in fact IRS didn't let you write off attorney fees on this case, that tax benefit is gone, correct?
A. It is gone. I would agree with that.
Q. If there is not enough income to write off, the tax benefit is reduced by the amount of income that doesn't exist to the tune of $2.8 million, correct?
A. To the extent it's not carried over, yes, sir.
Q. Now, you have been -- and, of course, in doing that is, in suggesting that Mr. Simpson has a $1,000,310 -- $1,310,000 deferred tax benefit, that would of course go to increase the value of his financial portfolio, correct?
A. That would increase the net of his assets less his liabilities, if you -- if that's where you're going.
Q. And the same with the pension plan and the same with medical -- May Medical? In other words, all of the figures that you've done on calculation of adjusted deferred tax would go to increase the value of Mr. Simpson's net worth, correct?
A. They would reduce the $4,121,000 shown on the chart and therefore would increase the bottom line.
Q. Now, you were talking -- discussing with Mr. Gelblum this 4,121,508 number, correct?
A. Yes, sir.
Q. Now, that is a number that was a calculation for tax liability on liquidation, true?
A. That's correct.
Q. Now, the number --
A. Excuse me. That's what it purported to be.
Q. Well, that's what you took it as in terms of your opinions and calculations, was it not?
A. Yes, sir, I've used that as a basis for those corrections.
Q. Oh. Now, normally when people have a summary of their financial condition, they don't include tax liability on liquidation; you would agree with that?
A. They would typically if they're assessing their financial condition not assume liquidation as you did in the case of the pension plan but would use the 45 percent as I have used.
Q. The 45 percent is an income tax rate, is it not?
A. That's correct.
Q. And when you were talking about reviewing Mr. Simpson's balance sheets before the balance sheets made for litigation, they did not have the liquidated tax liability on them, did they?
A. They didn't have any tax liability other than perhaps real estate taxes.
Q. And it did list income on there. It listed was that the page -- what assets, what balance on the Rockingham estate, correct?
A. Well, that tax --
Q. No, no. Listen to my question.
A. Well, you have a misunderstanding as to what's on the balance sheet.
Q. Let's go through it and maybe you can help clarify it.
A. Okay.
Q. On the condition of Mr. Simpson's financial summary -- Phil, get out the summary, okay. Blow-up is displayed.)
Q. (BY MR. BAKER) Now, on the summary of financial condition, you have got assets, including what's in the bank, the partnerships and pension plans, personal furnishings, et cetera?
A. That's correct.
Q. And you don't have, for example, what his income is estimated to be in the next year or the next 25 years, correct?
A. I don't have it?
Q. You have it, but on the reports that you reviewed of Mr. Simpson in terms of his summary of financial condition, that existed prior to any report being generated for litigation, it listed what his assets were, correct?
A. That's correct, and his liabilities.
Q. And it didn't list, for example, as I stated, it didn't list 25 years of what his income may or may not be, did it?
A. Or the present value of that, no, sir.
Q. And it also did not include any taxes on liquidation, correct?
A. That's correct, or any taxes at all.
Q. And the only other taxes would be taxes if in fact he made an income, which isn't listed on a summary of financial --
A. No, sir, that's not true at all.
Q. Well, let's go back. You're certainly not in terms of an ongoing financial statement going to list taxes on liquidation; you would agree with that?
A. Well, I don't know what you mean by liquidation, but if by liquidation you mean the disposition of an asset, that's exactly what's listed.
Q. That's what's listed after we were required to disclose his financial condition before litigation because they would -- those would have to be paid if in fact the assets were liquidated, you'd agree with that, you included this in your statements?
A. That's correct. I included it because it's a proper presentation.
Q. And the point is that if, in fact, you have an ongoing enterprise such as Mr. Simpson and Orenthal Productions and you have no intentions to liquidate it at all, you don't put taxes on for that would be incurred in liquidation, correct?
A. That's correct.
Q. So when the change occurred in his statement of financial condition, it included taxes that would be incurred upon liquidation; you would agree with that?
A. That appears to be the basis for some of the computation, yes, sir.
Q. And so you would anticipate that if you're going to have a fire sale of Mr. Simpson's assets and he is going to have to liquidate assets, that his net worth is going to decrease because of the amount of taxes that are going to have to be paid, correct?
A. If even $1 in tax is paid, it would reduce his net worth, yes, sir.
Q. In terms of -- for example, you talked about Rockingham and rollover provisions; remember that?
A. Yes, sir.
Q. If you sell Rockingham, which has a cost of 1 million 4, and you sell it for three seven you're going to incur taxes unless you buy another house that's worth three seven, right?
A. That's correct.
Q. If Mr. Simpson is forced to liquidate his house, he's not going to have any money to buy a house for $3.7 million, he's going to have to pay taxes between the one, four and the three, seven, true?

MR. GELBLUM: Objection, calls for speculation.

THE COURT: Overruled.
A. Depends on what he does with the proceeds.
Q. (BY MR. BAKER) If the proceeds are used to satisfy a judgment, he has no money to -- based upon even your balance answer sheet, he has no cash to spend to buy another house; isn't that true?
A. If he takes the proceeds from the sale and disposed of them other than buying a house, he would incur a tax liability.
Q. In your summary of financial condition, you have included, as we indicated -- in other words, this number of $25 million, you would agree this number isn't available to Mr. Simpson to spend or to satisfy any judgment, is it?
A. If he were to enter into negotiations to sell the complete future value of his name and likeness and all his trademarks, it would be available to him.
Q. If there were a buyer and he could sell it, obviously it's an asset that he could have control over, correct?
A. I agree with you.
Q. The number you've put up there of $25 million, it assumes there is some reasonable person out there who would pay that kind of money for Mr. Simpson's name and likeness now throughout his lifetime, correct?
A. That's correct.
Q. And if there is no such person who would pay $25 million, reasonable or otherwise, you would agree that amount of money is not available to satisfy any punitive damage claim, correct?
A. It depends on whether a person would buy certain portions of the rights, that's all of the rights that -- there could be movie rights, as you well know, and other types of rights, but taken to the extreme, if no rights could be sold at all, that money would go away.
Q. And he would not have any of the 25 million to pay any punitive damage claim in that scenario?
A. That would be -- under that assumption, that would be correct.
Q. And we have certainly not the 175,592 to pay any punitive damage claim if in fact a punitive damage claim is awarded by this jury in the next couple of days, right?
A. Last of that he would start receiving that in the year 2002, so he wouldn't be able to make the payment until 2002.
Q. So that the levy of execution could come and he would have no money, basically $25 million that you've added into his net worth, to make any payment, would you agree with that?
A. If he didn't sell some or all of that, yes.
Q. And as well, sir, if you remove those items and include the $8.5 million award of this jury on Tuesday, Mr. Simpson has a negative net worth, correct?
A. If you remove any large item from that and substitute the $8-1/2 million, it would tend to decrease the net worth, that would result in a negative net worth, yes, sir.
Q. And being that he has more liabilities than he has assets, correct?
A. Has more listed liabilities than he has acknowledged assets, correct.

MR. BAKER: That concludes my cross.

MR. P. BAKER: You want this up (indicating to blow-up entitled "Summary of Orenthal Simpson Financial Condition")?

MR. GELBLUM: Sure.

REDIRECT EXAMINATION BY MR. GELBLUM:
Q. Is your expertise in valuing name and likeness?
A. No, sir.
Q. You relied on Mr. Roesler for that?
A. I did.
Q. Mr. Baker asked you several questions about whether you asked Mr. Goodfriend and Mr. Taft for information. Did you understand you had the ability to call him up on the phone and get information from him?
A. No, sir. I was under the impression that all my requests had to go through you.
Q. Their witnesses for the other side?
A. That's correct.
Q. Now, Mr. Baker asked you some questions about whether you'd seen any documents reflecting receipts by Mr. Simpson of revenues based on his name and likeness. Could you put up, Steve, the summary of the profits gained from the murders, on the Elmo, please. (Document is displayed on Elmo.)
Q. You do understand a significant portion of those revenues to have come as a result of Mr. Simpson's name and likeness?
A. Yes, sir, I do.
Q. Autographs, memorabilia?
A. Photos.
Q. Interviews?
A. Interviews, yes, sir.
Q. And do you understand that Mr. Roesler in fact included in his, what he's calling the name and likeness valuation that ended up in your $25 million number, book sales as well?
A. Yes, sir.

MR. BAKER: I'm going for object to him leading this witness.

THE COURT: This is redirect. I'll allow certain latitude.
Q. (BY MR. GELBLUM) So, in fact, the bulk if not all of the $2.8 million there which we saw on the other sheet as having been earned in about a 15-month period, in fact, is a result of the exploitation of his name and likeness?
A. I would consider all those exploitation of name and likeness.
Q. Okay. Mr. Baker also asked you some questions about Orenthal Productions' loan receivable, the $265,000?
A. Yes, sir, he did.
Q. Right. And you saw a February 15, 1996 financial statement prepared by the defense, correct?
A. Yes, sir, I did.
Q. Okay. And you saw a document of that date for Orenthal Productions as well, correct?
A. Yes, sir, I did.
Q. And did that document, as of February 15, show an amount payable to Mr. Simpson?
A. Yes, sir, it shows --
Q. How much?
A. Shows $1,043,091 due to Mr. Simpson as of February 15.
Q. 1996?
A. 1996.
Q. And on the February 15, 1996 financial statement from Mr. Simpson, what value did the defense put on that receivable, the $1 million receivable?
A. They put $1.
Q. Under the same rationale, that the assets were less than liabilities?
A. Yes, sir.
Q. And in fact, has Orenthal Productions apparently managed to pay over $750,000 to Mr. Simpson in the last ten months?
A. Yes, sir.
Q. Is that why you discredit the $1 valuation?
A. Yes, sir. That's one reason.
Q. Okay. You also referred in your response to questions from Mr. Baker to a loan application?
A. Yes, sir.
Q. Okay. Just like to show you what I'll mark next in order as 2415, a 3-page document.

(The instrument herein described as a loan application was marked for identification as Plaintiffs' Exhibit No. 2415.)
Q. (BY MR. GELBLUM) Is this the loan application you're referring to?
A. Yes, sir, it is.
Q. Is that signed on the last page?
A. Yes, sir.
Q. And can you read the signature to the jury?
A. It says Orenthal J. Simpson by -- looks like Mr. Taft, Attorney in Fact, dated 4/6/95.
Q. You would say you thought it was '93 or '94. That's in fact April '95?
A. Yes, sir, it is.
Q. That's while Mr. Simpson was on trial?

MR. BAKER: I'm going to object to this. That's outside the scope.

THE COURT: Overruled.

MR. GELBLUM: If you move up to the top of the page, please, Steve. (Elmo adjusted.)

MR. GELBLUM: I'm sorry, to the previous page. (Elmo adjusted.)
Q. (BY MR. GELBLUM) There's a monthly income figure shown for Mr. Simpson --
A. Yes, sir.
Q. -- at the top of the page. And the left-hand column, can you read those off for the jury?
A. Yes, sir. The borrower is Mr. Simpson. Base employment income is 33,500, dividends and interest per month is $8,860 net, rental income per month is $7,125 and other income per month is 62,089.58, for a total monthly income of 111,574.60.
Q. In your practice as a CPA, have you seen these kind of loan applications before, these standard forms?
A. Yes, sir.
Q. And are these signed under penalty of perjury?
A. Yes, sir, they are. There's a federal perjury statute that makes it a federal crime to make a false or misleading statement in connection with the granting of credit from a federally insured institution.
Q. And again, the date on this is April, 1995?
A. Yes, sir, it is.
Q. Okay. Finally, sir -- you can take that down, Steve. (Mr. Foster complies.)
Q. (BY MR. GELBLUM) Mr. Baker asked you some questions about the deductibility -- put up the adjust -- calculation of adjustments of deferred tax. I'll go down the deferred tax benefit there on the tax benefit for the attorney fees. You read Mr. Taft's deposition?
A. Yes, sir, I did.
Q. And did you see there that he -- what the basis -- is that where you got the information that they were claiming these fees as deductions?
A. Yes, sir, I did.
Q. And do you see that he said he got an opinion from a tax attorney allowing him to do that?
A. That's correct.
Q. Okay. Now, Mr. Baker asked whether if Mr. Simpson does not have sufficient income that he would not be able to use all of these offsetting losses; is that right?
A. That's correct.
Q. And by the same token, if Mr. Simpson has additional losses, he would not have to pay all of the various taxes that he had listed he would -- that he would have to pay; is that correct?
A. To the extent that he had losses, it would offset the income, it would reduce the amount of taxes payable.
Q. Thank you.

MR. GELBLUM: I have nothing further.

MR. BAKER: Put up 2415 again. (Exhibit 2415 is displayed on Elmo.)

RECROSS-EXAMINATION BY MR. BAKER:
Q. Okay. Now, this was income in 1993, '94, right?
A. At the time I testified to it a few moments ago, I was not sure of the day. That appears that it's in early 1995.
Q. Okay. So it would be 1994 income?
A. No, sir. It's current income.
Q. Now, how much is income at -- what's the monthly income at 2.5 million a year?
A. It's about $200,000 a month.
Q. And the book and the videos where you say Mr. Simpson -- you had it categorized as his profit on the murders.
A. Yes, sir.
Q. Those were both one shot deals, correct?
A. Yes, sir.
Q. You wouldn't use that to assert that he was going to make that kind of income, correct?
A. Well, I think that you have a series of one shot deals that produce income over time.
Q. And there's no one shot deals in 1996 that you were aware of, the last half?
A. I hadn't been provided any information, no, sir.
Q. Well, you got the computer printouts of all the income that Mr. Simpson made in 1996. That's how you did those charts; isn't that correct?
A. Well, I got redacted computer printouts, that's correct, and they were limited to those categories and that's how I summarized it.
Q. Now, what were Mr. Simpson's attorneys' fees for the criminal trial?
A. I can tell you what the balances are.
Q. Do you know what he paid total?
A. No, sir. You haven't given us that information. As of December 31, about 2.8 -- almost $2.9 million for both trials and including --
Q. That's still owed; is that correct?
A. Yes, sir.
Q. And then there's $200,000 roughly for attorney fees for the custody hearings?
A. That's correct. 188,000.
Q. And in addition, Mr. Simpson -- you don't know if he's paid 2, 3, $4 million already in attorney fees to the criminal lawyers?
A. We don't know, no, sir.
Q. Nothing further.

MR. GELBLUM: Nothing further, Your Honor.

THE COURT: Okay. Next --

MR. GELBLUM: Move in Exhibit 753 and 2409 through 2415.

MR. BAKER: Objection, cumulative and argumentative.

THE COURT: Received.

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 753.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2409.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2410.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2411.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2412.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2413.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2414.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2415.)

THE CLERK: I need 2409 and 2415. I need the C.V. and the 3-page loan application.

MR. GELBLUM: Call Mark Roesler, Your Honor.

THE CLERK: Counsel, can I get those two exhibits before we move on. (Mr. Gelblum hands exhibits to the clerk.)

MARK ROESLER, called as a witness on behalf of Plaintiffs, was duly sworn and testified as follows:

THE CLERK: You do solemnly swear that the testimony you may give in the cause now pending before this court shall be the truth, the whole truth and nothing but the truth, so help you God~?

THE WITNESS: I do.

THE CLERK: Please be seated. Sir, would you please state and spell your name for the record.

THE WITNESS: My name is Mark Roesler, R-O-E-S-L-E-R, first name M-A-R-K.

DIRECT EXAMINATION BY MR. GELBLUM:
Q. Morning, Mr. Roesler.
A. Morning.
Q. What's your occupation, sir?
A. I'm chairman and CEO of a company called CMG Worldwide.
Q. And what is the business of CMG Worldwide?
A. We represent various sports and entertainment personalities.
Q. And what do you do for them?
A. We do marketing, licensing, management work for them.
Q. Can you briefly tell the jury about your education since college.
A. I graduated from -- from college in 1974, and then -- I'm sorry, 1978 -- and I went to Indiana University School of Law. And I also went to Indiana University Graduate School of Business, where I received both a masters in business administration and a juris doctorate degree.
Q. What year was that?
A. That was -- I graduated in 1981 from both schools.
Q. And upon graduation, what did you do?
A. Upon graduation, I immediately went to work for a company by the name of Curtis Publishing Company. And they were in the business of -- of publishing a magazine called the Saturday Evening Post. And that magazine owned about 350 copyrighted illustrations of Norman Rockwell. Norman Rockwell had died a few years earlier, and we began working with his estate, and I started representing -- working with his estate in 1981. And shortly thereafter, we started representing outside clients, and I was put in charge of that. And our first client in 1981 was the Elvis Preseley estate.
Q. And did you represent the Elvis Presely estate?
A. I represented the Elvis Presely estate from 1981 through 1987.
Q. And since 1981, have you represented both living celebrities and estates of dead celebrities?
A. Yes, sir I have.
Q. As a general matter, what kinds of things do you do for your clients?
A. Well, like you say, we represent both living and deceased clients. Where we have become the biggest company in the business of representing famous deceased people. And our specialty is really representing the famous personalities of the twentieth century. Obviously, some of those are deceased. In the sports area, we represent mostly Hall-of-Fame-type athletes, and the baseball and some in the football area.
Q. Can you give us some examples?
A. In the baseball area, we represent people like Jim Palmer, Bob Eller (phonetic), Whitey Kilmer (phonetic), all Hall of Famers. Many of the famous deceased baseball players, from Babe Ruth, Lou Gherig, Ty Cobb, people like that. In the football area, we represent people like Vince Lombardi and Jim Thorpe. Other Hall of Fame living clients we represent are people like Johnnie Unitas. And we represent some boxing people, like Floyd Patterson, that are Hall of Fame boxers that are retired; deceased boxers like Jack Dempsey, Joe Lewis, people like that.
Q. Do you also represent celebrities outside the sports field?
A. Yes, yes, we do. We represent a number of entertainment industry clients. We represent James Dean, Marilyn Monroe, Humphrey Bogart, people like that. About probably 40 or 50 entertainment-type clients.
Q. Have you represented the estate of Malcolm X?
A. Yes, sir, I have, and still do.
Q. So, a wide variety of people?
A. Yes.
Q. Is -- the common thread is fame; is that correct?
A. That's correct. Fame in the twentieth century.
Q. What do you do for those clients, as a general matter?
A. As a general matter, we negotiate contracts that utilize their -- their image, their name, or their likeness. And obviously, generally, that's for a fee. And we also secure whatever legal protection is necessary to see that -- to see that that continues into the future.
Q. Okay. And what is the overall goal of the services you render for these clients?
A. Well, typically, the overall goal is to see that the assets are preserved and the asset is made as valuable as possible, and generally, that that value obviously results, in many cases, substantial sums of money. But in order to make it valuable, it's also necessary to do whatever's necessary to protect it, both in terms of --of negotiating specific contracts, narrow parameters, securing trademark production, things of that nature, guarding against unauthorized uses.
Q. Have you negotiated contracts for your clients in the area of appearances and autograph shows?
A. Yes.
Q. Merchandising?
A. Yes, sir.
Q. Book deals?
A. Yes, sir.
Q. Media uses?
A. Yes, sir.
Q. The whole gamut of ways to exploit a celebrity's name and likeness?
A. Yes, sir.
Q. Were you asked oh, do your services just relate to exploiting name and likeness within the United States?
A. No, sir. I mean, typically, the clients we represent typically have international name. Many of our clients -- we do more business outside the United States than we do inside the United States.
Q. Can you give me an example of that?
A. Well, one example in the sports area, we have a very successful chain of Babe Ruth restaurants, and the first one is -- has been opened. It's the largest restaurant in England, seats almost 500 people. That's in London. Another one is scheduled to open in Barcelona, and there's none of those in the United States. Someone like a James Dean or Marilyn Monroe, most of our business is outside the United States.
Q. All right. Now, take this down. (Indicating to blow-up entitled Summary of Orenthal Simpson's Financial Condition as of December 31, 1996, Revised 1-31-97. Were you asked to perform some services in this litigation, sir?
A. Yes, sir, I was.
Q. What were you asked to do?
A. I was asked to value the name and likeness of Mr. Simpson once a liability verdict was rendered in the civil action.
Q. Okay. Did you perform an analysis of that?
A. Yes, I did.
Q. Did you reach a conclusion?
A. Yes, I did.
Q. What was your conclusion?
A. Well, my conclusion was that Mr. Simpson had -- had value; that that could vary from year to year; but in general, the average value would be in the two- to three-million-dollar-per-year range.
Q. And that would be -- would that be for the rest of his life?
A. Yes, sir, it would be.
Q. And you've told us that you represent a number of estates of deceased clients. Would Mr. Simpson's name and likeness also have some value after his death?
A. Yes, it would. The State of California has a special statute called Section 990, and Section 990 specifically provides for the right of publicity as -- as this area's called, the right of someone to protect their name and likeness. It provides for that to extend for 50 years. I might say it -- at this point. That it doesn't necessarily end after 50 years, because we do have clients -- for example, Babe Ruth, who's been dead for 50 years this year, I believe, but because we secured a trademark protection for his name or his likeness, it's able to continue beyond that 50 years.
Q. What kind of sums were you able to obtain for somebody like Babe Ruth, who's been dead for 50 years?

MR. BAKER: Objection. Relevancy.

THE COURT: Overruled.
A. Someone like Babe Ruth brings in over a million dollars a year.
Q. (BY MR. GELBLUM) Now, I think you were sitting here when Mr. Freeman testified?
A. Yes, I was.
Q. He testified that, based on your opinion and reducing your numbers down to the present value, that a reasonable business person or investor today would pay approximately $25 million for the exclusive right to exploit Mr. Simpson's name and likeness for the rest of his life. Do you agree with that?

MR. BAKER: I object to that, Your Honor. It calls for speculation. There's no foundation.

THE COURT: Overruled.
A. It was -- it was my understanding that he said that someone would pay $25 million for the -- for the entire right of publicity, which would include both during his lifetime and after his lifetime.
Q. In fact, I believe you testified just during his lifetime.
A. Okay.
Q. Do you consider that a reasonable number?
A. I consider that a reasonable number.
Q. Okay. And we'll get into a little more detail later, but do you have experience where somebody, in fact, sells on a current basis, the right to use some celebrity's name and likeness in a limited area for a certain time in the future?
A. Yes, I do.
Q. Okay. Did you prepare a report in connection with your services here?
A. Yes, sir, I did.
Q. Do you have a copy of it handy?
A. Yes, in my briefcase.
Q. All right. If you'll get that out.
A. (The witness complies.)

MR. GELBLUM: This is Exhibit 752.

(The instrument herein referred to as Report by Mark Roesler with Exhibits regarding value of defendant's name and likeness was marked for identification as Plaintiffs' Exhibit No. 752.)
Q. (BY MR. GELBLUM) In preparing that report, Mr. Roesler, did you review any documents?
A. Yes, I did.
Q. What did you review?
A. I reviewed basically five different categories of items. The first category was a trademark search of the various trademarks that Mr. Simpson has tried -- is trying to secure for both his name and his likeness. The second segment were the two lawsuits that Mr. Simpson filed against several dozen companies that were using his name or likeness without his authorization. The third area was various current market information on the value of Mr. Simpson's -- both his autograph and his product. The fourth area were 20 contracts that Mr. Simpson has entered into for his name and likeness. Nineteen of them were after June of 1994. And the fifth area was the financial documents that were supplied to us by Mr. Simpson.
Q. Now, in reaching your conclusion that Mr. Simpson's name and likeness, as you described it -- and we'll go through the individual categories that make up that total -- come to about two to three million dollars a year, did you make any assumptions as to how that name and likeness would be exploited?
A. Yes, I did.
Q. What assumptions did you make?
A. Well, I made -- I made assumptions Mr. Simpson would use his reasonable or best efforts to -- to exploit his name and likeness.
Q. Okay. Did you assume anything about whether he would seek to protect his name and likeness?
A. Well, I reviewed the facts that Mr. Simpson had secured --was in the process of securing trademark protection for his name and likeness, and also reviewed the facts that he had filed several lawsuits against various people that were using his -- his name and likeness. So I reached the conclusion that he would continue to -- to proceed in that manner.
Q. Okay. Now, did you -- did you search the public records for information regarding Mr. Simpson's trademarks?
A. Yes, sir, I did.
Q. And do you have a summary of what that search revealed?
A. Yes, I do.

MR. GELBLUM: Mark that next in order as 2416.

(The instrument herein referred to as Roesler Summary of Search was marked for identification as Plaintiffs' Exhibit No. 2416.)
Q. (BY MR. GELBLUM) And what did that search reveal?

MR. BAKER: I object, Your Honor, because that assumes that they were granted.

MR. GELBLUM: He's applying for it; he's seeking to protect it.

THE COURT: It's his application. This is the basis of this witness's opinion. Overruled for that purpose.
Q. (BY MR. GELBLUM) How many different trademarks did Mr. Simpson apply for, according to the public record you found?
A. Well, Mr. Simpson has applied for six different trademarks that involve his name or his likeness. And some of them involve a combination of that. And those six different trademarks were filed in 20 different classes; and those were all filed since 1994 and since -- after June of 1994. Typically, it takes anywhere from two to four years for a trademark application to mature to an actual registration. But the -- in each application, Mr. Simpson -- either there's two different -- there's two different forms that you can use, either what's called an intent to use or an actual use, when you file these applications. For three of the applications, he filed what's called an actual use, saying he's already had use in those categories, and he listed 90 different goods that he had -- that he had actual use on. And on the intent-to-use applications, on the remaining ones, he listed his intention to -- to do as many over 500 different -- 500 goods. Some of those goods were the same. In the different classes, there were over 100 different types of goods that he indicated that he intended to use on that. And those applications are filed under penalty of perjury.
Q. And what are the six -- I think you said there are six different marks applied for?
A. Yes, sir.
Q. What are those marks?
A. The first mark is Team O.J. Justice For All. The second mark is The Juice. The third mark is O.J. Simpson with an image of Mr. Simpson.
Q. An image meaning a picture?
A. A likeness of Mr. Simpson. A fourth mark is just O.J. Simpson. The fifth mark is the -- just Juice. And the sixth mark is O.J.
Q. Okay. And what are some of the categories of goods Mr. Simpson is seeking trademarks on under those names?
A. Well, some of those -- some of those products are -- some of those classes of goods, rather, are metal goods, jewelry, paper goods, and printed matter.
Q. Back up a little from the microphone, Mr. Roesler.
A. Metal goods, jewelry, paper goods and printed matter, clothing, and toys, and sporting goods were the classes in the first mark that he filed for. And within those goods or services, it -- you can list various items. For example, in class 25, his clothing, and it lists various types of clothing items that you can specify.
Q. Okay. How does the scope of these trademark applications compare to the clients that you represent?
A. It's very extensive.
Q. And is 24 -- is this a typical procedure for somebody seeking to exploit their name and likeness, applying for trademarks?
A. Somewhat typical. A trademark -- a trademark will give you additional legal protection. Someone that's famous has a protectable right of publicity.

MR. PETROCELLI: Move back, Mr. Roesler; push the mike down a little. There you go.
A. (Continuing.) So there is a protectable right of publicity that an individual has. A trademark can give you additional protection that allows you to sometimes more easily enforce those rights. The trademarks can be expensive to -- to secure, so often, it's balanced against how much you want to spend to protect your name or your likeness with these trademarks, which is really just additional protection and gives you additional scope. So typically, the clients of ours that secure trademark protection are the ones that generate more significant sums of money on an annual basis.
Q. And how many classes of goods did you say Mr. Simpson had applied for protection on?
A. Twenty different classes of goods.
Q. Covering how many different goods, how many different items?
A. Well, collectively, there were -- he had listed over 500 items, 500 types of goods.
Q. Okay. Now, I think another thing you mentioned that you do for your clients is to seek to protect the value and protect the value of the name and likeness out there by policing the market; is that right?
A. That's correct.
Q. And have you seen evidence that Mr. Simpson has attempted to do that?
A. Yes, I have.
Q. And you mentioned two lawsuits he had filed?
A. Yes.
Q. All right. I'm going to put in front of you what I'll mark as 2417 and 2418.

MR. GELBLUM: 2417 is a lawsuit in the Superior Court of the State of California for the County of Los Angeles: O.J. Simpson, Orenthal Productions, Inc. versus Choi, C-H-O-I and a couple other pages of caption, defendants. And the second is a another lawsuit filed also in the Superior Court of Los Angeles County, O.J. Simpson and Orenthal Productions -- and I apologize, Your Honor: I picked up two copies of the same lawsuit. Do you have the other lawsuit with you, sir?

THE WITNESS: No, no, I don't.

MR. GELBLUM: All right. I'll have to get that after the break. I'll just put the one in front of you, 2417.

(The instrument herein referred to as Copy of complaint in Simpson V. Choi was marked for identification as Plaintiffs' Exhibit No. 2417.)
Q. (BY MR. GELBLUM) Have you reviewed that complaint, as well as the other complaint?
A. Yes, I did.
Q. As a general matter, what -- First of all, when was that complaint filed? You see a file date stamp?
A. The complaint was filed -- it appears to have been filed on September 20 of 1995.
Q. Okay. And you reviewed that complaint?
A. Yes, sir, I did.
Q. And as a general matter, what does it seek? What relief does it seek?
A. Well, it's a complaint for six different causes of action, first being a commercial misappropriation of his likeness; the second being invasion of privacy; the third being false light; the fourth being trademark infringement; the fifth being unfair competition; and the sixth, both interference with prospective economic advantage.
Q. And are there any statements in that complaint, sir, regarding the plaintiff's characterization of the value of his name and likeness?

MR. BAKER: Objection. Irrelevant, Your Honor.

THE COURT: Overruled.
A. Well, in this particular complaint, I have it in my opinion, here -- probably be easier to read it out of my opinion -- but basically, he makes the comments that the statements that he's used, the marks in connection with the variety of goods and services continually for many years, and has exclusively licensed and registered the marks to Orenthal Productions Inc. from any types of goods or services over his career consumers have come to.

THE REPORTER: Can you repeat that please, over his . . .

THE WITNESS: Over his career consumers have come to recognize and identify goods associated with the marks as meaning that these goods and services either originated with O.J. Simpson or were endorsed or sponsored by him.
Q. (BY MR. GELBLUM) Would you read paragraph 46. This is a complaint filed on behalf of Mr. Simpson.

MR. BAKER: I'd object to reading that.

THE COURT: Overruled.
A. Number 46 says that Plaintiff O.J. Simpson is perhaps one of the most famous people in the world today. Mr. Simpson's name and notoriety have created huge, lucrative markets to people such as the defendants herein to sell unauthorized and unlicensed merchandise carrying his name, photograph, and/or likeness, including clothing, posters, cards, toys, souvenirs and other paraphernalia.

MR. GELBLUM: Okay. And I have located the other complaint, which we'll mark as 2418. And that's captioned O.J. Simpson, Orenthal Productions, versus John Doe, et cetera, numerous other defendants.

(The instrument herein referred to as Copy of Complaint filed in State of California, Superior Court for the County of Los Angeles, captioned O.J. Simpson, Orenthal Productions, versus John Doe, et cetera, numerous other defendants, was marked for identification as Plaintiffs' Exhibit No. 2418.)
Q. (BY MR. GELBLUM) Is Exhibit 2418 the other complaint that you reviewed, sir?
A. Yes, sir, it is.
Q. Is that complaint seeking similar relief?
A. Yes, sir, it does.
Q. All right. Now, from the documents that you've reviewed, sir, can you tell whether prior to the murders of June 12, 1994, Mr. Simpson made a practice of licensing his name and likeness?
A. Certainly from the documents, he confirms that he has.
Q. Okay. And from the documents reviewed, after the murders, did he license his name and likeness?
A. Yes, he did.
Q. And did you review a number of contracts that reflect that?
A. Yes, I did.
Q. Did you create a summary of the contracts you reviewed?
A. Yes, I did.

MR. GELBLUM: I'd like to mark that next as 2419.

THE CLERK: 2419.

(The instrument herein referred to as Summary was marked for identification as Plaintiffs' Exhibit No. 2419.)
Q. (BY MR. GELBLUM) Do you have a copy of that with you?
A. Yes, sir, I do.
Q. Let me just put the first page up on the Elmo, just so the jury can see what you're talking about. (Plaintiffs' Exhibit 2419 displayed on the Elmo screen.)
Q. (BY MR. GELBLUM) Briefly describe what that document is.
A. Well, the entire -- the entire document is a summary of the contracts that were provided to us since June of 1994. All 20 of them, with the exception of the first one right there, which was entered into on June 1 of '94, happened after the -- the date of the murders.
Q. Okay. And you have briefly summarized each contract; is that right?
A. Yes, I have.
Q. Okay. Do you know for a fact whether the sums paid -- called for in the contracts were actually paid to Mr. Simpson?
A. I don't know, no. I don't know for certain.
Q. When the jury reviews that, what they're looking at is your summary of the contract terms; is that right?
A. That's correct.
Q. Okay.

MR. GELBLUM: This would be a good time.

THE COURT: Okay, 1:30, ladies and gentlemen. Don't talk about the case. Don't form or express an opinion.

(At 12:00 noon, a luncheon recess was taken until 1:30 p.m. of the same day.)

SANTA MONICA, CALIFORNIA; THURSDAY, FEBRUARY 6, 1997 1:38 PM

DEPARTMENT NO. WEQ HON. HIROSHI FUJISAKI, JUDGE APPEARANCES:

(REGINA D. CHAVEZ, OFFICIAL REPORTER)

(Jurors resume their respective seats.)

THE COURT: You may resume.

MR. GELBLUM: Thank you, Your Honor.

DIRECT EXAMINATION BY MR. GELBLUM: (continued)
Q. The last exhibit we marked and had up on the Elmo before the break was 2419 which was a summary of contracts. I'm not going to mark these because they're voluminous. Are these the contracts that you looked at that you summarized on 2419?
A. Yes, they are.
Q. Okay. Now, let's get into the specific categories that make up your opinion about the total value of Mr. Simpson's name and likeness. How many different areas were there that you looked at?
A. I basically divided them up into seven different areas.
Q. You tell us what those seven areas were, then we'll go through them one at a time.
A. Yes. The first area -- the first area was the autograph area. The second area was the product or merchandise memorabilia area. The third area was the endorsement or advertising area. The fourth were media type uses. The fifth area was book or audiotapes. The sixth area was the movie area. And then last, was items -- actual items that were owned by Mr. Simpson.
Q. Okay. Let's start with the autographs. Is there information that is generally available in the autograph industry as to the value of different celebrities' autographs?
A. Yes, there is.
Q. And are there publications that publish that information on a regular basis?
A. Yes, there is.
Q. Is there a magazine called Tuff Stuff, T-u-f-f S-t-u-f-f, that's one of the leading standard publications?
A. Yes.
Q. How often is that published?
A. That's published on a monthly basis.
Q. You have the most rent edition?
A. Yes, I do.
Q. Can we take a look at it.

MR. BAKER: Objection, 2034.

THE COURT: Overruled. I don't understand that objection.

MR. BAKER: I took his deposition and any information that came in that --

THE COURT: Is that a reference source?

THE WITNESS: Yes, sir, it is.

THE COURT: Overruled.
Q. (BY MR. GELBLUM) All right. If you could display that for the jury so we can see what it is we're talking about. (Witness complies.)
Q. (BY MR. GELBLUM) Is that something available in book stores and news stands?
A. Yes. This was purchased at a news stand here in Santa Monica.
Q. Is that used and relied upon by people in your business?
A. Yes, sir, it is.
Q. Okay. Does that display in a chart form and a monthly basis the going price for different celebrities' autographs?
A. Yes, it does.
Q. Okay. Is Mr. Simpson listed in there?
A. Yes. Basically every sports celebrity of the -- basically of the 20th Century is listed on here, that has some fame.
Q. Is there just one price for each celebrity?
A. No. There's seven, generally, different prices depending upon what the autograph is affixed to.
Q. Is there a standard format for an autograph that's used for comparison purposes for different sports and different celebrities?
A. Basically, an 8 by 10 photograph is kind of the standard of comparing between the different sports, whether it's basketball, baseball, football, boxing, golf, whatever.
Q. Is that because it's easier to compare that than compare a signed football, versus signed basketball, versus a signed baseball?
A. Yes. Because, obviously, in the baseball area a lot of baseball players signed baseballs, and football players would sign footballs.
Q. And they cite different amounts?
A. That's correct.
Q. What does the current edition of Tuff Stuff reflect as the going price for Mr. Simpson's 8 by 10 autograph, 8 by 10 photograph?

MR. BAKER: I object on foundational grounds.

THE COURT: Overruled.
A. It values his current signed photo at $60.
Q. How does that compare with all of the other athletes listed?

MR. BAKER: Object, Your Honor, it's irrelevant.

THE COURT: Overruled.
A. Well, of the several thousand that are listed, there's basically two different categories of autographs. Those are autographs of athletes that are deceased and autographs of athletes that are still alive. The ones that are deceased are -- can be more because they aren't available anymore. As far as the living athletes, several thousand living athletes that are listed -- listed here, there are only five -- five athletes with a higher value on their autograph than Mr. Simpson.
Q. (BY MR. GELBLUM) Who are those five?
A. In the baseball area, Joe DiMaggio and Ted Williams. In the basketball area, Wilt Chamberlain, Bill Russell. In boxing, Mike Tyson.
Q. And what does Mike Tyson's autograph go for?

MR. BAKER: Objection, relevancy.

THE COURT: Overruled.
A. $100.
Q. (BY MR. GELBLUM) And Mike Tyson, of course, was convicted of rape some time ago and served some time in jail?
A. Yes, sir.
Q. Did his autograph -- by the way, do you know whether the value of Mike Tyson's autograph increased or decreased or stayed the same from the time before he was convicted of rape and then after he was convicted of rape?

MR. BAKER: Relevancy.

THE COURT: Overruled.
A. It increased.
Q. (BY MR. GELBLUM) Okay. And did you do a comparison of what happened with Mr. Simpson's autograph from the time before he was charged with the murders and after he was charged with the murders?
A. Yes, I did.
Q. Did you prepare a chart reflecting that?
A. Yes. Yes, sir, I did.

MR. BAKER: You got some documents for me.

MR. GELBLUM: This is part of his deposition exhibits.

MR. BAKER: Oh.

MR. GELBLUM: Your Honor, do you mind if we mark that magazine as an exhibit and use that? Is that acceptable?

THE COURT: It's your exhibit.

MR. GELBLUM: That will be 2420. And we'll mark this, O.J. Simpson's valuation chart, next in order as 2421.

(The instrument herein referred to as Magazine entitled Tuff Stuff was marked for identification as Plaintiffs' Exhibit No. 2420.)

(The instrument herein referred to as O.J. Simpson's valuation chart was marked for identification as Plaintiffs' Exhibit No. 2421.)

MR. BAKER: That isn't in his deposition.

MR. GELBLUM: It was. Let me see if I can find you a copy.

MR. BAKER: I have a book of all of his exhibits.

MR. GELBLUM: I don't have another copy now. It's up on the chart.

MR. BAKER: I'm going to object on 2034 grounds.

MR. GELBLUM: It was a deposition exhibit.

THE COURT: Excuse me.

MR. BAKER: It was not a deposition exhibit. It's not here.

THE COURT: There's an objection. I'm sustaining it unless you show me otherwise.

MR. BAKER: If you'll show it to me, I'll look and see if it's here.

MR. FOSTER: Here. (Document is handed to Mr. Baker.)

MR. BAKER: I don't think so, Peter. I don't think I've ever seen it before.

MR. GELBLUM: I don't have the deposition transcript with me, Your Honor.

MR. BAKER: Let me see it again.

MR. GELBLUM: It's Exhibit 8 -- I'm sorry, Exhibit 11 to the deposition, called a valuation chart. (Mr. Baker and Mr. Gelblum converse sotto voce.)

MR. BAKER: It's not here.

MR. GELBLUM: It's the same -- it's Exhibit 7 to the deposition. (Counsel converse sotto voce.)

MR. BAKER: Take this one and use the whole thing then. (Counsel takes two pages out of deposition.)

MR. GELBLUM: Would you come in a little closer on the top, Steve.

THE COURT: Are my eyes going bad or?

MR. FOSTER: It's the documents.
Q. (BY MR. GELBLUM) All right. Can you read across the top. What are the columns listed that you have there? Mr. Roesler, you can look at it on the screen.
A. Okay. The columns across the top are prior to June of 1994, and in the period between June and October -- June of '94 and October of '95.
Q. That's another period that Mr. Simpson was incarcerated?
A. That's correct. Then November of '95 through May of '96. And then June of '96 through the present time. So I tried to see if there was any fluctuation in terms of the value of his autograph during these periods of time.
Q. Okay.

MR. GELBLUM: Now, could you back that up and show the description on the left side, please. Indicating to Elmo)
A. On the left side are some different items, and as I testified to a few moments ago, we were really focusing in on a signed photo which -- a signed 8 by 10 which is really the standard in the industry.
Q. There's No. 3?
A. That's No. 3, yes, sir.
Q. Before the murders how much was a signed photo of Mr. Simpson going for?
A. $25.
Q. And immediately after the murders and during his incarceration?
A. It went up to $60.
Q. Has it remained there since?
A. It has remained there very consistently at $60.
Q. Okay.

THE COURT REPORTER: Does this have a number?

MR. GELBLUM: Yeah, 2421.
Q. (BY MR. GELBLUM) And have other items signed by Mr. Simpson, related to Mr. Simpson, experienced similar increases in value since the murders, and have retained their valve since then --since his acquittal?
A. Yes. It seems that most of Mr. Simpson's value has almost tripled since -- since the murders in terms of the autograph memorabilia.
Q. Okay.

MR. GELBLUM: Steve, can you pull it over to the left so the jury can see the other numbers. (Elmo adjusted.)
Q. (BY MR. GELBLUM) Perhaps while that's up there, Mr. Roesler, you could read down what the first line is for the one from $7 to $20. What's that for?
A. That's for what they call a cut signature which is just a signature, not -- not on a photo, or just a plain signature.
Q. On a piece of paper?
A. On a piece of paper.
Q. And the second line?
A. Is a 3 by 5 card which normally -- that's like a little post card.
Q. And the third line, that's the 8 by 10?
A. That's the 8 by 10 signed photo.
Q. And the fourth line?
A. Is called a gold line card. Of all the various -- it's of the Hall of Fame football players.
Q. And there's another page to this exhibit. These are just --these are additional items related to Mr. Simpson and they showed the valuation at different points in time?
A. Shows a value of some of his -- some of the cards and some of the actual -- cards that aren't actually signed by Mr. Simpson.
Q. Okay. Okay. The jury can take a look at that in detail. Thanks. Based on -- by the way, is Tuff Stuff the only publication that reflects this increase in Mr. Simpson's -- the value of Mr. Simpson's signature?
A. No. Most any publication would have consistent values.
Q. Okay. Are you familiar through your work, sir, with the number of autographs that various sports celebrities sign in a year?
A. Yes, I am.
Q. And can you give us a range.

MR. BAKER: I object. It's irrelevant, immaterial.

THE COURT: Overruled.
A. Well, it's not uncommon for famous sports stars to sign anywhere from 20 to 50,000 autographs or more.
Q. That sounds like a lot of autographs. At autograph shows is there some kind of average number of autographs these guys can sign in an hour?
A. Typically, it's expected anywhere from 250 to 300 or 350 autographs per hour that a sports celebrity is expected to sign.
Q. So to sign 25,000 autographs in a year, that would be about 500 a week with two weeks off; is that right?
A. That's correct.
Q. And that would take how many hours per week to do that?
A. Probably less than two hours a week.
Q. Okay. And are there a number of sports stars out there who sell that many autographs year in and year out?
A. Yes, there are.
Q. And are there other athletes who earn a million to a million and a half dollars per year just from autographs?
A. Yes.

MR. BAKER: I object to the leading, Your Honor. This whole examination has been leading.

THE COURT: Okay. Sustained.
Q. (BY MR. GELBLUM) I don't think I ever asked you, what is your bottom line opinion on how much you think Mr. Simpson could earn from signing autographs on an annual basis for the rest of his life?

MR. BAKER: Speculation.

THE COURT: Overruled.
A. I believe Mr. Simpson can earn at least 1 million to 1 million and a half dollars a year in autographs.
Q. (BY MR. GELBLUM) Are there any athletes who make that much money from autographs?

MR. BAKER: That's irrelevant, Your Honor.

THE COURT: Overruled.
A. There -- yes, there are a number of athletes that make that kind of money.
Q. (BY MR. GELBLUM) Can you give some examples?
A. Mickey Mantle used to make between 2 and $3 million a year signing autographs. Joe DiMaggio had contracts where he's made over $2 million a year signing autographs. Those are just two of many. Reggie Jackson has had contracts where he's made over a million dollars a year signing autographs.
Q. Now, when you say contracts to sign, what are you talking about?
A. Well, that's a good question, because sometimes the -- sometimes the athletes just signs autographs on their own. Other times they have contracts with companies where they have an exclusive contract with that company to sign autographs just for them. And the arrangement I was talking about with Mickey Mantle and Joe DiMaggio, those were contracts that they had with the specific company where they were paid to exclusively sign autographs for those -- for that particular company.
Q. Were they paid in advance for --
A. Yeah.
Q. -- a period of time, going out to the future?
A. Yes, they were.
Q. They were paid up front by some company millions of dollars --

MR. BAKER: I object.
Q. -- To sign their autographs?

MR. BAKER: Irrelevant, immaterial, unless he says Mr. Simpson -- he can say Mr. Simpson has that kind of contract, when he cannot.

THE COURT: Overruled.
A. Yes, they were.
Q. (BY MR. GELBLUM) Any reason why Mr. Simpson can't have such a contract?
A. No reason.

MR. BAKER: Then give it to him.
Q. (BY MR. GELBLUM) People who make those -- who give those contracts to those athletes, is their business making money?
A. Yes, I believe so.
Q. And you believe that Mr. Simpson could make a million to a million and a half dollars per year signing autographs?

MR. BAKER: Leading, asked and answered.

THE COURT: Sustained as to leading.
Q. (BY MR. GELBLUM) We've got your opinion on that. Let's go to the next category, product licensing, I think you said. Do you have an opinion as to how much money Mr. Simpson could make in an annual basis for product licensing?
A. It was my opinion that Mr. Simpson would make anywhere from three-quarters of a million dollars to a million and a half dollars a year by licensing his name and likeness for various products.
Q. Is there any, in your experience, correlation between the value of somebody's autograph as accepted in the market and the amount of money they can make from product licensing?
A. Yes, there is a positive correlation, generally, of somebody's autograph is worth more, so is the memorabilia that's associated with their name or likeness.
Q. Okay. When we're talking about product licensing or memorabilia, what are we talking about exactly?
A. Well, you're talking about any product or piece of merchandise that would have the name or likeness of Mr. Simpson associated with it. Primarily, this would be in the sports area. And where there's a sports memorabilia market place as a -- is a very large market place that many, many famous athletes had a lot of product licensing.
Q. Are you aware of any other athletes who make in the range of three-quarters of a million to a million and a half dollars per year between product licensing --
A. There may have been name-type athletes that make that kind of money.
Q. Can you name any?
A. One of our clients, Babe Ruth, makes that kind of money. Mickey Mantle. Joe DiMaggio. People like that in terms of retired players. Obviously, some of the current players, you know, a Michael Jordan or someone like a Joe Montana, who recently retired, can make -- makes that kind of money.
Q. On an annual basis?
A. On an annual basis.
Q. Have you seen, in the material that you've reviewed, any indication that there is interest, since Mr. Simpson was released from jail, that there's been any interest from third parties in engaging in product licensing deals with him?
A. Yes, I have.
Q. What indication have you seen?
A. Well, I reviewed Mr. Taft's, his business manager's deposition, and one of the lawsuits that we spoke about this morning when they sued a number of infringers that were using Mr. Simpson's name and likeness. In that deposition, Mr. Taft stated that there were -- there were anywhere from 20 to 50 discussions with companies after October of '95. And I believe the deposition was February 15, 1996.
Q. That's about four and a half months?
A. Yes, it is.
Q. Okay. In your experience, is that a considerable number of discussions to be having with potential licensors -- licensees?
A. Well, it would depend on who it is, but it's 20 to 50 discussions in a four and a half month period. That's a fairly significant number. But considering Mr. Simpson's fame that would consist -- that is consistent with what I would expect.
Q. Now, so that's three quarters of a million for -- one and a half million for product licensing?
A. Yes, it is.
Q. All right. Now, the next category you mentioned is endorsements and advertisements. Again, can you briefly explain what you mean by that, what's included within that category?
A. Well, an endorsement would be where a celebrity actually supports or promotes a particular product or service. Advertisement would be perhaps a couple steps below in the sense that you could be using an advertisement and not necessarily support or endorse the particular product, you could just -- your name could be an area photo or -- you wouldn't necessarily endorse a particular product.
Q. Okay. And at the present time, do you believe Mr. Simpson has much of a future as a commercial endorser on a national basis for national products?
A. No, I don't believe Mr. Simpson has much viability as a --as a commercial endorser, at least in the mass market area. I believe that there are several different markets where it's possible he could make certain money. He certainly has international notoriety so there might be some limited advertising and endorsement opportunities internationally, some perhaps in the -- in certain ethnic marketing type area. There could be some -- some limited possibilities maybe in the -- maybe down the road in the -- in the sports area, in the Hall of Fame area, in football, but very limited in that area.
Q. Okay. And what is your estimate for the amount of money that Mr. Simpson could make in these limited areas on an annual basis going forward for the rest of his life?
A. It was my opinion that Mr. Simpson might make anywhere from 100,000 to $500,000 in this area.
Q. And is that a large amount for somebody with his name and notoriety?
A. No, that's -- I consider that a fairly minimal amount.
Q. Your next category you mentioned was media type uses. And could you explain what you mean by that?
A. Well, media type uses would be where -- where either photos or interviews of Mr. Simpson were used. Could be in either --in terms of documentaries, books, magazines, similar uses like that. And then in that area, Mr. Simpson has demonstrated that he's made money in that area in the past, primarily by giving exclusive interviews. I believe they were -- there were two interviews in the past number of months that he gave, one for 20 or $25,000 and another for $50,000 I believe. So that would also include photos of Mr. Simpson that -- perhaps recent photos from his recent -- the matter surrounding this trial and previous trial or could be sports images of Mr. Simpson from his career as a -- as an athlete, and all of those are areas where Mr. Simpson would be compensated for the use, whether it's in, you know, could be in a documentary form, could be interview form or whatever.
Q. Do you have other clients who make money from these kinds of uses?
A. Yes, we do. Most of our clients make -- make money in this area.
Q. This is a typical area for people, celebrities to exploit?
A. Yes, it is.
Q. The next category you listed was books and audio tapes. I'm sorry, I'm not sure you gave the bottom line number for the media type uses in the last category. What was your estimate for how much Mr. Simpson could make in that category on an annual basis?
A. I estimated that Mr. Simpson should make anywhere from 100,000 to $250,000 each year in this area.
Q. Okay. Back to the books and audio tapes. Start with this, so I don't forget it, in the beginning. What's your estimate about how much Mr. Simpson might make in the future from books and audio tapes?
A. I'd put a conservative estimate of anywhere from -- from 4 to $5 million as a -- as a one time or 4 to $5 million over the rest of his life in this area.
Q. That's something on an annual basis, or you're talking about a book or two?
A. I'm talking about a book or two, and that -- again, that would be because it wouldn't be something that would necessarily be on a recurring basis, it was hard to slot it into particular years, but I estimated the total of that would be 4 to $5 million.
Q. What's the basis for that estimate?
A. Well, the basis for that estimate is Mr. Simpson's recently published one book or -- authored one book, the "I Want To Tell You" book, and he's also done an audio tape, and there's been no book on either the criminal trial or -- or the civil trial, and I placed what I think is a very conservative estimate of 4 to $5 million in this area, which is -- which is actually less than -- than some of the other principal figures received for the books that they've done.
Q. What figures are you talking about?

MR. BAKER: I'll object. This is relevance and --

THE REPORTER: Can you repeat your objection, please.

THE COURT: Overruled.

MR. BAKER: Doesn't matter what my objection is.
Q. (BY MR. GELBLUM) Go ahead, Mr. Roesler. What are the figures you're referring to when comparing what you estimate Mr. Simpson could get to what others have gotten?
A. Both Marcia Clark and Johnny Cochran have received advances in excess of $4 million for their books on the -- on the criminal trial, and I believe it's -- it's reasonable that Mr. Simpson could receive certainly more than either of those two.
Q. Okay. Let's go to the next category you had, which was movies. Obviously, I think you've discussed the course of the trial, Mr. Simpson has had a career as an actor. Is it your opinion that he can continue that career at the same level and in the same types of movies that he has in the past?
A. No, it's not.
Q. Okay. Did you assign a number for what you think Mr. Simpson could obtain from movie roles the balance of his life?
A. Yes, I did. And I did it the same way I did the books and audio tapes. I assigned just one value to that area over the rest of his life.
Q. What's that value?
A. I assigned a value of between 500,000 and $3 million during the rest of his life.
Q. Now, does that -- is that number just for movie roles that he would perform in the future from here on in?
A. Well, that's -- that includes several different areas. It includes any movie roles that he might be in. It includes residual revenues. I took into consideration that in the -- in the last time period that I analyzed, the Screen Actors Guild residuals for Mr. Simpson were over $10,000 just for 1996. So I assume that he could make at least $250,000 just from the residuals on the existing movies that he's done. Also, there's -- he would receive revenue if any clips from his existing movies were used in various movies, and often clips from -- from a movie that you're in are used in another movie or in some other form of media use, and you're paid what's referred to in the industry a clip licensing fee.
Q. Is there some range -- standard range for clip licensing fees?
A. Typically, depending upon the use, it's anywhere from several thousand dollars to $25,000 or more, depending upon how extensive the use of something like that is. But I guess the other area was I think it's reasonable that at some period down the line Mr. Simpson might play some small part in a movie, either here or -- domestically or abroad, and he could receive revenue for that. Again, not the kind of revenue he's been accustomed to from his previous movie roles, but it is -- it is possible that he could receive revenue from that source too.
Q. So your estimate on this category of movies is based on the assumption that there could -- would be a substantial decrease from what he received in the past for this kind of activity?
A. Yes, very substantial decrease.
Q. Another category was items owned by Mr. Simpson. What do you mean by that?
A. Well, these would -- are items that are owned by Mr. Simpson that he could sell off as something that he owned, and there's a value to these items that were once owned by Mr. Simpson, there's a premium associated with that.
Q. How do you know that?
A. Well, I know that from some of the -- some of the things that have surfaced and been sold that Mr. Simpson owned. I believe one of his trophies sold for $5,500. A pair of tennis shoes that he owned brought in $805 in an auction. There was a premium associated with the sale of his Ferrari. So all -- all of these items that were owned by Mr. Simpson, there are people out there that are willing to pay a premium to say that they have an item that was owned by him.
Q. And what -- what value did you assign to this category?
A. Well, I looked at the value in his financial statements, where he said he had $500,000 worth of personal furnishings, and I attached a one time value of anywhere from a half million dollars to a million dollars in this area.
Q. Is that half million to a million just the premium that you're estimating could be obtained based on the sale of goods that he owns?
A. Yes.
Q. It's not the value of the goods themselves?
A. That's correct.
Q. Adding all these numbers up together, all the figures, I think you had a low end and a high end, what did you come up with again for the total that you think Mr. Simpson ought to be able to earn from all these various sources, on an annual basis, for the rest of his life?
A. On an annual basis, I estimated that figure to be in the range of 2 million to $3 million per year.
Q. And is that an extraordinarily high amount for athletes of his name and notoriety?
A. No, it is not.
Q. I want to show you what -- this was Deposition Exhibit 8, I believe, or part of 8, something from Mark McCormick's Guide for Sports Marketing. We'll mark this next in order.

THE CLERK: 2422.

MR. GELBLUM: 2422.

(The instrument herein described as Exhibit 8 from Deposition was marked for identification as Plaintiffs' Exhibit No. 2422.)
Q. (BY MR. GELBLUM) Can you describe what 2422 is?

MR. BAKER: I'll object under Evidence Code 721, Your Honor. (Pause.)

THE COURT: Lay a foundation.

MR. BAKER: Your Honor, I would just object on the grounds that neither this article or magazine can be introduced through direct testimony. That's my understanding of 721A and 721B. That's what he's attempting to accomplish here.
Q. (BY MR. GELBLUM) Did you rely on -- without telling us what's on the pages quite yet, did you rely on Exhibit 2422, was it --

MR. BAKER: It's irrelevant, Your Honor.
Q. (BY MR. GELBLUM) -- in rendering the opinion you just gave that 2 to $3 million a year is not an exorbitant amount for somebody in Mr. Simpson's position?
A. Yes, I did.

THE COURT: Just a minute. (Pause for the Court to review code section.)

THE COURT: Overruled.
Q. (BY MR. GELBLUM) And what is that exhibit, sir?
A. Well, this is a recent publication that was published this year and it was from the book entitled Mark McCormick's Guide to Sports Marketing.
Q. Who is Mark McCormick?
A. Mark McCormick has published a number of books in the sports -- in the sports marketing area and he is the founder of a company called International Management Group, but he's considered one of the foremost authorities in the -- in the sports business and he's also an author and he published this book, and one part of the book was who the top endorsers were, the current top endorsers on an annual basis in the sports marketplace.
Q. And did Mr. McCormick list various -- is it just sports figures?
A. Yes, it is.
Q. Sports figures and the amounts that they make from off the field activities, that is activities other than performing in their sport?
A. That's correct.
Q. And are there a number of people who make on an annual basis more than 2 to $3 million a year that Mr. McCormick listed?
A. Well, of the top 20 -- the top 20 were in a range of 40 million as a high to Michael Jordan each year to -- number 20 was Steve Young, quarterback for San Francisco 49'ers, and he was listed at $3 million a year.
Q. Okay. And based on that, does that support your opinion that it's reasonable to assume Mr. Simpson could make 2 to $3 million a year through the various uses you described?
A. Yes, it is.

MR. GELBLUM: Nothing further, Your Honor.

THE COURT: Okay. CROSS-EXAMINATION BY MR. BAKER:
Q. Have you ever represented any athlete or retired athlete who has been found guilty by a jury of murdering his ex-wife and another human being and had a damage assessment of 8.5 million against them?
A. No, sir.
Q. Do you know of anybody in the world that has that experience?
A. That particular experience?
Q. Sure. That's what we're talking about. Mr. Simpson has been found liable by this jury of murdering two people and assessed damages of $8.5 million. You're aware of that?
A. Yes, sir.
Q. Do you know of anybody in the world who has the experience of representing such a person?
A. No, I do not.
Q. Now, in terms of your analysis, you just told us about the top -- the 20 top endorsers, did you not?
A. Yes, I did.
Q. And you are of the opinion that Mr. Simpson's value as an endorser is severely limited, correct, minimal amount, 100,000 to 500,000, right?
A. Yes, sir.
Q. Now, when were you retained in this case, Mr. Roesler?
A. I was retained in -- sometime in early 1996.
Q. And you're from Indianapolis, right?
A. Yes, sir.
Q. And the Indianapolis Star, Indianapolis News is the paper there in Indianapolis, right?
A. Yes, sir.
Q. And just after the verdict came down in the criminal case, you told that newspaper that his viability as a commercial endorser will be diminished to virtually zero, didn't you?
A. I believe I said something to that effect.

MR. BAKER: Put that up on the Elmo. Excuse me. I'm sorry. (Document is displayed on Elmo.)
Q. (BY MR. BAKER) You said in an interview before you were retained on this case, talking about Mr. Simpson's ability as a commercial endorser, "There's a segment of the public that remain Simpson fans. However, the majority of those who don't support him have such strong feelings that his viability as a commercial endorser will be diminished to virtually zero." That's what you told the paper before you were retained in this case, right?
A. That was a statement with respect to his endorsements -- his endorsement capabilities.
Q. That's what you told the paper before you were retained in this case; virtually zero?
A. Can I ask you to clarify your question. Are you talking about my whole opinion or are you talking about one of the seven areas?
Q. Did you tell the Indianapolis Star that his commercial endorse -- his ability or viability as a commercial endorser will be diminished to virtually zero?
A. I believe I told the Indianapolis Star what I stated there.
Q. All right. And that was your opinion before you were retained in this matter, correct?
A. That's correct.
Q. And as I understand it, you believe that Mr. Simpson will have the ability to sell 20 to 50,000 autographs per year for the rest of his entire life, right?
A. I believe in the area of about 25,000 autographs a year is what I estimated.
Q. You just testified, did you not, that he could sell 20 to 50,000 autographs per year, right?
A. I believe -- I believe my testimony was that there are individuals out there, sports celebrities out there that -- that sell that many autographs a year.
Q. Mr. Roesler, let's stick to Mr. Simpson.
A. Okay.
Q. In your opinion, relative to Mr. Simpson --

MR. GELBLUM: Is there a question?

THE COURT: Excuse me?

MR. GELBLUM: I'm wondering if there's a question or just a speech.

MR. BAKER: Just be patient. Just be patient.

THE COURT: I think he's gearing up to ask a question.

MR. BAKER: I'm gearing up.
Q. (BY MR. BAKER) Now, your testimony is that Mr. Simpson -- that there is a market out there for the next 25 years to sell autographs with O.J. Simpson's name on it, right?
A. Yes, sir.
Q. And you believe that that is not going to diminish as a result of the verdict that the jury rendered on Tuesday, right?
A. That's correct.
Q. And you think it's exceedingly viable, right?
A. Will you define exceedingly viable.
Q. Well, 25 years, that's what I mean. That's a pretty viable marketplace, to sell 20 to 30,000 autographs a year for 25 years. There's got to be a lot of demand out there to sell that many autographs. You would agree with that?
A. A lot of demand is a relative term. I stated that I believe he could sell 25,000 autographs a year for the rest of his life.
Q. Now, let me show you --

MR. BAKER: What's the next in order?

THE CLERK: 2423.

(The instrument herein referred to as Phone calling card depicting OJ Simpson was marked for identification as Defendant's Exhibit No. 2423.)
Q. (BY MR. BAKER) That's an autographed phone calling card, right? Has Mr. Simpson in a Buffalo Bills uniform and has got his autograph, and it's got a picture of him in the corner there, right?
A. Yes, sir.
Q. Now, what's that worth, Mr. Roesler? What can you sell that card for?
A. Well, I can't tell you exactly what you could sell this card for. I'd need more information. I mean, how much -- how much calling time is on the card?
Q. There's none. There's no calling time on the card. It's a prepaid phone card. What you do is, you call in, you get the prepaid amount, and use it as a phone card. And it's got written rights on it, how collectible it is, right?
A. Okay.
Q. So forget the fact that it's a phone card, or -- doesn't matter to me, but it's his picture, his autograph; it's got him in uniform. He's a Hall of Famer. Tell the jury what it's worth.
A. Well, it has his actual signature on it, I'd have to know how many of these were produced, but I'd say it's worth -- it's worth -- I don't know. I'd have to study it.
Q. Come on, tell us what it's worth. You told us what an autograph is worth. Tell us what that's worth.
A. There's a myriad -- there are countless products out there. I can't -- I can't give you an opinion exactly on what it's worth, but it's worth something.
Q. Give us a range.
A. It's worth anywhere from -- since it has his signature on it, from -- anywhere from $20 to $100.
Q. Okay. So minimum is 20, and if you couldn't even give those away, would you agree that your opinion is basically valueless, correct?
A. If you couldn't give those away, yes, I would agree with your statement, if you couldn't give them away.
Q. Okay. Now, in terms of coming up with the numbers that you come up with, you have suggested that these items -- for example, you talked about an 8-by-10 being worth $60, right?
A. Yes, sir.
Q. And that's retail price, huh?
A. Yes, sir.
Q. And you're not suggesting to this jury that the personality would get $60 for an 8-by-10 picture, are you?
A. Not on an 8-by-10 picture -- Mr. Simpson you're talking of -- correct.
Q. And you don't know, as you sit here now, if you can even give away 8-by-10s of Mr. Simpson, even if they're autographed; you don't know there's a market out there or there isn't a market, do you?
A. That's absolutely incorrect.
Q. Well, let me ask you this question: You said that he's going to earn all this money for all these years. We'll make you a deal right now. You want to buy his exclusive rights for the rest of his life, $25 million? You got it; done.
A. I --

MR. GELBLUM: Objection. Argumentative and irrelevant.

THE COURT: Sustained.
Q. (BY MR. BAKER) Twenty million.

MR. GELBLUM: Same objection.

THE COURT: Sustained.
Q. (BY MR. BAKER) You wouldn't buy it at all, would you?

MR. GELBLUM: Same objection.

THE COURT: Sustained.
A. I --
Q. Well, you wouldn't even have him as a client, would you, Mr. Roesler?
A. Well, I think if someone could buy Mr. Simpson's complete package of name and likeness and his trademark rights for the type of numbers you're talking about, that would be a bargain.
Q. You go sell it and we'll give you a commission, okay? Fair enough?
A. Okay. Thank you. (Laughter.)
Q. I guarantee you, you'll never collect. You wouldn't even take him as a client because you're worried about what your other clients would think if you had Mr. Simpson as a client; isn't that true, sir?
A. That would be a consideration; yes, it would.
Q. And let's go back to one thing. In terms of this autograph, when you talk about the selling of autographs -- do you go to any sports memorabilia shows in the last six months?
A. Yes, sir.
Q. Did you go to the Heismann show?
A. Well, was that -- no. I'm trying to -- I'm trying to remember if someone from my staff went to that show. If you give me a little more information -- where was it?
Q. Have you ever heard of the Heismann Memorabilia Show, Mr. Roesler?
A. The name seems --
Q. The Heismann Trophy, you know, you kind -- do we kind of assimilate one with the other?
A. Yes, sir, I can.
Q. And do you know whether or not the promoters of the Heismann Memorabilia Show would even let O.J. Simpson exhibit anything?
A. Is that the show that he had the $100,000 contract for that --
Q. He was absolutely excluded from being present at the show.

MR. GELBLUM: Objection. Is Mr. Baker testifying?

MR. BAKER: Sure. If he is, I am.

MR. GELBLUM: Move to strike.

THE COURT: Mr. Baker, you wish to testify, take the stand?

MR. BAKER: I'll be happy to.

THE COURT: You're not testifying now. I'll sustain the objection.
Q. (BY MR. BAKER) The show was in the Meadowlands in New Jersey. Are you familiar with it, the Heismann show?
A. The -- yes, I'm familiar with what we're discussing.
Q. And do you know how much memorabilia Mr. Simpson usually markets at the Super Bowl through his agent every year?
A. Do I know? I don't know the exact amount.
Q. Do you know that they excluded him this year; he sold nothing at the Super Bowl?

MR. GELBLUM: Objection. Mr. Baker is testifying. Assumes facts not in evidence.

THE COURT: You may answer yes or no.
Q. (BY MR. BAKER) Do you know whether that's true, he sold absolutely not one nickel of sports memorabilia at the Super Bowl?
A. I don't know that that's true.
Q. Do you know whether or not he sold even $10,000 worth of memorabilia in the last six months?
A. In the last six months, I don't -- I don't know that he sold $10,000.
Q. Do you think that there's really a market out there, Mr. Roesler, for the name O.J. Simpson on coffee cups and sweatshirts? You think that's out there?
A. Absolutely.
Q. You think that because you trademark something, that that means there's income?
A. That -- I would assume that someone that took out 20 applications for 550 different goods assumed that there was a market out there. And those applications were in '95 and '96. That would be my assumption.
Q. Taking out a trademark does not put one nickel in anybody's pocket until an item is sold. You would agree with that?
A. Until the -- there's a value to the trademark, in and of itself.
Q. Doesn't put one nickel in Mr. Simpson pocket or into his net worth, otherwise, his financial statement, until something can be sold. You would agree with that?
A. Until something could -- till a product could be sold or till you could sell the trademarks, I'd agree with that.
Q. You got to sell something, right?
A. That's true.
Q. If there is no market out there for it because Mr. Simpson has been black-balled, nothing is going to get sold; you would agree with that?
A. I would agree with your statement that if there's no market, that you couldn't sell anything.
Q. And in terms of product licensing, you seen any contracts in the last 12 months for Mr. Simpson to license any product?
A. Well, I testified a few moments ago, that in --
Q. Can you answer my question? It was pure and simple. Have you seen any contracts for Mr. Simpson to license anything in the last 12 months?
A. I haven't seen any contracts that commenced in the last 12 months.
Q. Do you know, sir, whether Mr. Simpson, when his image was untainted, earned two to three million dollars a year for marketing his likeness and image?
A. I wasn't supplied with any information prior to the murders.
Q. You have no knowledge whatsoever, do you?
A. That's correct.
Q. You're aware, of course, that his Hertz contract was revoked?
A. Yes, sir.
Q. You're aware that his NBC contract was revoked?
A. Yes, sir.
Q. You're aware that he does not get $50 per autograph?
A. No, I'm not aware of that.
Q. Well, is it your opinion that Mr. Simpson, after all sales, fees and everything else, can now generate 20 to 30,000 autographs a year, that he will net $50 on?
A. I could say on an average, Mr. Simpson might get a hundred dollars a signature on an 8-by-10. He might get less than that. So there's a range of prices on what's paid for different items.
Q. So we're clear, forgetting the value of whatever the autograph is signed upon, is it your testimony in this courtroom, that you believe Mr. Simpson, after commissions and costs after sales, can net $50 every time he signs his name? There's a market for 20,000 to 30,000 autographs per year for the next 25 years for Mr. Simpson?
A. That's correct.
Q. You don't believe that his -- the decision in this civil case will affect his value at all, correct?
A. That's correct.
Q. You believe that his popularity is high and will stay at a very high level, correct?
A. I believe it's high with a certain segment of the population.
Q. You testified in your deposition that his popularity was high and would remain high, correct, regardless of the segment?
A. Yes. Yes, Mr. Simpson has a very high level of recognition throughout the world. There are people that --
Q. Forget recognition.

MR. GELBLUM: Can he finish his answer?

MR. BAKER: No. His answer is nonresponsive.

THE COURT: Overruled. You may finish your answer; it's responsive.
A. I was testifying that he has a very high level of recognition throughout the world, and there are people that want a part of that, whether a product or an autograph.
Q. The recognition and popularity are two different things, aren't they?
A. They're a little different.
Q. There are people readily recognized that are not popular, correct?
A. Sure. Sure.
Q. And Mr. Simpson is -- in your view, is very, very popular, right?
A. I wouldn't necessarily -- I wouldn't necessarily make that statement. I think he's very popular with a certain segment of the world's population, and that --
Q. Did you see the poll today in U.S.A. Today?
A. I saw the poll yesterday.
Q. Seventy-four percent of white persons, he's not very popular with at all. The sports memorabilia market is driven by white America, is it not, sir?
A. Well, I don't -- I wouldn't agree with that.
Q. Now, you -- in determining Mr. Simpson's movie roles, you were speculating whether he could earn between $500,000 and $3 million over the next 25 years, correct?
A. I don't believe so. I testified that my opinion stated that he could make $500,000 to a million dollars over the rest of his life.
Q. Okay. Page 276 of your deposition -- well, page 28, lines 2 through 5, speaking about -- you're talking about Mr. Simpson's earnings of $500,000 to $3 million in movie-type roles. (Reading:)
Q. And basically, and you're basically, I take it, speculating that over the next 25 years, he could earn between $500,000 and $3 million; is that correct?
A. That's correct. That's what you testified to in your deposition, was it not, sir?
A. If that's what's in my deposition, that's probably what I said.
Q. And you said you speculate and form an opinion -- is that how you -- well, let me read you the entire testimony.
Q. So, for the two to three million that you have asserted Mr. Simpson can earn on the sale of his name and likeness, we can put zero for the limited movie-type roles, correct?
A. Well, I don't know if zero is -- it's difficult to speculate and form an opinion on what someone's future values is. It is difficult to place specific numbers. And in some categories, I thought it was very reasonable to place specific annual amounts, but this is something I don't feel comfortable with, putting an annual amount. I also put -- I also don't put an annual amount of zero on there. So what you do, sir, and what you came here to do before this jury, is to speculate and then form an opinion and put numbers on what's going to happen 25 years from now, when you don't even, of course, know if Mr. Simpson is going to be alive 25 years from now. Isn't that correct?
A. Well, it's correct that I don't know if Mr. Simpson going to be alive in 25 years. But I guess my answer was meant to be that I -- because I wasn't attributing an exact amount for each year, that I had to look at it a different way, and I came up with --with one lump sum that he could -- that he would receive over the rest of his useful life. And there were, like I said, a number of factors that went into that, the residual revenue that he could receive, and I arrived at what I thought was a fairly conservative number. And that's what my opinion was.
Q. Well, if the actual people who are trying to market O.J. Simpson memorabilia can't market it at all, you would agree that your opinions are flawed, correct?

MR. GELBLUM: Objection. Assumes facts not in evidence.

THE COURT: Overruled.

THE WITNESS: Would you please repeat the question.

MR. BAKER: Sure.
Q. (BY MR. BAKER) Let's assume hypothetically, there are people out there that have produced that card; there are people out there trying to sell Mr. Simpson's signature on football cards, et cetera, and there is no market. You would agree that if that's the case, your opinions relative to any of this $25 million, $50 million or whatever million dollars is flawed, correct?
A. I think that's correct.
Q. And you would also agree that it is speculative to assert what is going to happen after this jury has returned its verdict, because this case is like no other case in the world; true?
A. False.
Q. You think that this case is -- well, strike that. In your view, the best approach to determine what Mr. Simpson's future sales would be, would be to put on the stand the people who are attempting to sell his memorabilia and see if there is a market. You would agree with that?
A. No, I would not agree with that.
Q. In other words, you don't think that the people who are actually out there trying to make a living as a commission salesperson for O.J. Simpson memorabilia -- do you think you have better information than those people about what's in the market? Correct?
A. Well, I don't know exactly whether you're talking about his people that are actually selling product or you're talking about his business representatives or --
Q. I'm talking about people that are -- that are.
A. People that are?
Q. Sports memorabilia business, who are trying to make money off the name of O.J. Simpson. You would agree with me that they're in a better position to determine what the market than you, correct?

MR. GELBLUM: Objection. incomplete hypothetical. Depends who the people are, what heir abilities are, what their backgrounds are.
A. Maybe it would help you --

THE COURT: Excuse me. There's an objection.

THE WITNESS: Sorry.

THE COURT: Objection overruled. Go ahead and answer.
A. You're question is, for example, this person selling this phone card?
Q. (BY MR. BAKER) No. My question to you is that the people who let -- just take the last six months, for example.
A. Okay.
Q. Who are out there trying to sell O.J. Simpson sports memorabilia to make a living themselves, regardless of what happened to Mr. Simpson, would be in a better position than you to determine what the market is and if there is a market for any name or likeness for Mr. Simpson, correct?
A. I wouldn't necessarily agree with that. I mean --
Q. Okay.
A. -- memorabilia would be one aspect of it. There are many different facets of the portfolio of assets that Mr. Simpson has.
Q. And you have never tried to market one item, not a single item of Mr. Simpson's before you concluded that after this jury's verdict, he can make two to three million dollars a year. Is that true, sir?
A. It would be impossible for me to do. That's correct. I haven't, but I don't know how I could.
Q. You have not talked to one person who has tried to market the name or likeness of Mr. Simpson before arriving at your numbers that he can earn two to three million dollars a year for the rest of his life, correct?
A. That's incorrect.
Q. You have no knowledge of whether or not there really is a market, do you?
A. That's not correct.
Q. You -- well, just one other area quickly. And that, sir, is the area where you have indicated that these -- some of these personalities -- well, strike that. Let's go to the items owned by Mr. Simpson. You say that has an increased market because he's owned it, right?
A. Yes, sir.
Q. And you -- you talked about the Ferrari that he owned?
A. Yes, sir.
Q. And that Ferrari had a value, you said, of $92,000?
A. Something like that. I don't remember the exact numbers.
Q. Well, that's what you said in your deposition.
A. Okay. I'm sure. That was pretty close.
Q. That Ferrari sold for $102,000, right?
A. I think $102,000 is what Mr. Simpson netted. I think there was some -- some --
Q. Sales price of that Ferrari at auction was $102,500; is that not right, sir?
A. I don't know exactly what it was, without the facts. That could be correct.
Q. So part of all of this two to three million a year that Mr. Simpson can sell his personal property at some sort of, in your view, bonus or premium, right?
A. Not exactly correct. Because again, what I did on a couple of those areas, I assigned one number, one lump-sum number for the whole period of 25 years, as opposed to an annual fee. So, in the case of actual items owned by Mr. Simpson, I just placed a figure of a half a million dollars to one million dollars, one-time fee. Now that's -- I think that's a conservative -- conservative number, because Mr. Simpson can buy stuff and then sell it. So even though he only has $500,000, that assumes that he could get twice that much for it. But he can also buy things and sell it.
Q. You don't, of course, have a clue what the $500,000 -- whether it's sofas or tennis shoes, right?
A. I assume it's both, and many other things.
Q. And you think that all of this has a premium and there's a real market out there for Mr. Simpson's apparel, as well as his sofas and his lamps and china and everything else?
A. I think clothing items would be much more valuable than a sofa -- sofa or a -- a lamp. But I'm certain there's a value to the other items, too.
Q. And you're, of course -- of course, speculating when you put this $500,000 to a million, because you don't know if anybody would come to an auction of Mr. Simpson's personal property, do you?
A. No, I'm not speculating. This happens all the time with celebrities that were involved with -- there are various auctions and various sales of items that are so owned by these people. There's a value associated with it. And often, it's a premium. How much of a premium? It obviously significantly varies. And sometimes you're surprised by it. And in the Kennedy Onassis auction, I know they anticipated one figure, and several times that much came from that. And those were items such as drapes and lamps and things like that, that were sold there.
Q. And that was sold with somebody with an untainted image, correct, Jacqueline Kennedy Onassis?
A. I would consider it untainted.
Q. And you certainly, in your business, are well aware of the concepts of good will versus ill will, correct?
A. Well, I'm familiar that there's a difference between good will and ill will.
Q. And a personality only has the ability to sell items as long as they have good will and not ill will; isn't that true, sir?
A. I would say that's false.
Q. So ill will is just fine; and you don't think that Mr. Simpson is going to have any problems in marketing because of this jury finding him responsible for killing two people, right?
A. I think that Mr. Simpson --
Q. You can answer that yes or no.
A. Please repeat the question.
Q. You don't believe that Mr. Simpson will have any problem marketing anything as a result of this jury finding that he is responsible for killing two people, correct?
A. Well, you --
Q. Yes or no?
A. -- your --
Q. Yes or no?
A. -- blanket statements make it impossible for me to answer that yes or no.
Q. Well, never mind.

THE COURT: Ten-minute recess, ladies and gentlemen. Don't talk about the case. Don't form or express any opinions.

(Recess.)

(Jurors resume their respective seats.)

MR. BAKER: Your Honor, I apologize. I forgot one area. CROSS EXAMINATION BY MR. BAKER:
Q. Do you know anybody that wants Mr. Simpson memorabilia and card --
A. Steven Hisler.
Q. Steven Hisler just turned him down.

MR. GELBLUM: Objection, assumes facts not in evidence.

THE COURT: Sustained jury to disregard that.
Q. (BY MR. BAKER) Now, relative to your report. Your report was done the day I took your deposition in August of 1996, correct?
A. No, sir.
Q. Okay. Let me get page 45.

MR. GELBLUM: Objection. Not impeaching. That's -- he said that's when he printed it out, not when he did it.

THE COURT: Okay. Approach the bench.
Q. (BY MR. BAKER) Let me ask a foundation to perhaps save us some time. You have absolutely not one note relative to your opinions, correct?
A. What?
Q. No handwritten notes at all, sir, relative to your opinions and conclusions and speculations that you've given this jury here today, correct?
A. My -- The opinion that you're speaking about was written on a computer which I routinely use, and it was printed out the day of my deposition, so, no, I don't have -- I don't normally have handwritten notes because I use a computer.
Q. In fact, when you came out here to have your deposition taken you didn't have anything printed out at all, did you?
A. I had the opinion on -- on my computer.
Q. You produced nothing except a report that you printed out at the law offices of Mitchell Silberberg & Knupp, the plaintiff's attorneys, after you had spent the prior day with Mr. Gelblum, correct?
A. No. That's -- it was -- I printed it out before. I printed it out the morning of my deposition, and I printed it out because I carry a computer, but not a printer with me, so I used his printer.
Q. So you had not a piece of paper of your opinions until you went to the Mitchell Silberberg office and printed it out there, right?
A. I guess I don't understand. A piece of paper?
Q. Never mind. How much have you made for testifying in this case?
A. How much have I been paid?
Q. How much have you billed.
A. I think I billed you $350 for my deposition, and I have an outstanding bill of -- in the area of $15,000.
Q. How much do you bill an hour to come out and testify?
A. In this?
Q. In Mr. Simpson's earnings of 2 to $3 million a year?
A. In this case, I'm being paid, I believe, $175 an hour.
Q. Now, would you agree or disagree that the best evidence of how much Mr. Simpson could make would have to have as an input what he made in the past, correct?
A. No, I would not agree to that.

MR. BAKER: Nothing further.

REDIRECT EXAMINATION BY MR. GELBLUM:
Q. Mr. Baker showed you a part of a newspaper report quoting you saying you didn't think Mr. Simpson's commercial endorsement value was much at all; is that right?
A. That's correct.
Q. You still agree with that?
A. Yes, I do.
Q. Is that reflected in your opinion?
A. That's reflected in my opinion as that -- his value in that one particular category.
Q. Okay. And you think he has value in other categories?
A. Yes, I do.
Q. And Mr. Baker asked you in that same area questions about whether he had made this much money in the past. Do you recall that?
A. Yes, sir.
Q. Is it your experience in working with celebrities that when a particular area of revenue dries up, say advertising, endorsements, you try to move the client into other areas?

MR. BAKER: This is so leading, Your Honor.

THE COURT: Sustained.
Q. (BY MR. GELBLUM) What do you do in your business if a particular area of revenue dries up?

MR. BAKER: Lack of foundation.

THE COURT: Overruled.
A. Well, a celebrity, particularly a celebrity like Mr. Simpson who's very famous, has numerous opportunities to generate financial revenue. So in his particular case, at this particular time, he has the opportunity to make more money in certain areas than he does in others. And at one time there he could not generate the types of money today, or he couldn't generate the types of monies before the murders for a book as he could today for a book. Or his autograph wouldn't sell for as much before the murders as it does today. But there are other areas that are less, so in his particular case, you know, it's -- it's a reshuffling of his portfolio, so to speak. And I testified earlier I don't know exactly what his portfolio was before the murders, but that's not necessarily relevant. I looked at what his portfolio is valued at today.
Q. (BY MR. GELBLUM) Okay. Mr. Baker referred you to the McCormick book excerpt. There. I think you still have it in front of you.
A. Yes, sir.
Q. Okay. I think that's Exhibit 2422. It's called the Top Endorsers. Is it the only area of revenue that Mr. McCormick is listing what you call endorsements? In other words, endorsing a product?

MR. BAKER: I object. There is no foundation.
Q. (BY MR. GELBLUM) Does it attribute what the sources are?

THE COURT: Overruled. You may inquire what the sources are.
Q. (BY MR. GELBLUM) The title says "Top Endorsers." And then the next line says, these sportsmen and women that have what they earn last year through endorsements and other off-the-field ventures.
A. Off-the-field ventures would be autographs or memorabilia, things of that nature.
Q. So it's not just endorsements?
A. That's correct.
Q. Are there any other football players on the list? Are there any football players on the list?
A. Joe Montana is on the list as number 6.
Q. How does his -- the value of his autograph as reported in the market place compare to the value of Mr. Simpson's autograph?

MR. BAKER: Object to relevance, Your Honor.

THE COURT: Sustain it as beyond the scope of the cross-examination. It's relevant.
Q. (BY MR. GELBLUM) All right. Mr. Baker asked you some questions about that phone card. You still have it there?
A. Yes, I do.
Q. All right.

MR. GELBLUM: It's 2423.

(The instrument herein described as a phone card was marked for identification as Plaintiff's Exhibit No. 2423.)
Q. (BY MR. GELBLUM) In your opinion, does that have some value because it has Mr. Simpson's signature on it?
A. Yes, it certainly has value because it has his signature on it.
Q. Okay. For you to know the value of that card as a package, are there any variabilities that you would want to know?
A. For it to be valued as a collectible you need to know when this was produced, how many of them were produced, and what the value of it was originally. Might be other extraneous circumstances, but -- so there would be a host of factors that you'd need to know. But if you just had to value it in terms of the fact that it has Mr. Simpson's autograph on it, there's a minimum value on it just because it has his autograph.
Q. Okay. Mr. Baker asked you some questions about whether you knew about sales at a Heismann show or the Super Bowl show. Do you know if Mr. Simpson tried to sell anything at those shows?
A. No, I don't know.
Q. Do you know if Mr. Simpson has been trying to sell anything in the last six months or at all?
A. I -- I'm not sure if he has. It doesn't look like he's been trying.
Q. Okay. Mr. Baker asked you a number of questions about Mr. Simpson's tainted image. Would you agree that -- normally, would you consider in your field somebody -- someone having a tainted image if they were charged with, arrested for, and imprisoned for double homicide?
A. Yes, I would.
Q. And what happened to Mr. Simpson -- the value of Mr. Simpson's autograph immediately after he was charged with, arrested for, and imprisoned for double homicide?
A. His -- His value on his autograph almost tripled overnight.
Q. And has that increased or decreased at all since then?
A. It's -- it hasn't decreased one bit in the two and a half years.
Q. Mr. Baker also asked you some questions about the effect of this verdict, and I asked you about a poll. Did you look at a poll that was published in the Los Angeles Times yesterday?
A. I saw yesterday's Los Angeles Times poll.
Q. Did you compare that to --

MR. BAKER: Objection 721.

THE COURT: Excuse me.

MR. BAKER: Objection 721.

MR. GELBLUM: He opened it up. It's exactly this question.

MR. BAKER: No. That doesn't lay Evidence Code 721, my understanding of that Evidence Code.

THE COURT: Excuse me. The objection is overruled insofar as the scope of the cross-examination on that subject.
Q. (BY MR. GELBLUM) Did you compare the results of that poll with the polls from a year ago?
A. Yes. It was generally consistent.
Q. So the polls hadn't changed materially?
A. That's correct.
Q. Now, if someone were to get on the stand and testify that Mr. Simpson has absolutely no value, his name and likeness has no value, can't sell anything at all, how does that jive, if at all, with published reports of the market place that are relied on by collectors in this field?

MR. BAKER: Argumentative, outside the scope.

THE COURT: Sustained.
Q. (BY MR. GELBLUM) Based on the literature that you referenced and Mr. Baker referred to regarding the value of Mr. Simpson's autograph, is it conceivable to you that it is impossible to sell Mr. Simpson's autograph at this point in time?

MR. BAKER: Argumentative, outside the scope.

THE COURT: Cross-examination on that topic. Overruled.
A. It would be inconceivable to me.
Q. (BY MR. GELBLUM) Okay. And if somebody got on the stand and said they had not been able to make any deals, does that jive with the testimony you referred to earlier about Mr. Taft, that there had been 20 to 50 discussions in a four-month period about memorabilia?

MR. BAKER: Your Honor, he is arguing his case. This is argument.

THE COURT: Sustained.
Q. (BY MR. GELBLUM) If somebody were to get on the stand --

MR. BAKER: Argumentative.

THE COURT: Sustained.

MR. GELBLUM: Exactly the questions he asked, Your Honor.

THE COURT: Well, you didn't object. He did.
Q. (BY MR. GELBLUM) All right. Do you have any doubt whatsoever in your mind, Mr. Roesler, that based on all the materials you reviewed, the standard publications, that Mr. Simpson's name and likeness has substantial value in the market place today?
A. I have no doubt that it has a value of 2 to $3 million per year.
Q. Okay.

MR. GELBLUM: I have nothing further, Your Honor.

THE COURT: Recross. RECROSS EXAMINATION BY MR. BAKER:
Q. (BY MR. BAKER) Mr. Roesler, let's go back to that autograph card you say that has a value, in your opinion, of about 20 bucks.
A. That was my earlier testimony, yes, sir.
Q. And your earlier testimony was also that his autograph had a value of $60, right?
A. I wouldn't say that's a proper characterization.
Q. How much does his autograph alone have, that he can make a million to a million and a half a year on?
A. Well, it varies depending upon what type of product it's placed on.
Q. A piece of paper with his picture on it, a trading card?
A. Those are --

MR. GELBLUM: Beyond the scope, Your Honor.

THE COURT: Sustained. You may inquire about the telephone card.
Q. (BY MR. BAKER) So his signature on a card with his picture is worth less than you say he would get for an autograph, correct?
A. It could be.
Q. Now, basically, relative to your statement to the Indianapolis Star that his commercial endorsement viability is virtually zero, correct. Do you remember that?
A. Yes, sir.
Q. Do you believe that if someone makes $100,000 a year to $500,000 a year for 25 years, that is virtually zero?
A. Well, it's all relative. I believe that -- I believe that that's a nominal amount for Mr. Simpson. Yes, I believe it's a very nominal amount.
Q. Okay. So in your parlance, then, 2.5 million to 12.5 million equates, in your mind, to virtually zero, correct?

MR. GELBLUM: Objection, argumentative.

THE COURT: Sustained.
Q. (BY MR. BAKER) You suggest that he can make 100,000 to 500,000 as a commercial endorser, right?
A. Uh-huh.
Q. And you tell the paper that his value as a commercial endorser is virtually zero, right?
A. (Nod affirmative.)
Q. So my question to you is 12 and a half million dollars to you is virtually zero, right?

MR. GELBLUM: Objection, asked and answered, argumentative, multiplying it out.

THE COURT: Sustained.
Q. (BY MR. BAKER) You would agree 500,000 over 25 years is 12 and a half million dollars?

MR. GELBLUM: Same objection.

THE COURT: Sustained. I think you went over this on the first cross-examination.
Q. (BY MR. BAKER) And is your bill of $15,000 to these people, is it over 90 days old?

MR. GELBLUM: Objection, beyond the scope.

MR. BAKER: I just want to know.

THE COURT: Overruled. He can answer that.
A. Is my bill over 90 days old?
Q. (BY MR. BAKER) Yeah. Your $15,000 bill that you've got with the plaintiffs' attorneys, is it over 90 days old?
A. I don't know if it's over 90 days old, but it's -- I don't know exactly how old it is. It could be.
Q. Okay. Do you expect to be paid or do you think it's a bad debt?
A. I hope to be paid.

MR. BAKER: Nothing further.

REDIRECT EXAMINATION BY MR. GELBLUM:
Q. Is your bill 15 months old like Mr. Simpson's defense fees?
A. No, it's not.

MR. GELBLUM: Nothing further.

THE COURT: You may step down. Call your next witness.

MR. GELBLUM: No further witnesses, Your Honor.

MR. BAKER: We have a motion, Your Honor.

THE COURT: Okay. Jurors step down and go into the jury room. Don't talk about the case. Don't form or express any opinion.

(Jurors exit to jury room.)

THE COURT: The jury's out of the room. Go ahead. Make your motion.

MR. BAKER: Move to nonsuit on punitive damages, based on their exhibits, including 2112, that their whole idea of punitive damages is based on future earnings which is not in accordance with the cases cited to Your Honor. It is not compiled, it's the present net worth at the time of the trial, and we therefore move for nonsuit on the issue of punitive damages under Adams versus Murakami, they have the obligation to produce the net worth of the defendant to enable them to go forward with an issue of punitive damages.

MR. GELBLUM: We presented testimony from Mr. Freeman that it's proper to include Mr. Roesler's calculation and present net worth and calculations from Roesler. That's another amount a willing buyer would buy a willing seller today not in the future but today for the right to receive that future earnings. That's a proper component of his net worth.

THE COURT: Okay. Denied. Bring the jury out. We'll commence.

MR. BAKER: 2423 moved into evidence.

THE COURT: Received.

(The instrument herein described was received in evidence as Defendant's Exhibit No. 2423)

MR. GELBLUM: Erin, I moved all the others. I moved 22 through 24 in.

THE CLERK: No, we haven't moved the last series.

MR. GELBLUM: I moved in 752 and 2416 through 2422.

THE COURT: (Nods in the affirmative.) Received.

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 752.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2416.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2417.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2418.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2419.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2420.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2421.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2422.)

(The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2423.) The instrument herein described was received in evidence as Plaintiffs' Exhibit No. 2424.)

(Jurors resume their respective seats.)

THE COURT: Defense may proceed.

MR. BAKER: Call Skip Taft, Your Honor.

THE CLERK: Sir, you may take a seat in the witness stand. LEROY TAFT, called as a witness on behalf of the Defendant, having been previously sworn testified further as follows:

THE CLERK: You are still under oath from your previous trial testimony. Would you please have a seat and state your name again for the record.

THE WITNESS: Leroy, L-e-r-o-y, Taft, T-a-f-t.

DIRECT EXAMINATION BY MR. BAKER:
Q. (BY MR. BAKER) Mr. Taft, are you licensed to practice law in the State of California?
A. Yes, I am.
Q. How long have you been so licensed?
A. Over 35 years.
Q. And generally describe your educational background and experience.
A. Law degree and practicing in the business transaction field for the last 30 years, and as a represent -- I represented O.J. since he was a rookie at Buffalo.
Q. All right. 1969?
A. 1969.
Q. And when you say you've represented him, what are your duties and responsibilities relative to your representation of O.J. Simpson?
A. Well, at the present time I serve in a lot of roles; as his personal attorney, his business attorney, and his business manager.
Q. All right. And tell us what it entails, what are your duties and responsibilities as business manager for O.J.?
A. Well, it's a large gamut of -- of both personal and business responsibilities. My office handles all of the banking and all of the payment of the bills, and really, basically, reviewing all transactions that may have a legal effect on Mr. Simpson's rights and duties.
Q. All right. Now, do you take care of his acquisition and sale of property?
A. Yes, I do.
Q. Do you take care of his acquisition and sale of personal property?
A. Yes, I do.
Q. And do you, through your office, take care of and write the checks for his expenses, day-to-day living expenses.
A. Yes, I do.
Q. And do you keep accounting records and data relative to the information -- the financial information for Mr. Simpson?
A. Yes, I do.
Q. And does O.J. Simpson really have, to your knowledge, a personal knowledge of his own financial condition?
A. Not probably at this time. We regularly met before all of this transaction -- pardon me, before June 12, 1994, on a regular basis. But since he was arrested and charged and jailed for murder, of course, it's been difficult and his focus has been more on the criminal and the civil trial and the custody matter. And so more and more of the work is on my shoulders, and very little of it is really, basically, communicated to Mr. Simpson, by his choice.
Q. All right. Now, since June 12, 1994, has he disposed of significant assets?
A. Since what date?
Q. Since June 12, 1994?
A. Yes.
Q. Has he disposed of assets to maintain or just to pay bills?
A. That's correct. He virtually -- yes, that's correct.
Q. He had a condominium in New York, did he not?
A. Correct.
Q. That's been liquidated, has it not?
A. That correct.
Q. What was the money used for when the condominium was liquidated?

MR. GELBLUM: Objection, relevancy. The issue is his present financial condition.

MR. BAKER: If they can go 25 years in the future, it seems to me I can go a few months in the past.

MR. GELBLUM: It's present value of that future earnings, Your Honor. Different issue.

THE COURT: I'll allow it.
A. What was the proceeds used for?
Q. (BY MR. BAKER) Yes.
A. Part of it was used to retire the encumbrance that was on that property, and the balance of it was used to pay bills, both personal, business, and criminal and civil defense.
Q. And his condominiums in Laguna, were they liquidated?
A. Yes, they were.
Q. And what was that money used for?
A. Well, that -- those condominiums were part of the profit-sharing pension plan. So those monies, although they were losses, they remained in the plans, to the extent that there was cash -- net cash realized.
Q. Did Mr. Simpson have an interest in some Honey Baked Ham franchises?
A. Yes, he did.
Q. Has that been liquidated?
A. Yes.
Q. What happened to that money?

MR. GELBLUM: Objection. We requested and were refused this information, specifically.

MR. BAKER: You got that information.

THE COURT: Just a minute.

MR. GELBLUM: We got the proceeds, not what it was used for.

THE COURT: Approach the bench.

(The following proceedings were held at the bench with the reporter:)

(Court reviews real time screen.)

THE COURT: What is it you asked for and did not receive?

MR. GELBLUM: We asked for all the details regarding the transaction. All we got was a summary, three paragraphs financial terms of how much money he got for it. We got nothing about what it was used for. We have no idea what it was used for. We asked for all the income expenses information, we didn't get it. All we had was the net worth, and the coin from the autographs, and things like that.

MR. P. BAKER: Your Honor, they asked for the Corner Stone document. That is what we spoke of yesterday. What I did was because of the various confidentiality agreements, there's a summary with the declaration of Skip Taft which itemized the number and how the money was allotted. Then because of the confidentiality agreements, we got agreements between the three other confidential parties, had Mr. Gelblum reviewed the document, and subsequent escrow instructions. That's what they asked for. That's what we complied with. This was a little bit convoluted because of the confidentiality provisions, but eventually access was given so he could look at those documents. And this is what we discussed yesterday, when it was brought up, and I said, yes, he's seen it, it's subject to a confidentiality provision. You ordered me to bring it into Court and it is in Court. But he has seen it.

MR. GELBLUM: I don't know what happened to the proceeds. I was told what he got. That's fine. I don't mind him talking about that. But what he did with it.

MR. P. BAKER: He didn't ask that.

MR. BAKER: Your Honor, I will agree not to ask him what he did with the proceeds to anything if they're not going to ask him on cross-examination. All I'm trying to do is to get out, if they think that he's hiding any assets, I want him to tell them where they went. They've been accusing us of hiding assets and manipulating assets. And I assure you --

MR. GELBLUM: I'm asking about disposition. If he doesn't ask on direct --

MR. BAKER: On any --

MR. GELBLUM: -- about the disposition of any of the proceeds --

MR. BAKER: What do you have all this information, it's CNA --

THE COURT: Excuse me. Let me hear what you just said you want to do.

MR. GELBLUM: I was agreeing to Mr. Baker's suggestion, which is, he won't ask about what was done with any of the proceeds if I don't ask about it. That's fine.

THE COURT: If you don't ask about what?

MR. GELBLUM: If he doesn't want what was done with any of the proceeds on direct, I won't ask about what was done with the proceeds on cross-examination.

MR. BAKER: I'll agree to that. If you're not going make an accusation that O.J. Simpson has somehow maneuvered assets and hidden assets, if they agree to make no such accusation, I would agree to that. But if they're going to get up here and tell this jury we've hidden assets, I want to go through where it all went.

MR. GELBLUM: I think we are going to argue, based on the testimony that was heard this morning from Mr. Freeman, there are revenues that came in, we don't know what was done. The reason we don't know what was done, we weren't given any of the information. It's not fair to now hear this on the stand the first time, when we haven't had access to it. That's what it boils down to. It's that simple.

MR. BAKER: It isn't that simple.

THE COURT: Excuse me. Was there a request for information regarding the disposition of the proceeds?

MR. GELBLUM: We asked for all income and expense information.

MR. BAKER: And they got it. You can trace it back. You can --they got the general ledger, Your Honor. They can trace back every item.

THE COURT: You got the general ledger?

MR. GELBLUM: Got the general ledger.

THE COURT: Okay. If you have the general ledger --

MR. GELBLUM: All it shows is income; it doesn't show -- there's nothing on any of those that show where -- this money coming in, this money is not on the general ledger at all. All the general ledger has is things from third-party vendors.

THE COURT: Okay. Jurors, I'm going to give you a break. Ten-minute recess. That may be longer than ten minutes. Don't talk about the case. Don't form or express any opinions. Step out.

(The jury left the courtroom at 3:37 p.m.)

(The following proceedings were held in open court, outside the presence of the jury.)

THE COURT: The Court will conduct a semi-discovery -- semi-Evidence Code 402 proceeding at this time. You may conduct an inquiry, Mr. Gelblum, as to the proceeds and where those proceeds went, and see whether or not you received that information or not.

402 HEARING DIRECT EXAMINATION BY MR. GELBLUM:
Q. Mr. Taft, what was the done with the proceeds from -- what was the last question -- you were at the Honeybaked Hams, the cornerstone?
A. The proceeds were used to pay both federal and state income taxes and to pay personal and business expenses and attorney fees.
Q. Do you know the amounts for each of those categories?
A. Approximately $782,000 was paid in federal and state income taxes from that source.
Q. Is that the lien on that house?
A. There was a lien on the house as a result of those taxes.
Q. I mean, that's what part of the money went, to reduce that lien?
A. Correct.
Q. And what -- how much of the money?
A. And the balance, which was approximately $44,000, went to bills, personal and -- personal and business bills, and also to attorney fees.
Q. How much to attorney fees and which attorneys?
A. I really don't have that information to break it down.
Q. What kind of bills were personal and business expenses?
A. All of the personal bills would be all of the bills necessary to run the Rockingham household, and the --
Q. And how much is that on a monthly basis?
A. I don't know. I mean, I don't have that number right here.
Q. Do you have it in front of you?
A. No, I don't.
Q. You have it with you in court?
A. No, I don't.
Q. And what attorneys got paid from those fees -- I'm sorry --from those proceeds?
A. I'm not sure whether when I said attorney fees, I included in expert witnesses and expenses of the civil trial. I don't believe from the funds that we're talking about from the Honeybaked Hams source, I don't believe any civil attorneys got paid any money from that source.
Q. Of the $400,000, approximately what portion went to pay expenses for the civil case?
A. I'd say approximately a hundred thousand.
Q. And the other three hundred to personal and business expenses?
A. I would say so, yes, including some debt that was in there from the past, which would be an expense. But I mean, it wasn't even current expenses; it was past debt.
Q. What debt?
A. It would be some of the debt that we provided to you with respect to paying down accounts payable.
Q. Through Orenthal Productions to Mr. Simpson?
A. No, no, no. To outside vendors.
Q. For the litigation?
A. No. Through the litigation. And just some were other business expenses that were due, travel expenses for the experts, that sort of thing.
Q. A hundred thousand, you're saying, went to pay certain expenses relating to this case, the civil litigation?
A. That's my best recollection right now.
Q. None of that is attorney; that's just experts and investigators and people like that?
A. I think so, yes.
Q. Do you know which experts and investigators?
A. No, I don't.
Q. And then the $300,000, you said some of that was for personal expenses like running the Rockingham household?
A. Correct.
Q. And the rest of that $300,000 was for debt that also included litigation expenses?
A. No. It would -- it would be for office expenses.
Q. What office?
A. Well, there's salaries.
Q. Whose salaries?
A. There's Kathy Randa's salary.
Q. How much was that?
A. Pardon me?
Q. How much?

MR. BAKER: I'm going to object on privacy grounds.

THE COURT: Overruled. No privacy there.
A. I would -- I would say that's a approximately $3,000 a month, gross.
Q. (BY MR. GELBLUM) All right. And how much of the $300,000 went to Ms. Randa?
A. Well, this money we're talking about came in in August, so I would -- I would have to say that we're talking about maybe five months so.
Q. So that question, about $15,000. And how about the other $285,000, sir?
A. I would just be guessing Mr. Gelblum, without looking at the cash register.
Q. That's not in the courtroom?
A. No, it's not.
Q. So, $285,000 to general, personal and Mr. Simpson's people for any summary of his financial
A. That I can't identify at this moment. But, you know, it's a part of our -- our office records; it's part of his books; it's part of the Orenthal Productions books.
Q. And did any of that go directly to Mr. Simpson?
A. No.
Q. It went all to outside vendors?
A. All to outside vendors.
Q. Any of that related to either the criminal or civil litigation? We're talking about the $285,000 portion of the $300,000. Did any of that go to pay civil or criminal litigation expenses?
A. It may have. I just -- I'm trying to --to make it a distinction that it didn't go to lawyers, but it went to expenses related to the civil case.
Q. Did you think the balance of the $285,000 went to civil case expenses?
A. I'm not positive. I'd have to check my records.
Q. Some portion of it, then?
A. Yes, I think so.
Q. Over half?
A. I don't know.
Q. Do you have any idea what percentage?
A. Not without guessing, which I'd prefer not to.
Q. Okay.

THE COURT: Excuse me, Mr. Gelblum. You're conducting general cross-examination. I'm conducting this hearing because you told me up here at side bench that you were provided ledgers that showed the receipt of the sale of the Honeybaked Ham, but that you were not provided any ledgers or entries showing disbursements of those amounts. And I'm allowing you to ascertain whether or not there were such books and whether or not they were provided to you. I'm not conducting general discovery for you. It's kind of late for that.

MR. GELBLUM: Well, I agree that was the purpose of my objection, Your Honor, that we weren't provided --

THE COURT: I'm trying to ascertain that information so I can rule on that objection.

MR. GELBLUM: All right. Okay.
Q. (BY MR. GELBLUM) Are there -- are there books and records that reflect this information?
A. Certainly.
Q. What are they?
A. What are they what?
Q. What are they?
A. Books and records.
Q. What?
A. Accounting records.
Q. With regard to the books and records?
A. Accounting records.
Q. And where are they, at your office?
A. Yes.
Q. Have you provided those to us?
A. You haven't asked for them, so the answer is no.

MR. GELBLUM: Okay. Can I ask Mr. Baker what he intends to inquire of the disposition of other proceeds which we have also not received information about?

MR. BAKER: Your Honor, they asked for certain specific records. We've been over that in open court. We've gone through and provided those records.

THE COURT: Were those records requested?

MR. GELBLUM: I believe that all these records that would show the disbursements of these proceeds were requested. I don't have the discovery documents in court with me. Let me have the subpoena. Mr. Gelblum reviews document.)

MR. GELBLUM: The only thing in the subpoena, Your Honor, that would cover it, that would be in this area, it's not the Honeybaked Hams area that we just approached, but use of the insurance proceeds. We did ask for information regarding that.

THE COURT: Then your objection is overruled. Okay. Take ten. We'll resume examination.

(Recess.)

(Jurors resume their respective seats.)

MR. BAKER: Thank you.

DIRECT EXAMINATION (Resumed) BY MR. BAKER:
Q. Now, Mr. Taft, when we adjourned we were talking about the proceeds from the honey-baked ham sale, Mr. Simpson's franchise of honey-baked hams.
A. I recall.
Q. Okay. And tell all the ladies and gentlemen of the jury where the proceeds of that sale went?
A. About 8 -- between 780,000 and 800,000 went to pay federal and state income taxes that were owed back in 1994 and the balance of the money was used in the normal course of business to pay business expenses, household expenses and some legal expenses related to experts and travel and other related expenses.
Q. All right. Now, was there a sale of policies back to an insurance company?
A. Pardon me?
Q. Was there a sale of policies back to an insurance company?
A. Yes, there was.
Q. And the proceeds of that sale was what?
A. Well, the proceeds of that sale was paid by an insurance company for the full release of several policies under which Mr. Simpson was insured, to release all rights to defend and to indemnify.
Q. And that --
A. And that money was used to pay civil defense expenses, including some attorney fees.
Q. And was that money also used to pay some of the past criminal expenses?
A. No.
Q. Was it used to pay experts?
A. Yes.
Q. Was it used to pay some of the experts' bills from the criminal case?
A. Yes, it was.
Q. And that remuneration was 1,750,000?
A. That's correct.
Q. Now, have we gone over basically all of the funds that Mr. Simpson has obtained from the sale of assets in -- the last large chunk of sale of assets in the last two and a half years?
A. Let's see. We talked about the New York condo. We talked about the honey-baked ham termination. We talked about the insurance settlement. In 1994, after June, there were some stock options that he owned and he exercised his option on those stock options and there were some revenues produced from those stock options which created some of the income taxes that were still due and owing that we were unable to pay, and so those would also fall in the area of sale of assets.
Q. Okay. Now, did your working papers from the cost and expenses that you paid for Mr. Simpson as well as the income receipts that you got from Mr. Simpson and turn those over to an accountant to produce various statements of net worth on approximately a quarterly basis?
A. Well, it doesn't work exactly that way actually between my bookkeeper and myself, our computer at my office generates all the input that goes into keeping track of the expenses and the income and the assets and liabilities. Quarterly, we -- quarterly, we provide that to Marvin Goodfriend's office for possible adjustments in connection with the -- the accounting records as well as possible tax planning matters.
Q. And then he reviews the statements and alters them in accordance with federal tax laws and generally accepted accounting principles?
A. If necessary he makes whatever required adjustments. I rely on his expertise in that area to advise us on that.
Q. All right. Has Mr. Simpson sent assets out of the country at any time?
A. Absolutely not.
Q. When you produced a statement of net worth as of December 31, 1996, does this document -- next in order, Erin. I'm sorry.

THE CLERK: 2424.

MR. BAKER: Thank you.

(The instrument herein described as Networth statement as of 1-31-96 revised 1-31-97 was marked for identification as Defendants' Exhibit No. 2424.)
Q. (BY MR. BAKER) Does his statement of net worth as of December 31, 1996, which was revised 1/31/97, does that truly and accurately reflect what Mr. Simpson's net worth is?
A. Yes, it does.

MR. BAKER: Let's put this on the Elmo. Exhibit 2424 is displayed on lmo.)

MR. BAKER: Can you back it off or -- (Indicating to Elmo.)
Q. (BY MR. BAKER) We'll go right to the bottom line. And then we'll go through it.

MR. BAKER: Now pull it over to the net worth. The other way, please, Phil. Thank you.
Q. (BY MR. BAKER) You have a net worth of -- of negative $856,000?
A. That's correct.
Q. And that does not include the $8.5 million that was awarded on Tuesday by this jury?
A. That is correct.
Q. And is his real net worth, including the verdict rendered by this jury, a negative of $9,356,157?
A. Yes, in my opinion that is his true net worth.
Q. And so he's basically insolvent?
A. He cannot pay his bills.
Q. All right. Let's go up and look at the current assets. The current assets as of December 31 were in the bank as well as this note due from Orenthal Productions, of $6,849?
A. That's correct.
Q. You put that note at a dollar, and you saw this morning where Mr. Freeman had it at around -- I think it was $265,000.
A. That's correct.
Q. Why did you put it at $1?
A. All right, let me explain that. On Orenthal Productions' books, it does show a payable that is owed to Mr. Simpson, approximately 269,000. But 99 percent of Orenthal's income is O.J. Simpson. If he doesn't work, Orenthal doesn't make a dime. So if he doesn't work, Orenthal can't pay his bills. So it's only realistic that we put down there the real facts. That's why we call it a dollar.
Q. Now, let's talk about Mr. Simpson's ability to work for a minute. Do you have an opinion based upon your being his business manager for 27 years whether or not Mr. Simpson currently has an ability to work?
A. Yes, I do.
Q. What's your opinion in that regard?
A. For the last 12 months, and that's been since January of 1996, I've seen a gradual drying up of demand for O.J.'s services in every area. All the areas that was testified by Mr. Roesler, none of them really exist. That's pure speculation. And I saw it all drying up to where it's virtually nothing in terms of anything concrete on my desk at this time or any even meaningful negotiations at this time. There is zero. That was before Tuesday's verdict. Now, after Tuesday's verdict, I would say that it substantially impaired even the prospects that existed before the verdict.
Q. All right. Now, you saw where Mr. Freeman had listed $600 in income from autograph signing from 19 -- last six months -- or I think all of 1996. Do you see that?
A. Well, I was sitting over there. I heard you mention that. That didn't seem to track with my recollection.
Q. Let me show you a document that was Mr. Freeman's and ask you to just look down on the calendar year of 1996 as to what he indicated was income to Mr. Simpson for autographs and memorabilia.

MR. GELBLUM: Objection. Didn't purport to be for all of 1996. That's the only 1996 entry on there.

THE COURT: Excuse me?

MR. GELBLUM: Didn't purport to be all of his income for 1996.

MR. BAKER: For autographs and memorabilia. I'd prefer to ask my own questions, with your permission.

THE COURT: Clarify that question.
Q. (BY MR. BAKER) You see the notation for $600?
A. Yes, I do.
Q. That's not correct, is it?
A. Well, it's not -- it's probably correct for the time frame that the schedule provides, which is July 8, 1994 to April 10, 1996, in which it shows a $600 entry at that time. That may be correct, because I -- we don't keep books from, you know, July of '94 to April of '96, so I -- I can't say whether that's correct or not. If you would like, I could tell you in a better way. I could tell you what we might have done in 1996, the last 12 months.
Q. Okay. In terms of it drying up, has it dried up in the last 12 months; that is, income to Mr. Simpson?
A. Substantially.
Q. In the last six months, how much income has Mr. Simpson made?
A. In the last six months -- since April -- since August?
Q. Yeah, August through January.
A. Probably $30,000.
Q. And has there been, to your knowledge, efforts to market his memorabilia?
A. Vigorously.
Q. Has there been efforts to try to market his signature?
A. Vigorously.
Q. He didn't make any $1.2 million in the last six months?
A. No, he did not.
Q. Now, as you sit here today, sir, do the contracts that request Mr. Simpson services, do they come across your desk?
A. Every one of them.
Q. And do you review those contracts and then take them to O.J. and determine whether or not these contracts are going to be signed and whether he's going to get any money from any personal appearance or interviews or that sort of thing?
A. Yes.
Q. At the present time, is there any contract in existence or offered or made to Mr. Simpson for any personal appearance anywhere in the world?
A. Not one.
Q. Is there any offer from any source that you're aware of, anywhere in the world, to have him sign autographs for any purpose?
A. Not one contract. There may be a small amount of ongoing business for autographs, but probably not more than -- be lucky if it's $5,000 a month.
Q. And does he have any employment contracts whatsoever, presently?
A. None.
Q. In your opinion, is the likelihood of him obtaining any contracts in the next year good, bad, or horrible?
A. Horrible.
Q. And do you think that Mr. Simpson, because of the accusation of murders in this case, in this jury's verdict, is someone who is marketable as a sports personality?
A. Absolutely not.
Q. Now --
A. And there will be testimony to back that up.

MR. GELBLUM: Object.

THE COURT: Sustained.

MR. BAKER: You want to put that up?

MR. GELBLUM: What is it?

MR. BAKER: It's the same thing. Pull it down, please. I apologize. Can you go the other way.
Q. (BY MR. BAKER) We've got current assets of $6804; is that correct?
A. Yes.
Q. Then on that production note, that's the same as -- as in the current assets or is it a different note?
A. It's the same note, but basically that just says that Mr. Simpson is 100 percent stockholder of that corporation, so we list it as a closely held corporation. But it has no value unless's he producing income.
Q. And Pig Skins Inc., what's that?
A. Well, Pig Skins Inc. was the company that owned a 50 percent interest in certain Honey Baked Ham stores which was terminated earlier in 1996.
Q. All right. And the $242,500, that's the amount that's still due and owing, not the amount that he has already received and paid to IRS and various living expenses?
A. Yes, that's correct. And in note 2, if you were to show the second page notes, you will see that that money has gone down to a current value as of 1 -- right here -- of 1/23, it's gone down to 170, and it's even down lower than that because we were paying bills daily.
Q. And you're paying bills from the money that's coming in from the Honey Baked Ham?
A. Correct.
Q. The Pig Skin Inc.?
A. Correct.
Q. All right. Now, let's go back to May Medical. May Medical is -- you listed that as 42,000?
A. Yes. May Medical is a partnership interest in a medical building that's -- if I say upside down, would the jury understand that. It doesn't take in as much as it has to service the debt against the property. It's on the verge of being foreclosed. And because it was a tax shelter type investment where a lot of deductions were taken early in the investment, if that does get foreclosed, there will be a large tax liability. Mr. Goodfriend is better qualified to touch on that.
Q. Okay. Fair enough. Let's go down to -- so the total of closely held corporations and partnerships basically is 285,000. Can you see that?
A. Yes.
Q. All right. Now, on the assets, the OPI, both the 900,000 the 3.2 million that's his pension plan, correct?
A. Correct.
Q. The personal furnishings is estimated at fair market value of half a million dollars?
A. Correct.
Q. And the Rockingham residence has an estimated value of 3.7 million?
A. Yes.
Q. And that was done by an appraisal, was it not?
A. It was done in April of 1995 when the property was refinanced. They appraised it at 3.7, and if anything it's gone down probably since then, in my opinion, because of the notoriety connected with the property.
Q. Your view would not be the same as Mr. Roesler's view that the property has a greater value because it's his?
A. No. It wouldn't be my view.
Q. Okay. Now, the Apollo residence that you put down as a dollar, they put down $250,000.
A. Yes.
Q. Why did you carry that at $250,000 for a while on Mr. Simpson's summary of financial condition and then lower it to a dollar?
A. Well, initially, Mr. Simpson, back in 1969, he bought that house for his mother. He had to take title in his name because the loan was going to be in his name, because he had the financial statement and Mrs. Simpson did not. So we all -- we have carried it all along in his name, but there's no beneficial interest as far as O.J. is concerned in that property. She -- Mrs. Simpson, the mother, has lived there since 1969 continually until the present day.
Q. Since he has no beneficial interest in it, is that why you put a dollar?
A. Yes.
Q. There's some electric bicycles at cost, and his Chevrolet Suburban automobile at cost?
A. Correct.
Q. Okay. So he has total assets of 8.6 million?
A. Correct.
Q. Let's go to liability promissory note/ Hughes Guardianship, what's that?
A. Those are two notes that he was ordered by the Court in Orange County to reimburse the guardianship for monies that the guardianship had advanced to an attorney, Marjory Fuller, for representing Justin and Sydney Simpson during the custody litigation.
Q. Okay. This wasn't -- this wasn't for a lawyer for Mr. Simpson? He had a separate lawyer. This is a lawyer for the kids?
A. This was a lawyer for the children appointed by the Court.
Q. All right. And the 188,968, that's also attorneys accounts payable?
A. That's the unpaid balance that hasn't been converted to any other form, other than an unpaid balance, tied to a court order that Mr. Simpson is obligated to pay those fees.
Q. All right. There is a first deed of trust to Hawthorne Savings for 2.3 million?
A. Correct.
Q. Second deed of trust to the civil defense attorneys for 1.3 million?
A. Correct.
Q. There's Apollo residence, there's -- left on that first Mrs. Simpson's home, $1,959?
A. Correct.
Q. Mr. Simpson is on the title, so he's liable for that; is that correct?
A. That's correct.
Q. Still owing a million five to the criminal defense lawyers?
A. Correct.
Q. And deferred income taxes, if you had to liquidate, this is $4.1 million?
A. That's correct. And that's shown on a schedule.
Q. Right. We'll get to that in a minute. And there's $7,800 from the 1993 taxes, correct?
A. Yes. That -- this speaks as of 12/31/96, that was the court order to provide a statement as of that date. Since that time, bills go on; you pay them as you're required. IRS demanded that this be paid, and we have paid that since.
Q. Okay. And so that the liability exited Mr. Simpson's assets. Is that correct?
A. That's correct.
Q. And that, of course, doesn't include the eight and a half million dollars that this jury awarded on Tuesday, true?
A. True.
Q. Let's go over, just quickly go through the deferred tax liability. So you have on the $242,500, you have some tax liability, correct?
A. Yes, you do. This was a schedule that I asked Mr. Goodfriend's office to prepare as -- as it involves taxes.
Q. Okay.
A. You may want to -- I would prefer to defer to his expertise.
Q. All right. Fine, we will. Withholding going through that, that was included, but there Mr. Goodfriend figured taxes on the various assets based upon liquidation and the gains?
A. Exactly right. We were asked to show a statement as of a given date as if it were to turn all the hard assets into cash in order to pay debts. In order to do that, there is -- four, five of the assets that are on that statement that has deferred tax liability connected with it. And the taxpayers have got to get paid before anybody else. So that's why it's fair to put it on there.
Q. Okay. Fair enough. Now, so, as I understand your testimony, sir, Mr. Simpson has a negative net worth of basically nine and a half million dollars, correct? 9.3. I'm sorry.
A. Including the verdict that came down on Tuesday?
Q. Yes.
A. Yes.
Q. And it is also your opinion that he has no means of income at the present time; is that correct, sir?
A. That's correct. Nothing pending.
Q. Now --
A. Nothing pending or nothing final.
Q. Let's talk just a little bit about a -- we've heard that Mr. Simpson could have -- according to Mr. Roesler, he's entitled to $4 or $5 million for a book deal. Did you hear that testimony?
A. Yes.
Q. Now --

MR. GELBLUM: Misstates the testimony. Doesn't say anything about being entitled to it.

THE COURT: Sustained.
Q. (BY MR. BAKER) Mr. Simpson tried to market a book after the criminal trial, did he not?
A. That's correct.
Q. And there were no buyers?
A. No success at all.
Q. And the asking price at that time, has -- from that time forward has been a million dollars; is that correct?
A. What asking price?
Q. In other words, Mr. Simpson had offered Random House, Little Brown, Viking, Penguin, and Judith Reagan, all to write a book for a million-dollar cash advance and was turned down by all four.

MR. GELBLUM: Objection. Leading.

THE COURT: Sustained, but you may answer.
A. Well --

THE COURT: Move it along.
A. The actual offering and negotiations was handled by an agent in the east, and I'm not sure whether we start -- whether on Mr. Simpson's behalf, whether a dollar amount was assigned.

THE COURT: Excuse me, Mr. Taft. I'll sustain it.

THE WITNESS: Pardon me.

THE COURT: I'll sustain it on the basis of that answer.
Q. (BY MR. BAKER) Do you know whether or not Mr. Simpson has been rejected by four or more publishing companies for a book deal?
A. Yes.
Q. And has he?
A. Yes.
Q. Has he been rejected by every publishing company for a book deal?
A. So far as I know, we've never received one proposal in writing to do a book deal. Everybody else has, but we have not.
Q. Now, was the video deal a failure?
A. Pardon me?
Q. Was the video of Mr. Simpson's commercial a failure?
A. Yes.
Q. Okay. And he received certain guarantee payment; is that correct?
A. That's correct.
Q. And is there any suggestion or indication that he has any video, book deal, appearance deal, car deal, anything in the future?
A. There is none at this point.

MR. BAKER: Is this a good point, Your Honor?

THE COURT: Yes. Ladies and gentlemen, we'll adjourn until 9 o'clock tomorrow. Don't talk about the case. Don't form or express any opinions. Don't read anything. Don't watch anything. Don't let anybody speak to you. Don't let anybody call you about this case. Maintain your isolation from the media and information on this case. All right?

JURORS: Yes, sir.

THE COURT: Thank you.

THE BAILIFF: Quiet, please, until the jury leaves the room.

(At 4:29 P.M., an adjournment was taken until Friday, February 7, 1997, at 9:00 A.M.)