April 11, 2011 5:20 PM
Bingham, Katten, Honigman, Magic Circle Firms Handling Two Major Sports Deals
Posted by Brian Baxter
Two billionaires are set to take over the National Basketball Association's Detroit Pistons and the English Premier League's Arsenal thanks to an assist from their lawyers.
Tom Gores, a Michigan native and founder of Beverly Hills-based private equity firm Platinum Equity, is poised to acquire the Pistons after several months of negotiations. The Am Law Daily reported last August on the firms with ties to the team, which has fallen on rough times in recent years after winning the NBA Championship in 2004.
The start of the team's transition to a new era began in March 2009 after the death of longtime Pistons owner William Davidson, a member of the Basketball Hall of Fame. Davidson's widow, Karen, inherited a club valued by Forbes in 2009 at $479 million. That value dropped to $360 million in 2010, according to Forbes.
A press release on Friday announced that the Pistons would be sold to Gores as part of a portfolio of assets owned by Palace Sports & Entertainment (PSE). Terms of the deal were not disclosed. PSE, headed by former general counsel Alan Ostfield, also owns a suburban Detroit music theatre, operating rights to a local music festival, and the Pistons's 22,000-seat playing arena, The Palace of Auburn Hills.
The Detroit Free Press reports that Ostfield, who also serves as president of the Pistons, played a critical role in orchestrating a sale of the team, whose longtime legal counsel and former general manager, Butzel Long counsel Oscar Feldman, sold his minority stake in the franchise back to the Davidson estate in late 2009.
Katten Muchin corporate partner Adam Klein and associate Harris Eisenberg in Chicago are leading a team from the firm advising the Pistons on their sale to Gores. Klein is no stranger to NBA franchise sales, having advised Joe Lacob, managing partner of private equity firm Kleiner Perkins Caulfied & Byers, on his $450 million acquisition of the Golden State Warriors last year. Katten Muchin also has close ties to the NBA through Chicago Bulls owner Jerry Reinsdorf, who worked as a tax lawyer at the firm during the 1970s.
Detroit-based Honigman is also playing an important role in the transaction. Corporate partner Barbara Kaye is advising PSE on the sale of the Pistons, having previously advised PSE on its acquisition of the National Hockey League's Tampa Bay Lightning. Honigman litigation partner Joseph Aviv is serving as outside counsel to the estate of William Davidson during sale negotiations. (The Davidson estate is also represented by Birmingham, Mich.-based Williams, Williams, Rattner & Plunkett.)
Gores turned to Bingham corporate partners John "Jack" Concannon III and Joanne Foley, private equity cochair James Loss, banking and leveraged finance partner James Black, Jr., and real estate and environmental counsel William Squires III for advice on the Pistons acquisition. Bingham previously advised Gores and Platinum Equity on several major deals, such as its $2 billion acquisition of Ryerson in 2007 and $470 million purchase of Covad Communications Group in 2008. (Platinum's general counsel is Eva Kalawski.)
Bingham's Concannon is also an old hand at major sports deals. He was part of a team of lawyers from the firm that advised the former owners of the Boston Red Sox on their $700 million sale to a group led by hedge fund titan John Henry and television magnate Tom Werner, a deal that eventually cost Bingham its longtime role as outside counsel to the baseball team, according to a 2003 feature story from The American Lawyer. Concannon also advised real estate billionaire Stephen Ross on his $1.1 billion acquisition of the National Football League's Miami Dolphins in 2009.
The Pistons sale requires the approval of the NBA's Board of Governors, which is expected to take place sometime this week.
Across the pond, another prominent American investor is seeking to take control of Arsenal, the legendary English soccer team based in North London. At least six firms landed roles advising on the offer, according to U.K. publication Legal Week.
E. Stanley Kroenke, a real estate billionaire who is Arsenal's largest shareholder, more than doubled his stake in the club to almost 63 percent by purchasing the roughly 16 percent stakes each held by former shareholders Danny Fiszman and Lady Nina Bracewell-Smith. The bid by Kroenke, who took a nearly 10 percent stake in the team three years ago, values Arsenal at $1.2 billion. The BBC reports that Kroenke is expected to make an offer for the rest of the team, most of whose shares are owned by Uzbeki billionaire Alisher Usmanov.
Clifford Chance corporate partner Timothy Lewis, who joined the Magic Circle firm last year in London from British rival Macfarlanes, and banking and finance partner Jason Young in New York, who earlier this year handled an important deal for the National Hockey League's Pittsburgh Penguins, are advising Kroenke Sports Enterprises on its namesake's maneuver for full control of Arsenal. Legal Week reports that Kroenke's financial adviser, Deutsche Bank, is being represented on finance aspects of the deal by lawyers from White & Case and Herbert Smith in London and New York.
By acquiring full ownership of Arsenal, Kroenke would add to his impressive portfolio of professional sports teams. Kroenke already owns Major League Soccer's Colorado Rapids and last year the entrepreneur turned to SNR Denton corporate partner Alan Bornstein in St. Louis to help him take control of the National Football League's St. Louis Rams.
Bornstein has been a longtime lawyer to Kroenke, having previously advised him on his $450 million acquisition of the NBA's Denver Nuggets, NHL's Colorado Avalanche, and their 19,000-seat Pepsi Center playing arena in 2000.
Other lawyers advising on the proposed Arsenal sale are Linklaters private equity cochair Ian Bagshaw for Bracewell-Smith, Edwin Coe M&A partner Russel Shear for Fiszman, and Slaughter and May corporate partner Nigel Boardman for Arsenal itself, according to Legal Week.
Arsenal sought to reassure its fans that the team's sale won't result in a foreign buyer saddling the club with debt, as happened to Premier League rival Liverpool FC, whose ownership battle played out in courts on both sides of the Atlantic late last year. (Two firms recently won roles advising on a deal that will see basketball star LeBron James take a small stake in Liverpool.)
Arsenal's general counsel is Svenja Geissmar.Make a comment