September 9, 2011 8:37 PM
The Score: Covington Helps NFL Ink $15 Billion ESPN Deal
Posted by Brian Baxter
A key issue at play in the National Football League's now-settled labor dispute this past summer was the flood of cash from the league's television contracts with ABC, CBS, ESPN, Fox, NBC, and DirecTVthat would fill NFL coffers once the standoff ended.
Some of that cash began to flow Thursday when the NFL and ESPN announced an eight-year rights extension to the sports network's current license to televise Monday Night Football and produce related programming through 2021. The new deal will pay the NFL about $1.9 billion per year, a 63 percent increase over the value of its current deal, according to the Sports Business Journal.
Covington & Burling corporate partner Douglas Gibson and tax partner Jeremy Spector advised the NFL on the deal. The firm has long served as outside counsel to the league—partner Gregg Levy helped steer the NFL through litigation-related aspects of the lockout—and has strong ties to current and former league officials. Former NFL commissioner Paul Tagliabue currently serves as senior of counsel at the firm, although he no longer works on NFL issues. NFL general counsel Jeffrey Pash is also a former Covington partner.
Gibson and Covington represented the NFL last year on the $750 million sale of the St. Louis Rams franchise to real estate billionaire E. Stanley Kroenke. Gibson also advised the league on the $1 billion sale of the Miami Dolphins to another real estate billionaire, Stephen Ross, in 2009.
Gibson, who declined to comment on his role representing the league, was part of a Covington team that advised Turner Broadcasting last year on a 14-year, $10.8 billion television contract with the NCAA to broadcast its annual March Madness men's basketball tournament.
ESPN handled the contract extension negotiations with the NFL entirely in-house through deputy general counsel Diane Morse and assistant general counsel Lisa Stancati. David Pahl serves as the sports network's general counsel.
The deal with the NFL includes more broadband rights for ESPN's Web site and mobile platforms, as well as international rights and the option to broadcast a future wild-card playoff game, according to ESPN.com. The deal also allows ESPN to broadcast more game highlights and develop studio shows based on those highlights.
Not included in the latest deal: the right for ESPN or its parent company ABC to join the rotation of networks that broadcast the Super Bowl. The path toward that game began Thursday night with the defending champion Green Bay Packers beating the New Orleans Saints 42-34.
Around the Horn
—The NFL's 32 teams are more valuable than ever, according to the most recent edition of an annual report of estimated franchise values released this week by Forbes. One of those jewels, the Minnesota Vikings, a team valued at $796 million and owned by shopping mall magnate Zygi Wilf, are seeking public funding for a new stadium after the roof of the team's current home collapsed last December. With public hearings and a potential public referendum ahead, more than a few lawyers are working on the issue, according to local news reports. We e-mailed Vikings vice president of legal affairs Kevin Warren—a Greenberg Traurig alum—for some insight into who might be huddling up with the team, but as of late Friday he hadn't gotten back to us.
—Lehman Brothers has asked a bankruptcy judge to force Giants Stadium LLC, the operating company for MetLife Stadium—the freshly sponsored 82,560-seat facility where the NFL's New York Giants and Jets play their home games—to produce e-mails, documents, and other communications it had with Sullivan & Cromwell and Goldman Sachs regarding auction-rate securities issued four years ago by Lehman to help finance the facility's construction. The Giants affiliate is seeking $301.8 million from the bankrupt Lehman estate, claiming that Lehman shunted Goldman aside and promised to finance the stadium in a nonstandard deal promising a more stable interest rate, according to a report this week by The Wall Street Journal.
—Richard Pound, a former vice president of the International Olympic Committee and current tax partner at Stikeman Elliott in Montreal, had some strong words for the Canadian legal profession in an op-ed published in the Vancouver Sun. Responding to a keynote address by David Johnston, governor general of Canada, at the Canadian Bar Association's recent annual meeting in Halifax, Pound called Johnston's remarks a "wake-up call" for the profession, suggested that "recent excesses" within the trade had "disrupted lives and the economy," and wondered "whether and where [Canada's] legal profession had failed to act with commensurate responsibility."Make a comment