November 29, 2011 5:40 PM
Three Firms Take Lead on Proposed Sale of NFL's Jacksonville Jaguars
Posted by Brian Baxter
Three Am Law 100 firms are advising on the potential sale of the National Football League's Jacksonville Jaguars by current owner J. Wayne Weaver to Illinois auto parts magnate Shahid Khan, who has pledged to keep the team in Florida.
The Jaguars, who joined the NFL as an expansion team in 1995, have struggled in recent years both at the gate and on the field. In addition to announcing the proposed sale to Khan, the team also fired head coach Jack Del Rio on Tuesday. Weaver, who has owned the Jaguars since their inception, said publicly Tuesday that he turned down other offers for the team from investors in California that might have decided to move the franchise to Los Angeles.
While the purchase price was not disclosed, Forbes reports that Khan has agreed to pay $760 million for the team, and plans to use $350 million in debt to finance the acquisition. The sale requires the approval of the league and owners who control the NFL's other 31 teams.
Foley & Lardner finance and financial institutions practice chair Charles "Chuck" Hedrick is leading a team from the firm advising the Jaguars on the sale. Other Foley lawyers working on the matter include employee benefits partner Leigh Riley, tax partner Timothy Voigtman, and insurance partner Brian Kaas.
Paul Vance, of counsel with Foley in Jacksonville, serves as senior vice president of football operations and general counsel for the Jaguars. According to a 2003 profile of Vance in The Florida Times-Union, he became Weaver's closest confidant and the second-most powerful person in the Jaguars organization after taking over virtually all nonpersonnel matters in 2001 from former vice president Michael Huyghue, a sports lawyer currently serving as commissioner of the upstart United Football League.
In his role with the Jaguars, Vance, a Columbia Law School graduate, manages the salary cap and contract negotiations with players, while also handling transactional and other corporate matters for the team. Foley states on its Web site that it has provided a variety of services to the Jaguars, including representing the team in financings amounting to more than $100 million, lease agreements with the city of Jacksonville, IP and general litigation, and numerous labor and employment matters.
Khan, a Pakistani native who, according to Forbes, helped build his fortune in the U.S. by "adroitly buying unwanted factories," owns privately held Urbana, Illinois–based auto parts maker Flex-N-Gate. He previously sought to purchase a 60 percent stake in the NFL's St. Louis Rams in 2010. Proskauer Rose advised Khan in that endeavor, which stalled when Rams minority shareholder and Missouri businessman E. Stanley Kroenke exercised his right of first refusal to match Khan's bid and take control of the team. The Rams were sold to Kroenke in August 2010 for $750 million.
Proskauer is once again advising Khan on his effort to purchase the Jaguars. Joseph Leccese, chairman of the firm and cohead of its sports law group, is working on the deal, along with corporate partner Jon Oram, tax partner Amanda Nussbaum, and employee benefits partner Steven Weinstein. Leccese told us on Tuesday that he was especially happy to represent Khan again only a few days after another firm client, James Crane, finally closed on his $680 million acquisition of Major League Baseball's Houston Astros. (Crane had unsuccessfully tried to buy MLB's Texas Rangers out of bankruptcy in 2010.)
As for the Jaguars, Forbes valued the franchise dead last out of 32 teams at $725 million in September, but that was before the NFL inked a $15 billion, eight-year television contract with ESPN that pays the league almost $2 billion per year. Despite playing in the NFL's third-smallest market, the new TV deal and the league's revenue-sharing agreement helped boost the value of the Jaguars, according to Forbes.
Covington & Burling represented the NFL on that TV deal with ESPN almost three months ago. Corporate partner Peter Zern, who advised the league in connection with the sale of the Rams, is also advising the NFL on the Jaguars deal. In 2009, Zern and Covington provided outside counsel to the NFL on the $1 billion sale of the Miami Dolphins to real estate billionaire Stephen Ross.
The NFL is a longtime Covington client. Former NFL commissioner Paul Tagliabue is currently senior of counsel with the firm. The league has leaned heavily on Covington in recent years for litigation counsel, particularly during its now-settled collective bargaining antitrust fight with the players union over the summer.Make a comment