November 23, 2011 7:03 PM
The Score: Legal Fees, Lawsuits, and Changing Leagues
Posted by Brian Baxter
UPDATE: 11/26/11, 1:30 p.m., EST. The NBA and its players have announced a tentative labor agreement, according to CBS Sports and The New York Times. Weil's James Quinn and Bruce Meyer took the lead representing the players union in settlement talks with the league over the past week. A 66-game season is expected to start on Christmas Day.
ESPN's Dave McMenamin reported via Twitter this week that the firm's founder, David Boies, is billing the players at an hourly rate of $1,220 per hour. (Though McMenamin didn't provide a source for that information, The Wall Street Journal reported that as Boies's standard hourly rate in August.)
In order to shoulder the high cost of its antitrust litigation with the NBA, the union is withholding licensing payments to players to put them aside for legal fees, according to McMenamin.
The Am Law Daily reported last week on the significance of Boies's entry into the collective bargaining fray, including questions about a potential conflict he might have as a result of his previous representation of NFL owners earlier this year in a similar labor dispute. But Boies's involvement on the players' side doesn't necessarily mean the lines of communication with management are totally closed.
As owners and players descend into their so-called nuclear winter, reports have emerged of one lawyer who might be able to help the parties salvage the NBA''s 2011–12 season. CBS Sports's Ken Berger reported this week that individuals on both sides have approached Weil, Gotshal & Manges litigation chair James Quinn about serving as a go-between for the warring camps.
Whether or not Quinn, who has a long history of advising pro sports labor unions in collective bargaining negotiations, can broker a settlement remains to be seen. While some predict that time could be on the players' side in the dispute, others, such as former union executive director Charles Grantham, believe that both sides must return to the bargaining table and hammer out a deal.
Coincidentally, Boies has unrelated reasons to be in touch with the NBA's lawyers from Skadden, Arps, Slate, Meagher & Flom. The two firms teamed up this week to bring a $25 billion derivative suit against the U.S. Department of the Treasury and the Federal Reserve over the federal government's 2008 bailout of AIG.
As of late Wednesday, both sides had quietly resumed negotiations in the hope of salvaging a season that would begin on Christmas Day, according to The New York Times. Boies, Schiller name partner Jonathan Schiller has released a statement confirming the settlement talks, The Washington Post reports.
Texas Team Sales Go Through, Dodgers Still on Hold
Almost six months after King & Spalding and Proskauer Rose advised on the $680 million sale of the Houston Astros baseball team to local businessman James Crane, the transaction has finally been approved by Major League Baseball, albeit with some significant caveats.
MLB, which announced a new collective bargaining agreement with players this week, agreed to look past some concerns about Crane's background in approving the transfer of the Astros to him from former owner Drayton McLane, Jr. Crane and his lawyers from Proskauer did manage to negotiate a slight reduction in the sales price by agreeing to move the team to the American League in 2013, according to the Houston Chronicle.
But moving the Astros out of the National League has proven unpopular among the local fan base, including with Fulbright & Jaworski litigation partner Kevin Yankowsky, who told the Chronicle that the move would violate the team's lease at Minute Maid Park. The Chronicle reports that Yankowsky will make a presentation in support of his position to the Harris County Sports Authority in Houston—headed by Haynes and Boone partner J. Kent Friedman—on December 1.
Friedman, who had designs on forming his own group to buy the Astros earlier this year, happens to be the father of Tampa Bay Rays general manager Andrew Friedman. Yankowsky told the Chronicle that if the local Sports Authority refuses to renegotiate its lease with the Astros, it can force the team to remain in the National League and give MLB the option of suing if it wants to proceed with the move.
One sale of a baseball franchise that doesn't appear imminent is that of the Los Angeles Dodgers. The team accused Fox earlier this month of interfering with its plans to sell itself and the franchise's media assets in bankruptcy court, according to sibling publication The National Law Journal.
Fox, represented by Jenner & Block, has asked a bankruptcy court judge in Delaware to dismiss the team's Chapter 11 case. Former federal judge Joseph Farnan, Jr., who has his own firm in Wilmington, has been tapped to mediate the dispute between the Dodgers and Fox.
Shifting to hockey, the NHL's Dallas Stars were successfully sold out of bankruptcy this week. A bankruptcy judge in Delaware approved the sale of the team to Canadian businessman Thomas Gagliardi. The Am Law Daily reported last month on Baker & McKenzie's role advising Gagliardi, while Weil, Gotshal & Manges took the lead representing former owner and private equity pioneer Thomas Hicks.
Another NHL team that may soon be sold is the Toronto Maple Leafs. The Original Six franchise's majority owner, the Ontario Teachers' Pension Plan, has been trying to unload the Leafs for several months. One suitor that has recently emerged for Maple Leaf Sports & Entertainment, which owns the Leafs, NBA's Toronto Raptors, and Major League Soccer's Toronto FC, is private equity firm Providence Equity Partners, according to reports by Bloomberg and The Toronto Star.
College Sports Shenanigans Continue
If there's one place where there is unfortunately a pressing need for lawyers these days, it's big-time college sports.
Penn State University, whose various legal wranglings we've previously covered here, here, and here, announced this week that it had hired former FBI director and federal judge Louis Freeh to head an internal investigation into a child sex abuse scandal involving former assistant football coach Jerry Sandusky and university officials accused of failing to report Sandusky's conduct to the proper authorities.
Sibling publications Corporate Counsel and The Legal Intelligencer have more on the hiring of Freeh, a founder of the Freeh Group International Solutions risk management firm and senior managing partner of the Freeh Sporkin & Sullivan law firm. Freeh will serve as special investigative counsel to a special committee set up by Penn State's board of trustees to probe the criminal child sex abuse charges, revealed in a graphic grand jury report earlier this month.
While Freeh said at a press conference that he has no ties to Pennsylvania or Penn State, the Philadelphia Inquirer reported that he had once served as an executive at a company with close ties to the school. A Penn State spokesman told The Am Law Daily that Freeh's firm is the only one working with the special committee and that he will have complete independence to conduct his inquiry. The Am Law Daily reported last week that the board of trustees had hired Reed Smith as outside counsel, but that the firm would not work with the special committee.
Putting the Penn State saga aside, as well as the public disclosure of similar sex abuse investigations at The Citadel and Syracuse, the former chief operating officer for the Fiesta Bowl, Natalie Wisneski, has been indicted on charges of filing false income tax returns for the bowl game, according to The Associated Press. Wisneski also faces federal campaign finance and conspiracy charges for soliciting political donations from bowl employees and later agreeing to reimburse them.
The Am Law Daily reported earlier this year on a 276-page report compiled by Robins, Kaplan, Miller & Ciresi that led to the firing of Fiesta Bowl CEO John Junker. He was let go along with several other top executives, including the bowl's general counsel Craig Williams of Snell & Wilmer, according to Corporate Counsel.
Nathan Hochman, a litigation partner with Bingham McCutchen in Santa Monica, is serving as interim general counsel for the Fiesta Bowl, whose future is undetermined. Hochman told The AP that the bowl "continues to fully cooperate with all federal, state, and local investigations."
Around the Horn
—First Terrell Owens. Then Clinton Portis. Now two more NFL players, Duane Starks and Roscoe Parrish, are suing Greenberg Traurig and real estate partner Pamela Linden over their failed investments in an Alabama casino, according to sibling publication the Daily Business Review. All four players (Parrish is the only one currently active) have filed separate suits against Linden and the firm. The DBR reports that more players are expected to file suit, claiming Greenberg Traurig steered them into the electronic bingo operation and failed to notify them of potential conflicts of interest.
—Hulk Hogan may be a champion in the ring, but the famous wrestler just got pinned in divorce court. The St. Petersburg Times reports that the Hulkster's ex-wife, Linda Bollea, got 70 percent of the couple's savings and 40 percent ownership of Hogan's business ventures in a confidential settlement. Hogan does get to keep any money he makes from personal appearances, and he's off the hook as far as alimony.
—Morrison & Foerster is representing the Ultimate Fighting Championship in a First Amendment suit filed earlier this month against several New York officials, accusing them of unjustly upholding a 14-year ban on mixed martial arts events in the Empire State, according to sibling publication The Am Law Litigation Daily. UFC, which recently signed a new television contract with Fox, has lobbied unsuccessfully for several years to get New York to lift its ban on MMA.
—Former New York Knicks guard Cuttino Mobley is suing the NBA team for pressuring him to retire in order to save $19 million, according to The AP. Mobley is being represented by Vladeck, Waldman, Elias & Engelhard, a well-regarded New York employment firm that won a $11.6 million sexual harassment verdict four years ago against the team and ex-general manager Isiah Thomas. (The case later settled.) Courthouse News has more on Mobley's complaint.
—Wilmer Cutler Pickering Hale and Dorr's pro bono efforts helped set Dewey Bozella free two years ago. After being feted at the ESPY Awards this summer, Bozella won his professional boxing debut in October. Now the ex-con is being talked about as a possibility for Sports Illustrated's Sportsman of the Year. Another potential candidate? Caplin & Drysdale associate Matt Sanderson, the man behind the Playoff PAC, a group advocating for a workable postseason championship for college football.
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