December 16, 2011 7:39 PM
The Score: Covington Helps NFL Ink Billion-Dollar TV Extensions
Posted by Brian Baxter
Covington & Burling's sports practice maintained its hot streak this week, helping the National Football League negotiate a nine-year extension on television contracts with three major networks that will bring the league billions each year.
The Am Law Daily reported last week on Covington's role advising the Big East collegiate athletic conference in expansion efforts, its TV contract negotiations, and its ongoing dispute with would-be defector West Virginia University.
Many collegiate and professional sports leagues have been reaping the benefits from lucrative TV deals, which networks are increasingly willing to pay thanks to hefty rates they can charge advertisers. (Unlike other scheduled programming affected by the advent of digital video recorders, most viewers don't enjoy watching major sporting events on delay.)
In September, Covington represented the NFL when it negotiated an eight-year, $15 billion TV deal with ESPN. Now the NFL has reached agreements with CBS, News Corp.'s Fox, and Comcast's NBC on renewals of their contracts through the 2022 season, including an expanded slate of games on Thursday nights. (The NFL is barred from televising games on Friday.)
The deal, which was announced on Wednesday, will see the fees paid by each network increase about 7 percent annually, meaning that the annual value will gradually increase from the current $1.93 billion reaped by the NFL to a high of $3.1 billion. The NFL receives about $4 billion each year for its TV rights, making it North America's richest pro sports league.
Covington corporate partner Douglas Gibson, tax partner Jeremy Spector, antitrust cochair Thomas Barnett, communications and media cochair Jennifer Johnson, and litigation and NFL relationship partner Gregg Levy took the lead from the firm representing the league on its negotiations with CBS, Fox, and NBC. Former Covington partner Jeffrey Pash serves as the NFL's general counsel and the league's last commissioner, Paul Tagliabue, is senior of counsel with the firm.
Covington has also been representing the NFL on matters relating to the $760 million sale of the Jacksonville Jaguars to Illinois auto parts magnate Shahid Khan. That transaction, announced shortly after Thanksgiving, was unanimously approved by the league this week.
More Dodgers, Mets Madness
Major League Baseball's Los Angeles Dodgers have the right to accelerate the sale of their future TV rights, according to a ruling last week by a bankruptcy judge in Delaware. The ruling, which came over the objections of Fox Sports and its lawyers from Jenner & Block, paves the way for a possible auction for a new TV deal among rival media companies.
Fox's Prime Ticket channel, which has a contract to air Dodger games through 2013, sought to extend that accord by inking a $3 billion deal to cover the next 17 years with owner Frank McCourt. The deal would have paid McCourt, whose nasty divorce fight ultimately cost him control of the team, about $385 million upfront. But MLB commissioner Bud Selig rejected the deal and the Dodgers filed for Chapter 11 in late June.
On Friday, U.S. bankruptcy judge Kevin Gross issued a 20-page opinion explained his reasoning in ruling against Fox, criticizing the network for its conduct in trying to maintain its contract. A hearing has been scheduled for next month on Fox's appeal of Gross's ruling before a U.S. district court judge in Wilmington. Bloomberg reports that Fox has an exclusive 45-day window to negotiate with the team that ends on January 19.
The Dodgers have sought permission from the bankruptcy court to retain Covington for those negotiations, according to a recent report by sibling publication The National Law Journal.
While the Dodgers bankruptcy drama drags on, the owners of the New York Mets are still struggling to put the repair the team’s shaky finances more than three years after the fall of Bernard Madoff.
Mets owners Fred Wilpon and Saul Katz, victims or enablers (depending on one's perspective) of Madoff's massive fraud, recently took out a $40 million loan from Bank of America, as they seeks to cope with almost $70 million in losses from 2011 alone. The situation is dire enough that MLB could seize control of the team if it can’t get its finances in order, according to the New York Daily News.
A $200 million deal to sell a major stake in the Mets to hedge fund magnate David Einhorn, advised by Bingham McCutchen, fell apart in September over Einhorn's desire to eventually take control of the franchise. A book released last month details the ties between Wilpon and Madoff, which could eventually lead to a change in ownership after the former's 30-year reign in Flushing.
Sex Scandals Heat Up at Penn State, Syracuse
Former Penn State quarterback and assistant football coach Mike McQueary took the stand at a state court hearing in Pennsylvania on Friday, testifying that he saw longtime defensive coordinator Jerry Sandusky molest a boy in a locker room shower in 2002.
McQueary, who called the scene “extremely sexual in nature,” was the first witness at a hearing to determine whether two former Penn State administrators should face trial on perjury charges for failing to report Sandusky’s alleged sexual abuse, according to sibling publication The Legal Intelligencer.
A judge in Harrisburg ruled Friday that there was enough evidence to try both individuals—former athletic director Tim Curley and vice president Gary Schultz. Sandusky’s lawyer, the embattled Joseph Amendola, has accused the media of sensationalizing some of his client’s public statements, despite making a few of his own public slipups.
Amendola has brought on additional counsel to help him represent Sandusky, hiring Karl Rominger of Carlisle, Pennsylvania-based Rominger & Associates. Sandusky waived his right to a preliminary hearing earlier in the week. (Click here for the landing page for all the Intelligencer’s Penn State coverage.)
Syracuse, which last month hired Paul, Weiss, Rifkind, Wharton & Garrison to conduct an internal inquiry into how sexual abuse allegations against a former assistant basketball coach were handled in 2005, was hit with a defamation suit this week.
The two plaintiffs, former Syracuse ball boys Bobby Davis and Mike Lang, claim that the school and legendary head basketball coach Jim Boeheim, who is also named as a defendant, vilified them as liars when they came forward with allegations against former assistant coach Bernie Fine.
Fine, who has hired Syracuse firm Harris Beach to represent him, has not yet been charged with any wrongdoing. But a fourth man has come forward to accuse Fine of molesting him when he was an adolescent. Boeheim’s words defending his former colleague could come back to haunt him, the New York Daily News reports.
Around the Horn
—On Friday, U.S. district court judge Susan Illston in San Francisco sentenced former San Francisco Giants slugger Barry Bonds to two years of probation with 30 days home confinement, 250 hours of community service, and ordering him to pay a $4,000 fine in connection with his conviction on one count of obstruction of justice, according to sibling publication The Recorder. Illston stayed Bonds's conviction while he pursues an appeal. Bonds and his lawyers, led by Allen Ruby of Skadden, Arps, Slate, Meagher & Flom and Cristina Argueadas of Berkeley-based Arguedas, Cassman & Headley, went to trial earlier this year and beat most of the government's charges. Federal prosecutor Matthew Parrella told The Associated Press that the sentence against Bonds was a "slap on the wrist" and "almost laughable" given the millions of dollars he made during his playing career. The government's case against Bonds, who lives on a two-acre estate in Beverly Hills, reportedly cost more than $50 million.
—While Bonds and the BALCO investigation he helped spawn might finally be ending, baseball's performance-enhancing drug nightmares continue. Milwaukee Brewers star Ryan Braun reportedly tested positive for synthetic testosterone, leading the reigning National League MVP to hire noted sports lawyer David Cornwell of Atlanta's DNK Cornwell to appeal a mandatory 50-game ban under the league's collective bargaining agreement with the players union, which has cautioned against a rush to judgment. No player who has tested positive has yet mounted a successful appeal.
—In what Forbes called the greatest deal in sports history, the Ontario Teachers' Pension Plan sold its majority stake in Maple Leaf Sports and Entertainment, the entity that owns a bevy of professional sports team in Toronto, to rivals Bell Canada and Rogers Communications for almost $1.3 billion. The Am Law Daily reported last week on the four Canadian firms that took lead roles working on the deal.
—Chris Paul, arguably the best point guard in the National Basketball Association, has secured a trade to the Los Angeles Clippers. But before Paul was dealt by the New Orleans Hornets, who were taken over by the league last year after a deal to sell the team fell through, commissioner David Stern nixed another trade that would have sent Paul to the Los Angeles Lakers. The rejection raised the specter of Paul possibly suing the league to force a trade, forcing the NBA to fight a collusion claim in court.
—The NBA was sued this week by Warren Glover, a former New York Police Department lieutenant commander who spent ten years with the league before he was fired in July. Glover, represented by Randolph McLaughin of New York's Newman Ferrara, is suing for lost wages and damages. He claims that his superiors in the league office forced him out after he reported instances of sexual harassment.
—Kobe Bryant's wife has filed for divorce. The Lakers star's marital problems have been well covered in recent years, but the end came Friday when Vanessa Laine cited "irreconciliable differences" in seeking a separation from her husband of ten years. Laine, who did not sign a prenuptial agreement, has retained high-powered divorce lawyer Laura Wasser of L.A.'s Wasser, Cooperman & Carter.
—For all those media outlets that reported Scottie Pippen was bankrupt, you just got sued. The former NBA small forward, who spoke with Esquire this month, filed a $10 million suit in federal court in Chicago against ten defendants, including several universities whose school publications reported on the ex-Chicago Bull star's supposed insolvency, for reporting that he lost his fortune in a corporate jet deal gone bad. Arthur Gold of Chicago’s Gold & Coulson and Jeffrey Katz of Chicago's Spellmire Law Firm are representing Pippen. (Click here for the 16-page complaint, courtesy of the ABA Journal.)
—The Chicago Bears cut Sam Hurd Friday, two days the NFL wide receiver was hit with federal drug trafficking charges. Hurd faces up to 40 years in jail for allegedly running a drug ring to distribute large amounts of cocaine and marijuana in the Chicagoland area. Hurd has retained California lawyer David Kenner, best known for once representing rapper Snoop Dogg, to represent him.
—And while much has been made lately about the long-term impact of concussions on some former NFL players, players in other pro sports leagues are waiting for science to catch up to them, writes hockey Hall of Famer, politician, and lawyer Ken Dryden in this piece for ESPN's Grantland. National Hockey League players thinking of pursuing a similar suit against their league face an uphill battle, according to The Globe and Mail.
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