March 13, 2009 6:39 PM

The Sean Avery Chronicles: A Second (Chance) Look at Sports and the Law

Posted by Brian Baxter

UPDATE: 3/16/09, 8:45 a.m. In an upset almost on par with Giants-Pats in Super Bowl XLII, DeMaurice Smith of Patton Boggs has been elected to succeed Gene Upshaw as the next executive director of the NFLPA.

Some of our loyal readers may have noticed that our weekly sports column took a brief respite last week, as we got hammered by layoffs, live blogging Bernie Madoff, and various other matters. Inexcusable, we know.

But first, a brief (personal) history lesson. We've always been big hockey fans, even if it's often the fourth wheel in U.S. sports. For our money, or what's left of it, watching a New York Ranger game from the blue seats at Madison Square Garden is one of the top five sporting experiences that any red-blooded American can have.

That's why we ventured out on a wintry January night more than a year ago to the Sky Rink at New York's Chelsea Piers for the first annual Lawyers' Cup match between the National Hockey League's primary outside counsel: Proskauer Rose and Skadden, Arps, Slate, Meagher & Flom.

USA-Soviet Union '80 or Rangers-Devils '94 it wasn't, but the game--the brainchild of Proskauer labor and employment associate Brian Gershengorn, son-in-law of NHL commissioner Gary Bettman (himself a Proskauer alum)--was not only entertaining, but also an overwhelming financial success that raised $20,000 for Ice Hockey in Harlem.

This year, the two firms took to the ice for the second annual Lawyers' Cup, once again raising money for charity and, of course, attempting to establish hegemony among the league's outside counsel.

"[Bettman] put a firm kibosh on the proposed side bet, which was the rights to exclusive league representation," jokes Skadden restructuring cohead J. Gregory Milmoe.

But while Proskauer may have come equipped with big foam fingers, it was Skadden who had the skaters, blanking Proskauer 5-0 despite a heroic effort in the goal by Finnish ringer, ahem, summer associate Jani Ake Holmborg. (Hey, it's summer somewhere, right?)

"He was fabulous," says Milmoe, who plays in a rec league with other Skadden employees. "I think I had about three or four clear shots--and once our game seems to be going well, it turns into 'Set up the old guy to make him look good'--and he stopped them."

The 61-year-old Milmoe, shown here hoisting the Lawyers' Cup, knows a thing or two about good goal tending. When he was six, Milmoe's family moved to St. John's, Newfoundland, where he lived for two years. His hockey career lasted until his freshman year at Cornell, where he played with Ken Dryden, future star goalie for the Montreal Canadiens, Canadian Olympic team, and now a politician and lawyer up north.

"I was decidedly not in that league," says Milmoe of his decision to abandon the ice for the boardroom. "But most of us playing have at least had illusions of being NHL players, so [Bettman] adds a certain cache to the event by giving it his endorsement."

The charitable aspect doesn't hurt either.

"We're still having checks come in," Milmoe says. "So I think even in the down economy, this will be a good thing for Ice Hockey in Harlem."

NBA and Beckham Have Proskauer in Common

Seeking to supplement an existing $1.7 billion credit facility, the National Basketball Association announced two weeks ago that it had secured an additional $200 million in credit from JPMorgan Chase and Bank of America.

Twelve teams have reportedly been seeking between $13 million to $20 million in loans to weather the economic downturn. The financing deal received front-page treatment from ESPN.com's Bill Simmons, who dubbed the league the "No Benjamins Association."

We like Simmons, even though he's an unabashed Red Sox fan, but sources familiar with the transaction say that the additional credit proves that the league remains financially viable rather than awash in red ink. That banks were willing to lend to the NBA despite the tight credit market is in itself a vote of confidence in the the league's business plan.

Chester "Chip" Fisher III, chair of the institutional finance group at Bingham McCutchen in Hartford, represented the investor group led by JPMC and BoA. Proskauer corporate partner and sports law group cochair Joseph Leccese and corporate partner Jonathan Oram advised the NBA on the deal. The league is a longtime client of the firm (NBA commissioner David Stern is a former Proskauer partner).

"This is the fifth offering we've done for the league-wide [credit] facility since its inception in 2003, and at this point it's actually quite routine," Oram says. (SportsBusiness Journal recently reported that other leagues such as Major League Baseball have had difficulty renewing their credit facilities.)

The NBA financing deal wasn't Proskauer's only major sports-related negotiation in past weeks. The firm has long served as outside counsel to Major League Soccer, which has been embroiled in a very public spat with superstar David Beckham about whether he will play in MLS or in Italy this upcoming season.

Proskauer helped negotiate Beckham's arrival in America two years ago, but now the star-crossed Brit has been hankering to play with Italian club AC Milan as a means of preparing for the 2010 World Cup.

Earlier this week Beckham and AC Milan reached a deal with MLS and the Los Angeles Galaxy, the team that holds Beckham's MLS contract, allowing him to divide his time between the two teams this season.

Sources familiar with the most recent deal say that Proskauer has reprised its role representing MLS. Oram, labor and employment partner Howard Robbins, and litigation cochair Bradley Ruskin are advising the league from the firm.

'Long Shot' Lawyers Seek to Succeed Upshaw

We've been following with interest the candidacy of DeMaurice Smith, chair of the government investigations and white-collar practice group at Patton Boggs in Washington, D.C., who is seeking to succeed the late Gene Upshaw as head of the National Football League Players Association.

Smith has been quiet the past few months as the increasingly unwieldy selection process unfolded, but now he's finally speaking out.

In a recent interview with The Washington Post, Smith acknowledged that in the beginning he seemed like a long shot candidate for the job of NFLPA executive director. He'd never played football beyond high school and he had no background in labor law.

But it soon became apparent that Smith had other attributes that helped him become one of three finalists--all of whom will attend the union's annual meetings in Hawaii this weekend--for the NFLPA job. (A successor is expected to be chosen by player representatives for the 32 NFL teams.)

Former Washington Redskins defensive end Charles Mann, a friend of Smith's, said the lawyer would help repair the frayed relationship between current and retired NFL players over benefits and royalties. Smith's outsider status might give him an edge over his two remaining competitors--former players Troy Vincent and Trace Armstrong.

"We need leadership that goes beyond whether you played the game or not," Mann told The WaPo. "Gene Upshaw was a great leader. But since his passing, do we want more of the same or do we want a dynamic, fresh, new visionary who can take us into the next age with the players' welfare and the retired players' welfare in mind?"

Any executive that steps into Upshaw's large shoes will first have to negotiate a labor truce with the league, which last year added Proskauer's Bob Batterman to a high-priced legal team tasked with rewriting the NFL's collective bargaining agreement (CBA).

Smith, a Redskin fan himself who colleagues affectionately call "De," enjoys close ties to Capitol Hill through his politically connected firm. Smith told The WaPo that while the labor issues at hand are complicated, he remains confident in the NFL's overall business model despite the economic downturn.

It remains to be seen what the NFLPA's lawyers think about one of their own replacing Upshaw. One source familiar with the selection process told The Am Law Daily that the union's two primary outside lawyers--Dewey & LeBoeuf litigation cochair Jeffrey Kessler and Weil, Gotshal & Manges litigation cochair James Quinn--have sat in on interviews of all candidates for executive director.

Another outside union lawyer, D.C.-based solo practitioner Joseph Yablonski, has been hired to investigate whether Vincent leaked confidential information about player agents during his four years as NFLPA president.

Further complicating matters is the fact that another candidate eliminated back in January--sports attorney David Cornwell of Atlanta's DNK Cornwell--last week obtained the written support of three player representatives to get an invitation back to the Hawaiian selection party.

Cornwell, who spent five years as an NFL in-house lawyer, made waves this week by criticizing the league's disciplinary policy. Cornwell has suggested appointing an independent arbitrator to review ruling's made by NFL commissioner Roger Goodell and creating a new senior position at the NFLPA to mend the rift between current and retired players.

With the four candidates relying on different factions for support, one labor lawyer tells The WaPo that it will be NFL management that benefits.

"Whoever gets elected may not have the full support of the rank-and-file," said Pryor Cashman partner Joshua Zuckerberg. "That can certainly be an issue going into negotiations. You want a union to at least have the appearance of a united front, where the leader has the backing of the majority."

'Voice of God' Civil Suit Goes Quiet

More than a month ago, right around the time that the Pittsburgh Steelers rallied to beat the Arizona Cardinals at the end of regulation in Super Bowl XLIII, we reported that the litigation between NFL Films and the estate of legendary broadcaster John Facenda (a.k.a. the "Voice of God") was in civil suspense as both sides pursued mediation efforts.

It appears that those talks have led to both sides meeting at the 50-yard-line to settle their differences.

Sibling publication The Legal Intelligencer reports that the NFL has agreed to pay Facenda's estate an undisclosed sum to settle the litigation, which began after NFL Films was accused of improperly using the late Facenda's voice in a promotional film for the 2006 incarnation of the Madden NFL video game.

The case was mediated by former U.S. magistrate judge Joel Rosen, now a commercial litigation partner at Philadelphia's Montgomery, McCracken, Walker & Rhoads. (Ironically the same firm that employs an inspirational former Penn State cornerback turned labor and employment associate.)

Facenda's estate was represented by Paul Laurincella of The Beasley Firm in Philadelphia while the NFL relied on Debevoise & Plimpton IP litigation chair Bruce Keller.

Around the Horn

A few other sports law-related items you may have missed in the past week on The Am Law Daily:

-- Our colleague Zach Lowe reports that Johnny Damon and Xavier Nady aren't the only baseball players wrapped up in the Allen Stanford scandal.

-- Lowe also reports that Davis Wright Tremaine secured a victory before the Washington Supreme Court, which ruled that professional sports stadiums can qualifiy as a public good.

-- And The Litigation Daily's Ross Todd reports that Fish & Richardson and Howrey recently teed off in a bitter IP dispute between Callaway and Acushnet (maker of Titleist) over golf ball design.

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