The Work

May 6, 2011 6:10 PM

The Score: Proskauer, S&C Wrangling Over Dodgers' Financial Records

Posted by Brian Baxter

A week after Major League Baseball took operational control of the Los Angeles Dodgers from owner Frank McCourt and handed it to Akin Gump Strauss Hauer & Feld senior counsel J. Thomas Schieffer, the league is now fighting to see financial records for the cash-strapped franchise.

Represented by Sullivan & Cromwell chairman Joseph Shenker and L.A. office managing partner Robert Sacks, McCourt met with MLB officials last week to state his case for keeping control of the team and his "practical concerns" about Schieffer's appointment. Since then McCourt has been making the media rounds, taking calls from Dodgers fans on the radio, vowing to keep the team he bought for $430 million in 2004 and denying that he siphoned off $100 million in funds.

But McCourt is heavily in debt and there are reports that the Dodgers won't have enough money to make payroll by the end of May and could face insolvency by July, according to The Wall Street Journal. That would likely result in MLB seizing the team from McCourt. A key factor in McCourt's ability to bolster Dodger Blue's bottom line is a 17-year, $3 billion television contract with News Corp.'s Fox network that would inject much-needed capital into the team.

The deal requires the approval of MLB commissioner Bud Selig, who has launched his own investigation of the team's finances. MLB has turned to a team from Proskauer Rose, including litigation cochair Bradley Ruskin, sports law group cohead Howard Ganz, antitrust litigation partner Scott Cooper, and corporate partner Jon Oram for counsel on the league's negotiations with McCourt and S&C.

The two sides are currently squabbling over access to seven years of Dodgers' financial records. Proskauer, which earlier this week advised the Pac-10 Conference on a $3 billion television deal with Fox and ESPN, wants hard copies and electronic records of the files MLB has requested. But McCourt and the Dodgers want to limit Proskauer's access to a closed "data room" at Dodgers Stadium.

Both sides are currently negotiating a solution to the document drama. A settlement would presumably allow Selig to wrap up his investigation of the Dodgers' finances and issue a decision on the team's proposed contract with Fox. McCourt has said publicly he is still mulling a suit against MLB. The Dodgers are two games below .500 and in third place in the National League West.

As the Lockout Turns

The ongoing collective bargaining negotiations, or lack thereof, have become the focus of the National Football League's lost offseason. While fans have been tuning out in droves--television ratings for the league's annual college draft were down 17 percent--the lawyers have been staying busy.

The NFL got a reprieve last week when the U.S. Court of Appeals for the Eighth Circuit issued a temporary stay of an injunction issued by a U.S. district court in Minneapolis stopping the league's lockout. Earlier this week, the Eighth Circuit granted an expedited appeal for oral arguments in the lockout case to be heard on June 3, which at least one lawyer considered to be an unusual step.

Lawyers for the players, such as Weil, Gotshal & Manges litigation cochair James Quinn, still believe that there will be an NFL season in 2011. But both sides have lawyered up for an appellate fight. The players have turned to former solicitor general and current Gibson, Dunn & Crutcher appellate cochair Theodore Olson to argue before the Eighth Circuit. Olson, who has called the lockout a "terrible injustice," will face off against NFL appellate counsel Paul Clement, his successor as solicitor general and now of Washington, D.C.'s Bancroft after quitting King & Spalding earlier this week. reports that a permanent ruling by the Eighth Circuit on whether the lockout will remain in place is not expected before Monday. Next week the NFL and players will also appear before another federal judge in Minneapolis for a hearing over a possible injunction and request for damages in a dispute over TV revenue. Latham & Watkins is representing the players in that case, while Covington & Burling is counsel to the league.

Around the Horn

-- The Dodgers aren't the only MLB team with legal issues. The possibility that the Tampa Bay Rays might file for bankruptcy in order to get out of their lease at Tropicana Field has the city of St. Petersburg considering hiring Brown Rudnick, according to The Tampa Tribune and St. Petersburg Times. A Brown Rudnick spokeswoman declined to comment on the firm's potential role advising the city.

-- One team that's staying put is the National Basketball Association's Sacramento Kings. Orange County billionaire and Broadcom cofounder Henry Samueli made a strong pitch to move the franchise to Anaheim last month, and the Kings looked as good as gone after reports surfaced of NBA lawyers trademarking new names for the team in southern California. But Sacramento put up $10 million in sponsorship pledges to keep the Kings and the decision was made for the franchise to stay in California's capital through next season. The Am Law Daily spoke last month to a lawyer working pro bono to save the Kings in Sacramento.

-- Daniel Snyder, owner of the NFL's Washington Redskins owner, is making headlines again by refiling his libel suit against the Washington City Paper over this story. Snyder announced the decision to refile the suit in D.C. Superior Court last week in an opinion column in The Washington Post. The National Law Journal, a sibling publication, reports that Snyder has added to his legal team by hiring McDermott Will & Emery partner Richard Smith as local counsel in D.C. Snyder's lead lawyer is Patricia Glaser of L.A.'s Glaser Weil. The City Paper has started a legal defense fund to pay its legal team, which is led by First Amendment bigwig Floyd Abrams of Cahill Gordon & Reindel.

-- Another Redskin in the news for entirely different reasons is Albert Haynesworth. The controversial defensive tackle has turned to A. Scott Bolden, the managing partner of Reed Smith's office in Washington, D.C., for counsel as Haynesworth faces sex abuse charges of sliding his credit card into the bra of a waitress and then groping her. Bolden told The Associated Press his client was prepared to "vigorously fight these charges."

-- The National Hockey League's Pittsburgh Penguins named former general counsel Travis Williams their new chief operating officer this week, according to the Pittsburgh Business Times. Williams, a former partner at Reed Smith, joined the team as GC in 2008. He's continued working with his old firm, most recently using Reed Smith to secure a $115 million secured syndicated revolving credit line with PNC Bank.

-- Online poker players looking to recoup funds in seized accounts can expect to see their money soon, according to a statement by PokerStars, one of three offshore poker companies targeted by the Justice Department last month. The government's case has been criticized by poker advocates, but The AP reports that one lawyer, K&L Gates gaming partner Fred Heather, told a gathering of casino executives and regulators at a conference in Las Vegas that the indictments shouldn't be seen as anti-gaming. Law firms certainly aren't turning away the business. Gibson Dunn and Pepper Hamilton both took roles this week on a $15.7 million merger between U.K. bookmaker William Hill and Vegas-based sports betting company Brandywine Bookmaking.

-- Carl Lewis' chances of running for state senate in New Jersey took a turn for the worse on Friday as the Garden State's supreme court declined to hear the former track star's appeal of a decision kicking him off the ballot. Drinker Biddle & Reath partner Mark Sheridan and counsel Mark Errico are advising state Republicans challenging Lewis' bid by claiming he voted in California as recently as 2009. But Lewis, represented by William Tambussi of Brown & Connery in Westmont, N.J., received a victory on Thursday when a federal appeals court remanded his residency claim back to U.S. district court on the grounds his civil rights may have been violated.

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