The Work

July 8, 2011 7:21 PM

The Score: Morgan Lewis, the Red Sox, and More Baseball Machinations

Posted by Brian Baxter

The New York Times Company announced recently that it had sold more than half of its minority stake in the Boston Red Sox to three undisclosed buyers for a combined total of $117 million.

The media giant expects to record a pretax gain of about $64 million in the third quarter of this year as a result of the deal, according to its namesake paper. The Times paid $75 million in 2002 for what at the time was a 17.75 percent ownership stake in Fenway Sports Group, which acquired the Red Sox that year in a $700 million deal.

Morgan, Lewis & Bockius is providing outside counsel to The Times, a company spokeswoman says. Howard Kenny, a corporate partner at the firm, advised the company two years ago in arranging a $250 million investment by Mexican billionaire Carlos Slim HelĂș.

Times general counsel Kenneth Richieri and assistant general counsel Alison Zoellner headed up an in-house legal team at the company also working on the partial Red Sox stake.

While the Red Sox hold a half-game lead over their archrivals, the New York Yankees, in the American League East, two other prominent Major League Baseball franchises are slipping in the standings while fighting legal battles in court.

On Thursday a bankruptcy judge denied a discovery request by the Los Angeles Dodgers--whose ownership put the team into Chapter 11 almost two weeks ago--seeking to force MLB to turn over documents detailing its handling of the team's troubled finances. The league and Dodgers owner Frank McCourt have been battling for control of the franchise, with the team's lawyers seeking a deposition of commissioner Bud Selig.

Dewey & LeBoeuf has so far been paid $325,000 for its work representing the Dodgers, according to sibling publication The National Law Journal. MLB, meanwhile, has turned to a team of lawyers from White & Case, Proskauer Rose, and Fox Rothschild to advise it in bankruptcy proceedings in Delaware.

One team that may not have to worry about bankruptcy court much longer: the New York Mets. The Am Law Litigation Daily reported this week that claims against the team and owners Fred Wilpon and Saul Katz--covered in this space before--by Bernard L. Madoff Investment Securities liquidating trustee Irving Picard of Baker & Hostetler could soon be shifted to federal district court.

U.S. district court judge Jed Rakoff is currently reviewing key elements of Picard's suit to determine whether district court rather than bankruptcy court is the appropriate venue for the case, as the team's lawyers at Davis Polk & Wardwell have argued. A decision by Rakoff to move the case out of bankruptcy court would complicate Picard's task, according to The Times.

The Times also reported this week that Picard and his Madoff team had once entertained the notion of leaving Baker & Hostetler for New Jersey firm Greenbaum Rowe Smith & Davis, which apparently made plans for Manhattan office space to entice such a move.

Following up on The Times report, Crain's Cleveland Business compared Picard's potential defection from hometown Baker & Hostetler to LeBron James taking his talents to South Beach. But Picard passed up the Jersey Shore in favor of remaining at Baker & Hostetler, which has profited handsomely from Madoff-related work.

The Rocket Goes to Court

Why is former MLB star Roger Clemens on trial? That's the question asked in an editorial appearing in The NLJ this week as the ex-pitcher's federal perjury trial got underway, despite some observers' criticism of what they say is the government's scant evidence against The Rocket.

Representing Clemens are Cooley litigation vice-chair Michael Attanasio and Houston lawyer Rusty Hardin, who spoke to The American Lawyer's Paul Braverman three years ago about his handling of his client's case. Hardin's strategy came in for some criticism last August when federal prosecutors secured an indictment against Clemens for lying about his use of performance-enhancing drugs, only a few months after fellow ex-MLB star Mark McGwire admitted his use of steroids on the advice of counsel from Hunton & Williams.

Clemens won a key ruling in late June when a federal judge ordered DLA Piper to turn over documents to his defense team related to the firm's work putting together the Mitchell Report, an investigation into performance-enhancing drug use in baseball and the subject of a March 2008 feature story in The American Lawyer.

The report's namesake, former Senate majority leader George Mitchell, Jr., returned to DLA as chairman emeritus last month. Mitchell himself could be called by Clemens to testify at trial, where a blackmail theory could figure prominently, as could several other baseball stars. Fox Sports has a breakdown on some of the key players--both on the field and off--that will likely appear at trial.

The Collective Bargaining Circus Continues

Another week, more drama in the ongoing collective bargaining negotiations involving the National Football League and the National Basketball Association, both of which have locked out their players.

Trying to determine to how either dispute will end--Dewey and Proskauer are advising players and management, respectively, in both--is an almost futile task, though that hasn't stopped plenty from trying.

In the NBA, which locked out its players last week, union officials are skeptical of the league's position that its franchises are hemorrhaging cash. Team financial information has been leaked to several media outlets--such as The Times, Forbes, and Deadspin--leading both sides to engage in a war of words about whose valuations were the most appropriate.

One league star, New Jersey Nets point guard Deron Williams, has announced his intention to play in Turkey for $5 million next season if a lockout continues. That decision, which could set off a string of similar moves by players seeking overseas riches while the NBA game are on hold, has led some legal observers to wonder whether certain contracts stateside could be canceled should players injure themselves abroad.

As for the NFL, lawyers for owners and the decertified players union continue to negotiate against a self-imposed July 15 deadline for resolving the labor impasse. The league's lockout is now in its fourth month and the upcoming season is clearly in jeopardy.

On Friday, the U.S. Court of Appeals for the Eighth Circuit tossed an April ruling lifting the lockout by a federal district judge in an antitrust suit filed by players, a decision that many observers predicted.

More unexpectedly, New York State attorney general Eric Schneiderman, a former partner at a predecessor firm of K&L Gates, announced on Thursday that he is launching an investigation into the lockout's potential impact on the state. (Click here for Schneiderman's letter announcing his investigation.)

Gibson, Dunn & Crutcher appellate cochair Theodore Olson has been representing NFL players before the Eighth Circuit, along with Dewey global litigation chair Jeffrey Kessler and Weil, Gotshal & Manges litigation cochair James Quinn. (Despite calls by some sports columnists calling for them to be canned, Dewey and Weil both recently renegotiated their contracts with the union, according to NBC Sports, which notes the deal now calls for the firms to be paid on a flat fee, rather than contingency, basis.)

A group of retired players seeking to intervene in the antitrust case against the NFL also filed a separate complaint this week against current players and owners, according to The New York Times. Hausfeld name partner Michael Hausfeld is representing the group of retired players.

Around the Horn

-- The Dodgers might be stuck in bankruptcy court, but one key figure from the divorce case that caused the franchise's ownership to unravel, former law student and founder Joshua Fisher, is taking his game to Bryan Cave. Fisher, who gained a certain level of notoriety for his day-to-day coverage of the divorce case, will soon begin his legal career as an associate in Bryan Cave's Kansas City, Mo., office.

-- On Wednesday, Canadian sports doctor Anthony Galea pled guilty to unlawfully bringing performance-enhancing drugs into the U.S., a plea that could have plenty of implications for pro athletes that once relied on Galea for treatment. Last year we looked at a Pittsburgh firm formed by two Dreier LLP refugees that was advising New York Yankees star Alex Rodriguez in the Galea matter, which is reportedly still under investigation by MLB.

-- Like fellow NBA star Chris Bosh, Gilbert Arenas apparently isn't a fan of reality TV show Basketball Wives. Arenas sued production company Shed Media and the mother of his four children, Laura Govan, in late June to prevent her from appearing on the program. Arenas claims the show will exploit his likeness without his permission, according to Courthouse News, which has a copy of the complaint. Gordon & Rees is representing Arenas in the suit. The firm filed a similar case in May against Shed Media on behalf of Bosh.

-- Golf Inc. named Troutman Sanders partner Michael Whitton and Foley & Lardner partner Van Tengberg two of its top ten golf industry attorneys this week. So who was number one? That honor belongs to Randy Addison of Addison Law in Dallas. Texas Lawyer caught up with Addison about his practice this week.

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