A recent U.S. Department of Labor filing reveals that the National Basketball Players Association spent more than $3.5 million on outside lawyers and consultants during last year’s collective bargaining battle with league management.
The NBA, which locked out its players to strengthen its bargaining position amid the fractious labor negotiations, eventually ended the stalemate by striking a deal with the union in November 2011. Now, the players’ legal costs are a matter of public record, thanks to the Labor Department filing, which was first reported on by USA Today last weekend.
The Am Law Daily reported last year on how much the NBPA paid its outside lawyers and consultants during the five years of relative labor peace between the last collective bargaining deal in 2005 and the lockout. Dewey & LeBoeuf, whose abrupt collapse earlier this year continues to make legal headlines, reaped the lion’s share of the fees dispersed by the union during that period.
Labor Department records show that Dewey and its former global litigation chair Jeffrey Kessler—who led a 60-lawyer team to Winston & Strawn in May—again placed among the union’s top legal billers by collecting more than $1.3 million during its most recent fiscal year that ended June 30.
The only firm to bill the union more than Dewey was Steptoe & Johnson, which received nearly $1.4 million. Leading the Steptoe team were Howrey refugees James Hibey and Alexis Hunter, the latter a special counsel at the firm whose father is NBPA executive director G. William Hunter, according to our previous reports.
Hunter himself received more than $3.1 million in compensation, 25 percent more than he earned during the previous fiscal year, according to USA Today. Another daughter, Robyn Hunter, serves as the union’s director of player benefits and services, while daughter-in-law and attorney Megan Natsuko Inaba is employed as director of special events and partnerships. NBPA records show that Robyn Hunter received $97,298 last year; Inaba was paid $174,500.
Inaba is married to Hunter’s son, Todd Hunter, who Yahoo Sports reported earlier this year is a vice president at a financial advisory firm called Prim Capital that has a consulting contract with the union. NBPA records show Prim was paid $594,900 for its services last year.
Those relationships are being scrutinized as part of a broader investigation by the U.S. attorney’s office in Manhattan into Hunter’s NBPA stewardship that became public with the issuance of a subpoena on April 25. As we’ve previously reported here, the union hired Paul, Weiss, Rifkind, Wharton & Garrison litigation cochair Theodore "Ted" Wells Jr. and partner David Brown to conduct an internal review of its business practices.
The NBPA’s latest Labor Department filing indicates that its executive committee retained Paul Weiss and that a subcommittee has been appointed to oversee the firm’s investigation and monitor the probe being conducted by the U.S. attorney’s office.
Another firm paid by the NBPA during the last fiscal year include Boies, Schiller & Flexner, which received $221,167 after being brought in to handle a pair of antitrust suits filed against the league last November, shortly before the sides settled their differences. Berens & Miller, a five-lawyer Minneapolis firm that served as local counsel to the NBPA in one of those cases, was paid $27,556.
NBPA records show the union also paid Weil, Gotshal & Manges, whose litigation cochair James Quinn and partner Bruce Meyer were brought in at the end of the lockout to successfully mediate the labor talks, approximately $73,795 for its services.
Other firms and consultants receiving payments from the union include: Navigant Consulting ($351,029), Blitman & King ($80,340), consultant and ex-Dewey associate Angela Smedley ($30,000), Sidley Austin ($20,787), Altshuler Berzon ($19,321), the Groom Law Group ($16,694), and consultant Kevin McGuinness ($12,189).
The Labor Department filing also lists the following compensation for the NBPA’s in-house legal staff: associate general counsel Ronald Klempner ($244,831), associate counsel Yared Alula ($170,042), counsel Sean Brandveen ($128,420), counsel David Kiefer ($107,892), and $18,942 to the estate of late general counsel Gary Hall, a former Blitman & King partner and close friend of Hunter’s.
In August The Am Law Daily reported on the death of Simon Gourdine, a well-regarded lawyer who headed the union before Hunter and was once the league’s first-ever deputy commissioner. The NBA’s 2012-13 season begins on October 30.
In-House Lawyers Handle $6.8 Billion TV Deal
Nearly 25 years ago, CBS shocked rival NBC by inking a $1 billion deal with Major League Baseball to broadcast games over a four-year period. How times change.
MLB announced this week that it had signed an eight-year broadcast rights deal with Fox Sports Media Group and Turner Broadcasting System, which will yield a combined $6.8 billion for the league over the life of a contract that runs through 2021. The deal comes on the heels of another eight-year, $5.6 billion contract MLB signed in August with ESPN, meaning that the league will have at least $12.4 billion flowing into its coffers from its broadcast partners over the next eight years.
While Covington & Burling took the lead for MLB on the ESPN deal, according to our previous reports, it was MLB’s in-house lawyers and their counterparts at Fox and TBS who hammered out the agreement announced this week.
TBS senior vice president and associate general counsel John Cooper and assistant general counsel Tina Shah led the negotiations for the Atlanta-based network, which will continue to air about a dozen regular season games and a slate of playoff games after agreeing to a $2.4 billion extension of its portion of the contract. Louise Sams serves as general counsel for TBS. (Last month Willkie Farr & Gallagher corporate cochair William Gump and partner Thomas Mark advised Turner when it spent a reported $175 million to acquire sports website Bleacher Report, which was represented on the sale by Latham & Watkins.)
For Los Angeles-based Fox Sports—which will pay more than $4 billion for rights to a slate of regular season and playoff games, the All-Star Game, and the World Series—the deal talks were handled by executive vice president for business and legal affairs Karen Brodkin, senior vice presidents for business and legal affairs Leanna Einbinder and Matthew Bensen, and vice president for business and legal affairs Khai Dhaliwal.
Leading the negotiations for MLB were general counsel Thomas Ostertag and counsel Christopher Brumm, along with the league’s executive vice president for business Tim Brosnan, a onetime Kelley Drye & Warren associate.
In-house lawyers who put together lucrative media rights deals often find themselves headed on to bigger and better things. Last month sibling publication the Connecticut Law Tribune reported on one such attorney: Michael Aresco, a former in-house attorney at ESPN who went on to become executive vice president of programming at CBS Sports before parlaying that position into being named commissioner of the Big East collegiate athletic conference in August. Another attorney reportedly vying for the position was Jack Mula, a former sports agent and general counsel for the National Football League’s New England Patriots, who is now a partner at Cornerstone Sports Consulting.
More Stadium Games—and Their Lawyers
While the value of TV contracts for many collegiate and professional sports continues to rise, so does the cost of constructing arenas and stadiums for the teams that lure fans to their TV screens and the seats of those facilities.
Last week, for example, the Los Angeles city council approved a plan to move forward with a $1.2 billion downtown football stadium backed by sports and entertainment giant AEG in the hope of luring a NFL team back to the city after a 17-year absence. (The Los Angeles Rams, advised by Irell & Manella, left for St. Louis in 1995, the same year the Raiders returned to Oakland.)
Before construction on 76,000-seat Farmers Field can begin, a portion of the city’s existing convention center must first be torn down—a project that will be funded with $300 million in municipal bonds. AEG is to repay those bonds with proceeds from the stadium and an upgraded convention center, according to the Los Angeles Times, which has the full details on the plan.
Unsurprisingly, there are quite a few attorneys involved in the process. Los Angeles city attorney Carmen Trutanich, who has been in the news lately for unrelated reasons, is working closely on the project with a land use team composed of deputy city attorneys Edward Jordan, Kimberly Miera, Michael Bostrom, and Judith Reel, chief assistant city attorney Pedro "Pete" Echeverria, and senior assistant city attorney Jane Usher, a former general counsel of the now-defunct United States Football League.
Nixon Peabody is serving as bond and tax counsel to the city for the financing portion of the project aimed at upgrading the convention center. Public finance partner Charles Wolf and tax partners Travis Gibbs and Bruce Serchuk are leading a team from the firm working on the matter. (Public records show that a potential conflict led Los Angeles to hire Nixon Peabody last year to replace Orrick, Herrington & Sutcliffe.)
Complicating matters is the fact that AEG’s billionaire owner, Philip Anschutz, has put the company up for sale. Hogan Lovells is advising AEG in connection with that process, according to our previous reports, and several potential buyers have already stepped forward. AEG chief legal and development officer Ted Fikre and William Delvac, a name partner at Los Angeles–based Armbruster Goldsmith & Delvac, have taken the lead on the stadium project.
Another wrinkle is the suit filed against the state of California in August by the Play Fair at Farmers Field Coalition, which claims that a state law passed earlier this year that expedites the legal process for challenges against the stadium on environmental grounds is unconstitutional.
Fernando Gaytan and Barbara Schultz, senior attorneys with the Legal Aid Foundation of Los Angeles, are backing the coalition, along with solo practitioner Robert Newman Jr. and Dan Stormer, a name partner at Pasadena-based Hadsell Stormer Richardson & Renick. Schultz told The Am Law Daily on Thursday that the coalition has retained Sabrina Venskus of Venskus & Associates for another suit it will file challenging the stadium project itself.
Farmers Field does have the support of the Natural Resources Defense Council, whose senior attorney David Pettit appeared before a city council committee meeting last month and said the Play Fair suit could scuttle the proposed stadium’s construction, according to the Los Angeles Times.
Around the Horn
—Nixon Peabody beat out several other firms earlier this year for the right to represent Erie County, New York, on its stadium lease negotiations with the NFL’s Buffalo Bills, according to sibling publication the New York Law Journal. Unable to reach a longer agreement, The Associated Press reports the Bills and Erie County signed a one-year extension in September.
—The Minnesota Sports Facilities Authority selected Dorsey & Whitney and Minneapolis-based Fabyanske Westra Hart & Thomson last month as general counsel and legal counsel for stadium construction, respectively, according to the Minnesota Lawyer. Jay Lindgren, chair of Dorsey’s infrastructure practice and cochair of its urban redevelopment group, serves as general counsel for the MSFA, which is tasked with supervising the construction of a new stadium for the NFL’s Minnesota Vikings. The Am Law Daily reported last year on the lawyers helping the Vikings in their push for a new stadium, which was finally approved in May.
—The NFL isn’t the only major sports league being wooed with new stadiums. The Am Law Daily reported last month on the firms backing a $490 million plan to build a new arena in Seattle for a National Basketball Association or National Hockey League franchise. Meanwhile, in Kentucky, the mayor of Louisville and local community leaders met last month to discuss the possibility of bringing an NBA team to the city, according to The Courier-Journal. Local lawyer J. Bruce Miller, a longtime booster for bringing an NBA franchise to Louisville, told The Courier-Journal earlier this year that a group of Chinese investors he had lined up lost interest in a deal during the NBA lockout. C. Edward Glasscock, chairman emeritus of Frost Brown Todd, serves as general counsel of the Louisville Arena Authority.
—MLB’s Oakland Athletics stormed toward the playoffs in the season’s final month, but the team will likely have to wait until year-end to learn whether they can build a new stadium in nearby San Jose, according to the Los Angeles Times. An antistadium group backed by the rival San Francisco Giants and represented by Pillsbury Winthrop Shaw Pittman sued San Jose in December 2011 over the proposed 32,000-seat stadium, and MLB commissioner Bud Selig is expected to step in and mediate the increasingly nasty dispute.
—MLB has a variety of other legal headaches to contend with. The outside counsel that prepared its high-profile steroids report, DLA Piper, is under fire for not turning over information on two player agents accused of working with a convicted steroids dealer, according to The New York Times. Former Los Angeles Dodgers owner Frank McCourt is being sued by his ex-wife Jamie—represented by Bertram Fields of Greenberg Glusker Fields Claman & Machtinger—over the value of their divorce settlement given the record-setting $2.15 billion sale of the team out of bankruptcy earlier this year. The New York Yankees are being sued by concession workers at their new stadium—which cost taxpayers $4 billion—who claim they have been cheated out of tips due to an automatic billing system, according to the New York Post. And in what can’t be good news for their lenders, New York’s other team, the financially hard-pressed Mets, expect to lose $23 million this season. Sibling publication Corporate Counsel recently caught up with Mets general counsel David Cohen to discuss his role with the team.
—Broke, a new documentary by ESPN, looks at the surge of current and former professional athletes finding themselves insolvent after earning millions during their careers. One ex-player featured in the film is former Boston Red Sox star Curt Schilling, who this week was forced to post as collateral proceeds from the potential sale of a bloody sock he wore while winning a key game against the Yankees in the 2004 American League Championship Series, according to the AP. Schilling’s video game company 38 Studios filed for bankruptcy in June, and the following month a trustee in the case sought to hire Cozen O’Connor, according to our previous reports. Cozen has already billed nearly $90,000 for its efforts in the case, and news reports reveal that other firms are seeking reimbursement for their services as well.