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Counsel for Memphis Grizzlies Makes a Buzzer-Beating Deal
Outside counsel Helen Friedli, who served as virtual in-house counsel to the Memphis Grizzlies pro basketball team for 12 years, weathered a full-court press from both sides as she shepherded the Grizzlies through the close of its sale, just two days before the regular National Basketball Association season started on October 31.
Every merger or acquisition has its highs and lows, said Friedli, a partner in the Chicago office of McDermott Will & Emery. And this sale was no different, she added, with buyer and seller pressing to close the deal before the season tip-off.
The team was sold for an estimated $350 millionFriedli wouldn't confirm the price, but said it was within the rangeto a group headed by Robert Pera, founder and chief executive of Ubiquiti Networks Inc. of San Jose. Pera was represented by O'Melveny & Myers.
"The NBA does serious background checks on every single buyer in the group," Friedli explained. And it was a challenge "keeping everyone engaged and enthused while getting through the process, while also trying to sell tickets for next season."
She said negotiations began last spring but hit a snag due to a "complicated" financing structure. A basketball team has no "hard assets" to offer, but rather depends on its revenue stream, she said.
While she wouldn't reveal specific details, she explained that the NBA has strict rules about team transactions and "puts limitations on the amount of indebtedness that can be placed on teams."
There was also pressure on the sellers to find a buyer who would keep the team in Memphis.
Friedli confirmed, "One of our considerations throughout the process was sensitivity to the support that a potential buyer would give and garner from the local community in Memphis. We're happy to say the new owner has committed to staying there."
The sale was the final duty Friedli completed for the team and its owner, Chicago businessman Michael Heisley. Since Heisley bought the team (then the Vancouver Grizzlies) more than a decade ago, she has handled its day-to-day legal affairs.
In 2000 she and McDermott partners Stanley Meadows and Ryan Harris helped negotiate Heisley's purchase of the Canadian basketball franchise, which was bleeding red ink back then.
"It was hard for an NBA team to be successful in a country that loves hockey," she said. Noting her longevity withand loyalty tothe team, she added, "My husband and I still have in our refrigerator a bottle of Canadian champagne, made from Vancouver grapes, that we received to mark the purchase."
Doing business as Hoops L.P., a subsidiary of Heisley's Heico Companies, the Grizzlies moved to Memphis. The negotiations included a deal to build a new arena in Memphis, which opened in 2004 and which the Grizzlies manage.
Friedli's other duties included overseeing contracts with suppliers, as well as with players and coaches. "It's a whole different set of skills," she acknowledged. "A unique experience."
The team eventually became profitable and moderately successful, tying for third in the Western Conference last season while making the playoffs.
So how did a female M&A lawyer end up running the legal affairs of a pro basketball team? "Well, I'm from Indiana," Friedli says with a laugh, noting that it's a fanatical basketball statethink Bobby Knight or Larry Bird," and I grew up with six brothers and a love of basketball. It was predestined."
The lawyer enjoyed attending the Grizzlies' games when she could, and she plans to continue following the team she represented for over a decade. "Of course I'll remain a fan," she said. "How can you not?"