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The Houston Rockets recently gave Michael Goldberg a tall order to fill: Negotiate a deal to bring 7-foot-5-inch Chinese basketball star Yao Ming to Texas to play for the team during the 2002-2003 season. “This is not your basic deal,” says Goldberg, a partner in Baker Botts’ Houston office who has represented the Rockets since Leslie Alexander purchased the team nine years ago. The deal presents unique challenges due to the competing interests of the various entities involved, the differences between how Chinese and Americans do business, and the political climate. “The whole point here was to get out of the box and start thinking from the Chinese perspective,” Goldberg says. Since learning on May 19 that the Rockets would have first pick in the June 26 National Basketball Association draft, Goldberg traveled to China three times. Goldberg’s first trip in early June — accompanied by Rockets general manager Carroll Dawson, coach Rudy Tomjanovich and director of media relations Nelson Luis — went a long way toward establishing trust, Dawson says. “We were there to … meet and greet the people, but when it came down to negotiating, that was the reason Michael was there,” Luis says. The trip gave the Rockets the chance to initiate discussions and negotiations, which culminated in a letter received at 2 a.m. on June 26 — the day of the draft — that gave the Rockets enough confidence to select Yao, a center for the Shanghai Sharks. During the 2001-2002 Chinese Basketball Association season, Yao, 21 and 295 pounds, led the league in blocked shots with 4.8 per game, ranked second in scoring with 32.4 points per game and recorded 19 rebounds per game, says Luis. Yao also was a member of the Chinese Olympic team in 2000. Goldberg returned to China two more times, most recently in late July to continue negotiations to secure Yao’s release from the Sharks and the CBA so that he’s free to play for the Rockets. “We had to take one step at a time to make sure we understood the concerns of the Chinese officials,” Goldberg says. These had to do, primarily, with questions of Yao’s availability to continue to represent China in certain games. That perseverance paid off. On July 26, Goldberg received the written release in Shanghai from Li Yaomin, the Sharks’ general manager. Hoping to obtain a similar release from the CBA that would clear the path for Yao to sign his NBA contract, Goldberg traveled to Beijing on July 29. He returned to Houston on July 31 with assurance that the Rockets would receive the CBA release, Goldberg says. To prepare for his legal undertakings in China, Goldberg sought the counsel of partner and former U.S. Secretary of State James A. Baker III. “I went to see him to get a little flavor for what it was like negotiating with China,” Goldberg says. “His basic advice to me was … to read his book ["The Politics of Diplomacy"], which I did,” especially the portions dealing with China. Goldberg, a seasoned international lawyer with 20 years of experience representing clients in Europe, South America, Asia, Canada and Mexico, heads the firm’s international arbitration group and is a senior partner in the trial department. He has served as lead counsel in myriad matters, ranging from product liability and corporate acquisitions to discrimination claims and commercial disputes. He also has developed a varied entertainment and sports law practice. Clients and opponents alike note that Goldberg doesn’t cut corners when it comes to preparing a case or deal. Dawson says the trip to China went smoothly due in large measure to Goldberg’s preparedness. Outside of being a great negotiator, Goldberg “does his homework and is ready for any situation that pops up, is never surprised [and] handles everything so calmly,” Dawson says. A MATTER OF TRUST During his first night in China on June 9, Goldberg took time to chat with Li well past midnight in the lobby of the hotel. “That just broke the ice and got the relationship started, so when we had the meetings the next day there was already the beginning of a level of trust. … Those hours were the key to everything,” Goldberg says. Indeed, establishing and maintaining trust has been crucial to this endeavor, particularly in light of rumors concerning the status of China’s other NBA player Wang Zhizhi. According to news reports, Wang allegedly failed to return to China to train with the national team after his contract ended with the Dallas Mavericks in May despite agreements with the Mavs, the CBA and Wang’s Chinese team that he do so. News reports speculate that he may be contemplating defection, which Wang denies. Goldberg had to negotiate with many parties: Yao’s agents, Erik Zhang, a graduate student at the University of Chicago Graduate School of Business, and John Huizinga, deputy dean of faculty at the business school; the Shanghai Sharks; and the CBA, which oversees the various national teams, including the Chinese Olympic team, and which must give the ultimate release. The Sharks and the CBA wanted promises that Yao will be free to play for China in the Olympics and World Championships, Goldberg says. In return, the Rockets sought assurances that Yao will play the entire NBA season and postseason, should the Rockets make the playoffs. “It’s not like there was a three-way negotiation where the Rockets were there and we were there and the Chinese were there,” Huizinga says. “There were a whole bunch of bilateral negotiations.” Indeed, each entity had different interests, which meant Goldberg and the Rockets had to forge a relationship with all three parties. Goldberg negotiated with each separately at their requests. Huizinga praises Goldberg’s flexibility and patience, which he says is necessary under the circumstances. And while Huizinga believes they are about to finish the deal, he notes its significance with regard to future deals between the two countries. “We have to make sure we are setting it up correctly and everybody is being treated fairly and equitably. It’s not like we are walking into a situation that is ready-made and everyone knows exactly what path we are going along.” Huizinga is particularly mindful of the fact that the way they all handle themselves vis-a-vis the Chinese authorities involved in the transaction may have implications for other athletes in the future. Zhang says Goldberg’s biggest challenge is to understand China’s culture, especially the “culture of business and the culture of bureaucracy.” Goldberg clearly understands that what works in America won’t necessarily work in China, Zhang says. Trust and understanding naturally followed, even when the parties disagreed, Zhang says. In short, Zhang says, “He is the type of lawyer I would hire in China.” Since the Sharks had the rights to the player, they had to release those rights and inform the CBA so the CBA could give a formal release. The Sharks were concerned they would lose their top player, Goldberg says, and wanted to discuss how the Rockets could help them in terms of identifying players in the United States who weren’t making the NBA who might want to go to China to play. (In China, each team can have up to two foreign players.) In addition, the Sharks sought marketing advice, particularly regarding naming rights and sponsorships that are an integral part of sports in the United States and are gaining acceptance in China, Goldberg says. “By the end of the meeting, when we left Shanghai to go to Beijing, we had gotten what we needed — their assurance that they were comfortable with us, that they had no objection to him coming to play for the Rockets,” Goldberg says. In Beijing, Goldberg met with Xin Lancheng, executive vice president and secretary general of the CBA. Each party had a translator, Goldberg says. “There were times when you’d give a two-word response and the translation would go on for five minutes,” he says and laughs. The CBA’s concerns involved Yao’s availability to honor commitments to the Chinese national team, including representing China in the Olympics. Goldberg says the CBA also was trying to gauge whether Rockets officials were the sort of people who would encourage a defection, which, in light of Wang, has been a sensitive issue. There were smiles all around when Goldberg told the CBA he hoped that they would all watch Yao lead the Chinese national basketball team in the gold medal game against the U.S. team at the next Olympics. Goldberg left China on June 13 and headed to Korea on another legal matter when he was called back to China on June 15 to work through some more negotiations. Since he had been in China on a single-entry visa, it took a lot of persuading to be allowed back into the country. On the Korean side, he had to sign a release saying he understood he might have to return immediately; on the Chinese side, he had to explain his mission and pay an appropriate fee. Perhaps what convinced the Chinese customs official of the legitimacy of his return to China was the photograph of himself with Yao, Goldberg says. On this second trip, Goldberg spent a substantial amount of time with Yao to further the deal. With the Sharks on board, Goldberg expects the CBA’s release in the near future. After receiving the Sharks release, the Rockets paid the Sharks $350,000, the maximum allowed by the NBA for a transfer. Goldberg says he recently reached an agreement with regard to Yao’s salary with Zhang and Huizinga. Yao will receive roughly $18 million over four years with the Rockets. Goldberg says the agents are negotiating with the Sharks and CBA with regard to the extent Yao’s earning will be shared with those entities, but Goldberg is not involved in those negotiations. Although there has been a delay in receiving the final release from the CBA — possibly due to the uncertain plans of the Mavs’ Wang — Goldberg is confident that Yao soon will join his new teammates in Houston for training and the preseason. “What’s exciting about this deal for me is that I grew up in Houston and I’ve always been a sports fan,” Goldberg says. His enthusiasm for the deal has almost nothing to do with being a lawyer — he’s just happy to be “involved in something I feel is good for the city.”

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