Recent federal tax filings by the National Football League and its collective bargaining arm, the NFL Management Council, show that the league paid a total of at least $15 million in legal fees to a trio of Am Law 100 firms during its 2011 fiscal year, which included a four-and-a-half-month labor lockout that ultimately ended with a 10-year collective bargaining agreement.
The filings by the two registered nonprofits, which cover the period from April 1, 2011, through March 31, 2012, provide only a snapshot of the outside legal expenses accrued by the NFL and its related entities.
League-affiliated units like NFL Enterprises, NFL International, NFL Productions, NFL Properties, and NFL Ventures do not have nonprofit status and are therefore not required to disclose confidential financial data. The finances of the league’s 32 franchises are also not a matter of public record—unless of course they’re leaked—so fees paid to King & Spalding by the Atlanta Falcons on their negotiations for a new stadium and Quinn Emanuel Urquhart & Sullivan by the Washington Redskins for representation in a trade dispute over the team’s nickname are not subject to disclosure. (NFL teams also pay their own taxes.)
Nonetheless, the federal tax filings by the NFL itself and the NFLMC do shed some light on what its lead outside firms—Akin Gump Strauss Hauer & Feld, Covington & Burling, and Proskauer Rose—are being paid. All three saw their gross revenues climb and profits per partner increase in 2012, according to The American Lawyer‘s annual reporting on the financial data of large firms. None would discuss their NFL–related fees when contacted by The Am Law Daily.
Those fees were not steep enough to merit inclusion in the section of the NFL’s Form 990 filing that details the sums paid to the league’s five highest-paid independent contractors—a list that contains itemized payments for office rent on the league’s Manhattan headquarters, as well as financial advisory, travel, and information technology consulting services.
The NFL’s tax filing shows that current commissioner Roger Goodell, the younger brother of current Hess general counsel and former White & Case corporate partner Timothy Goodell, saw his pay package increase from $11.6 million in 2010 to $29.5 million in 2011—a fact first reported last month by the Sports Business Daily.
While Goodell’s tenure has seen the push to improve player safety accelerate, the NFL continues to face an array of personal injury suits filed by former players. The league has assembled a formidable team of lawyers from firms like Bancroft, Dechert, Duane Morris, and Paul, Weiss, Rifkind, Wharton & Garrison to fight those suits, which were consolidated in federal district court in Philadelphia last year. Neither the NFL nor NFLMC’s tax filings contain information on fees paid to those firms. (Discovery has yet to begin in the litigation.)
The Form 990 filed by the NFLMC does show that the league’s longtime outside counsel at Covington enjoyed another lucrative year in 2011, reaping nearly $6.7 million for its work. Earlier tax filings by the NFLMC show that Covington was paid nearly $4.9 million for legal services between 2008 and 2010. Similar tax filings made by the NFL during that same period show the firm reaping another $16.3 million. All told, tax filings by both the NFL and NFLMC reveal that Covington has been paid roughly $27.9 million since 2008 in its role as the NFL’s primary outside counsel, although it’s unclear exactly how the league allocates legal expenses among its various subsidiaries.
Among the major assignments Covington lawyers tackled during fiscal 2011: antitrust litigation with the National Football League Players Association launched in the run-up to the lockout. Covington litigation partner Gregg Levy in Washington, D.C., who nearly became the league’s commissioner in 2006 before losing in a close race to Goodell, represented the league in several high-profile cases against players that year as the two sides maneuvered ahead of the labor battle to come.
The NFL and its players, of course, eventually reached a new collective bargaining accord in July 2011. When the league announced a few months later that it had inked a $15 billion television broadcast rights deal with ESPN, it was Covington that took the lead for the NFL in the negotiations. And when the NFL announced in December 2011 that it had extended its deals with CBS, Fox, and NBC, the firm was on hand again, according to our previous reports.
The latest filing by the NFLMC also shows that former league commissioner Paul Tagliabue—a onetime Covington partner who returned to the firm as senior counsel in late 2007 after 17 years leading the league—was paid nearly $8.6 million in 2011. Another ex-Covington partner, current league general counsel Jeffrey Pash, was the NFL’s second highest-paid executive with a total compensation package of $8.8 million that same year, according to the filing.
While the lag time between the end of the most recent fiscal year and the deadline for nonprofits to make their tax filings means the fees earned by Covington for NFL–related work in 2012 aren’t yet available, U.S. Senate lobbying records show that the firm’s relationship with the league remains as close as ever.
Covington earned $415,000 last year in its capacity as the NFL’s lobbyist on sports programming and player disability and benefits issues, according to Senate records. Leading the firm’s NFL lobbying team are senior counsel Martin Gold, senior legislative advisers William Wichterman and Elizabeth Letchworth, and associate Elizabeth Bell. The NFL, which also employs its own in-house lobbyists, also turned to Elmendorf Ryan ($240,000) and the Glover Park Group ($200,000) for lobbying work last year.
Placing second on the NFL’s list of outside legal vendors for fiscal 2011 is Akin Gump, which the NFLMC tax filing shows received nearly $5.4 million. (Previous NFLMC tax filings show the firm was paid a total of $15.8 million between 2007 and 2010.) Akin Gump traditionally represents the league in grievances with players and handles arbitration matters, although it also had a role advising on some technical issues related to the NFL’s new labor deal, according to those familiar with the matter.
Akin Gump has also played a key part in making changes to the NFL’s retirement plan for ex-players amid the welter of personal injury suits filed by players seeking damages for brain injuries and other long-term adverse health affects allegedly caused by a career on the gridiron.
Daniel Nash, a labor and employment litigation partner with Akin Gump in Washington, D.C., is the firm’s relationship and lead partner on most NFL matters. (The Am Law Daily noted in 2008 that current Detroit Lions general manager Martin Mayhew—a former NFL player and onetime NFLMC intern—had worked under Nash as a summer associate at Akin Gump.)
Proskauer—rated the most powerful law firm in professional sports by Sports Illustrated—is the third Am Law 100 firm listed on the NFLMC’s 2011 tax filing with $2.8 million in fees for legal services.
The Am Law Daily reported in 2008 that Proskauer’s retention by the league was a potential sign of the labor unrest that would ultimately erupt between players and owners in 2011. As with Akin Gump and Covington, the line item listing payments to the firm does not provide details about the specific legal services Proskauer provided, although it’s widely known that the NFL sought the firm’s hard-nosed negotiating expertise ahead of what proved to be a bitter collective bargaining fight with players and their own high-priced lawyers.
L. Robert Batterman—a labor and management relations partner at Proskauer in New York and veteran of previous collective bargaining standoffs involving NFL referees and the National Hockey League—took the lead with Covington in advising the NFL during its 2011 lockout. Batterman spoke at length with Bloomberg Law TV last month about how such lockouts have become a "necessary" weapon when squaring off against players unions in professional sports. (A separate NFLMC tax filing shows that Proskauer earned nearly $1.1 million in NFL–related fees in 2010.)
The NFLPA, the Washington, D.C.–based union that represents NFL players, is also a registered nonprofit and therefore required to file a Form 990 of its own. It is, however, impossible to compare the union’s spending on outside firms in 2011 to that of the league itself because the NFLPA has not yet submitted such a filing or made one available upon request as of Friday.
As a labor organization representing private sector employees, the union is also required to make details of its finances public in annual LM-2 filings with the U.S. Department of Labor, which also has yet to be filed by the NFLPA. A source with knowledge of the matter says the union may seek to not file either document for 2011 on the basis that a March 2011 decertification vote players took prior to initiating antitrust litigation against the league dissolved the NFLPA and thus made the filings moot. (Players subsequently voted to reconstitute the union after the lockout ended.)
The Am Law Daily contacted NFLPA executive director DeMaurice Smith—a former Latham and Patton Boggs litigation partner elected to lead the union in 2009—and union spokesman George Atallah, but did not hear back from either. A similar request to NFLPA general counsel Thomas DePaso, a former player who was promoted to the union’s top in-house legal position last year following the retirement of longtime predecessor Richard Berthelsen, also went unreturned. (DePaso, Smith, and Atallah were in the Bahamas at a convention for retired players.)
Senate records show that Patton Boggs has been busy lobbying on behalf of the NFLPA, reaping $120,000 for its efforts over the past year. Since July 13, 2009—the day the firm was formally retained by the NFLPA—Patton Boggs has received roughly $1.1 million for its work lobbying on antitrust, labor, and player safety issues. Patton Boggs partner Jonathan Yarowsky, associate Neil Potts, and public policy adviser Kathleen Ireland, all of whom are based in Washington, D.C., are leading the firm’s lobbying efforts for the NFLPA.
Upon taking over the NFLPA’s top job, Smith brought several former colleagues from Patton Boggs and Latham with him, according to our previous reports. They include former Patton Boggs partner and COO Ira Fishman, who now serves as managing director of the NFLPA, and ex–Patton Boggs and Latham associates Heather McPhee (now associate general counsel at the NFLPA) and Ahmad Nassar (now vice president of business and legal affairs at the union).
Former Latham associate Tuaranna "Teri" Patterson now serves as the NFLPA’s deputy managing director and special counsel to Smith, who, tax filings show, received nearly $2.4 million in total compensation for the fiscal year ending March 31, 2011.
Tax records reveal that the union’s other top legal in-house earners were Berthelsen ($879,408), Fishman ($682,658), DePaso ($625,687), staff counsel Timothy English ($445,915), and McPhee ($337,202). The union’s LM-2 filing for 2010 also shows the amounts paid to Nassar ($287,324) and Patterson ($178,554).