Rupert Murdoch.
Rupert Murdoch. (Daniel Acker/Getty)

Having helped Rupert Murdoch divide his media empire a year ago, Skadden, Arps, Slate, Meagher & Flom and Hogan Lovells are advising the Australian billionaire’s 21st Century Fox on its reported $80 billion bid for media conglomerate Time Warner.

The unsolicited cash-and-stock proposal, put forth by Fox last month, was revealed Wednesday when Time Warner issued a statement detailing its rejection. To overcome potential antitrust obstacles, the deal would have included the divestiture of Time Warner’s cable news channel CNN, according to a report by The New York Times’ DealBook, which notes that the offer could put the New York-based target in play in an era of rapid consolidation among major media companies.
Time Warner added in its statement that after consultation with its financial and legal advisers, the company determined that a deal would not be in the best interests of shareholders and that it has no intention of pursuing further talks with Fox. Among the myriad complicating factors for a potential union is the stock ownership structure of New York-based Fox, created last year to house the film and television assets of Murdoch’s News Corp.
Skadden took the lead for News Corp. on that split, as previously reported here, through M&A partners Howard Ellin, Lou Kling and Brandon Van Dyke. The transactional trio—Ellin and Kling grabbed Am Law Daily Dealmaker of the Week honors back in 2011 for their role advising Express Scripts on its $29.1 billion acquisition of Medco Health Solutions—are now working with Skadden antitrust partner Clifford Aronson in advising Fox on its bid to buy Time Warner. Ellin is the older brother of Hollywood producer and “Entourage” creator Doug Ellin.
Skadden’s ties to Murdoch grew stronger last year, when the firm represented New York-based News Corp., the company that now controls Murdoch’s print media holdings, on its $139 million settlement of shareholder litigation stemming from its phone-hacking scandal in the U.K. News Corp. subsequently hired Skadden communications practice head Antoinette Bush as its global head of government affairs.
Hogan Lovells, another longtime legal adviser to Murdoch-related media entities, is advising Fox on the tax planning necessary to push through with its purchase of Time Warner through tax partner Ira Sheinfeld. The firm and Sheinfeld advised Murdoch in 2012 on News Corp.’s purchase of an Asian regional sports network from media rival The Walt Disney Company and its $1.5 billion acquisition of a 49 percent stake in the YES Network. (Hogan Lovells and Skadden also handled News Corp.’s $5.6 billion buy of Dow Jones & Co., publisher of The Wall Street Journal, back in 2007.)
The race for content is a major factor in the effort by Murdoch’s Fox to buy Time Warner, whose HBO cable channel alone is worth an estimated $20 billion, according to Bloomberg. Both Fox and Time Warner have a robust roster of in-house lawyers, some of whom could be key factors in reaching a potentially historic merger.
News Corp. hired former Williams & Connolly litigation partner Gerson Zweifach as its general counsel in early 2012. Zweifach, who remains of counsel with the firm in Washington, D.C., now serves as group general counsel for both News Corp. and its Fox spinoff. (The dual roles helped Zweifach become one of the nation’s most highly compensated in-house lawyers last year with a $5.25 million pay package, according to an annual survey released Wednesday by sibling publication Corporate Counsel.)
Joel Klein, a former head of the Justice Department’s antitrust division turned chancellor of New York City’s public schools, was hired by News Corp. in late 2010 to serve as head of its educational publishing unit. Klein, who for a time put those duties aside to work with Zweifach in guiding the company through its phone-hacking scandal, is now CEO of Fox’s education division and an executive vice president reporting directly to Murdoch.
Viet Dinh, a founding partner of Washington, D.C.’s Bancroft PLLC, a firm whose prowess advocating for conservative causes was profiled by The American Lawyer in 2012, serves as an independent member of the board of directors at Fox. The executive ranks at Time Warner are equally well populated with high-profile lawyers.
Former Kirkland & Ellis partner Paul Cappuccio became general counsel of Time Warner following the media giant’s $182 billion merger with AOL in 2000. Cravath, Swaine & Moore famously reaped $35 million for advising Time Warner on that ill-fated union, which the firm helped unwind back in 2009, a year after Cravath represented the conglomerate on its $9.25 billion sale of Time Warner Cable. (In a sign of the shifting media landscape, cable giant Comcast is now seeking to buy Time Warner Cable in a $45.2 billion deal.)
It’s Cravath that is currently advising Time Warner in its response to the unsolicited takeover bid by Fox. The firm’s team is being led by corporate partners Richard Hall and Faiza Saeed, as well as antitrust partner Christine Varney, the latter of whom is a former Hogan Lovells partner who joined the firm in a high-profile lateral move from the Justice Department in 2011. Cravath has been a longtime legal adviser to Time Warner, with late presiding partner Robert Joffe once being offered its general counsel role.
Harvard Law School professor Robert Clark is an independent member of the board at Time Warner, along with retired Mintz, Levin, Cohn, Ferris, Glovsky and Popeo partner Kenneth Novack. Mintz Levin advised Time Inc., the publishing unit spun off by Time Warner last month, on its separation from its former parent.