Lawyers from a handful of Am Law 100 firms are advising on the proposed $1.2 billion sale of Major League Baseball’s Miami Marlins to an ownership group led by former New York Yankees star Derek Jeter and venture capitalist Bruce Sherman. A final deal is expected to close in time for the World Series in October.
News of Jeter’s interest in the Marlins first emerged in April, when he and former Florida Gov. Jeb Bush were reported as having reached a tentative agreement to buy the team for $1.3 billion. The American Lawyer reported at the time on Wachtell, Lipton, Rosen & Katz being retained by Jeter and Bush for their joint bid, while Marlins owner Jeffrey Loria turned to Proskauer Rose.
Both firms are still involved for either side, but Jeter’s partnership with Bush soured in May and the two each tried to cobble together new groups of investors to purchase the Marlins from Loria, a New York art dealer who bought the team for $158.5 million in 2002 after selling the Montreal Expos for $120 million. By July, Jeter had once again emerged as the favorite to buy the Marlins, thanks to some help from his good friend Michael Jordan, the basketball legend who turned to Wachtell to advise on his $275 million purchase in 2010 of the National Basketball Association’s Charlotte Bobcats, now called the Hornets.
Edward Herlihy (pictured right), co-chair of the executive committee at Wachtell, and fellow corporate partner David Karp took the lead for Jeter’s various ownership groups throughout their negotiations with Loria’s lawyers from Proskauer. The latter fielded a legal lineup led by corporate partners Wayne Katz and Andrew Kleiman, tax partners Amanda Nussbaum and Gary Silber, executive compensation partner Steven Weinstein, labor and employment partners Howard Robbins and Michael Lebowich, corporate co-chair and intellectual property transactions partner Daryn Grossman and associates Justin Alex, Carlu Franceschini, Bowon Koh, Jason Krochak, Nayirie Kuyumjian and Krista Whitaker.
Proskauer’s Katz counseled Loria more than a decade ago on his sale of the Expos and purchase of the Marlins, who beat the Yankees in the 2003 World Series. Proskauer, a firm that enjoys close ties to MLB, reportedly served as the main point of contact for parties interested in buying the Marlins, a team currently in second place in the National League East. But throughout the process, it was Jeter who remained in the headlines.
“[Derek] was really the captain in all of this, he was the glue,” said Herlihy, when asked about Wachtell’s role representing the longtime Yankee captain, who retired nearly three years ago. “And I think he came to us because of our expertise in putting these kind of deals together.”
Herlihy, one of the nation’s top corporate lawyers, previously advised on the roughly $1 billion sale in 2012 of the National Football League’s Cleveland Browns. As noted by The American Lawyer in a 2015 feature story, a surge in the valuations of North American professional sports teams in recent years has led several large firms to corner the market on transactions involving a select group of assets. (Despite a bidding war stalling out for the money-losing Marlins, The New York Times reported last week on how an influx of foreign money has changed the landscape of the English Premier League.)
“These are trophy properties, so there is usually a great deal of interest,” said Herlihy about his work on sports team sales. The Marlins transaction was a bit different in that Herlihy also had a trophy client in Jeter, who the Wachtell partner said he had to serve as a gatekeeper for as a bevy of potential co-investors were eager to meet the popular former pro athlete.
Herlihy and Karp worked on the deal with Wachtell antitrust partner Damian Giddens, executive compensation and benefits partner Jeannemarie O’Brien, finance partner Gregory Pessin, tax partner Joshua Holmes and associates Eric Feinstein, Joshua Hazan, Monica Heinze, Jordan Sauer, Michael Schobel and David Sturgeon.
Jeter will reportedly contribute only $25 million in his own money toward the purchase price for the Marlins, but Herlihy said that the Yankee icon will effectively serve as chief operating officer for the franchise, whose new controlling owner will be Sherman, chairman and CEO of M4 Capital LLC and a retired CEO at Private Capital Management LLC.
While Wachtell served as lead counsel to the new Marlins ownership group as a whole, Sherman turned to Skadden, Arps, Slate, Meagher & Flom to serve as his personal outside counsel on the Marlins deal. Leading the Skadden team working on the matter are M&A partners Jeffrey Brill and Michael Civale, sports partner Jeffrey Mishkin, banking partner Steven Messina, executive compensation and benefits partner Joseph Yaffe, finance partner Michael Zeidel, tax partner Steven Matays and corporate associate Thad Hartmann. Sherman, a resident of Naples, Florida, is married to Cynthia Kahn Sherman, a former partner at Clifford Chance predecessor Rogers & Wells in New York. Kahn retired from practicing law after her 1999 marriage to Sherman.
According to the Miami Herald, aside from Jordan, other investors in Sherman and Jeter’s new Marlins ownership group include Yale Law School graduate and ex-Morgan Stanley & Co. LLC wealth management chief Gregory Fleming, Energy Capital Partners founder Doug Kimmelman and The Beekman Group LLC’s co-founder John Troiano. Akerman and Foley & Lardner sports industry co-chair Kevin Schulz each advised individual minority investors in the group, although the exact identity of their respective clients was not immediately clear by the time of this story.
Irwin Raij, a Miami native and former co-chair of the sports industry practice at Foley & Lardner until leaving the firm earlier this year for O’Melveny & Myers, represented an unnamed investor who sought to partner with Jeter on an initial bid for the Marlins, according to sources briefed on the matter, while Covington & Burling partner Peter Zern, special counsel Brent Little and associates Max Corey and Victor Ojukwu took the lead for Jorge Mas, a Cuban American entrepreneur who mounted his own bid for the team. (Mas is now reportedly in talks to join Jeter and Sherman’s prospective Marlins ownership group, which Forbes reported Monday had received an offer of $175 million in financing from computer magnate Michael Dell’s investment fund.)
MLB, whose commissioner is former Morgan, Lewis & Bockius partner Robert Manfred Jr., is handling its part of the Marlins sale in-house through general counsel and ex-Proskauer partner Daniel Halem and senior corporate counsel Christopher Brumm. The Marlins in-house team is led by team president David Samson, Loria’s stepson and an attorney who confirmed over the weekend the franchise’s pending sale, as well as senior counsel Ashwin Krishnan and associate counsel Stephanie Galvin. MLB’s ownership committee is poised to review the team’s sale Wednesday during a meeting in Chicago. Any final sale requires approval from 75 percent of the league’s 30 teams.
Wachtell’s Herlihy said it was too early to know whether or not his firm will be involved in a looming ownership change for the NBA’s Houston Rockets, whose president announced last month that the team was for sale. The franchise, bought by current owner Leslie Alexander for $85 million in 1993, is now valued at roughly $1.65 billion. George Postolos, a former Wachtell associate and now head of his own Houston-based sports consultancy, spent eight years as president and CEO of the Rockets, which have enjoyed a longtime relationship with Baker Botts.
In July, a group led by Charles “Chuck” Greenberg, a former lawyer at Reed Smith and Pepper Hamilton, submitted a winning bid to acquire the National Hockey League’s Carolina Hurricanes from current owner Peter Karmanos Jr. for roughly $500 million. That deal is reportedly almost finalized, with lawyers now vetting a draft sales agreement.