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.
