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Cleveland's Sports Dealings a Boon to Skadden, Regional Firms
The Am Law Daily
For large firms looking abroad in search of opportunities for corporate work, they should perhaps cast an eye closer to home and look toward Cleveland's much-maligned professional sports teams.
Two of the city's oft-mocked franchises‚ the National Football League's Cleveland Browns and Major League Baseball's Cleveland Indians, have been busy in recent weeks inking deals that have yielded roles for national and regional firms.
This week the Browns announced a long-term partnership with Akron-based electric utility FirstEnergy to change the name of the team's 72,300-seat home to FirstEnergy Stadium. The deal requires the approval of Cleveland's city council, which owns the stadium that was built in 1999 to replace the Browns's former home, a since-demolished relic known affectionately as "The Mistake by the Lake."
While terms of the stadium sponsorship deal were not disclosed, local news reports state that it's worth $102 million over 17 years, putting about $6 million per year into the Browns' coffers.
Stuart Levi, cohead of the intellectual property and technology practice at Skadden, Arps, Slate, Meagher & Flom in New York, represented FirstEnergy on the deal along with associate Gregory Palumbo. Levi, who did not respond to a request for comment, previously advised insurance giant MetLife in connection with its 2011 purchase of the naming rights to a new stadium for the NFL's New York Giants and New York Jets. (Skadden also advised Allegheny Energy on its $4.7 billion sale to FirstEnergy in 2010.)
As for the Browns, the team is currently revamping its executive ranks following the closure in October of its $1 billion sale to truck-stop chain king Jimmy Haslam III. That deal saw Wachtell, Lipton, Rosen & Katz advise the team's former owners on their sale to Haslam, who was represented on the deal by Proskauer Rose, according to our previous reports.
Squire Sanders regional managing partner Frederick Nance‚ general counsel to the Browns since 2009, took the lead advising the team on the ownership change and is currently helping to steer the approval process of the stadium sponsorship deal through the city council.
Nance, a Cleveland native, has been a longtime adviser to the franchise, and was a contender to become commissioner of the NFL several years ago as a result of his successful efforts in orchestrating a $535 million deal bringing the Browns back to the city after a predecessor team left town for Baltimore in 1995.
On Wednesday, Nance's old role with the team came to an end as the Browns announced the hire of former Wilmer Cutler Pickering Hale and Dorr associate Sashi Brown as their new general counsel. Nance will continue to work with the team in the role of senior adviser and special counsel.
A source familiar with the FirstEnergy deal told The Am Law Daily that Edward Ristaino, chair of the sports practice at Akerman Senterfitt in Fort Lauderdale, took the lead for the Browns on the sponsorship agreement. Ristaino is no stranger to NFL deals, having advised Wayne Huizenga on his $1 billion sale of the NFL's Miami Dolphins in 2009, according to our previous reports.
The Browns' new in-house legal chief, Sashi Brown, joins the team from the NFL's Jacksonville Jaguars, where he was promoted to general counsel in January 2012 after the $760 million sale of that team to auto parts magnate Shahid Khan. (As with most major M&A deals, the new owner or acquirer often brings in their own lawyers, and that same month the Jaguars dumped former general counsel Paul Vance, of counsel with Foley & Lardner in Jacksonville.)
Brown, who did not take an active role on the FirstEnergy deal as he wraps up his duties with the Jags, will handle contract negotiations for the Browns. He'll have large shoes to fill in Nance, as well as other former top team lawyers like James Bailey, the man responsible for perhaps the greatest response letter ever written to one-time Roetzel & Andress attorney Dale Cox, a Browns fan who complained about stadium safety. (Bailey spoke with sibling publication Corporate Counsel two years ago about his famous missive.)
In December, the Browns also hired former Wilmer counsel Alec Scheiner, a favorite among the statistically minded sports set, as their new president. Before joining the Dallas Cowboys as their top in-house attorney in 2004, Scheiner worked on the sales of several major pro sports franchises at Wilmer under the tutelage of former partner Richard "Dick" Cass, who now serves as president of the Baltimore Ravens, which relocated to the city from Cleveland in 1995.
While the Browns seek to rebuild their franchise in their new home FirstEnergy Stadium, which some observers have already nicknamed the "FirstEnergy Factory of Sadness," the Indians are keeping their lawyers busy with moves of their own a half-hour down the road at their 43,400-seat home, Progressive Field.
The Indians' current owners, who purchased the franchise for $320 million in 1999‚ announced the $230 million sale of their regional sports network to News Corporation-owned Fox Sports Media Group shortly before the new year.
The deal also includes the $400 million sale to Fox Sports of broadcast rights to Indians games for the next 10 years. The owner of the team, cable industry multimillionaire and attorney Larry Dolan, turned to local firm Thrasher, Dinsmore & Dolan (where he once served as president and managing partner) for counsel on the agreement.
Indians general counsel Joseph Znidarsic, a partner at the firm, worked on the broadcast rights negotiations with Fox Sports along with corporate partner Kelly Slattery, sports and entertainment partner J. Jaredd Flynn, and labor and employment partner Todd Hicks.
Thrasher, Dinsmore & Dolan serves as both outside counsel to the Indians and the longtime counsel to Larry Dolan, whose son, Paul Dolan, was approved last week by MLB as the controlling owner of the franchise. (Paul Dolan, the president and chairman of the Indians, is also an attorney who was once a partner at the firm.)
Fox Sports, which is planning to launch its own national sports network later this year to challenge The Walt Disney Companyowned ESPN, was advised on the deal with the Dolans by a team of in-house lawyers.
Handling M&A aspects of the transaction were senior vice president of corporate transactions and distribution Adam Reiss and director of business and legal affairs Kevin Tanji. The broadcast rights part of the agreement was handled by executive vice president for business and legal affairs Karen Brodkin and senior vice president for business and legal affairs Leanna Einbinder.
Brodkin and Einbinder were part of a team of in-house lawyers advising Fox Sports last year on its $6.8 billion deal with Turner Broadcasting System to televise MLB games through 2021. In August, Covington & Burling represented the league on its own eight-year, $5.6 billion broadcast rights deal with ESPN.
Despite worries about regional sports networks being potentially overvalued, for the time being they continue to remain all the rage. When Major League Baseball's New York Yankees sold a 49 percent stake in the YES Network for roughly $3 billion to News Corporation late last year, seven Am Law 200 firms were on hand to provide legal counsel, according to our previous reports.