Sports Law: From Small Beginnings To Maturity

Wednesday, February 1, 2006 - 01:00

Editor: Would each of you gentlemen tell our readers something about your professional experience?

Ganz: I went to Columbia Law School. After graduation, I clerked for two years for a United States District Judge in the Southern District of New York. I then joined Proskauer Rose. I am part of the firm's labor and employment department and have done a considerable amount of sports law work over the years.

Leccese: I graduated from the University of Virginia Law School in 1985, following which I clerked for a federal judge for a year. I joined Proskauer in 1986 and spent the next five years in its private equity practice. For the past 15 years I have worked primarily in the sports law area.

Editor: How did each of you come to sports law?

Ganz: I came to Proskauer largely because I had good friends here, one of whom was David Stern, who had been a law school classmate. At the time, the firm was doing a modest amount of work for the National Basketball Association. I was intrigued with this and managed to have myself assigned to some NBA matters; and as our representation of the NBA grew, my work in the sports area increased significantly.

Leccese: I came to Proskauer as a summer associate in 1984. I was attracted by the people and by the quality of the firm's work. I was also attracted by the firm's representation of the NBA. During my first year, the NBA decided to add four expansion teams - Miami, Orlando, Charlotte and Minnesota. Harvey Benjamin, who is now working for the NBA, was the partner in charge of the project, and he invited me to join a meeting that included David Stern, Gary Bettman and Russ Granik. That transaction was a full-time undertaking for four months, and it led to other NBA projects. When Harvey left in 1991 to join the NBA, they were willing to tolerate me as their lawyer. Gary left the NBA in 1992 to join the National Hockey League, all of which has resulted in new relationships for the firm.

Editor: Can you tell us about the origin of Proskauer's sports practice?

Ganz: The story - at least as it has been passed on - is that, in the early 1960's, a lawyer by the name of George Gallantz came to the firm from Simpson Thatcher. At the time, Simpson Thatcher represented the owners of Madison Square Garden, who also were the owners of the New York Knickerbockers. When an issue arose involving the NBA, Simpson thought it appropriate - in light of its representation of both the Garden and an NBA team - for another firm to handle the NBA work, and they recommended Gallantz. That was the origin of Proskauer's sports practice.

Editor: How has it evolved over the course of your careers?

Leccese: Over the years much of the sports work involved litigation, particularly antitrust and employment issues. In the sports world these issues are often joined. The question whether labor exemptions to the antitrust statutes apply is a good example. In the late 1960's there were a number of cases concerning the rights of players and the enforceability of restrictions such as the college draft, free agency, and age limitations. These cases affected all major sports. Over the past 15 years the practice has developed both in breadth and depth. Our client list now includes the NBA, the NHL, MLB, Major League Soccer, the ATP Tour, and the WTA Tour. We also represent teams, including the Philadelphia Eagles, the New York Jets, the Florida Marlins, and the New Jersey Devils, and we are currently engaged in a bid for the Washington Nationals baseball team. We also represent a variety of financial institutions engaged in financing sports transactions. For these clients we are engaged in labor, litigation, corporate, tax, IP, real estate, and financing work. It is an interdisciplinary practice that cuts across all segments of the firm and requires the participation of a great variety of practitioners.

Ganz: One sign of evolution (I am not sure if it is progress) is that the first collective bargaining agreement between the NBA and the National Basketball Players Association, which was entered into in about 1967, consisted of about 10 pages, including exhibits. The most recent agreement runs over 400 pages. It is, I am fond of saying, Biblical in its proportion and Talmudic in its complexity. In addition, the money involved in this industry has become all but Apocalyptic over the past 20 years.

Leccese: The first deal I did for the NBA involved the sale of four teams for $32.5 million each. Seven years later we were selling a single team for $125 million. Today I do not think an NBA team is available for less than $300 million, and a number of teams are worth much more.

Editor: What kinds of skill sets are required here?

Leccese: We all come to this practice with different basic training. Howard was trained as a labor and employment lawyer and litigator, and I had a corporate background. What distinguishes people in this practice is their substantial knowledge of other people's specialties in addition to their own. Howard, Bob Batterman and Brad Ruskin have a keen sense of business and deal-making, and they have taught me to be sensitive to the issues that arise in their specialties.

Ganz: Given the extraordinary public focus on sports matters, lawyers engaged in this practice must learn a couple of things. One is to keep their egos out of the representation. Second, they must develop something of a tough skin. It is, of course, most pleasant for someone to read about his or her success in the media, but the fact is that the media cover the less than successful outcomes as well. Third, they must understand the potential public relations consequences of what they say or do. We are not public relations advisors in this practice, but our clients - who are the focus of media attention - expect us to act in a manner that reflects an understanding that they are such a focus.

Editor: Is there such a creature as a separate and distinct sports lawyer or is this someone who brings, say, his litigation or contract negotiating skills to a practice which happens to represent players and sports teams?

Ganz: I spend 80 percent of my time on sports law matters. That is the result of very significant developments in the professional sports business in recent years. Even in relatively quiet times, sports law work occupies 60 percent of my time.

Leccese: For me it is almost 100 percent. I may be representing a bank or handling a matter involving a non-sports business for a sports owner, but there is always a connection to our sports clientele. Together with Wayne Katz and six associates, I am a full-time practitioner in the sports area. In a major project, such as that currently underway concerning a new stadium for the Jets and Giants, we draw upon resources from across the firm, including Bill Hart in the IP area, Ira Akselrad from our tax group, Brad Ruskin and Lou Solomon from the litigation department, and a variety of real estate lawyers. In addition, as you go across many of the firm's departments, you will find people who spend most of their time on sports.

Ganz: In the labor and employment area at Proskauer, there are a number of lawyers who have a pretty full plate of sports law work. For example, Bob Batterman was the principal labor lawyer involved in the NHL bargaining process; and Dan Halem has worked on basketball matters for a decade and baseball matters for almost six years. In fact, Dan is now getting ready for a number of salary arbitration cases in baseball. In the litigation area, our partner, Brad Ruskin, has handled major matters for the Florida Marlins, and he has also done a tremendous amount of work for tennis, both domestically and internationally.

Editor: And the types of matters handled by the group?

Ganz: In the labor and employment area, we represent the leagues in collective bargaining. In connection with those agreements, significant antitrust litigation has been brought by the players over the years, so we have been very active on that front. That particular strategy was ended by a United States Supreme Court decision a number of years ago, but we remain cognizant of the connection between the restrictions that the leagues wish to impose, on the one hand, and the possibility of antitrust violation claims on the other. We had our hands full in connection with Latrell Sprewell a couple of years ago, and more recently we were involved in the highly-publicized Indiana-Detroit brawl. In addition to the high profile work, the leagues employ a whole array of people other than players and referees who raise normal employment issues.

Leccese: In the corporate and transactional area, we cover a variety of matters. This ranges from expansion transactions to domestic and international television rights for many different types of clients. We handle the purchase of teams, including the Philadelphia Eagles, the New York Jets and the Florida Marlins. We work on a variety of financings with respect to the construction of sports arenas and stadiums, which involves, among other things, extensive negotiation with public authorities. Depending on the transaction, we might represent one of the leagues, a particular team or a lender. With respect to NBA teams alone, we recently handled well over one billion dollars of financing. In the Internet area, we have done joint ventures with IBM for the NHL. We have also done a joint acquisition with Intel for the NBA, together with a variety of other contractual matters over the years.

Editor: Proskauer's sports law practice is at the epicenter of developments in this area of the law. What do you see coming in the way of interesting and challenging issues?

Lecesse: The point at which IP, technology and sports intersect is an extremely interesting area at the moment. People love watching sports events live, and the mobile video devices that are hitting the market today are going to be a source of considerable legal attention.

Ganz: The relationship between the professional leagues and their teams and between players and teams in collective bargaining is a source of very challenging issues, and this is ongoing. The year-long NHL lockout is a significant reminder of the risks here, and I am hopeful that everyone in the industry has taken away the appropriate lessons from that episode.

Editor: What about the future? Where would you like to see this practice in, say, five years?

Lecesse: I would like to see our practice move into the international arena. The financing of new stadiums in Germany in anticipation of the 2006 World Cup, for example, is something that is of great interest to the worldwide capital market, and I believe our practice has the expertise and experience to be able to function well in that market.

Ganz: I share that vision, and I would anticipate that American professional sports leagues may well expand beyond our borders. In light of our great depth of domestic experience, I think we can contribute to that expansion overseas in a very significant way.

Please email the interviewees at hganz@proskauer.com or jleccese@proskauer.com with questions about this interview.