Four large law firms are working on the sale of the Phoenix Suns, a potentially record-setting deal that values the National Basketball Association team and the WNBA’s Phoenix Mercury at $4 billion.
Mortgage lending billionaire Mat Ishbia and his brother Justin Ishbia agreed Tuesday to acquire a majority stake in both teams. Current owner Robert Sarver began exploring options to sell both franchises after the NBA suspended the real estate mogul and fined him $10 million over discrimination and harassment allegations.
Sarver has turned to DLA Piper partner Richard Rubano in New York for outside counsel on the deal, which still requires the league’s approval. Covington & Burling and McDermott Will & Emery are advising the Ishbias, while Proskauer Rose is representing the NBA, a longtime client of the firm.
Three sources familiar with the negotiations confirmed the legal lineups on the deal, which at a $4 billion valuation would be the highest price ever paid for an NBA team. All four firms are frequently hired by deep-pocketed investors looking to break into the increasingly lucrative world of professional sports by buying teams.
Sarver’s one-year suspension and fine followed an independent investigation by Wachtell, Lipton, Rosen & Katz, which in mid-September issued a report finding that Sarver used racist slurs and harassed female employees. The NBA hired Wachtell for the inquiry last year after ESPN reported on allegations of racism, misogyny, and harassment in the Suns workplace.
Sarver apologized for his actions after Wachtell lawyers completed their report.
Proskauer partners Joseph Leccese—chairman emeritus of the firm—and Wayne Katz have taken the lead representing the NBA on the Suns deal.
The firm’s ties to the league, whose longest-serving commissioner and one-time general counsel was former Proskauer partner David Stern, go back decades. Adam Silver, the NBA’s current commissioner, is the son of late Proskauer senior partner and chairman Edward Silver.
Covington, whose partner Peter Zern in Washington is representing the Ishbias, is also closely connected to the NBA. Zern has had a key role handling broadcast rights agreements for the league—whose general counsel is former Covington litigator Rick Buchanan—and advised on the formation of NBA Africa.
Zern and Covington also counseled Steven Ballmer on his $2 billion buy of the Los Angeles Clippers in 2014—at the time a record price for a US sports team—after working on the $338 million sale of the New Orleans Hornets in 2012. Covington also handled the $450 million sale of the Golden State Warriors in 2010.
McDermott tax partner Patrick McCurry in Chicago is also representing the Ishbias. The firm, which also worked on the $350 million sale of the Memphis Grizzlies in 2012, is known for its private client and wealth planning practice.
Mat Ishbia, a former walk-on college basketball player, is now chairman, president, and CEO of United Wholesale Mortgage LLC, a Pontiac, Mich.-based mortgage lender that went public last year.
Justin Ishbia, a former private equity associate at Kirkland & Ellis, is a founding partner of Chicago-based private equity firm Shore Capital Partners LLC. Kirkland was also involved in the investigation of the Suns under Sarver, according to ESPN.
DLA Piper’s Rubano, who is counseling Sarver’s Suns Legacy Partners LLC, previously advised hospitality billionaire Tilman Fertitta on his $2.2 billion acquisition of the NBA’s Houston Rockets in 2017. Rubano also was part of a legal team that handled the $730 million sale of the Atlanta Hawks in 2015.
The Suns, who reached the NBA Finals in 2021 before being knocked out of the playoffs early last year, are now in fourth place in the NBA’s Western Conference.
The Mercury, who play in the WNBA’s Western Conference, earlier this month saw star player Brittney Griner return to the US after being jailed in Russia for 10 months.
Sarver issued a statement late Tuesday announcing the purchase agreement with a group led by the Ishbias. The announced sale of the Suns and Mercury came a day after ESPN reported on more claims related to a toxic workplace culture under Sarver that extended to other club employees, including Jason Rowley, a former general counsel of the Suns now serving as president of the team.
Media contacts for the Suns and current general counsel Melissa Goldenberg—a former Greenberg Traurig associate hired by the club in 2014—didn’t respond to requests for comment about whether the team retained separate outside counsel during the Wachtell inquiry into its operations.
In 2010, the Suns hired Lon Babby, a sports agent and former litigation partner at Williams & Connolly in Washington, as president of basketball operations. Babby spent five years in the role before becoming a senior adviser and retiring in 2016.
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