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New York Mets Bidding War Puts Big Law’s Wachtell in Crossfire

July 28, 2020, 4:04 PM

Alex Rodriguez and Jennifer Lopez have turned to the law firm Wachtell, Lipton, Rosen & Katz in their bid to buy Major League Baseball’s New York Mets, leaving hedge fund mogul Steven Cohen looking for new representation.

Wachtell is representing Rodriguez, a former New York Yankees star-turned-ESPN broadcaster, and Lopez, an actor and entertainer, in the couple’s quest to acquire the team, five sources familiar with the discussions told Bloomberg Law. Wachtell previously counseled Cohen in a deal to buy the Mets that fell through in February, according to four sources.

Cohen is now in the market for new outside counsel as he takes another stab at buying the Mets, who play their home games at 42,000-seat Citi Field and as of late 2019 were valued at roughly $2.6 billion.

The team’s current ownership, led by real estate investor Fred Wilpon, initiated talks last year to sell 80% of the franchise to Cohen. The Great Neck, N.Y., native ultimately backed out of a tentative deal, only to recently reenter the bidding, according to Bloomberg News.

Wachtell, known for its robust M&A practice, has been a major player in a number of professional sports ownership deals. Edward Herlihy, a veteran dealmaker and co-chairman of the firm’s executive committee, is leading the representation of a group of investors led by Rodriguez and Lopez.

Herlihy represented an investor group that included Rodriguez’s former Yankee teammate, Derek Jeter, on their $1.2 billion acquisition of the Miami Marlins in 2017. A Herlihy-led Wachtell team also negotiated truck stop magnate James Haslam III’s $1 billion buy of the National Football League’s Cleveland Browns in 2012.

Wachtell has previously handled complex business transactions for Rodriguez and Lopez. Wachtell was referred that work by Jeffrey Lee, a former senior associate at the firm who spent the past two years as COO of ARod Corp., a Woodland Hills, Calif.-based business that controls Rodriguez’s various investments.

Lee left ARod Corp. in February and isn’t working on the Mets matter but continues to advise Rodriguez and Lopez on their business affairs. He declined to discuss his relationship with both celebrities, who got engaged last year, as did Herlihy. A Wachtell spokesman didn’t respond to a request for comment about the firm’s work for the couple and Cohen.

All-Star Legal Lineup

Rodriguez’s investor group, which is being advised on the financial side by JPMorgan Chase & Co., also reportedly includes two billionaires: Vitaminwater co-founder Michael Repole and Vincent Viola, a founder of high-speed trading platform Virtu Financial Inc. who also owns the National Hockey League’s Florida Panthers.

Rodriguez earned about $448 million in total salary over a 22-year playing career, which ended in 2016. Shortly before his retirement, he squabbled with Gordon Rees Scully Mansukhani over a $380,000 legal bill related to inquiries he faced over his use of performance-enhancing drugs. That dispute was subsequently settled for an undisclosed sum.

Rodriguez’s reported $1.7 billion offer for the Mets comes a decade after he appeared on a list of creditors owed $24.9 million in salary in the bankruptcy of the Texas Rangers. The team was sold out of Chapter 11 reorganization in 2010 for $385 million.

The Mets, owned for more than three decades by Wilpon’s Sterling Equities Inc., are currently being advised by Davis Polk & Wardwell. A spokeswoman for the firm didn’t respond to a request for comment.

Davis Polk has enjoyed a longtime client relationship with the Mets, having counseled the team’s ownership on a $162 million settlement in 2012 with a bankruptcy trustee overseeing the dissolution of Bernard Madoff’s Ponzi scheme.

That dispute led Wilpon and his fellow Mets co-owners to retain Stephen Greenberg, a former managing partner at Manatt, Phelps & Phelps who now serves as a managing director at private investment bank Allen & Co. LLC, to advise on selling a portion of the team. The Mets raised $240 million in cash in 2012 by selling 12 minority stakes to several investors, including Cohen.

Greenberg, a veteran in the sports team transactional space and son of Hall of Fame baseball player Hank Greenberg, is once again serving as a financial adviser to the Wilpon family and Mets ownership. He didn’t respond to a request for comment. David Cohen, a longtime general counsel for the Mets, declined to comment.

Vincent Tortorella, a former federal prosecutor who in January became general counsel and chief compliance officer at Point72 Asset Management LP, Cohen’s hedge fund in Stamford, Conn., didn’t respond to a request for comment about the billionaire’s selection process for outside counsel.

Team Sale Timeline

Among the other bidders now circling the Mets, whose season just got underway after a months-long delay stemming from the Covid-19 pandemic, is Harris Blitzer Sports & Entertainment LLC.

The Camden, N.J.-based company is controlled by a pair of private equity titans in Apollo Global Management Inc. co-founder Joshua Harris and The Blackstone Group Inc. executive David Blitzer, both of whom own the NHL’s New Jersey Devils and National Basketball Association’s Philadelphia 76ers.

In a twist, Davis Polk took the lead for Comcast Corp. in 2011 on its $330 million sale of the 76ers to Harris and Blitzer’s HBSE, which was advised by Wachtell partner Andrew Nussbaum on the acquisition. Nussbaum, who also advised HBSE on its $320 million purchase of the Devils in 2013, didn’t respond to a request for comment about the Mets auction.

Proskauer Rose corporate partner Wayne Katz is now representing HBSE on its bid for the Mets, said four sources familiar with the talks. Raine Group LLC, a boutique investment bank known for its sports industry work, is also advising HBSE. Katz, who was unavailable for comment, and Proskauer have a track record of clinching big money MLB team sales. Two other HBSE lawyers didn’t respond to requests for comment.

Proskauer counseled Houston businessman James Crane on his $615 million acquisition of the Houston Astros in 2011, an investor group that paid $800 million for the San Diego Padres in 2012, and art dealer Jeffrey Loria on his sale of the Miami Marlins three years ago. MLB itself also turned to Proskauer for corporate counsel in the bankruptcy of the Los Angeles Dodgers, sold for $2 billion in 2012 to a group led by Guggenheim Partners LLC CEO Mark Walter.

A winner of the Mets auction may not be announced until a final round of bidders is selected in September, said two sources familiar with the process. The league’s central office in New York, which has done preliminary vetting of various bidder groups, must approve the financing terms for a transaction.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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