Legal League: Why have top lawyers fallen in love with sports?
Big players are coming into sports fields recently, and no, I’m not talking about multi-million-pound Brazilian wonder kids, but big-ticketed lawyers who have fallen in love with the sports industry.
Previously, the sports industry traditionally used specialist boutiques or mid-level market law firms for their work, however, the trajectory has changed and now big City law are increasingly getting involved.
But why? Keir Gordon, partner at Charles Russell Speechlys, which has long-served sports, pointed out that the “large UK and US firms are seeing opportunities in sports because of the rising levels of private capital and institutional private equity that is being invested in the sector.”
“The sports sector has become (and continues to become) progressively more global and sophisticated,” stated Georgina King, managing associate at Linklaters.
She noted that their clients are looking for a multi-practice and multi-jurisdictional outfit, which the larger firms can offer. She explained that sports matters have become “considerably more complex as the landscape continues to change and expand”.
How did this change come about? Chris Mort, global head of sports and gaming at Freshfields highlighted that money involved in sports has “increased dramatically over the last 15 or so years.” He added “if there is more money at stake people are willing to pay more in legal fees to protect their interests.”
“If there is more money at stake people are willing to pay more in legal fees to protect their interests”
Chris Mort, Freshfields
Opportunities for sports investments
Luis Alonso, global co-head of sports and entertainment at Clifford Chance, explained that there is “an increasing number of financial investors exploring opportunities around sports and entertainment, establishing dedicated teams focused on investing on sport-related assets.”
Mort suggested a few significant landmarks for lawyers, including the development of Sky Sports (and others), the commercial success of the English Premier League and private equity firm CVC’s involvement in Formula One.
On the private equity point, he noted that it “showed CVC and other private equity investors that there were opportunities in sport investment”.
The face of the industry also shifted markedly during the pandemic, when live events had to suddenly accommodate lockdowns and shift from stadiums to sofas. As Keir Gordon notes: “Digital consumption of sports increased, and new developments such as the explosion in data analytics opened up opportunities for rights holders in sports and technology businesses in terms of the content they provide to their audiences.”
Main drivers
So what are the main driving factors for a phone call to a top lawyer? King stated that “at Linklaters, we have seen that the European football investment market been the most active, and this is compounded by a continuously changing regulatory landscape and a boom in the relevance of broadcasting rights.”
Alonso also pointed to the demand of European football, but added that NFL, NBA and MLB in the US are also main actors: “Stakeholders in other sports like Golf, Formula One, Moto GP, and tennis, among many others, are increasingly seeking legal advice.”
Last year’s news that Manchester City had been hit with 115 charges for allegedly breaching Premier League financial fair play rules also set tongues wagging. Top City barrister, Lord Pannick KC of Blackstone Chambers, was instructed to defend the club at a rumoured cost of £10,000 per hour.
So will this surge of interest from City lawyers in sports continue? Mort said the trend is “certainly continuing currently, with a wider pool of international investors looking to invest in a wider pool of sports.”
Alonso concluded that “it is not a case of elbows out, or ’boutique’ vs ‘big law'”, but rather “going forward, we see there being demand for both, as a consequence of sector growth, increased complexity and stakeholder sophistication.”