- The Washington Times - Sunday, July 28, 2002

Sports Biz

The name Jeffrey Kessler probably does not mean much to most sports fans. He's not a player, coach, commissioner, league or team executive, or even an agent.
Kessler is a New York-based antitrust and trade attorney with a firm called Weil, Gotshal & Manges. Working under that lesser public profile, however, Kessler's work, mostly on behalf on major league players' associations, has greatly shaped the landscape of modern pro sports.
He played key roles in developing the liberalized free agency rights that have changed the face of the NFL, via the now-legendary Freeman McNeil antitrust case of the early 1990s, and the current soft salary cap and overall economic structure of the NBA that similarly have altered how players move around the league and are compensated.
Kessler, now representing a group of 14 Canadian-based former limited partners of the Montreal Expos along with fellow Weil partner James Quinn, stands poised to go down in the history books again. And this time Major League Baseball is the target.
In a federal racketeering and fraud suit filed earlier this month against MLB commissioner Bud Selig and Jeffrey Loria, former majority owner of the Montreal Expos and now in the same role with the Florida Marlins, Kessler's clients claim MLB secretly conspired to drive down the value of the Expos and dilute the limited partners' equity in the team. The suit seeks punitive damages of at least $100million, as well as triple compensatory damages.
"I think the case is very important," Kessler said. "It obviously doesn't speak directly toward free agency rights or an entire economic structure, but it seeks to establish the boundaries in what a [sports league] commissioner can do and what he has the legal authority to do."
Even more potentially influential is the complete opening of MLB finances this case could provide. As recent reports in Forbes Magazine and elsewhere suggest, public confidence in the accuracy and completeness of the financial data Selig released before Congress last December is low. This case, similar to the McNeil case, could compel a release of much more detailed, reliable and team-specific data.
And that release, in turn, could prove important as labor talks continue between owners and players, should those negotiations still be ongoing when movement on the legal case picks up this fall.
"It'll be very interesting to see what happens," said Mark Conrad, law professor at Fordham University's School of Business. "It remains to be seen how much of this case really has any legal basis. It may just be a ploy to engineer a better settlement for those partners. But it certainly puts a spotlight on an already crazy situation."
Kessler did not purposely set out to become such a serious player in pro sports. His background is foremost in antitrust and competition law in corporate matters, and to this day much of his work remains representing large companies such as Matsushita Electric Corp., corporate parent of Panasonic.
But back in the late 1970s, Kessler, fresh out Columbia Law School, quickly fell under the wing of Quinn. Quinn had worked on the NBA's Robertson antitrust settlement of 1976, named for Hall of Famer Oscar Robertson, that eliminated the reserve clause in pro basketball. That case soon led to others in the specific and unique world of sports law, and Kessler's quick string of successes pushed him to a sought-after rule among sports union leaders.
"Many of the provisions in our current collective bargaining agreement are the result of ideas and agreements Jeffrey struck upon. He's been invaluable to us," said Richard Berthelsen, general counsel for the NFL Players Association. "He and Jim Quinn are probably the best known and most effective outside attorneys working on behalf of players."
Besides the Expos litigation, Kessler currently is working cases representing the NFLPA, Major League Soccer Players Association, the Arena Football League players and organizers of basketball's National Invitation Tournament, who have filed an antitrust suit against the NCAA.
The soccer players represented by Kessler have failed twice to prove in court that the single-entity MLS structure and salary cap violate antitrust laws, or that the league itself was an illegal monopoly, representing a large loss for Kessler. But he does not consider that matter closed, and he is now seeking for the U.S. Supreme Court to hear the case.
Like virtually any lawyer, Kessler is by no means without his critics. By spending so much time working behalf of players, Kessler is often accused along with the unions of lapsing into public relations grandstanding and playing the part of an ideologue. MLB officials also have suggested the new Expos suit was motivated, at least in part, by the Major League Baseball Players Association, a charge Kessler and union officials both firmly deny.
Nonetheless, Kessler in the new case must prove that Selig, Loria and their lieutenants knowingly sabotaged the economic prospects of the Expos in Montreal and wrecked the limited partners' interests in the club in the process. Loria, former Expos general partner Claude Brochu and baseball executives have steadfastly asserted for years, and still do, that the Canadian partners willingly ignored cash calls to infuse new capital into the Expos and then agreed to the dilution of their collective equity in the club from 76 percent to 6 percent.
"The suit has no basis in fact or law," said MLB president Bob DuPuy. "The fact is that MLB repeatedly encouraged these limited partners to take a more active role in the Expos and, when necessary, to fund team expenses. They refused to do so despite our pleas. They repeatedly refused to help the Montreal Expos and were unable to obtain a new stadium or feasible plan for a new stadium the city of Montreal."
Kessler also is no real friend to advocates of baseball in Washington, at least in the near term. Should MLB executives seek to move or eliminate the Expos before the racketeering and fraud suit concludes, Kessler said he will seek an injunction keeping the club in Montreal pending a trial.
"I am sorry for the people of the Washington, D.C. area. They certainly deserve a team and probably should have had one a long time ago," Kessler said. "But should Major League Baseball seek to do something with the Expos while this lawsuit is pending, we would be forced to file an injunction. The plaintiffs are seeking to preserve the situation there, and have a responsibility to protect the asset."

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