Elite firm appreciates the value of backing a winning sports team. By Gavriel Hollander
When Stan Kroenke made his initial investment in Arsenal FC back in 2007, Gunners chairman Peter Hill-Wood famously said he did not want “these type of people” involved in the running of possibly England’s most traditional club. It is no coincidence, therefore, that one of the strongest law firm-football club relationships around should be between Arsenal and Slaughter and May, a City institution popularly seen as being chock-full of Hill-Wood’s ’type of people’.
Earlier this month it was Slaughters that again grabbed the headline mandate, acting for Arsenal when Kroenke finally launched his long-awaited takeover bid.
It was the second time in a few short months that the firm had been involved in a US-backed takeover of a Premier League football club following the gruelling battle for the control of Liverpool FC last autumn – a battle eventually won by John Henry’s New England Sports Ventures group.
Some of the many other firms involved in the Liverpool deal are understood to have been frustrated by the attention Slaughters got at the time. The rolling news TV stations set up shop outside the firm’s City offices, while Liverpool supporters stormed the lobby to serenade Slaughters’ famous water feature with a rousing rendition of You’ll Never Walk Alone.
But in many ways the Liverpool saga demonstrates both what Slaughters’ sports practice does and what its use is for the wider firm.
As an Everton FC fan, Slaughters head of sport Andrew Jolly admits he was disconcerted to hear his team’s cross-city rivals’ anthem echoing through the office. His personal conflict kept him at arm’s length from the proceedings, but he knows that the value to the firm of being involved in these transactions goes beyond the bottom line of the legal fees.
“It does have that benefit, yes,” says Jolly when asked whether high-profile sports work provides Slaughters with the kind of exposure to a wider audience that money simply cannot buy. “That can never be the primary reason, but because it attracts a higher level of interest it gets reported more widely.”
Jolly adds, though, that it is important to remember that not all publicity is good publicity. “It’s a positive thing,” he says, “but only as long as what you’re doing is supported by the fans of the
The gist is that prestige and its inherent value can drive a major firm’s interest in a sector the participants in which, despite the Premier League’s macho posturing, still count as small fry compared with the type of client usually associated with the City’s top firms.
And it is not just Slaughters that has realised the marketing potential of hitching your wagon to the right footballing star.
At the height of fans’ anger over Malcolm Glazer’s ownership of Manchester United FC last spring, Freshfields Bruckhaus Deringer hosted the first meeting of the Red Knights, the group of high-
net-worth Man Utd fans who sought to put together a package to oust the unpopular American.
Freshfields London corporate chief Mark Rawlinson was a member of that elite group and is understood to have persuaded his firm to donate an office for the inaugural meeting. Mischievous sources at the firm have suggested that the staging of the meeting earned Freshfields the equivalent of at least six-figures’ worth of free – and predominantly positive – exposure.
However, a few high-profile boardroom takeovers do not a complete practice make.
“I don’t really think [Slaughters] has a sports practice,” says one partner at a firm with a well-established sports group. “Their charge-out rates are still higher than most clubs can afford. Most of their usual clients are FTSE100 companies with £5bn-plus turnovers.”
Relatively speaking, Premiership clubs are, for want of a better expression, in a different league. Even the most successful struggle to break through the £200m revenue barrier in an average season, meaning that splashing out on top-end legal fees could mean missing out on the next 20-goal striker.
“The only regular contract work they have is with Arsenal,” adds the partner. “But [Arsenal] has been a fantastic client for them.”
That Arsenal work, on which Slaughters’ sports practice is largely based, has come a long way in the decade or so since corporate partner Nigel Boardman created parent company Arsenal Holdings in the early years of this century.
Jolly still recalls the time when, as an associate, he took a call from the training ground about a tree collapsing. He and Boardman have since worked on numerous player transfers, disciplinary matters and, most lucratively, the financing of the Emirates Stadium.
The firm does list several other high-profile names in its stable of sports clients, including the England and Wales Cricket Board and the Lawn Tennis Association, but firm insiders accept that work is intermittent.
A partner at a specialist sports practice is equally sceptical about the extent to which the Slaughters group is a genuine player on a day-to-day basis.
“They’re not really a competitor for us,” he explains. “There are enough big-ticket sports things to make it worth their while, so if [Man] Utd were bought out they’d be able to say they have the expertise to do it.”
The Liverpool example seems to illustrate the point. Despite winning plaudits for the work Slaughters still partnered with a sports boutique in the shape of Couchmans, which was instructed by former Liverpool chairman Martin Broughton.
Jolly admits that sport is never going to be one of the pillars of his firm’s business model.
“We’re a business, not a charity, so everything has to make money,” he stresses. “But we all have an interest in sport and we like to have a varied practice.
“If I went to Chris [Saul, senior partner] and said I wanted to do nothing but sport, I’m not too sure the idea would fly. But equally, I’m not sure I’d want to do that.”
The Slaughters practice may be somewhat derided by specialists, but it is still something that most of the firm’s peers at the top end of the market do not have. It also lauds the versatility Slaughters lawyers pride themselves on.
“We want lawyers who are intellectually flexible,” says Boardman, who admits he was “a novice” when he acted on his first player transfer for Arsenal. “I don’t want someone who’s done 10 takeovers in a row and nothing else. They need new challenges.”
Conflicts and allegiances
While Jolly insists there is no real difference between practising sports law and practising in any other sector, it does lend itself to a unique type of conflict.
Jolly himself jokes about not getting involved in the Liverpool takeover, but as an Everton fan there was a genuine concern about not wanting to be seen getting involved in a matter where he could be seen to be personally conflicted.
He is, though, happy to act for Arsenal, a club supported not only by Boardman but also by two other members of the Slaughters sports practice – financing partner Philip Snell and planning partner Steven Edwards.
“We act for Marks & Spencer too, but it doesn’t mean we only buy M&S suits,” says Jolly. “But you can deliver a better service if you understand what your client’s going through.”
It is still possible to separate personal allegiances from professional performance, however.
Former Slaughters associate Ian Lynam, now a partner at Charles Russell, acted for Thierry Henry on Fifa’s investigation into the 2009 World Cup qualifying play-off match, when the French forward appeared to deliberately handle the ball twice in the build-up to his side’s winning goal.
The incident denied Lynam’s native Ireland a place in the finals in South Africa.