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The Dallas Cowboys have not won the Super Bowl since 1996. The New York Yankees have not earned a World Series ring since 2009. Yet, last week both helped break a long streak.
The US Department of Justice has, for a $3.5mn penalty, settled allegations that Legends Hospitality, 49 per cent owned by the Cowboys and Yankees, violated US antitrust law. The deal awaits court approval.
Legends since 2021 has been controlled by the private capital firm, Sixth Street Partners, bought in a deal then valuing it at $1.35bn. An outsourced sports stadium services and consulting business, the company was built from scratch more than a decade ago by the two sports franchises as well as Goldman Sachs, eventually passing through other private equity hands.
In late 2023, Legends announced that it was buying rival ASM Global, for $2.4bn.
The problem for the Feds, in their view, was that Legends had, in the midst of the ASM transaction, “gun-jumped”: in other words, it began coordinating with ASM on pursuing stadium and arena contracts in multiple instances, before the deal had closed and before the US antitrust authorities had signalled the combination was in the clear. This was the first gun-jumping enforcement action since 2017, according to law firm A&O Sherman.
Specifically the DoJ found that, in the most egregious example, Legends and ASM decided that on a pending arena bid they were both chasing, one would stand down as the merger negotiations advanced, the effect being a bidder taken out of market.
To be clear, the Justice Department and Federal Trade Commission allowed this merger of two arch-rivals to get done. Their action was not enough to kill the transaction, which had already closed. Instead, this was a slap on the wrist with a nominal fine for a procedural foot fault.
The multiple transgressions the DoJ cited, though, were brazen and surprising given the fancy lawyers both Legends and ASM brought to the table. Even their severity was not enough to convince the authorities to halt a blockbuster merger.
The reality remains that, even in a time of heightened antitrust enforcement in the US, nearly all deals get through. Regulators have limited resources and thus often will only take on the most meaningful cases.
Dealmakers, then, are much like sports fans. As much as followers of the Cowboys and Yankees like to bemoan their futility, their teams win plenty.
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