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What to Make of Top Rank's Lawsuit Against Al Haymon

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What to Make of Top Rank's Lawsuit Against Al Haymon Empty What to Make of Top Rank's Lawsuit Against Al Haymon

Post by Pedro147 Thu 02 Jul 2015, 1:15 pm

http://bleacherreport.com/articles/2512020-what-to-make-of-top-ranks-lawsuit-against-al-haymon

Bob Arum’s Top Rank became the second major boxing promoter to file suit against uber-manager/adviser Al Haymon in federal court this year, seeking $100 million in damages.

The latest salvo, which pulls no punches and seeks to crumble Haymon’s multimillion-dollar operation, alleges that the secretive power broker and his business partners are "making a play to take over boxing."

It accuses Haymon of repeated violations of the federal Muhammad Ali Boxing Reform Act by "rigging the boxing industry so they can act as manager, promoter, sponsor and ticket broker for nearly every major professional boxer competing in the United States…"

Haymon's attorneys, per Rafael, issued a statement in which they declared the lawsuit "entirely without merit" and "a cynical attempt by boxing's old guard to use the courts to undermine the accessibility, credibility and exposure of boxing that the sport so desperately needs."

Top Rank’s suit joins one filed in May by Oscar De La Hoya’s Golden Boy Promotions, which once had close ties to Haymon under the leadership of departed CEO Richard Schaefer. That lawsuit also alleges attempts at monopolistic control over the boxing industry.

De La Hoya issued a statement on Wednesday that praised Arum and the lawsuit.

A third major promoter, Kathy Duva’s Main Events, sued Haymon, Schaefer and various others last year for fraud and accused the pair of conspiring to seize control of Golden Boy from De La Hoya.

That suit was later dropped.

Let’s pause here for just a second and try to unpack some of this stuff.

Many of the points echoed in these lawsuits are not new, even if some will discredit them as little more than sour grapes from promoters who have been bested.

Haymon has long been a reclusive figure in the sport of boxing. His detractors often use this secretive persona to fuel their criticisms, while his many supporters credit him for reinventing the sport’s business model by making it more friendly to fans and fighters.

He was able to secure more than $400 million in funding for his Premier Boxing Champions series from high-powered asset firm Waddell & Reed—named in Top Rank’s lawsuit—which, as Kevin Iole of Yahoo Sports reported last week, allows him to pay above industry standards for his production and talent.

Alex Trautwig/Getty Images
Iole also reported that his exorbitant spending has raised the costs for competitors and rival promoters and might not be financially sustainable over the long term.

But if there’s one blockbuster that Top Rank alleges in this suit, it’s that Haymon’s business model was never meant to last.

Top Rank argues that Haymon’s PBC series, which has network ties with NBC, CBS, ABC, ESPN and Spike TV, among others, is able to operate at a “significant short-term loss in the millions of dollars” in order to raise the costs for competitors to force them out.

Once the playing field is clear, Haymon and Co.—under Top Rank’s theory—would be free to recoup their losses by charging whatever they wish. After all, it would be the only game left in town.

It’s a potentially devastating allegation and, if true, would cast a long shadow over Haymon, PBC and his entire model of bringing boxing to network television for the benefit of the fans.

And it could complicate Haymon’s efforts to obtain further funding, especially when added to the recent reports from the Wall Street Journal (h/t Iole) that Waddell & Reed recently saw $12.5 billion in investor money pulled from the firm over investment concerns.

Allegations of violating the Ali Act, again, are nothing new, but this suit codifies many of the whispers that have floated around the industry for months and levels concrete charges.

The Ali Act specifically bars individuals from acting in the capacity as both promoter and manager. The reasoning is strictly to protect fighters against falling victim to nefarious business practices and getting—for lack of a better term—screwed out of their money.

Managers have a financial or fiduciary duty to their clients, while promoters don’t, and this creates a possible conflict of interest that the feds stepped in to end.

Haymon is an officially licensed manager. His fighters used to have a steady home at Golden Boy, but a settlement between the company and Schaefer earlier this year left the vast majority of his clients as promotional free agents.

Since he’s legally barred from managing and promoting, Haymon has outsourced that end of the operation to various individuals and companies.

The most prominent of what the suit calls Haymon’s string of “sham” promoters is veteran New York-based promoter Lou DiBella, who is described as one of Haymon’s “frontmen” by the plaintiffs.

DiBella is quoted in the suit as defending Haymon by pointing out that nothing precludes a manager from enlisting the services of a promoter. That, at least on the surface, is true.

But Top Rank points to specific sections of the Ali Act that prohibit “collusion” between the two parties before unveiling the smoking gun of its case: a check for $1.75 million made out to Julio Cesar Chavez Jr.’s promotional company for his April 18 loss to Andrzej Fonfara labeled “purse” on the memo line—a fight promoted by Goossen Promotions—that the fighter posted on and later deleted from his Instagram account.

Top Rank points out that paying purses is the responsibility of the promoter (see Floyd Mayweather Jr.'s checks from his September 2013 fight with Canelo Alvarez and May 2014 fight with Marcos Maidana) and not the manager, but Haymon Sports paid this particular purse.

All of this comes in the wake of further bad news for Haymon.

Ivan G. Goldman of Boxing Insider reported last week that the California State Athletic Commission had discovered Haymon was blocking Los Angeles boxing venues, particularly the Staples Center and Forum in Inglewood, from rival promotions by putting holds on the arenas, only to pull out later.

Top Rank also included that tidbit, which the CSAC says it has since remedied, in its suit as evidence of Haymon’s desire to eliminate competition by using dodgy business practices.

This stuff all reads like an episode of House of Cards with Haymon playing the part of Kevin Spacey’s shady congressman Frank Underwood and manipulating the chess pieces from the sport’s seedy underbelly.

He just better hope this lawsuit, and all the questions it raises and puts under the light of day, doesn’t expose his operation as nothing more than a house of cards.

Pedro147

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Post by TRUSSMAN66 Thu 02 Jul 2015, 1:20 pm

Poor old Bob.............Watching some canny operator do a great job of taking over Boxing must hurt....

Thank heavens we still have upstanding citizens like Arum who have the best interests of the great and noble sport of Boxing at heart !!

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Post by wheelchair1991 Thu 02 Jul 2015, 2:01 pm

Nothing will happen with this lawsuit

wheelchair1991

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Post by Mayweathers cellmate Thu 02 Jul 2015, 2:03 pm

Monopolising boxing has been the dream of pretty much every promoter. Can't see Haymon doing it.

Mayweathers cellmate

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Post by hazharrison Sun 05 Jul 2015, 6:14 am

Essential reading:

http://ucnlive.com/the-square-jungle-the-premier-boxing-champions-edition/

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