Boxer sues Don King under Ali Act

August 25, 2012

Boxer Joseph Agbeko has sued Don King and his promotional company under the Muhammad Ali Act in New Jersey Federal District Court. The lawsuit claims that King took more money than he should have from several purses from the fighter from Ghana.  King is seeking to dismiss the claims made by the fighter.

Agbeko claims that King took more money than he was owed from his fights when King promoted the fighter.  Agbeko was promoted by King in seven fights since 2007.  The legal papers reveal the amount of money taken from Agbeko’s purse which makes one understand the enactment of the Muhammad Ali Act.  Agbeko’s representation requested information from Don King under the Ali Act.

Agbeko claims that in one fight in 2008, he was paid only $4,000 but was charged $21,000.  In addition, King deducted this money without substantiating these deductions.  Furthermore, the suit claims that King did not pay the IRS for Agekbo.  Thus, not only did he not receive a full fight salary, he had to pay his tax obligation.

Timeline

Don King’s attorneys have filed a motion to dismiss scheduled for September 17, 2012.  The motion looks to dismiss most of Agbeko’s claims with the exception of the financial disclosure requirement (15 USC 6307e(b))under the Act.  It will seek a summary judgment motion under that claim.  King contends that Agebko made “hundreds of thousands” of dollars while advancing Agbeko training fees and other needs.  Additionally, King’s attorneys call Agebko’s complaint “confused and [a] confusing seven-part complaint.”

Payout Perspective:

The lawsuit is an interesting look at fighter pay for boxers.  Agbeko is not a household name yet was a alphabet champion. There were still many deductions that were taken from his fight earnings that could not be substantiated by King according to the Complaint.  King’s attorneys claim that the Complaint does not support a claim under the Muhammad Ali Act and at its core is “inadequate disclosure.”

One of the claimed issues by King’s attorneys with the Muhammad Ali Act is the disclosure requirement (below) for promoters.  Under the Act, a promoter must disclose its payouts before the promoter is paid. Yet, as argued by King’s reps, this number may be unknown since promoters do not know the actual gate and attendance ahead of the fight.

15 U.S.C. 637e(b)

(b) Disclosures to the boxer

A promoter shall not be entitled to receive any compensation

directly or indirectly in connection with a boxing match until it

provides to the boxer it promotes –

(1) the amounts of any compensation or consideration that a

promoter has contracted to receive from such match;

(2) all fees, charges, and expenses that will be assessed by or

through the promoter on the boxer pertaining to the event,

including any portion of the boxer’s purse that the promoter will

receive, and training expenses; and

(3) any reduction in a boxer’s purse contrary to a previous

agreement between the promoter and the boxer or a purse bid held

for the event.

There are not many cases that are being litigated under the Ali Act and it will be interesting to see how the Court will rule.

Some have queried whether MMA should have a Muhammad Ali Act.  While there are some definite positives out of full disclosure for fighter pay, the interpretation and application of the Act by courts will have to be examined.

MMA Payout will keep apprised of the hearing.

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