Al Haymon wins round against Top Rank in antitrust lawsuit

October 18, 2015

Al Haymon won a round in federal court in Los Angeles on Friday as he was successful in dismissing an antitrust lawsuit filed by Top Rank Boxing.  The court gave Top Rank the ability to amend their complaint by October 30, 2015.

The motion to dismiss Top Rank’s First Amended Complaint by Al Haymon, et al. was heard without oral argument by the court.

The court dismissed all of three antitrust claims brought by Top Rank against Al Haymon citing that it failed to allege “antitrust injury.”  The order states that it specifically failed to allege injury “to itself or to competition.”

Top Rank accused Al Haymon of 3 primary issues in its antitrust claim:

-Tie Out Contracts and “Sham Promoters”

-Predatory “Payola” Practices

-Venue Blocking

Per the Court order:

…as the Haymon Defendants point out, Top Rank has failed to allege how it has been injured by the alleged conduct.  Indeed, it has not identified a single bout that it has attempted to promote but was precluded from promoting by the Haymon Defendants, a single venue from which it has been blocked, or a single network that has refused to broadcast a fight promoted by Top Rank.  Top Rank correctly argues that competitors who are “frozen out” of a market by an antitrust violation have suffered antitrust injury and possess antitrust standing. However, Top Rank has failed to allege any facts demonstrating that it has actually been “frozen out” by any of the Haymon Defendants’ conduct.

Notably, the court dismissed defendant Waddell & Reed Financial, Inc., Waddell & Reed Investment Management Company, Ivy Investment Management Company and Media Group Holdings (“Waddell Defendants”) without the ability for Top Rank to amend their complaint as the Court deemed it would be “futile.”  Waddell was the alleged financial investor and adviser for Haymon et al. as they provided the money for PBC.  Despite its liberal policy favoring amendments, the Court noted that Top Rank has had the opportunity to amend its pleading and finds no amendment would persuade the Court that it has a claim against Waddell.

To survive a motion to dismiss, Top Rank had to allege market power or economic power in the relevant markets by Haymon, et al.  Top Rank identified the relevant markets as 1) the market for managing Championship-Caliber Boxers in the U.S. and 2) the market for the promotion of Championship-Caliber Boxers in the U.S.  Although the Court noted that these market definitions may not defeat a summary judgment motion, it may surpass a motion to dismiss.

The Court indicated that while Top Rank may define the relevant markets, it failed to adequately allege market power or economic power within those markets.  Specifically, the court notes that Top Rank does not provide “facts or figures” concerning Championship-Caliber Boxers (i.e, how many there are, how many promoters, promote them, how many managers manage them, etc.).  The court also takes issue with Top Rank’s allegation that Haymon’s market share is greater than 50%.  Here, the court finds no factual evidence of how Top Rank arrived at the figure and whether it is limited to the management of “Championship-Caliber Boxers.”

As a result of its inability to show that Haymon, et al. possessed market or economic power in the management market, it could not show that it tied together the sale of two distinct services of managing and promoting Championship-Caliber boxers.  Although Top Rank argued that the illegal tying arrangements may be in “consent” clauses in the Haymon contracts, Top Rank did not provide any factual allegations showing such clauses in fighter contracts which purported that a fighter was bound by the same manager and promoter.

In addition to the antitrust claims under the Sherman Act, the court dismissed a claim under the Clayton Act for injunctive relief due to the fact there was no showing of claims under the Sherman Act.  In addition, state law claims under the California law were deferred if and when Top Rank amends its complaint.  If it does not, the court will not rule on the state law claims.

Payout Perspective:

It’s interesting to note that Top Rank had sought the deposition of an officer from the Waddell Defendants prior to the ruling.  A deposition was noted for October 7th according to the court record but we assume that did not happen pending the ruling.  It was likely the hope that Top Rank could establish a link between the Waddell Defendants and its case.  However, with the court ruling, Top Rank would have to appeal the order for them to bring back Waddell into the case.  Look for Top Rank to file an Amended Complaint with specific allegations.  Despite the court dismissal, it invites Top Rank another shot at filing a complaint.  This might be interesting foreshadowing for some of the issues in the Golden Boy-Al Haymon antitrust case ongoing in Los Angeles.  Essentially, the court did not find Top Rank established sufficient facts that Al Haymon, et al. had market power/control over the relevant markets.  One of the arguments here is that this information might be obtained through discovery (i.e., contracts, venue contracts, etc.).  The court seemed definite that there must be some concrete factual allegations for Top Rank antitrust claims to go forward.  MMA Payout will keep you posted.

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