Golden Boy eyes potential antitrust lawsuit against Haymon, PBC

May 1, 2015

There are reasons why Al Haymon never speaks, one of those may be to prevent the threat of litigation.  A recent article about Haymon’s Premier Boxing Champions may bring on an antitrust lawsuit involving rival Golden Boy Promotions as chief plaintiff.

A recent Sports Business Journal article featured Haymon’s PBC and went over how funding was structured.  Although Haymon did not provide comment for the article, factual information in it allegedly strengthened the argument that Haymon’s business model for PBC violates portions of the Muhammad Ali Boxing Reform Act.

A draft of the Complaint has been viewed by and it appears that Golden Boy Promotions is seeking a temporary restraining order and then a permanent injunction against his business practices that violate state and federal laws.  It also requests monetary damages against Haymon.

The claim is that Haymon is using his monopoly as a boxing manager to create another monopoly for promoting TV fights.

Golden Boy is hush on if and when this lawsuit may be filed.

Notably, the SI article includes a letter dated April 28, 2015, from the Association of Boxing Commissions (“ABC”) to the Department of Justice in which it claims that Haymon is in violation of the Ali Act.  Essentially, through his controlled companies Haymon is acting as manager and promoter which the ABC claims to be a violation of the “Firewall provision” of the Ali Act (specifically section 5(b) of the Act).  ABC also calls into question the contracts Haymon fighters must sign.  Essentially, ABC believes that they are in “restraint of trade” and “contrary to public policy” as the contracts exceed 12 months.  A footnote in the letter notes that UFC, Bellator and other MMA promotions have this contractual model.  It also notes that MMA is not covered by the Ali Act.

Payout Perspective:

This will be an interesting lawsuit and with the Zuffa antitrust lawsuit ongoing, we can see some major waves happening in the business of combat sports.  Haymon’s boxing business model is unique and received much scrutiny by rival promoters.  There have been attempts in the past to sue Haymon but those were summarily dismissed and/or settled.  If Haymon and PBC are sued, we may see some interesting information divulged from the factual discovery process in the lawsuit.  It could also overturn the current wealth of boxing on multiple networks by PBC.  MMA Payout will keep you posted.

May-Pac PPV will cost $99

April 1, 2015

The Wall Street Journal is reporting that May 2nd’s long-awaited PPV fight between Manny Pacquiao and Floyd Mayweather, Jr. will have a price point of $99 HD and $89 SD.  It will be the highest priced PPV ever.

The previous high for a sport PPV was “The One” which featured Mayweather fighting Canelo Alvarez.  The event which drew a record $152 million in PPV also had the highest price point, $74.95 HD ($64.95 SD) for a PPV prior to next month’s event.

HBO and Showtime are handling the negotiations with pay-TV distributors and had sought an advantageous split on behalf of Mayweather and Pacquiao.  With a normal split of 50/50 for PPVs, HBO and Showtime were looking for a 70/30 split of the PPV revenue.  Of course, pay-TV distributors balked at the proposal.

The key distributors involved are iN Demand and DirecTV. The other distributors that the networks must reach agreements with are Dish Network and Vubiquity, the entity that handles negotiations for AT&T and others.

The WSJ report indicates that distributors will concede a split in the favor of the networks but not as much as the 70% proposal.

Estimates claim that the PPV could garner 3 million PPV buys which may almost double the previous PPV record.

Payout Perspective:

It’s unlikely that $100 will deter many wanting to see this fight.  Although the price is steep for a fight that many believe should have happened years ago, it is still an attraction that is unique and features the best known boxers in the sport.  It was no surprise that HBO and Showtime sought a bigger piece of the pie in these negotiations as both are trying to maximize the revenues as they have agreed to partner in this event.

Featherweight boxer Gonzalez sued by Golden Boy

March 31, 2015

ESPN reports that Golden Boy Promotions filed a lawsuit against boxer Jhonny Gonzalez on Friday prior to his fight on Saturday.  The complaint filed in Los Angeles Superior Court claims that Gonzalez’s Mexican promoter violated Golden Boy’s exclusive rights to promote his bouts.

Despite the lawsuit, it did not attempt to file an injunction from stopping Gonzalez from fighting Gary Rusell, Jr. Saturday night.  It is requesting $1 million and for equitable relief which asks the court to enforce Golden Boy’s promotional agreement which Gonzalez entered into in 2013.

The lawsuit implicates Al Haymon as conspiring with Gonzalez’s promoter, Osvaldo Kuchle’s Promociones del Pueblo, in delaying a bout with Russell (who Haymon manages) until Golden Boy was not in the picture.

Gonzalez was stopped by Russell, Jr. on Saturday.

Payout Perspective:

Although the story does not indicate a cause of action, one might expect it to be a breach of contract claim.  This is at least the second boxing lawsuit which names Al Haymon as a contributing issue in a promotional dispute.  Last year, you might recall that Sergey Kovalev’s promoter, Main Events, sued Adonis Stevenson’s management group as well as the boxer.  That lawsuit was settled essentially with Bernard Hopkins stepping up to fight Kovalev.  Here, we may have a similar (not the same) situation.  Obviously, the timing of the lawsuit probably precluded an injunction, although it would have been interesting.  But we will see what happens next.

De La Hoya announces the launch of network

January 26, 2015

Oscar De La Hoya announced last week that he is launching his own network.  De La Hoya TV will debut this spring as announced at the National Association of Television Program Executives annual conference in Miami.  The network will offer combat sports including boxing, MMA as well as features on sports and lifestyle that will cater to the burgeoning Hispanic population in the United States.

No word on where you may find De La Hoya TV as the head of Golden Boy Promotions and his partner in the venture, Jose Alberto “Pepe” Gomez are still talking to cable and satellite systems about carriage deals.  Per ESPN, there are no plans for the channel to include live sports programming.

The network will be based in Miami and will focus on Spanish-language content for the U.S. Hispanic market.

Payout Perspective:

This is an interesting business venture for De La Hoya and perhaps just an expansion of his personal brand.  The network states that it will offer boxing and MMA although there is no word on whether it has worked out any contracts with any existing organizations.  Certainly, De La Hoya’s network will join some competition for the Hispanic market as Nuvo TV and the El Rey Network are two of the newer networks looking for a Hispanic audience.  The big question will be whether it can be picked up by a cable and satellite system and how many households it can get into.

Wilder-Stiverne on Showtime scores 1.24M

January 22, 2015

ESPN’s Dan Rafael reports that Saturday night’s boxing event on Showtime between Deontay Wilder and Bermane Stiverne drew an average of 1.24 million viewers per Nielsen.  The peak for the fight was 1.34 million viewers.

The estimated average is based solely on the actual fight and not the overall event televised on the premium cable network.  It was the biggest in over two years and drew the second largest boxing audience since 2004 behind Miguel Cotto-Austin Trout in December 2012.  It also should be noted that the fight between Adrien Broner and Marcos Maidana in December 2013 drew an average of 1.3M viewers on Showtime.

Rafael also provides numbers for the other two fights on the telecast including Leo Santa Cruz’s victory over Jesus Ruiz (912,000 viewer average) and Amir Imam’s win over Fidel Maldonado, Jr. (811,000 viewer average).

Payout Perspective:

The fight between Wilder and Stiverne gained a good amount of buzz in the lead-up to the event.  Showtime had an All-Access centered on the two heavyweights and Don King did his usual promos.  The two fighters also provided their own sparks to fuel interest in the fight.  One might argue that based on the ratings, boxing heavyweights still do matter in the sport.

Golden Boy-Schaefer settle lawsuit, avoid arbitration

January 11, 2015

Kevin Iole of Yahoo! Sports reports that Richard Schaefer and Golden Boy have settled its lawsuit arising out of Schaefer’s departure from the boxing promotion last year.  The settlement leaves Al Haymon with several key boxers for a shwow .

Golden Boy sought private arbitration to settle the departure of Schaefer from this past spring.  Golden Boy was looking for $50 million in damages.  Along with Schaefer, Floyd Mayweather and several key employees of Golden Boy left.  As part of the settlement between the parties, Golden Boy relinquished the rights to several of the promotion’s top fighters notably Adrien Broner and Danny Garcia.

Golden Boy will retain the rights of Amir Khan, Lucas Matthysse and Leo Santa Cruz.  The fighters remain advised by Al Haymon.  The LA Times’ Larry Pugmire indicated that Marcos Maidana will leave to join Haymon (via Bad Left Hook).  According to Iole’s article, Schaefer will be precluded from promoting for a period of time.  But, he’s likely to officially join the Haymon/Mayweather camp.

Payout Perspective:

The settlement saves all parties a lot in legal fees.  It also means that Al Haymon and his “advised fighters” can move forward with a possible network debut on NBC and NBC Sports.  Golden Boy has a thinner roster but it will likely focus its efforts around Canelo Alvarez as the centerpiece for the company.

2014: a look at some of the business issues in boxing

January 2, 2015

MMA Payout takes a quick review of 2014 in the sport of boxing.

2014 was an interesting year for the sport as boxing began to expand with more PPVs than the standard Pacquiao and Mayweather bi-yearly events.

Canelo Alvarez faced Alfredo Angulo in March (the event drew an impressive 350,000 PPV buys), Sergio Martinez faced Miguel Cotto in New York in June (although projected to score 475,000 PPV buys, it drew just an estimated 350,000) and Alvarez returned in July to headline a PPV with Erislandly Lara (it drew an estimated 300,000 PPV buys).  There were also hints of Gennady Golovkin fighting on PPV although that never came to fruition.

Floyd Mayweather fought Marcos Maidana twice this year.  After May’s Mayweather PPV (in which it reportedly drew 900,000 PPV buys), Showtime President Stephen Espinoza informed the media that it would no longer release PPV buy numbers unless the event sets a PPV record.   However, after the second fight in September, it was revealed that the rematch drew 925,000 PPV buys.

Manny Pacquiao’s days as a PPV draw seem to be waning.  Although his rematch with Tim Bradley drew an estimated 750-800K PPV buys, it was down from the near 900K PPV buys in their first fight.  Although nothing official has been released, the Manny Pacquiao-Chris Algieri fight in November drew between 300,000 to 400,000 PPV buys depending on who you asked.  If this number is correct, it’s a huge drop off for Pacquiao.  This would be a likely reason why the push for the mythical matchup with Floyd Mayweather.

In October, ESPN’s Dan Rafael posted the top events in 2014 thus far.  Julio Cesar Chavez vs. Brian Vera 2 drew 1.39 million viewers with a peak of 1.53 million.  The ratings were for only that fight and not the entire card airing on HBO.  HBO dominated the top rated boxing events on cable (premium and/or regular) and Showtime did not crack the top 10.  Still, the competition between the two premium cable channels seemed to heat up in 2014.

With the Kovalev-Hopkins fight, we may see the cold war between Top Rank and Golden Boy softening.  Yet, Al Haymon still is one of the unseen, most powerful men in the business.

There were several notable lawsuits in 2014.

First, Main Events Promotions, the promoter for Sergey Kovalev sued Al Haymon, Golden Boy, boxer Adonis Stevenson and others for backing out of a potential fight between Kovalev and Stevenson.  The lawsuit was dismissed as the parties settled when Kovalev got his big fight against Bernard Hopkins. 

Next, Andre Ward lost a California State Athletic Commission arbitration hearing this past spring against his promoter Goosen Tutor Promotions.  Ward then turned around and sued him in Federal Court alleging violations of the Muhammad Ali Boxing Reform Act.

Mikey Garcia sued Top Rank alleging issues with his contract including violations of the Muhammad Ali Boxing Reform Act.  The lawsuit was transferred to Nevada as Garcia originally filed in California.

Don King was found in breach of contract when his fighter failed a drug test for an event in Russia in 2014.

In addition to these lawsuits, there were major shakeups at Golden Boy with former CEO Richard Schaefer leaving Golden Boy.  But, it appears to be a messy divorce with Golden Boy seeking $50 million in private arbitration.

Just like MMA, 2015 should be an interesting year for boxing.

With Pacquiao fight Saturday, ongoing question of whether PPVs are sustainable

November 22, 2014

With Manny Pacquiao returning to PPV Saturday night, the standard question of whether PPVs are worth it surfaced.

In a Newsday column published this week, there are quotes from both boxing and UFC executives which address the question of PPV as a viable platform. The conclusion appears to be that it takes a big event for people to purchase PPV.  This is something most of us already knew.  The column acknowledges that with the internet and social media, there are more ways to follow a PPV card without purchasing it.  Also, more people are content with highlights they may be able to obtain legally online.

UFC exec Marshall Zelaznik is quoted in the piece and stated that it’s up to the UFC to “figure out how to create and develop content that will make people not want to miss it.”  He went on to say that the UFC has to do “the right job to respect the consumer, to give them something that’s valuable and worth paying for.”

Dana White recently acknowledged this year’s PPV buy rates have been low and Floyd Mayweather’s PPV reputation has been affected with the underwhelming business done under the Showtime banner (except of course for The One).  Still, one big PPV event can mean a major windfall for the company.

On Saturday night, Manny Pacquiao is on PPV once again against an unknown in Chris Algieri.  Conspicuously, there has been little done in terms of promoting the fight.  Unless it has gone under the radar, there are no Tecate promotions and $25 rebates this time around.  The usual three rounds of HBO 24/7 has been limited to just one.  Even the replays of past Pacquiao fights have been limited on HBO and the Audience Network as Bradley-Pacquiao II is replayed.  Additionally, Algieri-Provodnikov has been replayed.

Payout Perspective:

There’s nothing new in the column related to the current state of PPV except the quotes from the execs.  It’s clear that the challenges of getting fans to buy PPVs are getting harder considering the amount of content out there, social media and the ability to see highlights that will satisfy one’s need to watch the event.  Are there too many PPVs?  Boxing has added several PPVs to the mix this year which may sway your mind about that question.  Certainly, many MMA fans have their opinion on the UFC PPVs.  As for Saturday’s event featuring Pacquiao, it will be interesting to see how many Pacquiao die hards will pay the $70 to watch.

Kovalev-Hopkins draws 1.328 million

November 11, 2014

According to Nielsen, Saturday night’s fight on HBO featuring Sergey Kovalev and Bernard Hopkins drew an average of 1.328 million of the network’s subscribers.  The rating makes it the second-highest rated boxing event this year next to Chavez-Vera II.

A couple weeks ago, ESPN’s Dan Rafael compiled the highest-rated fights of 2014.  Rafael reports that the peak for Saturday’s fight was 1.397M.  Additionally, the undercard fight on HBO featuring Sadam Ali and Luis Carlos Abregu drew 882,000 network viewers.

  1. Chavez-Vera 2(HBO) 1.39M (peak 1.53M)
  2. Kovalev-Hopkins (HBO) 1.328M (peak 1.397M)
  3. GGG-Rubio(HBO) 1.304M (peak1.323M)
  4. Crawford-Gamboa(HBO) 1.208M (peak 1.286M)
  5. Marquez-Alvarado(HBO) 1.198M (peak 1.322M)
  6. Donaire-Walters(HBO) 1.088M
  7. Provodnikov-Algieri (HBO) 1.017M
  8. Salido-Lomachenko(HBO) 1.017M
  9. Kovalev-Agnew(HBO) 1.006M (peak 1.048M)
  10. Postol-Aydin(HBO) 1.002M (peak 1.1M)
  11. Kovalev-Caparello(HBO) 990,000 (peak 1.052M)
  12. GGG-Geale(HBO) 984,000 (peak 1.048M)
  13. Pascal-Bute (HBO) 982,000
  14. Garcia-Herrera (Showtime) 972,000
  15. Stiverne-Arreola 2 (ESPN) 940,000

Kovalev-Hopkins moves past GGG-Rubio as second on the list.  The fight was dominated by Kovalev who put Hopkins down in the first round and controlled the rest of the fight.

Payout Perspective:

These are great numbers for a fight which pitted the 49 year old Hopkins against the surging Kovalev.  It was a fight that may be the olive branch that might end the cold war between Golden Boy and Top Rank which would be a bonus for the fans.  The viewership by HBO was likely due to the outlier that is Hopkins as there were several glowing articles about him (including a very good New York Times Magazine piece by Carlo Rotella).  There was also a 24/7 episode featuring the two fighters.  We will see now where both fighters go from here.

Top Rank seeks to dismiss claims in Garcia’s lawsuit

October 20, 2014

This past Friday, attorneys for Top Rank Boxing filed a Motion for Judgment on the Pleadings in U.S. District Court in Nevada seeking to dismiss a bulk of boxer Mikey Garcia’s lawsuit.

Garcia’s lawsuit was originally filed in Riverside County (CA) Superior Court.  Top Rank lawyer’s removed the case to Federal Court in Nevada via a procedural rule allowing such transfers based on the lawsuit dealing with federal legal issues (i.e., Muhammad Ali Act).  Garcia alleged that his promotional contract with Top Rank violated California law and the state’s strong public policy to protect California-based boxers from being taken advantage of by promoters and managers.  In the lawsuit, 3 of California’s claims relate to violations of California law.  Garcia claims that the promotional contract with Top Rank violated California’s Boxing Act and Professional Boxing Rules and California Labor Code section 2855.  He also claimed it was a violation of California’s restraint on competition.

Top Rank has moved for the court to make a judgment to dismiss Garcia’s claims based on the boxer’s claims under state law in California.  Essentially, Top Rank argues that Garcia entered into contracts with the promotion that state that the contract was governed by the state of Nevada.   Thus, any claims Garcia makes that violate California law should be dismissed since the contract is based on Nevada law.

Basically, Top Rank argues that despite the fact that Garcia is a resident of California and has had events where he fought in California; the contract dispute should be governed by the state of Nevada.  As such, Garcia’s legal claims related to violations of California law should be dismissed.

Top Rank argues several reasons why Nevada law should prevail under the terms of the contract. Namely, the terms of the contract dictate it, Garcia fought in Nevada and his manager does business in Nevada.  Also, Nevada law would not contradict California law.  It also cited the fact that prior boxing contracts with choice of law provisions are typically enforced by boxing commissions and courts.  Notably, it cited Robert Guerrero’s lawsuit against Golden Boy Promotions in which Guerrero lost his legal battle allowing the parties to settle their case in New York per the terms of the contract.  Guerrero argued that Top Rank did not use the   appropriate CSAC forms and the case should be heard in California.

Payout Perspective:

The motion to dismiss a portion of Garcia’s lawsuit was not surprising.  The legal strategy here was that Top Rank transferred the lawsuit to federal court and out of California where the state laws would seemingly favor the boxer.  Once the case was in Nevada, it sought to dismiss the California-specific claims.  Certainly, prior cases reflect the fact that Top Rank had the right, based on the contract, to seek out the appropriate governing law.  Whether or not the Court will grant the motion this time is another issue.

MMA Payout will keep you posted.

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