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.

Canelo Alvarez signs deal with HBO

September 24, 2014

Boxer Canelo Alvarez has signed a muli-fight deal with HBO which will begin on December 6th or December 13th on the network.  The deal is a major move in the world of boxing as Alvarez, considered the future of boxing, and a Golden Boy promoted fighter has joined the network dominated by fighters promoted by Top Rank.

Either date for the Alvarez fight will compete with UFC shows on the same dates.  UFC 181 will feature the newly revamped main event of Johny Hendricks-Robbie Lawler on December 6th and the following Saturday will be the UFC on Fox show on the network.

The LA Times reports that the fight could take place in either Houston’s Minute Maid Park or Reliant Stadium.

Payout Perspective:

The move follows a different path for Golden Boy as Oscar de la Hoya has retaken the helm of the promotion.  Earlier this year, Bernard Hopkins decided to take a fight with HBO fighter Sergey Kovalev over Showtime’s Adonis Stevenson.  Kovalev’s promoters had sued Stevenson, his manager, Al Haymon and Golden Boy as they claim Stevenson had backed out of a potential fight.  Alvarez heading to HBO is good news for HBO as it gets one of the most popular fighters in the sport.  One may argue that Alvarez was one of the main reasons that his fight with Floyd Mayweather set attendance and PPV records.

Main Events dismisses lawsuit against Golden Boy, et al.

August 4, 2014

The parties in the lawsuit involving promoter Main Events and Adonis Stevenson, Al Haymon, Golden Boy, Showtime and Stevenson’s manager have been dismissed per a letter sent to the Court on Saturday morning.

As we reported, the lawsuit filed this past May was based on alleged agreement for Main Events and their fighter Sergey Kovalev to face Adonis Stevenson what was anticipated as a big money fight on HBO.  However, Stevenson signed on with consultant Al Haymon and took a fight under the Golden Boy banner.  After the schism within Golden Boy, it was believed that the fighter left with Haymon.

A lawsuit was filed by Main Events claiming breach of contract, breach of fiduciary duty, fraud, tortious interference and interference with prospective economic advantage premised upon emails between Main Events and Stevenson’s manager. Main Events claimed that the emails constituted a contract while the defendants claimed that the emails were not a contract as other details needed to be hashed out before a contract could be signed.

As one might expect, the defendants filed a Motion to Dismiss based on their theory that the emails did not constitute a contract.  The court allowed Main Events to Amend its Complaint on August 4th but decided to settle the case.

In a letter which looks to be sent on Saturday morning, August 2nd, counsel for Main Events let the court know of a settlement and sought a cursory request to extend the deadline to file an Amended Complaint in the event the settlement fell through.

Memo Endorsement Re Dismissal

As a result of the settlement, Kovalev faces Bernard Hopkins this fall which will be co-promoted by Golden Boy and Main Events.

Payout Perspective:

It appears that all is well that ends well.  It’s clear that Kovalev’s promoters, Main Events, wanted to be made whole based upon the feeling of being left with nothing after Stevenson signed with Al Haymon.  The Hopkins fight is a good substitute for Stevenson.  Moreover, the legal claims made by Main Events were tenuous especially with the theory of a contract based upon emails. Instead of spending money on legal bills, the parties were able to negotiate an alternative.

Golden Boy, Haymon file motion to dismiss claims in Main Events lawsuit

July 25, 2014

Al Haymon and the rest of the defendants sued by promoter Main Events for allegedly breaching a contract for a fight between Adonis Stevenson and Sergey Kovalev have filed motions to dismiss the lawsuit.  However, the Court has allowed Main Events to amend its Complaint which may render the motions moot.

Some background on the lawsuit is here.

Haymon, Showtime Networks, Inc. and Adonis Stevenson filed a motion requesting an oral argument be heard in the motion to dismiss the Complaint.  In general, in federal court, most preliminary motions are decided on the moving papers unless oral argument is requested.  Even then, the Court may deny a request.   In addition, Richard Schaefer filed a motion to dismiss as well under the theory of respondent superior.

Essentially, Haymon et al. argue that there was no valid contract and as a result the Complaint filed against them should be dismissed.  Since there is no contract, the allegations of tortious interference with a contract and interference with economic prospective advantage must be dismissed.  Additionally, defendants claim that it lacked the requisite malice and intent needed for these claims.

The overarching issue is the lack of contract agreement.  The defendants cite an email which preceded the purported email agreement between Stevenson’s promoter and Main Events.  The email indicates that there was an agreement to agree on terms but details needed to be hashed over by attorneys at a later date.  According to the defendants’ brief, in New Jersey, an “agreement to agree” upon material terms at a future time is an unenforceable indefinite promise.

Golden Boy also filed a motion to dismiss the tortious interference with contract and interference with prospective economic advantage claims as well.  Golden Boy joined the motion of the other defendants but argued in addition that it was not responsible for Schaefer’s conduct on the basis of respondeat superior as the allegations occurred after Schaefer’s resignation.  Basically, Golden Boy attempts to absolve itself from any conduct Schaefer may have done while as CEO as it pertains to dealings in the Stevenson-Kovalev deal.

While these Motions to Dismiss were filed, the Court allowed Main Events to submit an Amended Complaint no later than August 4, 2014 (which would make it the Second Amended Complaint).  Discovery is stayed (halted) until further action from the Court

Payout Perspective:

As predicted, defendants have filed a Motion to Dismiss citing no formal contract.  While emails between parties may be considered a binding contract, defendants make the argument that the terms were not definite and were only an “agreement to agree.”  However, the news that Main Events may amend its Complaint may mean it will provide further definitive information on its claim.  MMA Payout will keep you posted on the lawsuit.

Showtime halts releasing PPV buy rates

July 21, 2014

Showtime’s Stephen Espinoza has announced that it will withhold upcoming PPV buy rates due to the controversy surrounding the Floyd Mayweather-Marcos Maidana PPV.  Espinoza told BoxingScene.com that the buy rates will only be released if the event sets a PPV record.

The Mayweather-Maidana PPV reportedly received 900,000 PPV buys although ESPN’s Dan Rafael reported it sold between 800K-900K PPV buys.  It should be noted that Espinoza and Rafael have had twitter beef in the past but that does not necessarily mean that Rafael’s report is off.

Espinoza explained his rationale in saying that the PPV buy rate speculation seemed to become “bigger than the event itself.”  Basically, Espinoza believes withholding the numbers would reduce misrepresentations about the PPV performance and that certain figures would indicate some sort of failure for the event.

At a time when boxing is starting to feel the PPV strain, it’s an interesting move on the part of Showtime.

Payout Perspective:

Imagine the outrage if Dana White were to tell media that they would not release PPV buy rates or even talk about that speculation.  What do you think of the move by Showtime?  Does it stop talk about PPV buys?  While the move helps control the message, it also doesn’t end speculation.  Certainly, not releasing information allows the blanket “you’re wrong” when it comes to any reports of PPV buys.  Yet, this tact seems like the company is hiding something as well.

Boxing asks what UFC fan has been for a while: are there too many PPVs?

July 14, 2014

Boxing writer Steve Kim of the new Undisputed Champion Network web site wrote an article on whether boxing has too many PPVs on the eve of Canelo Alvarez’s third appearance on PPV within 12 months.  The question is not new to UFC fan as they have been asking the question for some time.

For the UFC fan, UFC 174 exemplified the thesis that there are too many PPVs.  Preliminary reports have that PPV featuring Flyweight champ Demetrious Johnson anywhere between 95,000 to 125,000 PPV buys.  Regardless of where that number ended, it was the lowest output for a UFC PPV since 2006.  It reflects the new market for PPV in the UFC.  Fans will pick and choose which cards they want to purchase and it’s unlikely we’ll see 1 million PPV buy main events in the near future.

Kim talked to Showtime’s Stephen Espinoza prior to Canelo-Lara:

“I think we’re having a confluence of pay-per-views really, simply because we have three or four fighters who can legitimately carry a pay-per-view and they’ve decided to make the decision to go there,” said Stephen Espinoza, Executive VP and GM for Showtime Sports and Event Programming, whose company is distributing this weekend’s event. “As for the network, we’d always prefer to have everything on the network. There’s certain realities which make that unrealistic but ultimately, it’s the fighter and the promoter that make that decision of when they want to go pay-per-view, when they don’t.

Kim also questioned whether boxing can go down the UFC road:

Still, a pay-per-view a month? What is this, the UFC? Does boxing really have that many fights worthy of such a designation?

The cynical MMA fan would say that the UFC doesn’t have that many PPV-worthy cards yet the UFC offers monthly cards on PPV for $55 per event.

Payout Perspective:

For those that follow us, we touched on boxing beefing up its PPVs back in April.  If you were to replace boxing with MMA in the article, the issues would be the same with the exception that Espinoza comments place the issue on the fighter/promoter rather than the network.  In the UFC, the decision is all on the company whether it runs a PPV event and who will be on the card.  In my opinion, a reason for more PPVs in boxing is a trickle-down theory in combat sports. Fighter/promoter payouts can be mitigated if a fight is put on PPV.  Essentially profit margins are wider if you charge fans $60 for a fight rather than put it on subscription based television.  It seems like this is the strategy rather than the previous strategy of waiting for a big fight with two top names.  Certainly fighters have fought on HBO and Showtime in hopes that their career would ascend to a PPV.  In recent weeks, boxing has put on some exciting fights on both premium subscription networks.  So, the question is whether boxing fan will shell out $60-$75 for a fight that used to be on the networks.

 

Crawford-Gamboa on HBO Saturday receives 1.2M viewers

July 1, 2014

ESPN reports that Saturday night’s HBO live boxing event featuring lightweight Terence Crawford defeating Yuriorkis Gamboa scored a rating of 1.208 million HBO subscribers with a peak at 1.286 million.

The Crawford-Gamboa fight was a back and forth action-packed fight.  It was the second week in a row that had an entertaining fight as Robert Guerrero and Yoshihiro Kamegai put on a slugfest on Showtime the preceding week which drew 614,000 Showtime viewer average.

As reported by ESPN’s Dan Rafael, only Chavez, Jr-Vera II did better this year.

Payout Perspective:

The fights on HBO Saturday coincided with UFC Fight Night 44 which received just 702,000 viewers on FS1.  The HBO fights featured Terence Crawford fighting in his hometown of Omaha, Nebraska.  According to Rafael’s report, it drew 10,943 for a gate of $500,000.  It was a good draw for the hometown crowd.  This makes it two weeks in a row in which boxing had two “Fight of the Year” fights.  Although Guerrero-Kamegai may have drawn less, it was nonetheless a hard fought fight.

 

Main Events sues promoter, Schaefer and Stevenson

June 30, 2014

MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev.  The lawsuit centers around the involvement of boxing insider Al Haymon.  It was filed last month with little occurring in the lawsuit so far.

The lawsuit was filed last month and has not seen much movement in the initial filing at this point.  The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events.  The promotion is owned by Kathy Duva.  As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.

The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.

To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson.  The deal was allegedly sealed with emails in late January 2014 between Duva and Michel.  The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee.  The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.

However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev.  Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.

The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.”  It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy.  As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together.  The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.

Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.

The legal claims:

Breach of Contract

Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.

Breach of Fiduciary Duty

Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.

Fraud by Stevenson’s Promoter

Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.”  The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara.  Stevenson fought Fonfara in late May on Showtime.  In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.

Tortious Interference with Contract

Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.

Interference with Prospective Economic Advantage

Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.”  Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson.  But there was interference which caused Stevenson to back out of the agreement.

Payout Perspective:

This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy.  Actually, here its Main Events.  Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies.  The latest has a Summons issued to Schaefer in Laguna Beach, California.  A  pretrial conference that was to occur last week has been pushed to July 11th.

As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach.  Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.

The lawsuit underscores the power of Al Haymon in the boxing industry.  It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime.  As many know, Haymon advises Floyd Mayweather.  Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters.  The Complaint does not delve into this violation as it is not a plead cause of action at this point.  However, if discovery commences in this lawsuit, we may see allegations of specific violations.

It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.

Golden Boy and Schaefer heading to arbitration

June 26, 2014

ESPN reports that Golden Boy Promotions has requested arbitration against former CEO Richard Schaefer.  According to the report, De la Hoya and Golden Boy are requesting $50 million in damages from Schaefer although no allegations have been reported as to the claim.

The case is being sent to private arbitration per the terms of Schaefer’s employment agreement with Golden Boy.  It likely had a clause that if there was a disagreement, in lieu of filing a lawsuit, the parties would agree to go to arbitration which is theoretically faster and less expensive.  Thus, no lawsuit and it is unlikely that the general public will not know much of the evidence and testimony unless it is leaked.

Payout Perspective:

While we may not know the claims against Schaefer, the speculation that Schaefer and Al Haymon may go into business together may be one of the claims Golden Boy is making.  Golden Boy might claim that Schaefer breached his fiduciary duty as CEO by not acting in the company’s best interests.  The recent Main Events lawsuit filed against Al Haymon paints the picture that Schaefer and Haymon have worked together (more on this lawsuit in the coming days).  The legal action is not surprising considering the public departure of Schaefer and other staff as well as Floyd Mayweather.

Alvarez-Lara PPV also in theaters July 12

June 16, 2014

The July 12th PPV between Canelo Alvarez and Erislandy Lara will be shown in movie theaters as well as on Showtime PPV.  In conjunction with Fathom Events, the Showtime/Golden Boy card will be in over 200 theaters across the country.

Fathom Events is the company that has worked with putting UFC PPV events in theaters in the past.  Tickets in my area are going for $18 per ticket.  It provides fans another option to ordering another $60 PPV.

Canelo-Lara

Payout Perspective:

The move to put this PPV in theaters reflects an effort to promote Canelo Alvarez as the top star in its stable.  Alvarez-Lara does not sound like a huge selling PPV event to the casual boxing fan despite the popularity of Alvarez.  However, giving Alvarez as much exposure as possible is the likely reason for the extra investment.  With more boxing PPVs this year, the theater option gives some fans an option in watching this fight.

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