Golden Boy sues Haymon for antitrust violations

Golden Boy Promotions LLC and boxer Bernard Hopkins filed suit this week against Al Haymon and a variety of Haymon’s businesses and associates with respect to violations of the Sherman Antitrust Act.  The lawsuit was filed in federal court in Los Angeles.

The lawsuit paints the picture that many competitors have accused Haymon of for some time.  He is attempting to monopolize professional boxing in the United States and drive out all competition.  The lawsuit accuses Haymon of “blatantly” ignoring the “firewall” imposed by federal (specifically the Muhammad Ali Boxing Reform Act) and state laws which preclude a manager also acting as a promoter for a fighter.  The lawsuit claims that he has forbidden “hundreds of boxers” he manages from signing with another promoter.

The lawsuit names Waddell & Reed Financial, Inc. and Waddell & Reed, Inc. as defendants that financed and aided Haymon through an investment fund that funded the boxing enterprise.  Plaintiffs claim that these defendants provided more than $400 million dollars to finance Haymon.

The lawsuit claims that Haymon, et. al have created a “tying” relationship in violation of antitrust laws.  This is done through agreements affecting to separate relevant markets.  The first market is for management of Championship-Caliber Boxers and the market for promoters.  As described in the Complaint, the management market is the “tying” market whereas the promotion market is the “tied” market.  Essentially, the fact that Haymon manages so many fighters it affects the promotions market since he has exercised control over the direction of each fighters’ career.

The Complaint filed by Bertram Fields of Greenberg Glusker Fields Claman & Machinger, LLP in LA states that Haymon acted as an unlicensed promoter.  In fact, the Complaint cites an LA Times article which states that Haymon was the “main promoter” for the Floyd Mayweather-Manny Pacquiao fight.  The scheme articulated by Plaintiffs is that Haymon is using his dominance in one business to “take over and monopolize another business that federal and state law prohibit them (Haymon, et. al) from even entering.”

Plaintiffs are seeking damages in excess of $100 million which, according to relevant statutory law, could lead to treble (3 times) damages.  Thus, the lawsuit could be for more than $300 million.  In addition, Golden Boy is seeking an injunction from Haymon’s continued promotion.  This possibly could mean the severing of his multi-network affiliations with airing Premier Boxing Champions.

Perhaps not a coincidence, the Oscar de la Hoya led Golden Boy filed the lawsuit on Cinco de Mayo.  Plaintiffs seek a jury trial.

Payout Perspective:

We will have more on this in the weeks to come but if you were to compare this lawsuit to the one filed by the former UFC fighters, I would tend to believe that this antitrust claim has much more of a bite to it. Although it’s likely to sustain a Motion to Dismiss from Haymon’s lawyers, I think it has a better chance of making it to the discovery stage of the lawsuit.  We shall see how this will go.