Haymon-Golden Boy await judge ruling on MSJ

The Al Haymon-Golden Boy antitrust lawsuit filed in federal court in Los Angeles is set for trial on March 14, 2017 if the court does not grant the defendant’s Motion for Summary Judgment.

For a good refresher on what this case is about and the gist of the motion, you can read Paul Gift’s synopsis last month. We take a deeper dive in the legal issues of the motion below.

An oral argument for the motion was taken off calendar (i.e., cancelled) by the court this past November 28^th.  As of this date, there has been no ruling issued by the trial court.  Realistically, there is no timeline for the court to render a ruling on the motion except for the fact that there would likely be an opinion prior to trial documents needing to be filed with the court.

Haymon’s Motion for Summary Judgment

Haymon’s attorneys, and the attorneys for his entities that were also sued in this litigation argue that Golden Boy failed to establish a triable issue of fact of its attempted monopolization.  It essentially argues that there is no evidence of specific intent for a monopoly, Golden Boy failed to identify any anticompetitive or predatory conduct and Golden Boy misconstrues the concept of antitrust injury.

One of the claims set forth by GBP is that Al Haymon should be held individually liable for violation of the antitrust laws.  Haymon attorneys assert that Haymon could not be liable of antitrust injury because individual liability requires “inherently wrongful” conduct, a per se violation.  Haymon argues that attempted monopolization is not properly evaluated as a per se antitrust violation.

In an antitrust case, there are two ways a court looks at whether there is a violation of the antitrust laws.  The first is a “per se” violation and the second is the “rule of reason.”  Per se relates to conduct that is manifestly anticompetitive with limited potential for procompetitive benefit.  The rule of reason is the presumptive or default standard and the general standard it examines whether the procompetitive benefits outweigh the anticompetitive effect.

“Inherent conduct” is equated to a “per se” violation by Haymon.  In its moving papers, they state that courts have regularly dismissed claims against corporate officers in cases dealing with conduct that is permitted or even encouraged by the antitrust laws.  Here, the argument is that Haymon and his entities did not do anything wrong.

It also argues an “even if” scenario providing the hypothetical that if a court were to analyze the tying claim as a “per se” claim it would fail on the merits.  It first argues that there is no tie in the first place.  Haymon points out the similar Top Rank lawsuit in citing that Top Rank failed to prove as a matter of law that the two distinct services of promotion and managing were tied together.  The clause in the contract that is questioned is the provision that requires consent to enter into contracts.  However, Haymon’s attorneys point to the Canelo Alvarez-Amir Khan fight in May 2016 as an example of interpromotional fight making.  Also, the Floyd Mayweather-Manny Pacquiao case is another example which reflected the opportunity for a contracted Haymon fighter to work with another promoter.  Thus, the examples show that the contracts do not foreclose other promoters.

Haymon argues that the market described by GBP are artificial and are “illogical, divorced from the reality of the boxing industry, and fail to satisfy GBP’s burden to establish coherent markets in which the Defendants could possibly have market power.”  It states that “Championship-Caliber Boxers,” the market described by GBP in its lawsuit is not a recognized industry term.  Haymon attorneys identify the fact that the term was interpreted differently by multiple people within the boxing industry.  They also argue that GBP has not shown that there are barriers to entry in the markets for which they define.

Golden Boy Theory of Antitrust Injury

As you might recall Golden Boy brought a lawsuit against Al Haymon and his entities illegal tying of its managerial and promotional services.

As we wrote:

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.

Tying under Section 1 of the Sherman Act must show:

• There is evidence of a tie;
• There is evidence “of coercion” of purchasers to buy products or services;
• There is evidence of market power in a properly defined market.

Golden Boy opposes the motion on the grounds that Al Haymon is personally liable for antitrust injury.  It suggests that the standard for individual antitrust liability is met when an officer knowingly approves to each element of a claim whether or not the claim involves “inherently wrong” conduct.  It also states that it has ample evidence to support their tying claim as Haymon tied their management services to the rejection of competitors’ promotion services in favor of their own.  Also, it rebuts the assertion by Haymon that it has fabricated the relevant market definition.  It also contends that there are “significant barriers to entry” in the relevant markets.  Finally, it states that the Haymon acted as promotes as well as managers.

GBP claims that issues of fact exist as it relates to the evidence of exclusionary contracts which “tie out” others.  It also claims that its expert’s testimony provides ample evidence of the markets in the industry and that they are controlled by Haymon.

In its opposition to the motion for summary judgment, GBP argues that Haymon’s model of paying supracompetitive sums is not a “rational business model, unless there is to be a payoff.”  The “payoff” as concluded by GBP is the monopoly of the boxing promotion business, controlling the television market for boxing and “invoking supracompetitive pricing once dominance is obtained.”

The opposition points to “draconian exclusionary terms” in contracts which give Haymon Sports control over all aspects of the boxer’s career and a veto right over all boxing related contracts.  In its pleadings, Haymon does admit that a “standard management agreement gives it the right to approve the boxer’s selection of promoter, it has never exercised this right to require or coerce its boxers to use or not use a particular promoter.”  This seems to negate, but confirm terms within the Haymon boxing management contract that reflects control over the boxer’s selection of promoter.

GBP also argues that Haymon has a tying arrangement in which one must refrain from accepting another product.  Here, GBP contend that Haymon tied his management services to the rejection of competitors’ promotion services.  They suggest that fighters under contract with Haymon know that they cannot work with other promoters outside of Haymon.  GBP indicates that this is a triable issue of fact that would

Payout Perspective:

The standard on a motion for summary judgment is to weigh all of the pleadings and facts within and weigh them in the “light most favorable to the non-moving party (in this case GBP).”  If the court determines that there are no genuine issues of material fact, it will grant a dismissal as a matter of law.  However, a court will deny a motion for summary judgment if there are pending issues of fact.

Whether or not Haymon could be individually liable will be an issue the court will need to determine based on the facts provided and the legal arguments made by the parties.  While Haymon’s attorneys argue that personal liability cannot be assessed in these matters, Golden Boy argues that case law supports the contention that Haymon is personally liable.  As for the business model, the fighter contracts will be an issue for the court to consider as well as GBP’s expert testimony which addresses the relevant markets.

Once a decision is rendered, MMA Payout will let you know