A hearing took place on Friday morning in a federal courtroom in Las Vegas regarding a status conference on a lawsuit filed by Vergil Ortiz, Jr. as well as a arguing Golden Boy Temporary Restraining Order preventing Ortiz from signing a fight this April against Jaron Ennis.
On February 11th Golden Boy filed an Emergency Motion for a Temporary Restraining Order and a Motion to Compel Arbitration.
The hearing before the Honorable Cristina D. Silva evaluated Golden Boy’s request that it prevent Ortiz from breaking his contract with the promotion. Ortiz filed a lawsuit last month claiming that Golden Boy had lost its long term distribution agreement with DAZN and there was no other alternative. Thus, citing a clause in his Promotional Rights Agreement, he argues he could breach the contract.
In the event that Promoter’s distribution relationship with DAZN terminates, for any reason, and Promoter does not have an agreement in principle in place for an exclusive distribution relationship with an alternative broadcaster, then Boxer shall have the right to terminate this Agreement.
Golden Boy discovered that Ortiz was about to sign a “long term” fight deal with Matchroom Boxing (or possibly a third party) and fight Ennis this April. It is seeking an injunction from the Court requesting that it stop Ortiz from breaching contract and signing elsewhere.
One of Ortiz’s arguments is that Golden Boy does not need an injunction in this issue, rather if Golden Boy alleges a breach of contract occurred, it should file a lawsuit for money damages. Thus, no injunctive relief is necessary.
Golden Boy argues that the lawsuit filed by Ortiz has caused irreparable harm since they argue that he would sign a long-term contract with another company. Eric Gomez of Golden Boy provided a Declaration which stated that Ortiz “services in connection with the Bouts are of a special, unique, unusual, and extraordinary character giving them peculiar value, the loss of which cannot be reasonably or adequately compensated by damages in an action at law and could cause Promoter irreparable damage and injury.” Thus, the case is much more than just a lawsuit for monetary damages, because more is lost with Ortiz.
Golden Boy believes that this case should be sent to mandatory arbitration based on the contract signed by Ortiz. Therefore, an arbitrator should decide the contractual terms. Golden Boy’s attorney did note that it would come before the Court seeking a temporary injunction to prevent Ortiz from signing with Matchroom Boxing or another promotional company.
Furthermore it Golden Boy argues:
If Ortiz enters into an agreement with third parties for the Ennis bout, monetary damages could not compensate Golden Boy for its lost broadcast relationships and agreements with DAZN and others, lost promotional opportunities, lost goodwill, and lost contractual leverage.
Golden Boy argues that the issue of irreparable harm should be decided by the arbitrator.
One of the issues during the hearing is the debate on the relationship between Golden Boy and DAZN. The primary issue in Ortiz’s decision to file a lawsuit seeking declarative relief was that the Golden Boy broadcast deal with DAZN had ended. This brought into question the language in the contract regarding a “distribution agreement” versus a “distribution relationship.” Ortiz argued for a strict adherence to the language of the contract stating that the contractual period between DAZN and Golden Boy had ended on December 31st. While the two companies continued to do business, there was no “long” term contract in place after the 31st. Golden Boy argued that DAZN and Golden Boy had been working together in 2018. The two companies have contracts ending on December 31st with new agreements occurring the following year but sometimes those contracts are signed in January but also later in February, March or even later. So, Golden Boy argues that a “contractual relationship” was still in place while Ortiz argues the opposite. Judge Silva questioned Golden Boy’s attorney about this distinction. Therefore, a key term is in question since the term has no definition within the contract.
Other notable issues during the hearing included the discovery that the Declaration of DAZN’s COO was not surprising to either party. Ortiz’s attorney argued that Golden Boy knew of Edward McCarthy’s dual role with Matchroom and DAZN. Thus, it is a “win-win” proposition for him according to Golden Boy. But Golden Boy argued that with Ortiz no longer a part of the GB stable, it makes it less likely that a long-term deal with Ortiz will occur.
Golden Boy requested a 45-day TRO after the appointment of an arbitrator. Ortiz’s attorney stated that it was the first time they had heard about the request which they infer was too long. Ortiz’s side argued that it could turn around on the issue quickly since the points had been briefed.
Judge Silva stated that she wanted to issue a decision on the TRO on Friday but decided to hold off on issuing a written order in the coming days. She seemed to have paused due to the fact that Golden Boy’s Motion to Compel Arbitration is still pending with an opposition brief and reply still upcoming.
Payout Perspective:
In my opinion I got the impression that Judge Silva was siding with Ortiz here. While there is ambiguity with respect to the contract terms, the meaning of distribution agreement assumes a written contract, not an ongoing business relationship wherein parties engage in contracts. But, she also is thinking about the Motion to Compel Arbitration brought by Golden Boy. If she grants the Motion, the case goes to the arbitrator. Thus, the case may be sent to the arbitrator to determine the details of the contract and what that may mean. MPO will continue to follow.
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