Legal Analysis: Al Haymon “The Rasputin of Boxing” Sued by Golden Boy for Numerous Anti-Trust Violations
By Bryanna Fissori
After decades of controversial conduct boxing promoter/manager Al Haymon is being sued for a plethora of anti-trust violations.
The plaintiffs bringing the causes of action against Haymon are Golden Boy Promotions (owned by Oscar De la Hoya) and Co-owner Bernard Hopkins. The case was filed May 6th in the U.S. Central District Court of California and all said and done, requests a roughly estimated $300 million in damages from the Defendants.
Filing of the complaint follows just two weeks on the heals of the Association of Boxing Commission’s request that Attorney General Loretta Lynch asking that the Justice Department conduct an investigation and take action against potential violations incited by Haymon. When asked if the review would have any bearing on the case Bert Fields, attorney for the Plaintiffs told BoxingInsider.com “Not directly; but it’s important that government play a role.”
The Plaintiffs referred to Haymon in the text of the complaint as “the Rasputin of boxing.” The introductory statement of the lawsuit makes powerful claims on the character of Haymon and his place in the boxing industry;
“Al Haymon, acting though his wholly owned companies and backed by powerful venture capital firms, seeks to monopolize professional boxing in the United States . . . [Haymon] has repeatedly violated the fundamental federal and state laws that regulate boxing and ensure fair competition, including the Muhammad Ali Boxing Reform Act and the Sherman Act. Haymon seeks to create a monopoly by illegal, predatory and anti-competitive conduct. He has blatantly ignored the “firewall” required by federal and state law to separate managers from promoters, by illegally functioning as both . . . and he has acted to cut off legitimate promoters not only from promoting boxers he manages, but also from essential network television of boxing matches and from the quality arenas necessary for the effective presentation of their bouts . . .”
Haymon manages over 100 boxers, two of his most high-profile being Floyd Mayweather Jr. and Amir Khan. Other Defendants in the case include Alan Haymon Development, Inc., Haymon Sports. LLC, Haymon Boxing Management, Haymon Boxing LLC, Haymon Boxing Media Group Holdings, LLC. Waddell & Reed Financial, Inc., Waddell & Reed, Inc., Ivy Asset Strategy Fund, WRA Asset Strategy, Ivy Funds VIP Asset Strategy, Ryan Caldwell and Does 1 through 20.
Golden Boy (Plaintiff) is a competitor of Haymon and asserts that the Defendant’s continual violation of the established regulations will irreparably harm the industry. Fields also told BoxingInsider.com that they will be considering adding additional plaintiffs to the suit. The complaint attempted established five claims for relief in the case.
Unlawful “Tie Out” in Violation of the Sherman Act
The Sherman Act serves to prohibit contracts in restraint of trade and thus prevent monopolistic practices. “Tying” is the arrangement between to parties in which the seller agrees to sell a product or service (in this case a contract) to the buyer only on the condition that the buyer either also agrees to purchase a different (tied) product from the seller or agrees not to buy from any other seller.
Tying is not per se unlawful in all cases, but is such if the seller (Defendant) has sufficient market power to restrain competition in the market, two separate services are involved, it affects a substantial amount of commerce or the transaction is conditioned on additional purchases.
The Plaintiffs assert that Defendants have created these illegal “ties” by selling services in separately defined markets that are relevant to one another, this being the market for management and that for promotion as related to champion-caliber boxers. They also assert that Defendant use monopoly power in said market for management and this has an adverse effect on potentially millions of dollars worth of industry commerce.
Conspiracy in Restraint of Trade in Violation of the Sherman Act
The complaint alleges, “Defendants have knowingly and intentionally engaged in an unlawful contract, combination, or conspiracy that has unreasonably restrained trade in violation of Section 1 of the Sherman Act.”
There are a multitude of “unlawful agreements” mentioned in the complaint, some of which include agreements between Haymon and Waddell, boxers, venues, television networks, advertisers, sponsors, and many others.
Other anti-competitive conduct asserted includes violation of the Muhammad Ali Boxing Reform Act 15 U.S.C. Section 1631 et seq. prohibiting the act of both promoting and managing. Such violation is a federal crime. It also alleges operation of the promotion through “sham” promoters and illegally obtaining excusive rights to boxers and network deals.
Attempted Monopolization in Violation of the Sherman Act
Plaintiffs assert that the Defendants have attempted to obtain a monopoly in the market for promotion of championship-caliber boxers, which violates Section 2 of the Sherman Act and if left unchecked Defendants have a high probability of obtaining said monopoly.
Injunctive Relief Under the Clayton Act
Plaintiffs assert that without injunctive relief the injuries to Plaintiff and the industry as a whole will continue. “Plaintiffs therefore seek equitable and injunctive relieve pursuant to Section 16 of the Clayton Act, 15 U.S.C. Section 26, to correct for the anticompetitive effects caused by Defendants’ unlawful and anticompetitive conduct, and other relief so as to assure that such conduct does not continue or reoccur in the future.”
Any unlawful business practice constitutes “unfair competition” under the California Business and Professions Code section 17,200 et seq. With California as the chosen jurisdiction, if any of the claims asserted as to the unlawfulness of Defendants’ actions, Plaintiffs will succeed on this cause of action.
Why It Matters to Boxing
The fear of most industry professionals is that having one man in control of all of the high-caliber fighters could result in a situation where they as well as other industry professional have no other choice to succeed in the market. If this sounds familiar you may be equating it to the sport of Mixed Martial Arts and a little company known as the Ultimate Fighting Championship (UFC).
Currently boxers make SIGNIFICANTLY more than MMA fighters. Whether or not that is the fault of one company is for another discussion, but the UFC has undergone FTC investigation and been found to be operating fairly. That being said, no matter how you argue it, the UFC is the top of the food chain for MMA. Should one promotion or person be allowed to absorb that same type of market share, it is not unrealistic that a similar situation could be born.
When asked what kind of response was expected from the Defendants, Fields replied, “They’ll fight this to the death.”