Oklahoma congressman Markwayne Mullin announced that he will sponsor a bill that seeks to amend the Muhammad Ali Boxing Reform Act (“Ali Act”) to include mixed martial arts. The news could be big for the sport of MMA, its fighters and supporters. However, one might be wary of the practical effects of the Ali Act based on prior litigation.
Background on the Ali Act
Due to concerns with the exploitation and anticompetitive practices occurring in the boxing industry, the Ali Act was signed into law on May 26, 2000. According to the legislative history, Congress was particularly concerned with the lack of checks with contracting power. The original Ali Act was introduced by Senators John McCain and Richard Bryan.
Its stated purpose was three-fold. First, it was to protect the rights and welfare of boxers. Second, it was to aid state boxing commissions with the oversight of the sport. Finally, it was to promote honorable competition in professional boxing and enhance the overall integrity of the industry.
The Ali Act mandated major reforms in boxing including creating a “firewall” between managers and promoters, protecting boxers from coercive contracts and requiring disclosures regarding the bouts that they promote.
The federal law carries penalties including money damages, court costs and reasonable attorney’s fees and expenses. There is also the possibility of serving “not more than 1 year” in prison.
Here are some notable cases where fighters sued under the Ali Act. In all of the below examples, the cases were resolved prior to trial.
In August 2014, Andre Ward filed a lawsuit in the U.S. District Court for the Northern District of California against his promoter, Goossen Tutor Promotions, LLC (“GTP”) and Dan Goosen. The lawsuit was premised upon violations of the Ali Act which require promoter disclosure to the fighters. In his Complaint, Ward alleged that GTP had not made timely disclosures per the Ali Act for any of his fights from 2004 through 2012.
Pursuant to 15 U.S.C. § 6307e(b) of the Ali Act:
A promoter shall not be entitled to receive any compensation directly or indirectly in connection with a boxing match until it provides to the boxer it promotes:
(1) the amounts of any compensation or consideration that a promoter has contracted to receive from such match;
(2) all fees, charges, and expenses that will be assessed by or through the promoter on the boxer pertaining to the event, including any portion of the boxer’s purse that the promoter will receive, and training expenses; and
(3) any reduction in a boxer’s purse contrary to a previous agreement between the promoter and the boxer or a purse bid held for the event.
The lawsuit was an extension of continued discontent between fighter and promoter. Prior to the complaint, Ward and GTP went to arbitration twice in California. In both arbitrations held by the California State Athletic Commission, the Commissioner, ruled in favor of GTP.
[pullquote align=”right” cite=”” link=”” color=”” class=”” size=””]Congress was particularly concerned with the lack of checks with contracting power.[/pullquote]
The underlying grievance centered around an Exclusive Promotional Rights Agreement (“Promotional Agreement”) signed by Ward with GTP. The Promotional Agreement was to commence on September 8, 2012 and last three years. The issue was whether an injury which sidelined Ward should extend the terms of the Promotional Agreement. In the end, the State Athletic Commission agreed with GTP that it should.
Ward, clearly not happy with the ruling, filed the lawsuit.
It appears that the Ward-GTP battle ended in January 2015 as the parties stipulated to dismiss their case. Soon thereafter, Ward signed with Jay Z’s Roc Nation Sports as his new promoters. It was not until March 2016 that Ward returned to the ring.
Bantamweight boxer Joseph Agebko sued Don King and his promotional company under the Muhammad Ali Act in June 2012 citing that King’s promotional arm took more money than he was owed from his fights. According to Agbeko’s complaint, which was filed in the U.S. District Court of New Jersey, there were disparities in the amount he was paid versus the amount he was charged as fees and other charges were taken from his purse. Thus, for one fight he was paid only $4,000 but was charged $21,000. The lawsuit alleged that King deducted money from Agbeko’s pay without substantiating these deductions.
Agebko’s claims were based on the claim that King did not disclose payouts pursuant to Section 6307e(b)(1) of the Ali Act. In addition, he claimed that King was acting as promoter and manager, a conflict and violation of the Ali Act.
In a motion to dismiss Agebko’s First Amended Complaint filed on November 8, 2012, King’s lawyers claimed that Agbeko’s claims under the Ali Act were baseless. Attached to their motion, King’s lawyers included disclosures purportedly received by the fighter.
The motion makes a key distinction when interpreting the disclosure section of the Act. First, it notes that the Ali Act requires promoters “disclose only amounts they are ‘contracted to receive’ from a given boxing match.” It argues that it does not require promoters “disclose the actual dollar revenue they ultimately receive.” It further notes that the Act does not “require a promoter to supplement his disclosures.”
[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The practical issue here is that most fighters do not have the financial means to pay lawyers to fight big time promoters.[/pullquote]
The lawsuit did not go far after King’s motion to dismiss was filed as Agebko’s attorneys voluntarily dismissed their lawsuit on November 12, 2012.
One might only assume that either the parties settled prior to the need to file an opposition to King’s motion and/or Agebko voluntarily dismissed the lawsuit without settlement to avoid further litigation costs.
Bermane Stiverne sued King and his promotional company in November 2013 in the Southern District of New York. He sued under the Ali Act for allegedly being coerced into signing contracts which made King his exclusive promoter. He requested that the court void the promotional agreement he signed with King. Stiverne’s contention was that signing with King was a precondition to obtaining a fight with another boxer promoted by the same promoter. This would be in violation of Section 6307b(a)(1)(B) of the Ali Act. At the time, Stiverne was the World Boxing Council’s (“WBC”) No. 1 contender and sought a big payday with a fight with the heavyweight champion, Vitali Klitschko. Stiverne’s attorneys sought a preliminary injunction to prevent King from interfering with the opportunity for Stiverne’s manager to negotiate the title fight.
The Court denied the preliminary injunction request.
Stiverne’s lawsuit was met by King’s attorneys with a Motion to Dismiss his lawsuit and counterclaims citing breach of contract and tortious interference with a contract.
Stiverne’s case was voluntarily dismissed by Stiverne and according to reports he settled the case with King.
In May 2014, Garcia sued his promoter Top Rank Boxing under the Ali Act in federal court in Los Angeles. The case was subsequently moved to Nevada where Top Rank filed a partial summary judgment seeking to dismiss a number of claims including the Ali Act violation.
Garcia claimed that Top Rank engaged in managerial conduct after signing a 2009 promotional agreement. This would be in direct contradiction to the firewall, section 6308 of the Ali Act, that was established which prevents this conflict of interest. In addition, Garcia alleged he was not provided disclosures for his fights pursuant to the Act.
Top Rank filed a Motion to Dismiss Garcia’s lawsuit citing the claims as without merit. The promotion denied allegations that it served as manager and promoter. It also provided evidence that it gave Garcia the requisite disclosures required of promoters under the Ali Act. Top Rank made the distinction that the Ali Act does not require disclosure in connection with offering a bout, but only with an actual, scheduled fight.
The case has settled with the parties agreeing to dismiss the lawsuit. As a result, Top Rank released Garcia from his contract earlier this year.
The only court opinion to date which sided with a fighter was the case of boxer Jeff Lacy in his lawsuit against promoter Main Events Productions (see Main Events Prod., LLC v. Lacy, 358 F. Supp. 2d 391 (D.N.J. 2004)) The violations of the Ali Act relate to Lacy not receiving disclosures pursuant to section 6307e. In a motion for summary judgment, Top Rank argued that the disclosures went to Lacy’s manager. Premised upon agency law, Top Rank claimed that the delivery of the disclosures to the manager was sufficient. However, the court, reading the Ali Act’s plain language and legislative intent indicated that disclosing the payouts by a promoter from the event must be sent directly to the boxer. The court denied Top Rank’s summary judgment motion.
In addition to the court denying Top Rank’s motion, it also denied its Motion for Reconsideration related to the aforementioned motion.
Although the parties settled prior to trial, one might infer from the ruling that Lacy was able to obtain a favorable outcome from the lawsuit.
Arizona Senator John McCain, the original lawmaker that introduced the Ali Act, recently endorsed expanding the federal law to protect mixed martial artists. While Senator McCain’s sentiment to protect fighters is universal among all fight fans, it’s the practical impact of a law to do this which may be difficult. Similar to boxers, protecting MMA fighters from the unsavory nature of the combat sports business is central to the Ali Act.
However, certain measures should be made to allow accessibility of the Act for the individuals it seeks to protect. The above cases are just a handful of examples of fighters that have tried to sue under the Ali Act. The practical issue here is that most fighters do not have the financial means to pay lawyers to fight big time promoters. In addition, under the Ali Act there are flaws which still do not provide the protection to fighters. As shown above, promoter disclosures of payouts are a continued issue for boxers. There are also issues where the firewall of manager and promoter still seemingly exist creating the same problems boxers had before the law. While the Ali Act has provided a caution to unsavory business practices in boxing, there are still instances of problems within the industry. An extension of the law to MMA should include revisions to the existing legislation.