On Thursday, a federal judge granted Al Haymon’s motion for summary judgment and dismissed Golden Boy Promotion LLC’s antitrust lawsuit filed in federal district court in Los Angeles against the promoter. The lawsuit concerned Haymon’s business practices related to his management of boxers and his startup boxing promotion, Premier Boxing Champions.
The order dismissed one of two lawsuits filed against Haymon and his business entities Haymon Sports and Premier Boxing Championship (“PBC”). Top Rank Boxing previously filed suit in the same venue concerning the similar issue. After a motion to dismiss its complaint was granted but with the right leave to amend, the parties settled the lawsuit.
Haymon and Golden Boy were set for trial to start on March 17, 2017. Due to a prior Settlement Agreement when the two entities (Haymon Sports and Golden Boy severed its business relationship) the covered period in which the claims took place occurred after January 1, 2015.
In the lawsuit, Golden Boy alleged that Haymon attempted to monopolize the boxing market for Championship Caliber in violation of antitrust laws, specifically Section 2 of the Sherman Act. Also, Golden Boy alleged violations of Sherman Act Section 1 as it relates to “tying” services concerning the purported management of fighters tied to promoting their fights. The lawsuit alleged that the services were anti-competitive and predatory conduct for the market of boxers through several means including:
- requiring boxers who want to be managed by Defendants to sign long-term exclusionary contracts giving Defendants total control over their boxing careers, including the exclusive right to render any boxing-related services and the right to veto any boxing-related contract;
- preventing boxers from signing promotional agreements with Golden Boy or any other “legitimate” promoter;
- entering into multi-year exclusive contracts with key television networks;
- acting as both a boxing manager and promoter in violation of the Muhammad Ali Boxing Reform Act (the “Ali Act”), 15 U.S.C. §§ 6301, et. seq.;
- engaging in predatory pricing by “reversing the ordinary flow of money from the network to the promoter” and instead buying air time on key television networks; and (6) blocking Plaintiffs’ access to venues for boxing bouts.
The following are two examples of the exclusionary contract language:
(ii) Fighter Actions. From and after the Effective Date and continuing for the duration of the Term, Fighter shall not (directly or indirectly) enter into any agreement or arrangement (written or verbal), or grant any authority or power, relating to any Boxing Activities, without the prior written consent of Manager, subject to applicable law.
(iii) Promotional Agreements. If during the Term hereof, Fighter desires to enter into any promotional agreement or bout agreement to which Fighter is not then bound, selection of the promoter shall be at the sole discretion of the Manager.
In essence, Golden Boy claimed that Haymon made boxers sign and fight Haymon-managed boxers only. It also had the ability to veto any proposed fights or neglected to negotiate for potential fights that were outside the scope of Haymon-controlled fighters. Golden Boy claimed that Haymon used “sham” promoters to facilitate its scheme and boxers had to work through these Haymon-friendly promoters.
According to Haymon, his PBC promotion was an effort to bring boxing back to “free television.” When Haymon could not secure a television deal through the traditional “license fee” in which networks pay the promotion for its product, Haymon decided to pay networks (also known as “time buys”) to air PBC on a variety of networks including deals with SpikeTV, ESPN, FS1 as well as Fox, NBC and CBS. Golden Boy argued this method was anti-competitive monopoly as it foreclosed other promotions from airing on those networks.
In addition, Golden Boy argued that Haymon was the true promoter of the PBC fights promoted by others as they contracted with the television networks for airtime, chose the venue, purchased advertising on television and the internet to stimulate the interest for PBC events, entered into agreements with sponsors for television exposure, received revenue from advertising sales and sponsorship sales; and paying the boxer’s purse. Haymon provided declarations from its promoters stating that their duties were the same as for events that didn’t include Haymon fighters.
The Court did not find Golden Boy’s argument of a “tie” persuasive as the only evidence set forth by plaintiffs was “informal, vague and hearsay conversations” from Golden Boy’s President with several boxers. The opinion points out that Golden Boy did not depose these boxers to provide the substance of the anecdotal conversations. Moreover, the Court stated that Golden Boy did not provide evidence that it approached Haymon fighters with specific agreement to fight or promote.
Judge Walter noted that the number of televised boxing events has increased since the advent of the PBC. As for the alleged “tying” arrangement, the Court noted evidence of inter-promotional bouts between Haymon Sports and other promoters. Notably, the Court identified the big Manny Pacquiao-Floyd Mayweather fight on May 2, 2015. Pacquiao is promoted by Top Rank while Mayweather was advised by Haymon.
Moreover, the Court held that Golden Boy did not demonstrate that Haymon possessed economic or market power in the tying product. However, the Court did find plaintiffs’ expert’s market definition flawed. Specifically, it the product market fails to “encompass all economic substitutes of the product,” and “geographic market fails to extend to the area of effective competition where buyers can seek alternative sources of supply.” The Court did not find the report covered these key issues to define the relevant market.
Furthermore, Golden Boy claimed that Haymon was in violation of the Muhammad Ali Act because he served as both manager of fighters and promoter which would be considered a direct conflict in violation of the federal law geared to protect boxers. However, the Court found no antitrust injury as the Court noted that the Ali Act can only be utilized by fighters and/or a governmental agency. As a competitor, Golden Boy had no standing and no antitrust injury.
Analysis of the Ruling
Judge Walter dismissed the lawsuit in its entirety. Contrary to what Golden Boy had hoped, the Court found most of the tactics employed by Haymon and PBC actually helped boxing and paid boxers well. The claims set forth by Golden Boy appeared to be more of a complaint that the competition to promote would be difficult (e.g., more money would need to be spent to secure top fighters, strategy to be on television, etc.) Moreover, the Court looked at the pragmatic effect of PBC as the sport of boxing was back on major television networks and brought with it viewership. In its conclusion, the Court reminded readers that antitrust laws are meant to protect competition, not competitors.
The opinion takes the view that Golden Boy’s lawsuit is predicated on hardships of competing in the boxing market against an adversary with seemingly unlimited funds to expend and willing to be a “loss leader” with the end game of running out other competitors and turning the business into a profitable venture.
Whether it was a miscalculation of strategy with the identification of relevant markets, the lack of boxers willing to come forward to discuss issues with Haymon representation or just the inability to convincingly provide factual evidence to support a tying (or “tie out”) theory, Golden Boy did not have sufficient evidence to move forward according to the Court.
Notwithstanding an appeal, one might look to Golden Boy and other promotions like Top Rank being more aggressive in the marketplace after network exclusivity clauses were eliminated as part of PBC’s antitrust settlement with Top Rank Boxing. Golden Boy entered into a television deal ESPN to air Golden Boy boxing starting in March. The deal will be paid by sponsors (Tecate is the first major sponsor of the program) instead of a license fee paid by the network.
Haymon’s PBC venture has not turned a profit. In fact, it has lost money at an alarming rate. How much longer can PBC seep money without seeing returns, we shall see.