Enemies at the Gate

This week, Top Rank, the promotional outfit run by Lee Harvey Oswald-era holdover Bob Arum, launched a $100M lawsuit against Al Haymon and his various enterprises. The lawsuit, which can be read in full here, alleges that Haymon has engaged in assorted illegal activities, including flagrant violations of the Muhammad Ali Act, the frequently invoked but rarely prosecuted law designed to preserve a boxer’s financial interests by keeping promoters and managers on opposite sides of the bargaining table. This is the third high profile lawsuit against Haymon by one of his main competitors. It would appear that, finally, his enemies are at the fortress’ gate.

The grievance, which is an entertaining read, alleges that Haymon has violated numerous antitrust and anti-competition laws, most of which the majority of people reading this article are probably aware of. Boxing insiders have long known Haymon is operating in a grey area, a fact that was hilariously confirmed (and documented in the lawsuit) when Julio Cesar Chavez Jr. Instagrammed a picture of a cheque for $1,750,000 made out to him by Haymon Sports. The cheque explicitly reads ‘Purse’ on it, despite the fact that purses are paid by promoters, and not managers, which Haymon purports to be. The grievance claims he uses “sham” promoters like Lou DiBella to create the illusion of propriety, when in fact it’s Haymon who makes every decision.

Arum’s lawsuit accuses Haymon and his “conspirators” of various improprieties.

The suit also alleges that he participates in predatory “payola” business tactics, which is an old strategy once popular in the music business. To eliminate competition and popularize their artists and content, record companies would pay stations to broadcast their music, instead of stations compensating record companies for the right to play their songs. The suit says that Haymon, a former music mogul, is paying television networks to broadcast his fights. This contradicts the traditional flow of money in boxing, which, in theory, has a network pay the promoter for the right to broadcast a bout, and a promoter pay the fighter and manager for their participation.

Top Rank is worried about the future of its business, as is Golden Boy, which launched its own $300 million lawsuit against Haymon in May. Both promotional operations are fearful Haymon may come to dominate every aspect of boxing, from promoting events and reaping broadcast rights and ticket sales, to managing every elite fighter in the sport. A monopoly like this would leave no room for competition at boxing’s championship level, where the sport’s real money is made, and which is the heart of Top Rank and Golden Boy’s business.

The grievance cites an anonymous estimation that Haymon and his “conspirators” stand to lose approximately $200 million during the first two years of their Premier Boxing Champions network television venture. This is an astronomical amount, but something his team had supposedly prepared for. Haymon is backed financially by Kansas City hedge fund Waddell & Reed, which apparently loaded his war chest with an astounding $425 million. The executive from Waddell & Reed working with Haymon is a man named Ryan Caldwell. The suit cites this quote by Caldwell: “You have to be capitalized for three to five years to do this. To weather the storm. Because in some regards you [are] going to be the irrational player for a while.”

Caldwell’s assessment gestures to a long term strategy, in which, presumably, Haymon and his team overspend to get their fighters on television, stage a plethora of cards, and continually add to boxing’s largest talent stable. Then, several years from now, they will wield such institutional control that Haymon and his team can recoup initial losses by charging exorbitant licensing fees to broadcast fights. Who knows, maybe he’ll create his own television network and cut out everyone.

So, out of all of this (much of which this article doesn’t even touch on), here are two thoughts:

1. The purpose of the Muhammad Ali Act is to ensure fighters don’t get robbed of their money. Haymon’s fighters love him precisely because he gets them paid. In some cases, they get paid at the expense of career advancement, because matchmaking suffers when one person controls everyone’s fate, but don’t expect a mutiny by Haymon’s fighters. Their indifference to the concept of antitrust violations, ‘tie out’ agreements, anticompetitive damages, and even making fan friendly fights, is inversely proportional to the growth of their bank accounts.

If, in the defense of this lawsuit, Haymon can point to his satisfied stable of clients as evidence of the positive change he’s engendered in an industry known for its callous treatment of its workers, perhaps he can garner sympathy for his monopolistic tendencies.

PBC talent
Talent does not always translate into entertainment.

2. Haymon’s business strategy involves incurring enormous debts from the venture’s outset. This implies a long term plan, in which losses are recouped many times over once PBC is ubiquitous.

The problem with this strategy is that it assumes there will be an audience years from now. As it stands today, the product is mediocre and its promotion has been clumsy. There have been few good PBC fights, some glaringly bad ones, and there’s little to look forward to. Who, beyond Angel Garcia, wants to watch his son Danny, a once promising welterweight star whose career has recently skidded, fight Paulie Malignaggi this August? Who wants to see Keith Thurman walk over Luis Collazo on July 11? Though PBC can’t be faulted for this, even instances of good matchmaking, like Broner vs Porter, turned in disappointing results.

Fans don’t even know what PBC really is. What is its raison d’être? Is PBC’s brand predicated only on the novelty of free high-level boxing on cable television? Is there anything more substantial beyond that? Will PBC become its own league? Is there a grand vision that will culminate with competitive matches between the top fighters, or will it continue in the same unstructured way with fans getting more bouts between journeymen and pay-per-view aspirants? Is there a road-map? What is the plan?

Or, is this the plan: that industry monopolization will further embolden Haymon to make any sort of match, however bad, because he’ll be the only show in town. Perhaps he believes fight fans will remain fight fans no matter what, and that if he stages it, we will tune in and advertisers will pay to tap into that audience.

As with everything to do with Al Haymon, much remains open to speculation. The truth, which usually resides in the shadows, might be found among the pages of the Top Rank lawsuit. Or maybe not. I’m a boxing fan after all, so I really have no clue.

               — Eliott McCormick

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