By Sam C. Ehrlich
In a bout between two boxing business heavyweights, boxing management icon Al Haymon has prevailed over Golden Boy Promotions (Golden Boy). In a summary judgment decision filed by Judge John F. Walter in the United States District Court, Central District of California, Haymon fought off a flurry of antitrust challenges from Golden Boy, allowing him to continue his business ventures outside of managing his clients.
The Parties
The plaintiff in this action, Golden Boy, is a boxing promotion company owned by champion boxers Oscar De La Hoya and Bernard Hopkins. The defendant, Al Haymon, is the owner of Haymon Sports LLC (Haymon), a boxing management firm that represents over two hundred boxers including Floyd Mayweather, Jr., Amir Khan, and current welterweight champions Danny Garcia and Keith Thurman.
Central to this action is Haymon’s management of the “Premier Boxing Champions” (PBC). PBC is a boxing series on various network television channels, including NBC, CBS, ESPN, Fox Sports 1, and SpikeTV, and an attempt by Haymon to create a “league-like” entity in boxing. Haymon currently pays NBC, CBS, ESPN, and Fox Sports 1 for timeslots, but has looked to “flip the model” in the next few years to instead receive license fees from these networks.
The Allegations
First, Golden Boy alleged that Haymon blurred the line between managers and promoters through their ownership of the PBC. They alleged that Haymon employs “fake” or “sham” promoters for PBC fights, and that Haymon illegally functions as both the manager and promoter of these fights.
Golden Boy claimed that the assumption of these dual roles is in violation of the Ali Act (15 U.S.C. § 6308), which makes it unlawful for a promoter “to have a direct or indirect financial interest in the management of a boxer,” or for a manager “to have a direct or indirect financial interest in the promotion of a boxer.”
Further, Golden Boy alleged that Haymon’s management arm would prevent their boxers from working with competitors’ boxing services, which they claim would be an illegal “tie” in violation of Section 1 of the Sherman Antitrust Act. Under Section 1 of the Sherman Act, a “tying arrangement” is where sellers with market power in one product market extend their market power to a distinct product market by selling one product only on the condition that the buyer also purchases a different product, or at least agrees that they will not purchase the tied product from any other supplier. Cascade Health Solutions v. PeaceHealth, 515 F.3d 883, 912 (9th Cir. 2008); Paladin Assocs., Inc. v. Mont. Power Co., 328 F.3d 1145, 1159 (9th Cir. 2003). These tying agreements are generally considered per se violations of Section 1 of the Sherman Act.
Finally, Golden Boy also claimed that through their alleged “tying agreements” and their alleged violations of the Ali Act, Haymon was also working to create a monopoly in the market for promoting bouts of Championship-Caliber Boxers in violation of Section 2 of the Sherman Act. Golden Boy alleged that by signing multi-year exclusive contracts with various television networks, Haymon was preventing Golden Boy and other promoters from promoting fights on these networks, as well as various affiliate networks.
The Court’s Findings
Overall, Judge Walter was very hesitant to grant Golden Boy much of anything, stating that Haymon’s conduct “has resulted in an increase in televised boxing matches and improved compensation for boxers,” instead of depressing the market like Golden Boy had claimed. This was particularly evident on the Ali Act claims, where the court noted that the promoters that work with the PBC “vehemently disagree[d] that they are ‘sham’ promoters,” as they testified that their duties for PBC fights are “substantially the same as their duties for non-PBC events,” and for the PBC events where networks pay a license fee, the promoters collect those fees as well.
Further, the court ruled that Golden Boy had failed to demonstrate that Haymon actually tied together their management services and the PBC. The court noted that Golden Boy had not “submitted testimony from a single boxer . . . that states that he has been pressured or coerced into working with a particular promoter or prevented from working with Golden Boy,” while six boxers had submitted declarations stating that Haymon had not pressured them for or against working with a specific promoter.
By contrast, the court found that Haymon had on several occasions allowed its managed boxers to fight in Golden Boy-promoted bouts and in fact “the most lucrative fights during the Covered Period of this lawsuit . . . occurred between boxers managed by Haymon and boxers promoted by Golden Boy” and other promoters, including the Golden Boy promoted fight between Canelo Alvarez and Amir Khan on May 7, 2016 and the infamous May 2, 2015 Floyd Mayweather, Jr. v. Manny Pacquiao fight promoted by Top Rank (who settled with Haymon earlier this year).
The court found that Golden Boy relied on “certain informal, vague, and hearsay conversations” between Golden Boy’s president and several boxers and their representatives about potential promotion deals. The court noted that Golden Boy had not deposed any of these boxers to explore the details of these conversations, and all but two of the named boxers submitted declarations on behalf of Haymon.
The court was similarly unwilling to entertain Golden Boy’s Section 2 arguments, finding that Golden Boy had failed to demonstrate that Haymon’s exclusive television agreements were anticompetitive. The court found that while Haymon’s agreements had foreclosed avenues to dealings with certain networks, plenty of avenues still existed for Golden Boy to promote its fights. As the court noted, Haymon did not have exclusivity with HBO, Showtime, or pay-per-view networks, which were in fact the most profitable distribution channels for boxing. The court also found that during the Covered Period, both Haymon and Golden Boy had convinced networks that had traditionally not carried bouts to show boxing, showing that there were still “many alternative channels of distribution available to Golden Boy and other promoters.”
Finally, the court found Golden Boy’s Ali Act allegations unpersuasive, as under the Act’s provisions, only boxers or government agencies can claim violations of the Ali Act.
Conclusion
As this decision shows, the court will grant leeway to sports entities who expand their business into other ventures, so long as there is no substantial effect on competition.
Here, Golden Boy alleged that Haymon, by trying pushing boxing into a network-friendly league-like format, was illegally getting involved with the promotion of fights in violation of the Ali Act and Sherman Act. But since Golden Boy failed to show any negative effect on the market or any influence on boxers, the court was unwilling to move the case to trial.
If Golden Boy had shown that Haymon, through his management of the PBC, did get involved in promoting fights while effectively “cutting out” promoters like Golden Boy, this case likely would have gone very differently. But as it stands, Haymon convinced the court that his new business model can still co-exist with promoters like Golden Boy, and thus the court found that both entities can exist simultaneously.
Sam C. Ehrlich is a doctoral student in the Department of Sport Management at Florida State University.
