By Zach Arnold | May 6, 2015
A letter from ABC President Tim Lueckenhoff and Vice President Jim Erickson to current US Attorney General Loretta Lynch lays out an argument that individuals with legal standing could use to sue Al Haymon in regards to alleged violations of the Muhammad Ali Act.
The letter, dated April 28th of 2015, reads as follows:
Dear Attorney General Lynch:
The Association of Boxing Commissions (“ABC”) is an association composed of boxing Commissions located in the United States and Canada. It is a non-profit organization formed to, inter alia, encourage adherence to and enforcement of applicable federal laws regarding boxing and foster standardized reporting of results and uniformity of supervision of the sports which the member Commissions govern. It is charged by the Muhammad Ali Act (15 U.S.C. 6301 et. seq.) with promulgating uniform regulatory guidelines for boxing (e.g. 15 U.S.C. 6303, 15 U.S.C. 6307a and 6307b) handling suspension appeals within certain circumstances (15 U.S.C. 6306 (b) (2)).
The ABC has received complaints regarding the activities of an individual named Alvin Haymon and various companies associated with him. We think it (is) appropriate to refer this matter ot the Attorney General for investigation and enforcement pursuant to 15 U.S.C. 6309.
[Haymon appears to work through at least two companies, Haymon Sports LLC and Al Haymon Development Inc.]
It appears that numerous provisions of the Muhammad Ali Act are being broken, and most importantly, 15 U.S.C. 6308(b) which is designed to create a firewall between promoters and managers. 15 U.S.C. 6308(b) reads as follows:
(b) Firewall between promoters and managers
(1) In general, it is unlawful for (a) a promoter to have a direct or indirect financial interest in the management of a boxer; or (b) a manager — (i) to have a direct or indirect financial interest in the promotion of a boxer; or (ii) to be employed by or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager’s contract with the boxer.
(2) Exceptions, Paragraph (1) — (a) does not prohibit a boxer from acting as his own promoter or manager; and (b) only applies to boxers participating in a boxing match of 10 rounds or more.
15 U.S.C. 6301(5) defines manager as follows:
“The term “manager” means a person who receives compensation for service as an agent or representative of a boxer.”
Mr. Haymon, through various companies which he controls, claims to have in excess of 150 boxers under contract. Copies of agent’s and of managerial contracts are annexed as Exhibits “A” and “B” to this letter with Exhibit “C” being only a signature page. In a 2015 recent filing for his manager’s license he claimed to have agreements with some 43 fighters. Exhibit “D”. That number is now claimed to exceed 150.
Mr. Haymon, again through companies which he controls, has gained substantial financing from investment groups and, through his companies, has entered into “time buy” cards with numerous television networks including NBC, CBS, ESPN, and Spike. A “time buy” is where a promoter purchases time from a television network rather than the traditional telecast method where a network pays a rights fee to a promoter to purchase rights to telecast an event.
According to press releases, these contracts are directly between the networks and Haymon controlled companies, again with the funding supplied by investment groups. While Haymon hires certain promoters to run the local aspect of the show, the television contracts run through the Haymon controlled entities, purses for the major fighters on the card are set by Haymon controlled entities, the production format is set by the Haymon controlled entities. The series of events is called PBC (short for Premier Boxing Champions) and the announcements state that PBC is control by “Haymon Sports.”
15 U.S.C. 6301 (9) defines “Promoter” as follows:
“The term “promoter” means the person primarily responsible for organization, promoting, and producing a professional boxing match.”
As the funding for the PBC series comes exclusively from Haymon controlled entities, the purses are set by Haymon controlled entities, the selection of the main event fighters is controlled by Haymon controlled entities and the format is controlled by Haymon controlled entities. There are event copies of checks for purses from Haymon Sports LLC which have been posted online. See Exhibit “E”. It is clear that he, operating through his entities, operates as a promoter as well.
It appears that this model is a direct violation of the Firewall provision of the Muhammad Ali Act. The role of manager (who has a fiduciary responsibility to the fighter) and the role of a promoter (who does not and who has in this case a fiduciary responsibility to investors), is completely incompatible. At the time the Muhammad Ali Act was being drafted testimony was given as to the need for a firewall between promoters and managers. See e.g. Testimony of Jim Thomas before the House Subcommittee on Commerce, Trade, and Consumer Protection (a Subcommittee of the Committee on Energy and Commerce), September 9, 2004 (U.S. Government Printing Office), p. 13; Testimony of Patrick C. English before the Senate Committee on Consumer, Science, and Transportation, March 24, 1998; Testimony of Patrick C. English, before National Association of Attorney’s General Task Force on Boxing, January 20, 1999 pgs. 303-304, 334-335; 34 Columbia Journal of Law and the Arts, 422 (2001); Testimony of Joseph Spinelli before the Permanent Subcommittee on Investigations, August 12, 1994 (U.S. Gov’t Printing Office); Corruption in Professional Boxing – Inadequate State Regulations, Minority Staff of the Permanent Subcommittee on Investigation, March 10, 1993 (p. 23), the Senate report on the Muhammad Ali Act could not be more clear:
“It remains essential that … the manager serve and protect the interests of the boxer. They should not be serving the financial interests of the promoter … It is not plausible for a boxer to receive proper representation if the manager is also on the payroll of a promoter. This is an obvious conflict of interest … A manager must be determined advocate for the boxer’s interests and not be influenced by financial inducements from a promoter.” S. Rpt. No 106-83 at 9 (U.S. Gov’t Printing Office).
Haymon and related companies make no attempt to hide that they operate in the dual capacities of Promoter and manager. It was the Vice President of Operations “Haymon Boxing” which sat on the dais and participated in the announcement of the PBC series on NBC. No other promoter was present. Frankly Haymon seems to be floating this breach of the Firewall provision of the Muhammad Ali Act. By virtue of the management contracts which require that no boxer may enter into any fight contract without his permission, Haymon can ensure and has ensured that his fighters will fight only for his series — the PBC series.
By way of illustration, recently there was a PBC show in California. The ostensible promoter was an entity called TB Goossen. All promotional advertising for the show reflect that it was a PBC show and according to news reports every single featured boxer (of which there were six) were signed to Haymon management or advisory contracts. However, no contracts were filed reflecting Haymon’s involvement either as a manager or promoter. This is an apparent violation of 15 U.S.C. 6307 e (1) which requires that a promoter file “a copy of any agreement in writing to which the promoter is a party with any boxer participating in the match.” The purses for the four main fighters on the card were reported as $1,900,000. The typical Haymon contract provides that he will receive 15% of the fighter’s purse, in this case that would be $285,000. Yet there was no disclosure to the Commission as would be required under 15 U.S.C. 6309 e (3) (A) requiring that the Commission be informed of “all fees, charges and expenses that will be assessed through the promoter, including any portion of the boxer’s purse that the promoter will receive…” Thus 15 U.S.C. 6307 e (3) (A) appears to have been directly violated.
It also appears that 15 U.S.C. 6307 b (1) (A) and (B) is being violated. As best as we can ascertain, in order to appear in a bout on Haymon’s PBC series fighters must be under contract to Haymon. Those contracts have terms in excess of 12 months. See Exhibits “A” and “B”. A coercive contract is a “contract provision which grants any rights between a boxer and a promoter … if the boxer is required to grant such rights … as a condition precedent to the boxer’s participation in a professional boxing match against another boxer who is under contract to the promoter.” 15 U.S.C. 6307 b (a) (B). Such contracts, if they exceed in months are, according to the Muhammad Ali Act “in restraint of trade” and “contrary to public policy.” 15 U.S.C. 6307 (1) (A).
Further, it appears that 15 U.S.C. 6308 (c) is being violated. This takes a bit of explanation.
A “sanctioning organization” is defined as:
“an organization that sanctions professional boxing matches in the United States –
a) between boxers of different States or
b) that are advertised, otherwise promoted, or broadcast (including closed circuit television) in interstate commerce.” 15 U.S.C. 6301 (14)”
One of the express purposes of the Muhammad Ali Act was to regulate “the sanctioning organizations which have proliferated in the boxing industry” which “have not established credible and objective criteria to rate professional boxers and operate with virtually no industry or public oversight. PL 106-210 section 2, May 26, 2000, 114 Stat. 321.
However, it is obvious that the PBC is following the model used by MMA promoters which are not covered by the Muhammad Ali Act, to wit, having their own “in house” champions.
Managers working with the PBC have publicly that this is the model, and reportedly title belts are being made.
15 U.S.C. 6308 (c) prohibits any “officer or employee of a sanctioning organization” from receiving “any compensation, gifts, or benefit, directly or indirectly from a promoter, boxer or manager. Here, just as with the UFC or Bellator the promoter is is the sanctioning organization. Obviously things of benefit are being granted. For instance:
1) The Promoter pays for all costs associated with the sanctioning of PBC bouts.
2) The boxer is granting a benefit by signing with Haymon since Haymon gets the manager’s/advisor’s fee, promotional benefits, and controls who will fight for the PBC title.
While this step has not officially occurred, according to credible reports plans are underway that it occur in the near future, certainly a legitimate area for injunctive relief pursuant to 15 U.S.C. 6309 (a).
The ABC has no resources or authority to investigate further or to take action with respect to this. However, we can and do request that there is a “reasonable cause to believe” that Haymon is “engaged in a violation of this chapter.” [15 U.S.C. 6301 et. seq] and that 15 U.S.C. 6309 gives express authority to the United States Attorney General’s Office to investigate and to take action. We ask that you do so.
Very truly yours,
Assobiation of Boxing Commissions