By Zach Arnold | May 24, 2015
A nearly six-year long legal battle has ended between Juanito Ibarra, his former clients Tito Ortiz & Rampage Jackson, and a slew of media writers who were sued for libel & slander in Los Angeles federal court. A formal settlement was agreed upon between the two sides on May 15th by Ibarra’s formidable attorney, Samuel J. Smith.
The six years of legal proceedings saw Rampage Jackson burn through numerous lawyers. There were court filings/hearings for sanctions. There were a litany of defendants filing anti-SLAPP motions to strike and a billion different legal lessons to learn for anyone concerned about speech & public participation laws on the Internet. In many respects, the wild and crazy six year legal battle is a blueprint that I would strongly recommend any writers or future writers to carefully study regarding the intersection of Federal & state public participation laws.
Late last week, statements were issued on behalf of both Tito Ortiz & Rampage Jackson in regards to allegations made in the press about Juanito Ibarra’s personal & business character.
Quinton “Rampage” Jackson: “Juanito Ibarra and I have resolved the lawsuits that have been pending for a number of years. While we have had our differences in the past, it is all now behind us. Some things were said in the past, which I now retract and I am deeply sorry that they were said. I wish nothing but the best for Juanito in all of his future endeavors and know that he will continue to do the Lord’s work.”
Jacob “Tito” Ortiz: “In 2008, I gave an interview to Punch Drunk Gamer entitled “Wherever I may roam…..I want the Title.” In that interview, I made several statements including the allegation that Juanito Ibarra was a thief who had mismanaged the finances and stolen from and taken advantage of Quinton “Rampage” Jackson. I made these remarks based on what Rampage had told me. After several years in court and review of all the available records, I realize that Mr. Jackson and I were wrong. Juanito didn’t steal from or take advantage of Rampage and he didn’t mismanage Rampage’s money?it was all accounted for. I regret the effect my words had on Juanito’s life. Juanito is a trainer and manager of superior skills and the fact is, he helped to make Rampage a champion. Anyone would be blessed to be taught by Juanito. So there is no confusion, and so the public and the MMA, boxing and sports community at large know, I retract all of the negative statements, inferences and accusations that I directed at Juanito and sincerely apologize to Juanito and his family. I am grateful to have ended my dispute with Juanito and look forward to refocusing on building a better MMA community with him.”
Why did they spend all that time and money on attorneys in order to avoid the inevitable outcome of issuing retractions and apologies?
The case was set to go to trial in July. On the Los Angeles court web site, it appears there were attempts to try to bifurcate the defendants (Tito and Rampage) in the defamation case, which would have meant separate trials.
In the end, both sides reached a settlement but it cost a lot of money and each side learned some painful lessons in the process — lessons that you should carefully study if you end up on the other end of a Strategic Lawsuit Against Public Participation (SLAPP).
By Zach Arnold | May 23, 2015
Luca Fury has long argued that fighters who are testosterone users don’t really end up with a winning edge over their opponents. He’s right. Vitor Belfort’s performance at UFC 187 was proof positive. After a spirited flurry of punches, Chris Weidman dispatched of Vitor with relative ease. The whole fight seemed to have an odd hype dynamic heading into the encounter. Weidman went the Randy Orton legend killer route by stating that a win over Belfort would finish off all the Middleweights from the Brazilian-dominated era. Meanwhile, it was ixnay on discussing why Belfort has had trouble fighting in Nevada (read: testosterone). Throw into the mix the tough article by Patrick Wyman on Weidman, Frank Mir, and Fabricio Werdum < "http://www.deadspin.com/why-are-ufc-champions-hanging-out-with-an-accused-russi-1705763244">hanging out with an alleged Russian war criminal and you ended up with a nuttier-than-usual public relations battle on Saturday.
Truth be told, there wasn’t much drama to be expected from Weidman’s title fight. The real interest was in the main event and whether Rumble Johnson would knock out Daniel Cormier. He couldn’t but not for a lack of trying. And Rumble was summarily taken apart. He’s still a very scary man.
The fight result now leads us to a rematch between Cormier and Jon Jones and I’m not sure there are as many fans this time who think Cormier has a chance of winning as there were for the first encounter. It will sell a lot of tickets, however…
By Zach Arnold | May 16, 2015
Official lobbying records from the state of California show that Zuffa LLC, the parent company of UFC, spent $30,000 in Q1 of 2015 to lobby for state Senate Bill 469.
Senate Bill 469, introduced by Senator Appropriations chair Ricardo Lara, would:
- Extend the life of the California State Athletic Commission until the year 2020
- Open the pathway for the Athletic Commission to perform out-of-competition blood and urine drug testing of any licensed fighter
- Allow the Athletic Commission to fine a fighter a percentage of their purse for failing a drug test (as opposed to the current standard $2,500 fine) plus give administrative discretion on imposing fines, giving a fighter 30 days to appeal or else accept punishment
- Authorize the Athletic Commission to recover costs for arbitration proceedings from parties involved in such hearings (contract disputes)
The bill is currently in the Senator Appropriations committee and placed on the suspense file, meaning it will be revisited after a new state budget has been passed.
Intriguingly, a Senate Appropriations committee analysis of the bill claims yearly projected Athletic Commission expenditures of $1.6 million dollars. Recently, the Athletic Commission’s spending authority was pushed from $1.2 million a year to $1.44 million a year. The Senate analysis, curiously, projects annual Athletic Commission revenues at $1.7 million. In the Athletic Commission’s current state, you would be lucky to get a $1.3 million year for revenue. You would have to go back to the days of Armando Garcia to even come close to sniffing a $1.7 million year for revenue. It appears the increased projection for revenue is based on changing the fine structure of fighters who fail drug tests.
The SA committee analysis also claims that out-of-competition drug testing would cost the Athletic Commission $100,000 more each year to implement.
Amusingly, the Senate report also makes this claim:
The Fund is expected to have a reserve of approximately $1 million at the end of the 2015-16 fiscal year, which is sufficient to support the additional expenditures related to this bill while maintaining a healthy reserve for the duration of the sunset period.
Given two recent lawsuit settlements and impossible-to-make monthly projections for revenues that are hit-or-miss, asserting a claim of $1 million dollars in the Athletic Commission bank account at the end of the Fiscal Year in two months seems… ambitious.
UFC’s lobbying firm in California is the Sacramento-based Platinum Advisors LLC. Tim Lynch from PA is UFC’s top conduit at the capitol. John Carvelli, the Chairman of the California State Athletic Commission, uses Platinum Advisors LLC for lobbying efforts on behalf of his Liberty Dental Inc. company.
By Zach Arnold | May 14, 2015
— Deadspin (@Deadspin) May 13, 2015
It started years ago with UFC slapping a “sponsorship tax” on companies who wanted to sponsor individual fighters. The idea was that UFC had a right to get paid for creating the stage for advertisers to market their products to the masses. The idea was also couched in terms of protecting fighters by weeding out deadbeat companies.
Then it morphed into rumors a couple of years ago of UFC creating fighter uniforms in order to control sponsorships.
It’s now morphed into UFC inking a corporate deal with Reebok. It was supposed to revolutionize fighter sponsorships and make UFC a ton of coin. Instead, the UFC/Reebok partnership merely became a pretext for all of the major economic problems between management, fighters, and managers to rise to the surface for all the public to see.
In short, the Reebok sponsorship is being treated as rotten in the court of public opinion by everyone except UFC. The fruit from a poisonous tree.
We had the anti-trust lawsuit filed in San Jose against UFC. Fighters uncharacteristically spoke out in protest of the new proposed pay scale by UFC in regards to how much Reebok money they would get. The protests escalated thanks in part to fighters no longer being able to cut their own nickel-and-dime sponsorship deals. The protests claimed that their nickel-and-dime deals have been reduced to penny-ante Reebok payoffs.
By Zach Arnold | May 13, 2015
Some very interesting and perhaps important changes are being debated in the California Legislature to amend the way business is handled by the California State Athletic Commission.
Senate Bill 469, amended on April 22nd, includes several key amendments.
No more free arbitration for fighter/manager contract disputes
“Under existing regulation, a person who seeks arbitration of a contract dispute is required to send a written request for arbitration to the commission and to the Office of the Attorney General, as specified.
“This bill would codify these regulatory provisions in statute and would authorize the commission to recover the costs for the arbitration from the parties subject to the arbitration.”
Question: how will indigent, cash-strapped fighters who can barely afford legal representation be able to afford the costs of paying both the athletic commission & the Attorney General’s office?
A change in the fine structure for fighters who fail drug tests
B & P code section 18843 says the Athletic Commission can fine a fighter up to $2,500 for each violation. The new Senate bill would change the fine limit:
“(b) Notwithstanding any other provision, the commission may also assess a fine equal to __percent of the total purse for a violation of Section 18649 related to the use of prohibited substances.”
On Monday (May 11th), SB 469 passed the Senate Appropriations committee on a 7-0 vote.
The bill has now been placed on the “suspense file,” meaning it will be revisited after a new budget is passed in order to analyze what the economic impact of the bill will be.
By Zach Arnold | May 9, 2015
UFC’s event in Australia may have been internet-only viewing but those who watched it found themselves saying they wanted to take a shower after watching the fight.
Stipe Miocic violently battered Mark Hunt with over 350 blows in a heavyweight fight. Look at Hunt’s face:
Mark Hunt just posted this picture on Facebook pic.twitter.com/zj2oiBSNml
— Jason Floyd (@Jason_Floyd) May 10, 2015
As Brent Brookhouse astutely pointed out, we have UFC fighters on the receiving end of these kinds of beatings while getting locked into Reebok sponsorship deals that may pay $5,000 or less.
This latest beating for Hunt in the UFC cage comes after the last pummeling he endured in Australia 17 months ago from Bigfoot Silva. Silva would fail a drug test after that fight. After gaining some political traction for MMA regulation in Australia, tonight’s scenario was a worst-case scenario for the portrayal of the company’s image in Australia.
It got worse. Here’s UFC fighter Robert Whittaker:
Whittaker said in interviews he was cutting so much weight to make 170lbs that he lost his hearing. 185lbs is the perfect weight for him.+
— Adam Martin (@MMAdamMartin) May 10, 2015
Is that a first?
By Zach Arnold | May 9, 2015
Texas has great boxing fans and the worst commission in the country. Cole nearly took a point when boxers hugged to start round 12 #PBConCBS
— Jonathan Snowden (@mmaencyclopedia) May 9, 2015
On Friday, Bill Brady resigned from the Nevada State Athletic Commission board. As bad as athletic commissions like Texas and New York have been, I gave them slight praise for turning things around.
And then Saturday afternoon’s Al Haymon card in Hidalgo, Texas reasserted Texas as the worst major athletic commission in the United States.
On paper, a middle-of-the-road main event featuring Omar Figueroa Jr. and Ricky Burns turned into a nice little fight that was dominated & marred by the discretionary & unjustifiably risky antics of long-time referee Laurence Cole.
Laurence Cole is one of the worst referees I've seen in more than 40 years on the boxing beat. But you already knew that, didn't you.
— Nigel Collins (@ESPNFNF) May 9, 2015
Ricky Burns had a clear strategy — smother Figueroa and make him fight out of the proverbial phone booth. Figueroa drove his head into Burns, which made him more vulnerable to getting hit in the back of the head. Coles repeatedly warned Burns for punching Figueroa in the back of the head.
It’s one thing to warn a fighter. It’s another to physically alter his behavior and place the fighter in a precarious position. During multiple active clinches between Figueroa & Burns, Cole physically yanked one of the arms of Ricky Burns. Not only did he repeatedly yank one of Burns’ arms, he did so without separating the two fighters. He yanked a fighter’s arm while during active punching. It was incredibly disruptive & dangerous. Burns could have gotten seriously injured. Much credit should be given to the CBS announcing team led by Mauro Ranallo in calling out Cole for his in-ring behavior.
Referees instruct fighters before bouts to protect themselves at all times. How can a fighter protect himself at all times when the referee is repeatedly yanking on one of his arms during live action?
The good news is that Cole didn’t work the bigger fight in Texas on Saturday night, which was Canelo Alvarez demolishing James Kirkland. However, Cole was assigned a main event on an Al Haymon CBS show for a fight that impacted two men at different points in their careers.
For many years, Cole’s father Dickie ran the athletic commission under the Department of Licensing & Regulation umbrella. Not only did Laurence Cole get top referee bookings, he also actively sold & continues to sell event insurance policies to promoters running boxing, kickboxing, and MMA events in the state of Texas.
Laurence Cole Insurance Agency at BoxingCoverage.com. Cole is listed on the Farmers website as an insurance agent in Dallas.
If the athletic commission in Texas wants to demonstrate that they are serious about cleaning up the mess that Dickie Cole made, they would call a board meeting to start the process of stripping Laurence Cole of his referee license. That’s my opinion and I’m sticking to it. His in-ring actions on Saturday afternoon in Hidalgo, Texas could have potentially led to an injury and a fat lawsuit against the state of Texas.
By Zach Arnold | May 8, 2015
Things were supposed to get better for the Nevada State Athletic Commission after tone-deaf, loved-to-hear-his-own-voice Executive Director Keith Kizer resigned in order to get a pay raise to work in the AG’s office on Gaming Commission matters.
Instead, a dumpster fire has turned into a raging inferno with Bob Bennett as Executive Director and Andre Agassi’s lawyer, Francisco Aguilar, as the commission’s front man/Chairman for public relations.
Bill Brady, who had been on the commission board during it’s most tumultuous time period before Aguilar and casino/marijuana permit guy Anthony Marnell came aboard, resigned on Friday. He told the truth by stating that his heart wasn’t into working on the Commission panel any more. According to Brady, the fallout from the Manny Pacquiao/Floyd Mayweather fight was the straw that broke the camel’s back.
The corrosion of the image of the Nevada State Athletic Commission is almost irreversible at this point given the political entities involved in meddling and strong-arming the regulators. Look at what has happened since Marc Ratner’s departure:
- The on-again, off-again policy of allowing fighters to use testosterone (the base chemical of anabolic steroids) that was largely a policy that impacted UFC top fighters.
- An Executive Director in Keith Kizer who stated that fighters using testosterone shouldn’t be viewed as having a “scarlet letter” against them.
- The entire drug saga involving Chael Sonnen, from soup to nuts, that included Sonnen as an honorary adviser/consultant on testosterone matters… before he got suspended for multiple years on a failed drug test.
- A drug testing policy that went as hard, if not harder against marijuana users like Nick Diaz than hardcore performance enhancement drug users.
- A drug testing policy that tested Jon Jones for cocaine but yet didn’t suspend him for such usage.
- A commission that could very well lose a legal battle with Wanderlei Silva over suspending a fighter for missing/failing a drug test while not licensed.
- A commission that has stood by while MGM has publicly battled Bob Arum and Top Rank in an ugly display for all parties involved.
- A commission that somehow allowed Manny Pacquiao to fight with a rotator cuff injury, Tito Ortiz with a “fractured skull,” Forrest Griffin with a broken foot, and countless number of serious injuries not detected before major fights.
The timing of Bill Brady’s resignation tells you everything you need to know about the state of regulatory affairs in Nevada. The image of the Athletic Commission is at an all-time low. It’s a circus. While Texas and New York are (slowly) trying to dig out of the immensely deep holes they have dug for themselves, Nevada continues to sink further into chaos. The Pacquiao fight last Saturday night only highlighted how concerning the problems are to the masses. The Athletic Commission got exposed in the bright lights.
Since fight, Pacquiao & promoters have been sued in Nevada (3X), California (3X), FLA (3X), Texas (2X), NY (2X), MD, NJ, ILL, Delaware & CT
— Darren Rovell (@darrenrovell) May 8, 2015
The commission’s profits are as high as its image of integrity is as low amongst the fans, fighters, and promoters.
Bill Brady had nothing to personally do with the many regulatory failures of the Athletic Commission. He just had the common sense to be the first one to walk away after what happened last Saturday night.
It will be interesting to see if the 2016 Senatorial opponent to Governor Brian Sandoval uses the athletic commission as a campaign issue. Sandoval deserves all the criticism for allowing what has happened with the Athletic Commission under his watch.
By Zach Arnold | May 7, 2015
You’ve read the Association of Boxing Commissions letter to US Attorney General Loretta Lynch.
Both ABC & Golden Boy accuse Al Haymon & associates of violating the Muhammad Ali Act. ABC accuses Haymon of violating his fiduciary responsibility as a boxing manager to his various fighters because he also supposedly acts as a promoter through the PBC series. Golden Boy’s lawsuit alleges Haymon & company of violating the Sherman & Clayton Antitrust Acts. Both ABC & Golden Boy accuse Haymon and his business associates of conspiring in an illegal scheme with others in order to create a monopoly in the boxing industry by supposedly violating the Ali Act.
Which begs the following question: why didn’t ABC or Golden Boy, in their letter and legal complaints, bring up RICO (Racketeer Influenced and Corrupt Organization) as a cause of action if they’re alleging that Haymon & associates are supposedly involved in an illegal business/scheme?
By its legal definition, racketeering involves an organized group of individuals conspiring & engaging in an illegal business or scheme.
If ABC & Golden Boy have evidence that Al Haymon & associates are engaged in an conspiracy to commit an illegal business or scheme via violations of the Ali Act, why aren’t they citing the RICO statute as a potential cause of action?
To level charges publicly against Haymon that he is somehow violating the Ali, Sherman, & Clayton Acts, ABC & Golden Boy better have hard evidence to prove their case in a court of law. In civil court, only a preponderance of the evidence is needed to win. So why are the lawyers on behalf of ABC & Golden Boy confident enough to claim that Haymon is supposedly violating various federal acts via an illegal scheme but not confident enough to accuse Haymon & his business associates of racketeering?
18 U.S.C. Chapter 96 deals with RICO (Racketeer Influenced and Corrupt Organizations). In order to cite RICO as a cause of action, one must prove that the individuals being sued are involved in a criminal enterprise that has allegedly committed two or more specific violations within a 10 year time period. There is a list of various crimes that fall under the RICO statute, which provides both criminal & civil remedies.
Given the various legal claims made by both ABC & Golden Boy, there are two Code sections that stand out for hypothetical discussion:
In order to satisfy one of the requirements of “unlawful activity” for 1952, section 1957 applies. As defined by Findlaw, 1957 states the following:
(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).
(1) the term “monetary transaction” means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title, but such term does not include any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution; (2) the term “criminally derived property” means any property constituting, or derived from, proceeds obtained from a criminal offense; and (3) the terms “specified unlawful activity” and “proceeds” shall have the meaning given those terms in section 1956 of this title.
Golden Boy and ABC both allege that Haymon & associates have made money illegally by supposedly violating the Ali Act.
18 U.S. Code § 1962 – Prohibited activities breaks down the racketeering issue in plain English. Take note of sections B & C.
ABC is asking the US Attorney General to launch a criminal investigation into Al Haymon’s business activities. Golden Boy is pursuing civil remedies. In regards to civil remedies available for RICO causes of actions, read 18 U.S. Code § 1964 – Civil remedies:
(a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to:
- ordering any person to divest himself of any interest, direct or indirect, in any enterprise;
- imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce;
- or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.
(c) Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962. The exception contained in the preceding sentence does not apply to an action against any person that is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction becomes final.
(d) A final judgment or decree rendered in favor of the United States in any criminal proceeding brought by the United States under this chapter shall estop the defendant from denying the essential allegations of the criminal offense in any subsequent civil proceeding brought by the United States.
If both ABC & Golden Boy are going to accuse the Haymon Defendants of running an illegal business/scheme which allegedly involves violating the Muhammad Ali Act in order to create a monopoly in boxing, then why aren’t they citing RICO as a cause of action?
By Zach Arnold | May 7, 2015
On our site, we posted the letter that the Association of Boxing Commissions sent to US Attorney General Loretta Lynch alleging that Al Haymon is violating the Muhammad Ali Act.
On Tuesday, Golden Boy filed suit against Al Haymon and his business partners in Los Angeles federal court. The lawsuit alleges that Al Haymon is violating the Sherman Antitrust Act, the Clayton Act, and the Muhammad Ali Act.
Most of the initial text in the lawsuit filing mirrors the claims that ABC made in their letter to Loretta Lynch. So, we will focus on the various causes of action that Golden Boy, through attorney Bert Fields, has filed in their complaint against Haymon.
One item from the background claims in the complaint, however, is worth highlighting:
Plaintiffs are informed and believe and, on that ground, allege that defendants Waddell & Reed Financial, Inc. and Waddell & Reed, Inc. (collectively “Waddell”) are Delaware corporations in the business of supplying venture capital to businesses through controlled entities. Waddell financed and aided the Haymon Defendants through Ivy Asset Strategy Fund, WRA Asset Strategy and Ivy Funds VIP Asset Strategy (the “Waddell Funds”). These are investment funds established, owned and controlled by Waddell and their investors. Ryan Caldwell (“Caldwell”) is manager of the Waddell Funds (the Waddell Funds, Caldwell and Waddell are sometimes called the “Waddell Defendants” in this Complaint). The Waddell Defendants have provided more than four hundred million dollars to finance the unlawful activities of the Haymon Defendants alleged hereinbelow and have also advised, aided and abetted the Haymon Defendants in carrying out such activities and have conspired with them to do so.
Before the events on which this action is based, defendants sought to eliminate competition in the business of promoting Championship-Caliber Boxers by acquiring total ownership of Golden Boy and sidelining De La Hoya as a competitor. To that end, Waddell offered to purchase 100% of the equity interest in Golden Boy through another Waddell controlled fund, but conditioned its offer on obtaining an onerous and lengthy non-competition agreement from De La Hoya. Plaintiffs are informed and believe and, on that ground, allege that, in fact, the intended buyers of Golden Boy were the Haymon Defendants, that Waddell was to finance the acquisition of Golden Boy with the Waddell controlled fund as the nominal buyer, and that the involvement of the Haymon Defendants was to be concealed, since their acquisition of Golden Boy, a major promoter, would violate the law and perhaps expose defendants’ scheme to monopolize the promotion business. Defendants’ proposed acquisition of Golden Boy was not completed, because De La Hoya refused to accept the onerous, anti-competitive restrictions on his boxing related activities demanded by the proposed buyers.
With that noted from the Complaint, let’s take a look at the causes of actions listed in the court filing.
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
By Zach Arnold | May 5, 2015
Remember when Tito Ortiz said he fought in Las Vegas with a “broken skull”? Everyone chalked it up to another Tito exaggeration. It turned out that he was in a precarious position after all. Forrest Griffin, his opponent in Vegas, claimed that he fought with a broken foot.
And now Manny Pacquiao is claiming that he suffered a rotator cuff injury two weeks before his fight with Floyd Mayweather. Pacquiao is claiming the Athletic Commission wouldn’t allow him to take an injection of Toradol. Francisco Aguilar, Andre Agassi’s lawyer and current Chairman of the Athletic Commission, claims that he will have Nevada’s Attorney General office investigate why Pacquiao selected “no” on an athletic commission document in regards to having an injury.
What, are they going to go after Manny Pacquiao under penalty of perjury? Nevada got the cash they wanted from the Pacquiao fight. Imagine what they would have done if Pacquiao had backed out of the fight.
Manny Pacquiao wasn’t going to back out of a fight with over 3 million PPV buys on the line. Manny Pacquiao wasn’t going to turn down tens of millions of dollars. To back out of a fight at the last minute would have been catastrophic not only for Pacquiao but also for the Nevada State Athletic Commission. Whether backing out would have been as catastrophic as his actual fight performance was on Saturday night is up for debate.
Fighters fight. They fight because they love to fight and they fight because they want the paycheck. In theory, this is the reason Athletic Commissions exist — to protect the health & safety of fighters in an ultrahazardous sport who often can’t and won’t protect themselves.
The onus is on the Athletic Commissions to put a stop to fights when they know that fighters are too injured for their own good. Where are the doctors? How are fighters with broken feet, torn rotator cuffs, and “broken skulls” allowed to walk into the cage? Hiding behind the “they didn’t tell us on a form!” excuse is embarrassing. Applying The Honor System to pre-fight medicals in 2015 is foolish.
OK, you can quit laughing now. It’s Nevada. This is currently the same athletic commission that has a board member who applied for a marijuana permit despite having a gaming license and the Gaming Commission telling him to back off. This same board member happens to vote on any marijuana-related drug suspensions of fighters.
In Nevada, they aren’t even trying to hide the shell game. What price is there to pay? None. Other than their image, which really doesn’t matter when the casinos are still making big bucks off of Floyd Mayweather and UFC events.
Pacquiao's issues with the NSAC–and TR's feud w/MGM–makes it likely future fights are in Macau, the Philippines or Texas. Lot of bad blood
— Chris Mannix (@ChrisMannixSI) May 4, 2015
Now we have the dreadful prospects of a Mayweather-Pacquiao rematch, perhaps in Texas — a state with even less regulatory discipline than Nevada. Nevada already got their big bite at the apple. Now we have a potential class-action lawsuit brewing in Clark County against Pacquiao & Top Rank.
What a legacy Governor Brian Sandoval is leaving behind with the Athletic Commission as he transitions into a 2016 Senatorial campaign.
By Zach Arnold | May 2, 2015
— Mike Tyson (@MikeTyson) May 3, 2015
And another Floyd Mayweather unanimous decision win. 116 x 112 (8 rounds to 4 rounds) twice, 118 x 110 (10 rounds to 2 rounds).
Look on the bright side. Michelle Beadle and Rachel Nichols reportedly had media credentialing problems due to Mayweather’s camp putting their foot down. It was humorous to watch the general sports media in an uproar over this when they never blink an eye to the tactics UFC has used against media writers in the past for obtaining or maintaining credentials. Hell, Beadle and Nichols getting stiffed was an orgasmic moment for sportswriters to get more shots in against Mayweather regarding his history of domestic violence.
As for who really won, you know who won:
That's damaging going forwards to compete with PBC, and competition is for our best interests as fans.
— Alan Conceicao (@godsonsafari) May 3, 2015
I remember when Ken Hershman jumped to HBO after his tenure at Showtime and his many defenders said Ken just needed HBO’s resources to really stomp Showtime out as a player in boxing. Your guess is as good as mine on reading the tea leaves now.
Showtime ended up as a playground for Al Haymon. Now Haymon and his money marks are (reportedly) insanely paying out hundreds of millions of dollars to broadcast networks, along with cable networks ESPN & Spike TV, for airing events. At this point, who knows if Return on Investment is even a feasible or desirable option on the table if PPV isn’t the end game.
Worse, it’s clear that Haymon going all-in with pay-to-play deals means that TV executives aren’t going to open up their pocketbooks to pay for boxing events, especially on basic cable. It’s why ESPN killed Friday Night Fights. If/when Haymon’s experiment implodes, what will be left for boxing on basic cable (non-Showtime, non-HBO) or broadcast television? If Friday night’s Golden Boy event on Fox Sports 1 is any indication of what kind of cards you can expect on basic cable, heaven help us all.
Fits the MO. Wants to control everything. Shut up any opposition. I'm not one of his baby's mothers though. https://t.co/JSgId1u5c7
— Michelle Beadle (@MichelleDBeadle) May 3, 2015
Can’t wait for the next predictacle MMA sales pitch that Conor McGregor vs. Jose Aldo in July will be as big as Mayweather/Pacquiao and that UFC delivers what boxing can’t.
I am interested in the Association of Boxing Commissions trying to go after Al Haymon. It won’t go anywhere, at least I don’t think it will, but some eager attorney general looking for a high profile political fight could take a shot at Haymon with the Ali Act. I wonder who could be interested…