The Square Jungle: Al Haymon KO 1 Oscar De La Hoya
Before the shock of Oscar De La Hoya being arrested for Driving Under the Influence had begun to subside, Golden Boy Promotions suffered another setback when U.S. District Judge John F. Walter, of the Court of Central California, dismissed its antitrust case against Al Haymon and Premier Boxing Champions. This courtroom battle turned into the equivalent of George Kennedy (as Dragline) pummeling Paul Newman in “Cool Hand Luke.” And just like so many mismatches that have dominated the American boxing scene over the last year, it was a massacre.
How did Golden Boy suffer such a decisive KO against Haymon in court? Among one of many reasons, perhaps, is the fact that GBP may have overreached. “To the extent Golden Boy made any mistakes in the case,” says Paul Haberman, principal owner of the Law Offices of Paul S. Haberman, LLC, “I would say that perhaps the lawsuit was a little overambitious and perhaps should have focused more on some of the questionable steps actually taken against Golden Boy by Haymon in concert with (former GBP CEO) Richard Schaefer. Like the Top Rank lawsuit, this lawsuit attempted to be a far-reaching indictment of Haymon’s entire business practice and not necessarily a vehicle to litigate any specific misdeeds allegedly committed by Haymon against Golden Boy.”
Since the Golden Boy-Haymon-Richard Schaefer axis fell apart a few years ago, De La Hoya has been outmaneuvered consistently by his savvy competitors – no matter how hard he has tried to spin it publicly. When De La Hoya made a public grandstand about releasing a slew of supposedly reluctant GBP fighters in 2015 (including Danny Garcia, Keith Thurman and Deontay Wilder), for example, he neglected to mention at the time that a “Key Man” clause was the main reason for his action. In short, De La Hoya had no choice but to part with several commodities he had painstakingly developed from the ground up. Within a few weeks of reaching a settlement with GBP on several fighters, Haymon activated his contractual tripwire, bought out GBP and walked away with some of the biggest names in boxing. He has continued to bedevil De La Hoya at every turn.
In pursuing a legal endgame against Haymon, one whose success was never guaranteed, Golden Boy committed a boxing cardinal sin. Because most boxing lawsuits are intended as a means to extract concessions from defendants, they are usually worked out before they ever go to trial. While Top Rank Promotions settled out of court against Haymon last May after filing a similar suit in 2015 – terms of the agreement are confidential – Golden Boy receives nothing for its efforts except bad publicity and an expensive ream of invoices. Indeed, not only will Golden Boy have to pay its own legal bills but there is also a chance that it will have to pay those incurred by Haymon as well.
Another reason boxing lawsuits rarely pass the discovery phase is because shining a light on the inner-workings of a barely-regulated blood sport, more often than not, sullies plaintiff and defendant alike. Here, the collateral damage suffered by Golden Boy was predictable.
Over the course of the proceedings, it was revealed that company President Eric Gomez lies to the media, that WBO junior middleweight titlist Saul Alvarez is basically the only reason GBP is still in business, that public relations flack Ramiro Gonzalez had at least one writer (racist lowlife Hesiquio “Kiko” Balderas) willing to take orders as a company hatchet man and that GBP was actively waging a smear campaign against Haymon and the PBC.
Worst of all, perhaps, Golden Boy had its own onerous contracts with fighters aired for scrutiny, a fact that seemed to justify the caution with which Haymon has approached promoters on behalf of his clients.
Ultimately, this lawsuit left GBP the worse for wear – even in an industry in which public relations debacles have virtually no lasting effect on any of the power brokers in charge. Like a world-class prizefighter with a superior ring IQ, Haymon made several adjustments that lessened the appearance of monopolization while the GBP suit was pending. He stopped venue squatting, waived exclusivity provisions with television networks and began selectively outsourcing PBC fighters to HBO and Eddie Hearn, perhaps to diminish the notion of anti-competitive practices.
From The Square Jungle:
“Of course, Haymon may also have had another purpose in farming out some of his fighters, who are, after all, contractual commodities. He may have been looking to publicly undermine the “monopoly” tag applied to him by litigants looking for damages in court.”
While his outsourcing program has produced one brutal KO loss after another for some of his second-tier clients, it has, at the very least, helped defray some of the runaway costs of the first ramshackle professional boxing league in history.
In addition, Haymon seemingly used Golden Boy to undermine its own antitrust case. Even while suing Haymon for hundreds of millions of dollars, GBP masterminds could not resist cashing in on a Saul Alvarez-Amir Khan mismatch. Similarly, Golden Boy recently negotiated a deal with Haymon to pair Alvarez with Julio Cesar Chavez Jr., in a lucrative pay-per-view bout scheduled for May. What makes these matchups strange are that both were made with fighters at least two weight classes apart. In other words, there was no compelling industry reason – other than greed, raison d’être of boxing insiders across the globe – to stage these fights. They were not title eliminators. They were not mandatory defenses. They were not fights forced by purse bids, etc. Eventually, however, they became examples for Judge Walter to rule against Golden Boy via summary judgment.
“I can’t speculate on Haymon’s rationale for securing Khan-Alvarez,” says Haberman, “but I could tell you that if I were Golden Boy’s counsel, I’d have advised against such a bout during the pendency of the lawsuit. Obviously, it would have put ‘Canelo’ in a financially bad position but Canelo had other lucrative options including, notably, (IBF/WBA/WBC middleweight champion) Gennady Golovkin, that could have been made during the exact same time frame that the Khan fight happened.”
Golden Boy also produced an expert witness whose work was as shoddy as some of its matchmaking. Indeed, the nebulous concept of “Championship Caliber Boxers,” provided by Dr. Robert Kneuper, seemed no more than a bit of creative non-fiction and, as such, stands as a symbolic attempt at applying spurious order on a sport that is nearly devoid of oversight – never mind the fact it was concocted out of thin air.
Dr. Kneuper also bungled the predatory pricing aspect of the suit. “Judge Walter chided (Dr. Kneuper) for not performing any recoupment analysis,” says Kurt Emhoff, an attorney at Berg & Androphy, who currently manages ex-middleweight titleholder Sam Soliman and has provided legal services to several boxers in the past, “and only stating that Haymon intended to flip its model to obtain license fees, which Haymon ‘believed’ would eventually lead to recoupment. GBP needed to demonstrate a reasonable prospect of recoupment and Judge Walter held that the expert evidence was woefully short of that.”
Dr. Kneuper has a Ph.D. in Applied Economics, which, of course, means less than zero in the random world of boxing. Next time Golden Boy wants to sue someone, it should consider hiring experts with advanced degrees in animal husbandry, game theory and organizational leadership. In the end, the decentralized and barely-regulated aspects of boxing will win out – extraneous credentials be damned.
Indeed, Emhoff notes how difficult it is to charge someone with monopolization in an industry as haphazard as boxing. “Defining the market is extremely difficult in a world sport such as boxing,” Emhoff told UCNLive. “Back in the 1940s and 1950s, when there was one world champion in each division and the power base was almost entirely in the U.S., an entity like the IBC (the International Boxing Club) could exert some anti-competitive control. It’s a different world now. Specific to this case, the fighters who Haymon represents are getting paid well and they are not complaining (unlike the UFC fighters and their ongoing antitrust suit). GBP also now has an exclusive television deal of their own with ESPN – one of the bigger networks, with which Haymon formerly had an exclusive deal. I think after Top Rank, in their settlement with Haymon, got the concession from him to waive the exclusivity provisions in all of his television agreements – that made it more difficult for GBP’s monopoly claims.”
Although Judge Walter seemed to acknowledge the possibility that Haymon is simultaneously acting as promoter and manager (“Although the Court recognizes that there is a genuine dispute as to whether Defendants act as promoters, this dispute does not preclude the Court from granting summary judgment as to Plaintiffs’ federal claims for relief.”), that thorny issue is unlikely to be revisited any time soon. It will take a disgruntled Haymon client to lodge such a complaint and, since most PBC fighters are overpaid, the likelihood of that happening is slim.
“As the Court noted, the (Muhammad) Ali Act is designed to protect boxers, not promoters or management,” says Haberman. “The ideal client in an Ali Act lawsuit is a professional boxer who can successfully say that his or her manager/advisers, effectively acting as a promoter, caused him or her financial harm due to some lack of some separation between the two roles that might have compromised the duty of the manager/adviser to put the boxer first in any negotiations with promoters. Viewed that way, could any boxer signed to Al Haymon really claim an Ali Act violation, never mind any boxer not signed to him?”
With minimal industry pushback to worry about in the future, the PBC will continue on its way unimpeded, its odd business model still a gambit, its manager-promoter-matchmaker megapack now possibly a new paradigm for other players to emulate. Still, despite the definitive nature of the ruling, there are still several tantalizing questions that remain regarding the PBC. How, for example, does a manager sign exclusive deals directly with exhibitors (network television)? And how are PBC fighters paid by a promoter (if PBC promoters function as something other than “shams,” as Judge Walter declared), when PBC events produce little verifiable revenue? Finally, how do state athletic commissions allow one man to routinely manage both sides of a fight?
As for Golden Boy Promotions, which has suffered several misfortunes over the last two years, it still has the rights to the biggest box-office draw in North America (Saul Alvarez), a solid stable of young fighters, and an edge in the Latino market. Its future was recently bolstered by an output deal with ESPN – the same network Al Haymon once had in his time-buy grip – but few have bothered to set aside a celebratory haze to note that GBP will not receive a licensing fee for its cards.
Carlos Acevedo is the editor of The Cruelest Sport and a full member of the Boxing Writers Association of America. His work has appeared in Boxing Digest Magazine, Maxboxing, Boxing World Magazine and Esquina Boxeo. He is also a contributor to Remezcla and a member of the International Boxing Research Organization.