- January 20, 2016
A Quick Look at the Possible Regulatory Implications of Victories for Al Haymon in His Lawsuits with Top Rank and Golden Boy Promotions
Ask almost any boxer in the United States who the best manager in the sport is today, and most of them would inevitably say Al Haymon. Likewise, ask almost any boxer in the United States who the best promoter is in the sport today, and most of them would inevitably, erroneously or otherwise, say Al Haymon. And therein lies the regulatory issue at the nerve center of two of the most closely watched lawsuits in professional boxing today.
In two separate lawsuits filed within the past year, Top Rank and Golden Boy Promotions, who have each been regarded as among boxing’s elite promoters over the years, have alleged that Haymon, through a variety of different companies, substantial financial backing, and a series of exclusive deals with television networks, has acted as both a manager and promoter for the over 200 boxers he has under contract. This has led to both the financial detriment of nearly all of professional boxing’s other major U.S. promoters and in violation of the “fire wall provision” of the Ali Act, a federal statute which bans a boxer’s manager from also acting as his promoter. Much has been written and alleged as to the proprietary of Haymon’s business practices but, to date, no criminal charges have been filed against Haymon and no court has yet ruled that he and his business enterprises have violated the Ali Act. Interestingly, for many of the boxers signed with Haymon, any such determination would likely be financially detrimental, as he has generally provided his boxers above-average purses. But what impact would a ruling that Haymon has not, in fact, violated the Ali Act mean for the regulation of professional boxing in the United States? A quick look follows.
A Tearing Down of the Fire Wall?
Under the Ali Act, “[i]t is unlawful for…a promoter to have a direct or indirect financial relationship in the management of a boxer” and for “a manager…to have a direct or indirect financial interest in the promotion of a boxer; or…to be employed by or receive compensation of other benefits from a promoter, except for amounts received as consideration under manager’s contract with the boxer.” Notably, the Ali Act’s “[f]irewall between promoters and managers … only applies to boxers participating in a boxing match of 10 rounds or more.” As meticulously documented in Haymon lawsuits, it appears hard to dispute that Haymon plays both roles for virtually all of his world-level boxers (and all world champions he has under contract), and especially those who are featured in the televised portion of his companies’ Premier Boxing Champions shows, where most, if not all, of the bouts are scheduled for 10 rounds or more. Accordingly, any ruling suggesting that Haymon has not violated the “firewall provision” could, in the abstract, effectively eviscerate the provision.
Or would it? A large component of the allegations against Haymon in the various lawsuits is the claim that Haymon, while not expressly acting as a given card’s promoter, effectively does so by using “front” or “sham” promoters who essentially allow him to utilize their promotional licenses to stage shows while he handles the entire promotion behind the scenes, from selecting who appears on the card and negotiating with venues to who gets tickets. However, at this stage in both the Golden Boy and Top Rank lawsuits, the allegations as to the “front” or “sham” promoters are just that; allegations. It would take a substantial amount of discovery in each case to be able to conclusively say that Haymon did not just have excellent relationships with many promoters and boxers that would make for appealing bouts on their shows, but rather used them as fronts while he did all of the work and thus acted as both a manager and promoter. If a finding that all promoters involved with Haymon effectively served the role as promoters, in word and in deed, for each card featuring Haymon’s boxers, while Haymon did not, were to be made, it could be said that the Ali Act’s “firewall provision” had not been abrogated or otherwise rendered toothless, at least not in that manner.
The Rise of the Advisor Role?
Haymon is noted as an “advisor” to many of his boxers, which would appear to fill the role of neither a manager nor a promoter, but seemingly entails acting like a little of both. A handful of other individuals around professional boxing contract for their services as advisors as well, despite nebulousness of such relationships and the uncertainty of the enforceability of such agreements given the “firewall provision” in the Ali Act. Moreover, none of the nation’s boxing commissions issue an “advisor license” or otherwise formally regulate advisors, while virtually all of them regulate managers and promoters and require them to be licensed.
A ruling in favor of Haymon in the Golden Boy and/or Top Rank lawsuits would serve to solidify the viability of the advisor role in professional boxing and likely encourage others in and around the sport to assume similar roles for the boxers who seek their services. Such a development would require athletic commissions to revise their licensing requirements to cover advisors, or otherwise effectively decimate the power of commissions to protect boxers against unscrupulous handlers by allowing a loophole to exist that does not require advisors to be licensed despite the strong sway they would have over their boxers’ careers. It would also likely mandate a revisiting of the Ali Act’s “firewall provision,” as the advisor role currently fills a legal gray area between the manager and promoter role which would have to be addressed if the “firewall provision” were to remain viable.
The Rise of Attorneys as Advisors for Boxers on All Levels of the Sport?
A victory for Al Haymon in the Golden Boy and/or Top Rank lawsuits may not necessarily lead to a windfall for existing managers, promoters, or advisors, but instead may benefit attorneys who count professional boxers among their clientele. Indeed, if professional boxers are put in a position where it is not apparent that there is truly an arms-length relationship between their manager, promoter, and/or advisor, it may be that they turn to attorneys do make sure all of their handlers are effectively carrying out their contractual duties in a manner that is in the best interest of the boxer’s career. While such a development could effectively serve to make the professional boxing industry more honest without further government regulation, it could also make it more litigious, and thus serve as a financial detriment to players on all sides of the sport.
While it remains to be judicially determined whether Haymon’s business practices truly violate any laws, rules, or regulations governing professional boxing, what is clear is that the rulings in either the Golden Boy or Top Rank lawsuits could, for better or worse, effectuate a sea change in how the business of professional boxing is conducted in the United States. Findings of liability against Haymon could bring an end to Haymon’s entire model of doing business and shift the power in professional boxing back to the television networks, promoters, and managers in their individual capacities. Contrarily, victories for Haymon could effectively gut the “firewall” between promoters and managers, give rise to “advisors” who walk the line between both roles, and potentially increase reliance on legal counsel to make sure anyone is really looking out for the boxer in any given negotiation. Talk about prizefights with a lot on the line…
Tags: Al Haymon, Ali Act, Golden Boy, Top Rank