Established boxing promoter Bob Arum and his company Top Rank Inc. on Wednesday announced a legal fistfight to test powerful boxing manager Al Haymon’s Premier Boxing Champions operation.
Seeking more than $100 million in damages and an injunction to stop Haymon’s “predatory practices” in a 50-page lawsuit filed in U.S. District Court in Los Angeles, Top Rank attorneys detail a litany of steps they claim Haymon has taken to thumb his nose at the mandated separation between manager and promoter with his PBC model.
“If left unabated, this conspiracy threatens to fatally cripple competition in [boxing], thereby causing substantial and irreversible harm to boxers, legitimate promoters, and consumers,” Top Rank attorney Daniel Petrocelli wrote in the lawsuit.
Earlier this year, after bulking up his powerful stable of fighters, including Floyd Mayweather Jr., to 200, Haymon announced Premier Boxing Champions, which, with the alleged $400 million backing of a Kansas City, Mo., investment firm, Waddell & Reed, struck time-buy deals to put boxing on NBC, CBS, ABC, along with ESPN and other cable networks.
“In order to stifle legitimate promoters from competing against PBC, Haymon has obtained exclusivity commitments from broadcasters,” the lawsuit claims. “Between these predatory ‘payola’ payments and the expenses of promoting each televised match, Haymon and Waddell & Reed are operating at a significant short-term loss in the millions of dollars.”
In the lawsuit, it’s speculated that Haymon’s losses could exceed $200 million in PBC’s first 24 months of operation.
“This ‘loss leader’ strategy … has allowed Haymon to gain unfair advantage in the promoter market to the severe detriment of legitimate competitors like Top Rank,” according to the lawsuit.
Haymon and PBC officials declined to comment on the lawsuit.
Arum has promoted fights since working with Muhammad Ali in the 1960s. His current stable, featuring Manny Pacquiao, featherweight champion Vasyl Lomachenko and welterweight Timothy Bradley, fight on HBO.
Top Rank’s lawsuit follows similar claims made by Oscar De La Hoya’s Golden Boy Promotions in a May lawsuit against Haymon.
Top Rank additionally takes issue with Haymon’s attempts to block venues, such as AEG-owned Southland venues Staples Center and StubHub Center, from other promoters while also preventing PBC fighters from matches against Top Rank boxers.
The venue-blocking practices, which forced an attractive slugfest between Lucas Matthysse and Ruslan Provodnikov from the Southland to a New York casino, according to the lawsuit, have monopolistic goals.
“Using one’s power to box out competitors is a classic monopolistic tactic,” Petrocelli wrote in the lawsuit.
“Once Haymon obtains monopoly power in the market for promoting professional boxing matches, he will recoup the losses by charging exorbitant prices to broadcasters, sponsors, and consumers. Haymon and Waddell & Reed will be the sole competitor.”
Haymon and Arum have been longtime adversaries dating to Mayweather’s 2006 departure from Top Rank.
Ultimately, Haymon, once a musical promoter with ties to Whitney Houston and Beyonce, beefed up his stable, with many of his fighters linked to Golden Boy Promotions until a leadership split last year halted that bond.
Haymon’s cast includes unbeaten welterweights Keith Thurman and Danny Garcia, light-heavyweight champion Adonis Stevenson, former middleweight champion Peter Quillin and former welterweight champion Shawn Porter.
With PBC, Haymon has retained various other promoters, such as New York’s Lou DiBella and Sherman Oaks’ Goossen Promotions to promote the PBC bouts.
The Muhammad Ali Act stipulates that “[a] manager must be a determined advocate for the boxer’s interests and not be influenced by financial inducements from a promoter,” but, as DiBella noted, it’s never been enforced.
DiBella has said he sees no violation of the Ali Act that forbids managers acting as promoters since he’s actually promoting bouts and that PBC fighters are making purses that match or exceed what other championship-level boxers earn.
The lawsuit, however, refers to DiBella and the other PBC promoters as “sham” promoters, producing a $1.75-million check from Haymon Sports that PBC boxer Julio Cesar Chavez Jr. posted a photo of on social media for his April bout at StubHub.
“The transaction could hardly be more explicit … paying the purse is a classic promoter responsibility, not the job of a true manager,” Petrocelli wrote in the lawsuit that further claims Sherman Act violations.
“While Haymon’s sham promoters may formally execute contracts with venues, sponsors, broadcasters, and other stakeholders, and may submit those contracts to state athletic commissions, they do not control the negotiations. Rather, Haymon directs everything himself.”
PBC fighters “enter unlawful ‘tie out’ agreements, which prevent the boxers (whose interests Haymon purports to represent) from freely contracting with legitimate promoters,” the lawsuit claims.
The Assn. of Boxing Commissions in April asked U.S. Atty. Gen. Loretta Lynch to probe the PBC practices.
“For decades, the boxing business earned a poor reputation because of some unsavory characters,’’ Petrocelli said in a prepared statement about the lawsuit. “Congress stepped in and enacted laws to clean up the industry. Top Rank is trying to ensure that Al Haymon and Waddell play by the same rules as everyone else.’’