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http://www.boxingscene.com/what-al-haymon-planning--79627
By Thomas Hauser
Al Haymon is smart. “Scary smart,” one person who has dealt with him over the years calls him. He’s also adept at telling people what they want to hear, a good listener, and very much into control.
In recent months, Haymon has added significantly to the growing number of fighters that he manages or “advises.” In a better-run sport, his recruiting methods might earn him a trip to the commissioner’s office to answer charges of tampering. Be that as it may, the list of fighters that he represents now includes Floyd Mayweather, Marcos Maidana, Adrien Broner, Danny Garcia, Lucas Matthysse, Amir Khan, Devon Alexander, Deontay Wilder, Peter Quillin, Shawn Porter, Keith Thurman, Erislandy Lara, Paulie Malignaggi, Andre Berto, Chris Arreola, Sakio Bika, Gary Russell Jr, Adonis Stevenson, Chad Dawson, Beibut Shumenov, Jermain Taylor, Edwin Rodriguez, Lamont and Anthony Peterson, Jermell and Jermall Charlo, Leo Santa Cruz, John Molina, Rances Barthelemy, Luis Collazo, Josesito Lopez, Miguel Vasquez, Vanes Martirosyan, Dominic Breazeale, Marcus Browne, Terrell Gausha, Errol Spence Jr, Dominic Wade, and Rau'shee Warren.
That’s a lot of fighters. And it leads to the question: “What will Haymon do with them?” Showtime, which supplanted HBO as his primary purchaser of content, doesn’t have the budget for license fees to keep them all active.
The boxing industry has been kept largely in the dark with regard to Haymon’s plans for the future. Over the past few weeks, this writer has conducted dozens of interviews in an effort to put the puzzle pieces together. An outline is emerging.
Let’s start with some basics.
Haymon signs fighters to an "Exclusive Advisory Agreement" that gives his corporation the exclusive right to render services in securing the boxer's participation in professional boxing matches, exhibitions, entertainment performances, personal appearances, endorsements, and sponsorship opportunities that arise out of the fighter’s boxing career.
In return, Haymon is required to (a) use his "best efforts" to secure remunerative boxing matches for the boxer; (b) advise and counsel the boxer in the overall development of his career; (c) secure proper training facilities and equipment for the boxer; (d) publicize and promote the talents and abilities of the boxer in the media; and (e) attempt to secure commercial endorsements, personal appearances, and entertainment opportunities for the boxer.
Haymon often charges ten or fifteen percent of a fighter’s purse for his services. That’s less than the standard manager’s share. Sometimes, he’ll pay an advance to a fighter and only cut the fighter’s purse after the purse reaches a certain level. The advance is paid back only when the purses reach a still-higher number.
Haymon isn’t mother Teresa. He makes money from boxing, and not just from his managerial share.
For example, Haymon has had the contractual right to buy millions of dollars worth of tickets at face value for certain Floyd Mayweather fights. One promoter recounted being in Las Vegas for Oscar De La Hoya vs. Mayweather, having two prime tickets, and needing three. So he traded his two tickets to Haymon in exchange for three less desirable ones. An hour later, those two tickets were listed on the Internet for $12,000.
Ticket scalping (or “ticket brokering” as those in the business call it) is legal in many states. Haymon’s relationship with Lamon Brewster raises a more complicated set of issues.
Sam Simon was one of the co-creators of The Simpsons and an avid sports fan. In 1999, he became Brewster’s manager. “Boxing isn’t a source of revenue for me,” Simon said at the time. “But I take my responsibilities very seriously and get very involved emotionally in Lamon’s fights.”
On April 10, 2004, Brewster knocked out Wladimir Klitschko to become WBO heavyweight champion. Then Haymon came calling.
“Haymon wasn’t the power in boxing then that he would become,” Simon recalled several years ago. “But his modus operendi was pretty much the same. He sought Lamon out and told him, ‘Hey, brother. You look like you could use some good representation from someone who cares about you.’”
Before long, Simon was out and Haymon was Brewster’s advisor. Thereafter, Lamon suffered a detached retina in his left eye in the first round of an unsuccessful April 1, 2006, title defense against Sergei Liakhovich. But that doesn’t tell the whole story. Yes, Brewster suffered a detached retina during the fight. But his eye was injured before the bout. He’d undergone laser eye surgery several weeks prior to the fight. A review of Ohio State Athletic Commission records reveals that this history was covered up during the pre-fight paperwork and examination process.
Worse; one year later, Brewster went to Germany under Haymon’s watch for a rematch against Klitschko while he was still on medical suspension in the United States. Two of Lamon’s sparring partners told Keith Idec of the New Jersey Herald News that, prior to fighting Klitschko, Brewster was having difficulty seeing out of his left eye. Lamon lost every minute of the Klitschko rematch, which was stopped after six rounds.
Brewster ended his career as a human punching bag for the likes of Gbenga Okoukon and Robert Helenius. He is now vision-impaired and, possibly, legally blind in one eye.
Haymon is now boxing’s most influential power broker. The cornerstone of his empire was a relationship that evolved with HBO and, in particular, with Kery Davis (the network’s point person on boxing from the turn of the millennium until June 2013).
Haymon got dates for his fighters on HBO. And as long as he could control the promotion, he didn’t seem to care much who the promoter was.
In the boxing business, a person can be black or white, American or foreign-born, straight or gay, and survive. The one thing he cannot be is weak. Haymon smells out weakness and exploits it well. He maneuvered promoters into putting his fighters on their cards for a fraction of their normal promotional percentage and without the fighter being signed to the promoter. Some promoters bellowed like harpooned seals that they weren’t getting their fair share of the pie. But they stood in line for their cut of the television license fees that Haymon doled out to them.
Haymon has a lot of people’s testicles in his pocket. Greg Bishop found that out in 2011, when he began researching a profile on Haymon for the New York Times . Dozens of people whom Bishop called either declined comment or failed to return his telephone calls. An attorney for Haymon sent a cease-and-desist letter to the Times. To Bishop’s dismay, his article was substantially toned down before publication at the instruction of his editor.
Meanwhile, Haymon has an aversion to being interviewed by the media and operates largely out of public view. One might posit that there are people in the federal witness protection program who get more exposure than he does.
A manager who was angry that Haymon was attempting to sign one of his fighters recently hired an investigator to search public records and compile information on Haymon. The only thing of note in the report was the suggestion that, at various times, Haymon has used the alias “Brian K. Pitts.”
So . . . what should boxing expect next from Haymon?
Earlier this year, Haymon formed a new company, a Nevada-based LLC called Haymon Sports. The company has rented office space (suite 350 at 3930 Howard Hughes Parkway in Las Vegas).
At the same time, Haymon has been extending his reach by forming new alliances. Promoter Yvon Michel gives him a presence in Canada. Leon Margules offers access to Luis DeCubas Sr and Luis DeCubas Jr, who in turn can deliver Latino fighters.
Haymon initially planned to use Golden Boy as the primary promotional vehicle for his fighters during the next stage of his journey through boxing. Toward that end, he appears to have coordinated with former Golden Boy CEO Richard Schaefer in an effort to buy out Oscar De La Hoya and the company’s other major shareholders (AEG and the Brener family). That plan hit a roadblock when De La Hoya refused to sell.”
“I’m the Golden Boy, not Richard Schaefer,” Oscar said. “It’s my name and it’s my company.”
After buy-out negotiations failed, Schaefer resigned from Golden Boy. On June 16, the company instituted an arbitration proceeding against him, claiming $50,000,000 in damages.
At the same time, Haymon was trying to raise money (as much as $100,000,000) to underwrite a new venture. Creative Artists Agency (one of the top talent and sports agencies in the world) was approached but chose not to become involved in the fundraising process. Ultimately, Haymon settled on CVC Capital Partners and Waddell & Reed (both of whom are among the primary equity owners of the Formula One Group). Bruce Hardy McClain (a former managing partner of CVC and currently a member of the CVC board of directors) is also on the board of directors of Haymon Sports.
As noted earlier, Haymon already has more fighters than Showtime has dates for. And his stable of fighters keeps growing. Thus, to get to the next stage, he has approached many of the major sports channels about televising his fighters.
The NBC Sports Group expressed interest.
Multiple sources say that NBC has agreed in principle to a plan pursuant to which Haymon’s company (or a stand-in) would buy $20,000,000 worth of time on NBC and televise at least twenty fights cards during a one-year period. Most of the fights would be on the NBC Sports channel, but at least three would be on NBC.
Haymon’s investment group would pay most costs associated with the telecasts, including the fighters’ purses and television production costs. It would hope to recoup these costs through the sale of advertising. The plan is sufficiently far along that one talent agency has begun putting together a list of names that it can offer as television commentators.
And after the first year?
Sources say that Haymon is considering transitioning to an online subscription service that would bypass television networks and PPV carriers by dealing directly with consumers. Toward that end, he is said to have hired Alex Balfour (who was head of new media for the London Olympic Committee). Balfour is believed to be soliciting applications from potential employees who would like to work for the subscription venture. In that regard, his website ( www.alexbalfour.com ) says only that he is “currently the Chief Digital Officer of a new, exciting, start up in sport.”
The above plan is similar to a 24-hour-a-day subscription Internet channel that World Wrestling Entertainment launched earlier this year. The cost to subscribers for the WWE channel is $9.95 per month. But subscriptions have fallen far short of expectations and, because of operation and programming costs, WWE is expected to lose at least $40,000,000 during the coming year. That poor performance is a major reason why WWE stock has dropped by more than sixty percent (a loss in market value in excess of one billion dollars) since March of this year.
But launching a subscription channel might not be Haymon’s ultimate goal. His end game after that could be taking the company public pursuant to a plan whereby he and the initial investors would reap significant gains through a public stock offering. But – and this is a big but – going public means a different standard of disclosure and more stringent ethical requirements for the conduct of business.
Whatever the plan, one thing is clear. Haymon isn’t doing this as a charitable venture. A significant portion of the investors’ money that will be spent in the near future is likely go to pay for content (i.e. fight cards provided by Haymon). The investors might do well. Or the investors might lose a lot of money.
Haymon did not respond to requests for an interview in conjunction with this article. Stephen Espinoza (the head of Showtime Sports, whose contract was recently extended by the network) declined through an intermediary to answer questions. Richard Schaefer responded by telephone and said that, due to the pendency of litgation, he would prefer not to discuss the situation publicly at the present time.
That leaves a lot of unanswered questions such as, “What will Floyd Mayweather’s role be in all of this?” and “What role, if any, will people like Kery Davis play?”
Then there’s the matter of litigation.
On June 16, 2014, Bad Dog Productions filed a lawsuit against Haymon and several other defendants in state court in Florida. The lawsuit alleges tortious interference with contract and other claims in conjunction with super-featherweight Rances Barthelemy (who signed with Haymon earlier this year). Similar claims by other promoters and managers who believe that Haymon acted improperly to their detriment might follow. Many of these lawsuits will have little more than nuisance value. But one piece of litigation has the potential to become a major problem.
On April 29, 2014, Main Events filed suit in the United States District Court for the Southern District of New York against Haymon, Golden Boy, Showtime, Adonis Stevenson, Yvon Michel, and Groupe Yvon Michel (Michel’s promotional company). The suit alleges multiple causes of action against the defendants, including claims of tortious interference with contract and interference with prospective economic advantage against Haymon in conjunction with the falling apart of the proposed light-heavyweight title-unification bout between Sergey Kovalev (promoted by Main Events) and Adonis Stevenson (now managed by Haymon).
Main Events is represented in the litigation by Pat English. There’s a school of thought that there are two people in the boxing industry that one doesn’t want to have as an angry adversary. One is James Prince. The other is English.
It’s impossible to know at the present time how the Main Events litigation will play out. It’s possible that plaintiff will drop its claims against Golden Boy in exchange for the promotional company providing evidence against Haymon. English himself has said, “We filed the lawsuit based on the facts that we know with certainty at the present time. As we take discovery and the case unfolds, it’s possible, if not likely, that additional causes of action against Haymon will be added in an amended complaint.”
There’s also the matter of the arbitration proceeding between Golden Boy and Richard Schaefer.
When Schaefer resigned as Golden Boy CEO on June 2, he issued a statement that read, “After more than ten years with Golden Boy, it is time to move on to the next chapter of my career. This decision has required a great deal of personal reflection, but ultimately I concluded that I have no choice but to leave. I have succeeded in banking and I have succeeded in boxing, and I look forward to the next opportunity. I am proud to remain a shareholder, so I have a strong interest in the continued success of the company. I am proud of what we have accomplished at Golden Boy, but I now look forward to new challenges."
On June 13, Golden Boy chief operating officer Bruce Binkow (who was widely regarded as Schaefer’s righthand man) left Golden Boy. Then, on June 30, De La Hoya fired deputy COO Armando Gaytan, executive vice president Raul Jaimes, and vice president of marketing Nicole Sparks. Jaimes’s aunt is married to Schaefer. Gaytan is married to Nicole Becerra (Schaefer's longtime executive assistant, who left the company shortly after Schaefer’s departure). Sparks reported to Binkow.
That leaves a void at the top. Someone with business acumen has to run Golden Boy on a day-to-day basis. One name that has surfaced in that regard is Jeff Wald, who once co-promoted George Foreman and was the driving force behind the TV-reality series The Contender . Wald has experience in boxing and entertainment. He knows how to leverage star power and would bring some valuable personal relationships with him.
Meanwhile, Schaefer’s relationship with Haymon is at the heart of Golden Boy’s claim against its former CEO. Schaefer can be expected to argue in the arbitration proceeding that (1) whatever he did with Haymon was designed to benefit Golden Boy; (2) De La Hoya was an impediment to Golden Boy functioning properly; (3) he offered to buy Oscar and the other shareholders out at a fair price; (4) when it was clear that the friction between himself and De La Hoya was hurting the company, he resigned; and (5) Golden Boy appears willing to continue doing business with Haymon without having “paper” on all of Haymon’s fighters, which is no different from the practice that Schaefer himself followed.
Be that as it may; the arbitration proceeding (like the Main Events litigation) has the potential to uncover facts that are damaging to Haymon. And some of those facts might substantiate the claim that Haymon has achieved his present position in boxing through improper conduct encompassing both technical violations and more substantial violations of law.
For example, the Muhammad Ali Boxing Reform Act creates a firewall between managers and promoters. A manager is defined as “a person who receives compensation for service as an agent or representative of a boxer.” A promoter is defined as “the person primarily responsible for organizing, promoting, and producing a professional boxing match.” The act makes it “unlawful for a manager (i) to have a direct or indirect financial interest in the promotion of a boxer; or (iii) to be employed or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager’s contract with the boxer.”
Haymon purports to be a manager. But he seems to function as the promoter for many of the shows on which his fighters appear. Often, he negotiates the license fee with the television network, selects many of the fighters who appear on the card, determines the purse for one or more of the fighters, and tells the promoter of record how much the promoter will be paid.
Most of Haymon’s contracts with fighters state that they are governed by California law. But it appears that few if any of the contracts were signed before a representative of the California State Athletic Commission or filed with the commission as required by California law.
Haymon is also licensed as a manager in Nevada. But few if any of his contracts have been filed with the Nevada State Athletic Commission.
Contract filings in New York are a sloppy murky area of the law. Haymon’s boxer-manager contracts might not be recognized by the New York State Athletic Commission because they’re not on New York’s standard form. But because they’re not on the New York form, they also might not have to be filed with the NYSAC.
The wild card in all of this is that discovery in one or more of the aforementioned legal proceedings might lead to revelations that encourage law enforcement authorities to become involved. No one expects the United States Department of Justice to enforce the Ali Act. It would be nice if it did, but it hasn’t so far. And that’s unlikely to change anytime soon. Nor are state authorities likely to enforce contract-filing requirements in a meaningful way.
Similarly, if Haymon gave four tickets to a sold-out September 2010 concert at Yankee Stadium headlined by Jay-Z and Eminem to a network executive he was doing business with, that might violate the network’s policy on gifts. But it’s unlikely that it would rise to the level of a criminal matter.
But there’s a time-honored axiom in law enforcement: “Follow the money.”
If someone were to track what happened to the total license fees paid for each of the televised shows that Al Haymon’s fighters have been involved with, things might get interesting. For example, shifting license fees from one fight to another is sometimes improper; particularly when it has the effect of disadvantaging a particular fighter, manager, or promoter without that person’s knowledge. Here, one might note that, under federal law, certain revenue streams paid to promoters must be accurately disclosed to fighters.
There has been a lot of talk lately about Al Haymon being on the verge of “taking over boxing.” Under the Al Haymon model, it has been said, Haymon would control everything within his universe (including all sources of revenue) the way Zuffa LLC (UFC’s parent corporation) does.
But if the past fifty years are any guide, it’s impossible for one entity or person to control boxing. Don King was going to take over boxing. Bob Arum was going to take over boxing. Josephine Abercrombie and The Contender were going to take over boxing. It doesn’t happen. Haymon could make a lot of money and amass even more power than he currently has. Or the weight of the boxing world could come crashing down on his investors and his own head.
As for the near future, perhaps the Haymon fighters who are signed to promotional contracts with Golden Boy will appear on Showtime, while his other fighters will be on NBC. Maybe the inverse will hold true. Golden Boy seems to be holding out hope that it can arrive at an understanding with Haymon that will allow it to continue promoting at least some of his elite fighters. If that doesn’t happen, it’s possible that Golden Boy will sue Haymon for various economic torts. If Richard Schaefer can free himself of the restrictions inherent in his contract with Golden Boy – restrictions that are said to run until 2018 – he might be the ideal co-strategist and promoter of record for Haymon to work with.
As for Haymon’s fighters; unlike a promoter (who has only an obligation of fair dealing), a manager has a fiduciary duty to his fighters. Right now, Haymon’s fighters are corporate assets. And since they’re already signed, there’s little liability attached to them given the fact that Haymon hasn’t promised them much more on paper than his advice, counsel, and “best efforts” to perform certain tasks on their behalf.
Has Haymon told his fighters what he plans to do with their contracts as a corporate asset? Should he be making full disclosure of his future plans to them?
No sport other than boxing would allow itself to be in this situation. In any other sport, if one or more major players were planning a initiative that had the potential to restructure or fundamentally change the balance of power in the industry, it would be the subject of in-depth inquiry and investigation. But boxing has no sense of collective good. Virtually everything that happens in the sweet science today is dictated by the desire to curry favor with the powerful, the fear of reprisal, and selfish shortsighted economic interest.
Thomas Hauser can be reached by email at thauser@rcn.com . His most recent book (Thomas Hauser on Boxing: Another Year Inside the Sweet Science) was published by the University of Arkansas Press.
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