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By Zach Arnold | November 10, 2016

Quick & dirty summary:

In a Federal court filing, Al Haymon’s attorney repeatedly admits that he’s a boxing manager and not “an advisor”

Public record requests reveal that Haymon is a licensed manager in Nevada but not in California

Legal admission of Haymon being a manager raises the stake for Ali Act legal issues

A review of one of Haymon’s prior management contracts reveals consummation in California but “choice of law” provision in Nevada with mandatory arbitration

Prior Haymon contract required five year minimum term (seven year maximum term) with automatic two year extension for any fighter in a title fight or any fighter who signed a promotional contract with a TV outlet

Introduction

The financial struggles of the hedge fund backing Al Haymon have been revealed over the last year. More financial secrets will be coming out after a shareholder derivative lawsuit was filed in Kansas to try to get a judge to recover money a hedge fund allegedly put in a shell LLC for Haymon’s Premier Boxing Champions entity.

However, most of the questions regarding Al Haymon’s business practices remain unanswered mysteries. Until now. For the first time, thanks to a combination of Federal court filings & public record requests & confidential sources, it can now be revealed how Haymon’s various entities have entered into contracts with boxers and what his legal strategy has been to navigate the waters of the Muhammad Ali Act.

Haymon’s admission – I’m a manager

In Golden Boy’s anti-trust lawsuit against Al Haymon, GBP accused Haymon of violating the Ali Act by allegedly acting as both a manager of boxers and as a promoter (through Premier Boxing Champions). Haymon’s attorneys argued that he is not a promoter and that PBC is a “packager” that assists television networks who act as the real promoters. Take note of who owns what of the various Haymon Entities according to Haymon’s deposition in the Golden Boy lawsuit:

According to Al Haymon depo: Haymon owns Haymon Development which co-owns Haymon Holdings w/ Waddell which wholly owns Haymon Sports. — Paul Gift (@MMAanalytics) November 10, 2016

In public, Haymon has long been noted as an “advisor” rather than a manager. Managers are legally required to do deals with state athletic commission forms.

Now, attorney Michael E. Williams for Haymon Entities is arguing in Federal court that Haymon is not a promoter because he is a manager.

This argument carries important legal significance on two fronts. Keep in mind that the court filing says Haymon Sports LLC is in charge of the management contracts. Remember this for later on in the article.

First, Haymon argues in his motion for summary judgment against Golden Boy that they do not have legal standing to sue Haymon for an Ali Act violation because the law only gives boxers or government agencies the standing to pursue civil or criminal action against offenders. Since Golden Boy is neither a boxer or a government agency, Haymon claims they can’t sue him using the Ali Act.

Second, boxing managers are required to be licensed by athletic commissions in the states in which the manager does business in. California’s Business & Professions Code 18642 explicitly states that “no person shall participate in any contest or serve in the capacity of a booking agent, manager, trainer, or second, unless he or she has been licensed for that purpose by the commission.” The Athletic Commission’s Code of Regulations specifically says “no licensee shall enter into any agreement under the jurisdiction of the commission with any unlicensed person, nor shall any licensee have any such dealings related to boxing with any person or club whose license is currently under suspension, or revoked, or whose application for a license has been denied.”

With Al Haymon doing most of his business in four states (California, Nevada, Texas, New York), we filed public records requests with all four Athletic Commissions regarding managing licenses for he and his Haymon Entities. Haymon lives in California, is involved in shows in California, and has negotiated & entered into contracts in California. According to the California State Athletic Commission, Haymon has had no California boxing manager’s license on record for the past five years.

We turned next to Nevada. Nevada explicitly states that “all contestants, promoters, managers, seconds, trainers and ring officials must be licensed by the Commission. No person may participate, directly or indirectly, in any professional contest or exhibition of unarmed combat unless the person has first procured a license from the Commission.”

After filing a records request regarding managing licenses for Haymon, we hit the jackpot.

Al Haymon’s silver state tongue

It turns out that Al Haymon has been filing for a Nevada boxing manager’s license for several years now.

With this news, we made an educational guess that Haymon getting licensed in Nevada meant that his “advisory” agreements with boxers were in fact management contracts based on Nevada law. Thanks to a confidential source who provided us with a prior copy of one of Haymon’s contracts from Al Haymon Development, our suspicions were confirmed.

The contract we saw used a “choice of law” provision to directly state that even though Haymon is negotiating and entering into a contract based in California, Nevada law takes precedence. Additionally, either party (athlete or manager) had to give 30 days notice for a breach in order to cure the breach, and that legal disputes are to be dealt with in binding arbitration with a single arbitrator from Judicial Arbitration and Mediation Services (JAMS).

The contract we saw had a minimum five year time period with an automatic two year extension if a fighter is involved in a title fight or ends up signing a promotional contract with a television network. The agreement is capped at a seven year term limit with a 10% management fee. One provision in the contract states that the selection of the promoter shall be at the discretion of the manager (Haymon).

This is very important to highlight because Haymon’s own attorney in Federal court argued that Golden Boy had unclean hands in California business dealings by using promotional contracts with duration clauses longer than five years, which is in violation of California law. Haymon’s attorney said California law on duration clauses pushed Golden Boy to build their promotional contracts on Nevada law in order to avoid the five year rule. Now we see that a prior Haymon management contract used Nevada law to do exactly the same thing with a seven year maximum duration period.

The other important legal issue to highlight is the “choice of law” provision. Haymon, a licensed boxing manager in Nevada, is supposedly unlicensed in California. He is negotiating and entering into a boxing management agreement with licensed California boxers reliant on Nevada state law. Does the California State Athletic Commission have jurisdiction over such a management contract even with the “choice of law” provision? Remember the California code of regulations section we cited (§ 392)?

“No licensee shall enter into any agreement under the jurisdiction of the commission with any unlicensed person, nor shall any licensee have any such dealings related to boxing with any person or club whose license is currently under suspension, or revoked, or whose application for a license has been denied.

In this scenario, it’s extremely unlikely to see the California State Athletic Commission go after a licensed boxer for signing a management contract in California with someone who appears to be an unlicensed manager (Al Haymon) in the state. But what if the Athletic Commission wanted to pursue action against Haymon? Since Haymon appears to not be licensed with the California State Athletic Commission, their options are limited. Unlike the Contractor’s board or the Medical board, there doesn’t appear to be any code sections giving the Athletic Commission the option for a criminal referral in a competent jurisdiction.

The closest legal option the California State Athletic Commission could possibly pursue against Al Haymon would involve a civil referral citing Business & Profession Code section 17204, which gives a right of action under California’s unfair competition law to have a board or agency send a referral to an Attorney General or District Attorney to pursue a court case. This is the same law Golden Boy is using as a cause of action against Haymon in their current Federal antitrust lawsuit.

That’s not happening any time soon.

What does Haymon’s deposition testimony mean?

Who owns what now?

In the prior AHD contract we read, there was an assignment provision that allowed Haymon to transfer his management contracts “to any other entity in which he shall have ownership interests.” Haymon Sports is, according to Haymon’s testimony, owned by the hedge fund backing PBC. AHD is owned by Haymon. AHD and Haymon Sports co-own Haymon Holdings LLC.

Conclusion

Al Haymon has made millions of dollars in boxing by flying under the radar and keeping a low profile. Once he made the jump into the TV arena with Premier Boxing Champions, he made himself a huge target. Once you make yourself a huge target for lawsuits, the business secrets start getting revealed. Thanks to Haymon’s own words in discovery & deposition in Federal court filings combined with public record requests and confidential sources, for the first time in Haymon’s boxing career we are starting to get a peek into how he has made his millions and the legal tactics he has used to shield himself from his competitors.

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