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What we know about Al Haymon: Part II

22
Mar

THE RING’S Thomas Hauser in this special series sheds light on the powerful and mysterious boxing impresario Al Haymon and Premier Boxing Champions. Second of five parts.

Al Haymon's college yearbook photo

Al Haymon’s college yearbook photo

Al Haymon’s first view of boxing was through the eyes of his older brother.

Bobby Haymon was a journeyman welterweight who fought from 1969 to 1978 and compiled a record of 20-8-1 (8 knockouts). In the last fight of his career, he was stopped in three rounds by a young prospect named Sugar Ray Leonard. Al is said to still be resentful over the way his brother was treated by the lords of boxing.

The first fighter Haymon managed was Vernon Forrest.

It’s a long way from those early days to where Haymon is today.

The cornerstone of Haymon’s empire in boxing 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). Through Davis, Haymon received lucrative paydays for his fighters, sometimes against overmatched opponents. And equally important, HBO allowed Haymon to control the promotional process for many of these fights.

Haymon worked with a half dozen different promoters. But despite their involvement, he often dealt directly with HBO Sports President Ross Greenburg and Davis during contract negotiations while the promoter of record was limited to doing basic nuts-and-bolts work on the fight. Because of his relationship with HBO, Haymon rarely had to give a promoter long term contractual rights to any of his fighters. The promoter had little more than a handshake and Haymon’s word that he had a future with a particular fighter. That gave Haymon enormous leverage over promoters in terms of how income generated from each fight was split. Promoters put up with this arrangement because, over the years, HBO was remarkably generous when giving out dates and paying license fees for fights involving Haymon’s fighters.

“The big money in boxing is at the top,” says promoter Gary Shaw. “I stood in line like everyone else. Al would say, ‘You’re my guy on this fighter. No, you can’t have that one; someone else is my guy with him.’ Then Al would negotiate the deal with HBO and tell the promoter what the promoter was getting paid. And we bought into it because we needed the dates. Meanwhile, I wasn’t making money. Al kept telling me, ‘Next time, next time.’ And next time never came.”

Then Haymon settled on a favored promoter – Richard Schaefer of Golden Boy. And Floyd Mayweather, who was a Haymon client, became a superstar. That took things to a new level. Haymon leveraged his Mayweather power to exact further concessions from the premium cable television networks. And he was able to sign fighters from 135 to 154 pounds by telling them, “You’re in the Floyd Mayweather sweepstakes.”

But Haymon’s success wasn’t inextricably tied to Mayweather. He was building for a future after “Money” and kept the corporate entities that he controlled largely free of obligations to Floyd. Even today, most things Mayweather are separate and apart from the PBC brand.

Al puts his fighters first … I don’t know a single fighter who’s unhappy with Al. I know I have no complaints with the way Al has treated me.

The first indication that Haymon was planning to challenge the established order in boxing came when he began signing managerial and advisory contracts with a massive number of fighters. Ironically, when Haymon first aligned with Golden Boy and the promotional company was stepping up efforts to add to its own roster of fighters, Haymon had quipped, “Sometimes Richard and Oscar get that Pac-Man mentality where they have to gobble everything up.”

Now Haymon was gobbling everything up, an estimated 200 fighters. That was far beyond anything HBO and Showtime could accommodate.

Then Haymon’s master plan began to take shape.

On January 14, 2015, NBC announced that it had entered into an agreement providing for 20 Premier Boxing Champions telecasts in 2015 (five on NBC on Saturday nights, six on NBC on Saturday afternoons and nine in prime time on NBC Sports Network). But it wasn’t a traditional licensing-fee deal. Instead, Haymon was buying the time from the network, would be responsible for most costs associated with the telecasts and would recoup his expenditures as best he could by selling advertising himself.

On Jan. 22, a similar agreement with Spike was announced; only here, Spike was to cover approximately $350,000 in expenses in conjunction with each telecast.

The announcement of time buys on CBS (February 17), Bounce TV (March 2) and ESPN (March 18) followed.

The ESPN deal was a $16 million time buy that ran over a two-year period with Haymon having an option to extend the contract for another six months for an additional $4 million. The shows were to run in prime time on ESPN with at least two Saturday afternoon shows on ABC. ESPN would foot the bill for production.

The ESPN deal was particularly significant for two reasons. First, ESPN is a pipeline to the brain of virtually every sports fan in America. And second, it meant that the long-running ESPN2 “Friday Night Fights” series would end.

On Aug. 4, Fox Sports announced an agreement pursuant to which Premier Boxing Champions would be the exclusive boxing provider for Fox Sports 1. There were to be 21 Tuesday-night shows from Sept. 8 through June 28, 2016, with the shows being simulcast on Fox Deportes. On Oct. 18, 2015, Fox announced that there would be three prime time PBC telecasts on its broadcast network in 2016 (Jan. 23, March 12, and July 16).

At this point, Haymon had more networks than some promoters have fighters. And he’d established a sweetheart relationship with Showtime, which was continuing to pay substantial license fees for Haymon fights (although without PBC branding).

The time buys allowed Haymon to bypass normal media filters in delivering his boxing programming to the public. He no longer had to cajole network television executives into giving him dates. He had bought them.

Meanwhile, Haymon was also spending on other fronts.

On March 10, 2015, Warriors Boxing (a stand-in for Haymon) won a purse bid for the IBF 168-pound title fight between James DeGale and Andre Dirrell for a far-above-market bid of $3.1 million. That signaled PBC’s intention to control title bouts for its fighters whenever possible.

At the same time, Haymon reached out through an intermediary to make a two-year contract offer to Michael Buffer. The proposed deal would have been exclusive insofar as Buffer’s boxing work was concerned. The Hall of Fame ring announcer would attend approximately 24 Premier Boxing Champions shows per year, tape announcements for others and allow Haymon to use his “let’s get ready to rumble” trademark in conjunction with the promotion of PBC telecasts. In return, he would receive $1 million for the first year of the contract and $1.1 million for the second.

Then the offer was withdrawn. A source close to the situation says that the idea was nixed in deference to Showtime, which felt Buffer was too closely associated in the public mind with HBO and that the deal would marginalize Jimmy Lennon (Showtime’s own ring announcer).

If I was one of Haymon’s fighters. I’d think he’s Santa Claus. I understand why the fighters love him.

Haymon signs fighters to an “Exclusive Management Agreement” that gives him 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 opportunites for the boxer.

Haymon often charges 10 or 15 percent of a fighter’s purse for his services. That’s less than the standard manager’s share. Sometimes, he’ll pay an advance (or interest-free loan) to a fighter and only cut the fighter’s purse after the purse reaches a certain level. The advance (or loan) is paid back only when the purses reach a still-higher number.

Many of Haymon’s recent contracts purport to be for a five-year term with Haymon having the option to extend the contract for two more years if the fighter competes in a WBC, WBA, IBF or WBO world championship fight. The contract further provides that the term may be “additionally” extended if the fighter becomes one of the five highest-rated contenders for a championship sanctioned by the WBC, WBA, IBF or WBO. Another clause provides for one more two-year extension if the fighter “enters into a multifight agreement with any television network.” The contract concedes that some or all of these extensions can be invalidated if they’re found to be in violation of state or federal law.

Haymon is widely regarded as “pro-fighter.” His fighters are paid well, often above market value.

“Al puts his fighters first,” says Paulie Malignaggi. “No one puts the fighters first like Al. I don’t know a single fighter who’s unhappy with Al. I know I have no complaints with the way Al has treated me.”

As earlier noted, Haymon has approximately 200 boxers under contract. Fighters can be difficult to satisfy. No matter how good a job a manager or promoter does, there are complaints. But there have been virtually no complaints regarding Haymon’s stewardship from the fighters he controls.

“Acts want to be promoted properly,” Haymon told Ebony Men in 1994. “They want to be exposed to the masses. They want professional productions and proper presentation. I always focused on making sure the artists got what they needed and that they were satisfied and sufficiently taken care of to go out and represent to other artists that I had done a good job because that’s the best reference.”

“Everything that Al promised to me, he delivered,” Floyd Mayweather said last year.

Don King and 50 Cent each took runs at separating Mayweather from Haymon and failed.

“If I was one of Haymon’s fighters,” says a rival promoter, “I’d think he’s Santa Claus. I understand why the fighters love him.”

It’s nice that a capable businessman is representing the best interests of fighters. But it would be wrong to think that Haymon is Mother Teresa. The truth is more nuanced than that.

“I hear all the time that Al is an advocate for what’s best for fighters,” Greg Bishop of Sports Illustrated says. “What happened to Lamon Brewster stands in stark contrast to that.”

On April 10, 2004, Brewster knocked out Wladimir Klitschko to become WBO heavyweight champion. His manager at the time was Sam Simon. Then Haymon came calling.

“Haymon wasn’t the power in boxing then that he would become,” Simon said several years ago. “But his modus operandi 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, Brewster had left Simon. His initial contract with Haymon called for Alan Haymon Development Inc. to receive seven percent of the first $2 million of each purse and 5 percent thereafter.

Simon was independently wealthy. He had provided Brewster with a house to live in rent-free during the time that he was Lamon’s manager. And he intended to be supportive of Brewster when the fighter’s ring career was done.

On Haymon’s watch, Brewster suffered a detached retina in his left eye in the first round of an unsuccessful April 1, 2006, title defense against Sergei Liakhovich in Cleveland. But that doesn’t tell the whole story. Yes, Brewster suffered a detached retina during the fight. But his eye had been injured before the bout. He’d undergone laser eye surgery several weeks prior to the fight and the eye had continued to trouble him.

Boxers who compete in Ohio are required to have an opthalmic examination prior to the fight. “I have the form right in front of me,” Bernie Profato (executive director of the Ohio State Athletic Commission) told this writer five days after Brewster-Liakhovich.

The form revealed that, on March 24, 2006, Brewster was given an opthalmic examination by Dr. Thomas Anthony Baudo in Vero Beach, Florida. Baudo filled out a form entitled “Opthalmological Exam for Professional Boxer.” On that form, under a heading that read “specify abnormalities,” he wrote that Brewster had undergone surgery for a retinal tear and detachment but that his eye was now “stable.” Baudo also wrote, “Mr. Brewster understands the increased risk of RD (retinal damage) when boxing.”

In accordance with Ohio law, Brewster also underwent a general pre-fight physical examination prior to receiving his license. The “Physical Examination Report” for that exam included three questions under the heading “Eye History.” It asked if the applicant (1) had ever experienced blurred vision or (2) ever had a surgical procedure on his eyes or the tissue around his eyes other than simple sutures to the skin around the eyes. And it specifically asked (3) “Has applicant ever been informed by a physician that (he) had significant eye problems such as a retinal detachment, retinal tear, or dislocated lens.”

In each instance, the answer Brewster gave on this examination form was “no.” His history of retinal surgery was covered up.

Haymon, as noted in Part I of this series, is known for micromanaging. It strains credibility to believe that he wasn’t aware of Brewster’s eye problems. Yet one year later Haymon sent Brewster to Germany for his next bout, a rematch against Wladimir Klitschko on July 7, 2007, while Lamon was still on medical suspension in the United States. Two of Brewster’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.

Brewster lost every minute of the Klitschko rematch, which was stopped after six rounds. He ended his career as a punching bag for the likes of Gbenga Okoukon and Robert Helenius. He’s now in financial difficulty and legally blind in one eye.

As Haymon’s power has grown, his adversaries have alleged with increasing frequency that his conduct violates federal and state law. The first statute cited in that regard is often the Muhammad Ali Boxing Reform Act.

The Ali Act creates a firewall between managers and promoters. A manager is defined by the act 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 (ii) 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 functions as the de facto promoter for virtually all of the shows on which his fighters appear. He negotiates with the television networks, selects most of the fighters who appear on the card, determines purses for the featured fighters and tells the promoter of record how much the promoter will be paid.

“I don’t know how much money was raised, I don’t know how much money was spent and I don’t care,” Leon Margules said of a recent PBC card for which he was the promoter of record. “That’s Al’s job.”

One can argue that the Ali Act was designed to protect fighters and, thus, Haymon’s blurring of the line between managing and promoting is inconsequential. Other legal issues are more problematic.

Haymon seems to be engaging in some of the same questionable practices as other managers and promoters.

For example; Keith Thurman’s purse as reported to the Florida State Athletic Commission in conjunction with his July 11, 2015, PBC fight against Luis Collazo was $1.5 million. But Thurman told Dan Rafael of ESPN.com that Haymon gave him a check for an additional $1.2 million.

The purses filed with the New Jersey State Athletic Control Board for the Aug. 15, 2015, PBC fight between Antonio Tarver and Steve Cunningham were listed as $250,000 for each fighter. But Tarver is said to have received a total of $500,000. And a source close to Cunningham says that the fighter was paid an additional $100,000 as an advance.

It’s a constant battle to hold onto your fighters. … All I can tell my guys is, ‘Stay with me. If you do your job in the ring, I’ll get you on HBO. HBO isn’t going to disappear and Haymon might.’

Haymon isn’t the first person in boxing to be mentioned in conjunction with differing sets of contracts and inaccurate filings with state athletic commissions. But if an inaccurate filing occurs, the tax consequences can be significant. And it might affect payments to third parties based on contract percentage splits.

The antitrust issues that surround Premier Boxing Champions are more consequential.

Talking about the American economy in 1960, John F. Kennedy declared, “A rising tide lifts all boats.” But the PBC tide is threatening to sink many of them.

Haymon’s time buys have changed boxing’s economic model and made it increasingly difficult for mid-level promoters to survive. They can develop a prospect to the point where he’s 12-0, and then there’s virtually nowhere they can go to get him on television. Even larger promoters like Main Events lack the resources to buy time on attractive platforms. In the United States, only HBO and Showtime are paying significant license fees for fights. And Showtime does business primarily with Haymon.

In sum, Haymon is changing the structure of the marketplace in a way that’s threatening to drive out competing promoters.

He has also been poaching fighters. Cameron Dunkin manages Terence Crawford. He has lost several fighters to Haymon, including Leo Santa Cruz and Mikey Garcia.

“It’s a constant battle to hold onto your fighters,” Dunkin says. “Haymon has his guys whispering in their ear, ‘Danny Garcia is making more money than you are because he’s with Al and you’re better than Danny Garcia. Al is flying his fighters around in a private jet.’ All I can tell my guys is, ‘Stay with me. If you do your job in the ring, I’ll get you on HBO. HBO isn’t going to disappear and Haymon might.'”

“Haymon is screwing up the marketplace,” Pat English (the attorney for Main Events) says. “That’s for sure.”

On July 1, 2015, Top Rank (Bob Arum’s promotional company) filed suit in the United States District Court for the Central District of California against Haymon, three companies controlled by Haymon, Waddell & Reed (which has supplied the venture capital for Haymon), and one of Waddel & Reed’s affiliated companies. The suit alleged violations of the Sherman Antitrust Act, Clayton Antitrust Act, Muhammad Ali Boxing Reform Act and various California state statutes.

An Oct. 16, 2015, court order dropped the Waddell & Reed defendants from the lawsuit and dismissed many of the claims against the Haymon defendants with leave to amend. On Jan. 6, 2015, the court ruled that Top Rank’s amended complaint was sufficient to survive a motion to dismiss and ordered that the litigation proceed to the discovery stage.

On May 5, 2015, Golden Boy and Bernard Hopkins filed a separate lawsuit, also in the United States District Court for the Central District of California, against Haymon, various companies that Haymon controls, Waddell & Reed and Ryan Caldwell (a former Waddell & Reed fund manager). In late-June 2015, Golden Boy dropped Waddell & Reed as a defendant in its lawsuit.

Counsel for Top Rank and Golden Boy have been coordinating their efforts.

Top Rank has served discovery demands on the Haymon defendants and close to a dozen other individuals and corporate entities including Waddell & Reed, Ryan Caldwell, Richard Schaefer and several local promoters that Haymon has been using to promote PBC events. Similar requests for discovery from the television networks that Haymon has been doing business with are expected shortly. To date, Top Rank’s discovery demands (and those of Golden Boy) have been met by a laundry list of objections with the apparent aim of delaying, if not outright obstructing, discovery.

A source close to Haymon says, “So far, Al is resisting discovery. But if discovery really goes forward, he’s going to go after every piece of paper that involves Top Rank’s relationship with Manny Pacquiao. Al takes pride in the fact that his representation of Mayweather is the antithesis of the way Arum has dealt with Pacquiao. And yes, I know that Arum is Pacquiao’s promoter, not his manager, so he has a different fiduciary duty. But that doesn’t relieve him of the obligation to give Pacquiao an honest accounting. And by the way, why should Michael Koncz (Pacquiao’s business advisor) get a free pass?”

This could get ugly.

Meanwhile, the reaction of many in boxing to the ghostlike presence of Al Haymon brings to mind words written by Hughes Mearns more than a century ago:

Yesterday upon the stair

I met a man who wasn’t there

He wasn’t there again today

I wish, I wish he’d go away

 

This is the second in a five-part series. Click here for Part I, or go to Part III.

Hauser is a consultant for HBO Sports.

Thomas Hauser can be reached by email at [email protected] His most recent book – A Hurting Sport – was published by the University of Arkansas Press. In 2004, the Boxing Writers Association of America honored Hauser with the Nat Fleischer Award for career excellence in boxing journalism.