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Top Rank lawsuit seeks $100M, stoppage of Al Haymon's PBC series

When Floyd Mayweather adviser Al Haymon and Manny Pacquiao promoter Bob Arum of Top Rank spearheaded the deal to make the May 2 megafight, it was merely a ceasefire between the bitter rivals.

Their decade-long battle hit full-blast mode again Wednesday as Top Rank filed a 50-page lawsuit against Haymon in U.S. District Court in Los Angeles seeking $100 million in damages and an injunction preventing Haymon from continuing to put on his Premier Boxing Champions series, claiming he has violated federal antitrust laws and the federal Muhammad Ali Boxing Reform Act, which makes it illegal to act as both a manager (who has a fiduciary duty to a boxer) and a promoter (who does not).

Top Rank alleges that Haymon serves in both capacities for most of the nearly 200 fighters in his stable.

Top Rank also sued Waddell & Reed, a Kansas City, Missouri-based investment group that has invested more than $400 million from its $40 billion hedge fund to bankroll Haymon's PBC, which has purchased time on multiple television networks, including ESPN, NBC, CBS, Spike TV and Bounce TV, to put on cards featuring his fighters.

"With the financial backing, complicity, and material assistance of Waddell & Reed and other financiers, Haymon is rigging the boxing industry so they can act as manager, promoter, sponsor, and ticket broker for nearly every major professional boxer competing in the United States, all in violation of the Muhammad Ali Boxing Reform Act, the Sherman (antitrust) Act, and a host of other state and federal laws," the suit said. "Openly defying the statutorily-mandated 'firewall' between manager and promoter -- two distinct professional roles that, as described at length below, serve fundamentally different purposes in the boxing industry -- Haymon has leveraged his dominance in the boxing management business to injure and exclude competitors in the business of promoting professional boxing matches in the United States."

The lawsuit comes two months after Oscar De La Hoya's Golden Boy Promotions filed a similar lawsuit seeking $300 million in damages from Haymon and Waddell & Reed.

"Al Haymon and Waddell & Reed are engaged in a sophisticated scheme to gain control of the boxing industry," Top Rank attorney Daniel Petrocelli of O'Melveny & Myers said. "As the lawsuit explains in detail, they are violating federal law, defying state regulators and absorbing significant short-term losses to drive legitimate operators out of the business."

Haymon attorneys Kramer Levin Naftalis and Frankel provided ESPN.com with a statement on behalf of Haymon: "The lawsuit filed today by Bob Arum and Top Rank is entirely without merit and is a cynical attempt by boxing's old guard to use the courts to undermine the accessibility, credibility and exposure of boxing that the sport so desperately needs.

"The Premier Boxing Champions series makes boxing free again, by bringing championship boxing to free TV, with a fighter-first promise and a commitment to the fans to restore boxing to the luster of its heyday. The continued success of this effort will far outlast this baseless lawsuit."

The suit claims that Haymon uses "sham" promoters -- namely Lou DiBella, Tom Brown's TGB Promotions and Leon Margules' Warriors Boxing -- to follow his orders in putting on events in order to hide his direct involvement in the promotion.

"In at least some instances, Haymon falsely and fraudulently conceals his role in promoting his clients' bouts by employing 'sham' promoters or 'frontmen' -- nominal promoters who are in fact controlled or dominated by Haymon," the suit said, adding that "for a fee" they "rent their promoters' licenses to Haymon and Waddell & Reed, and function in a perfunctory role under the instruction of Haymon. Ultimately, however, the money passes through Haymon's accounts, and Haymon makes all material decisions."

The suit points out Haymon's "brazen illegal activities" as it relates to the April 15 fight between Julio Cesar Chavez Jr. and Andrzej Fonfara, both Haymon clients. After the fight, Chavez posted on Instagram a photo of his $1.75 million check made out to his company, Chavez Jr. Promotions, LLC, from Haymon Sports, with the notation in the memo line that it was his "purse."

"Paying the purse is a classic promoter responsibility, not the job of a true manager," the suit said. "Tellingly, Chavez Jr.'s Instagram post was removed minutes after it appeared.

"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 ... The fa├žade of Haymon's frontmen is underscored by the fact that, more often than not, they do not have promotion contracts with the boxers themselves, as a legitimate promoter normally would."

With regard to the alleged Muhammad Ali act violations, the suit contends that Haymon has skirted the firewall that is supposed to exist between manager and promoter.

"Haymon is essentially sitting on both sides of the bargaining table," the suit said. "While purporting to act in his clients' best interests, Haymon has obtained direct and indirect financial interests in promoting his boxers -- thereby creating the very conflict of interest the Ali Act sought to remedy."

The suit contends that Haymon's interest in purchasing time on various networks with Waddell & Reed's money is in part to close as many broadcast avenues as he can to his competitors, including Top Rank.

"In order to stifle legitimate promoters from competing against PBC, Haymon has obtained exclusivity commitments from broadcasters," the suit said. "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. This 'loss leader' strategy -- which Waddell & Reed has bankrolled and actively participated in -- has allowed Haymon to gain unfair advantage in the promoter market to the severe detriment of legitimate competitors like Top Rank.

"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."

The suit claims that PBC losses could surpass $200 million in the first two years. The suit also alleges that Haymon prevented Top Rank and other promoters from access to major venues, including prime Southern California boxing venues such as the Staples Center, the Forum and the StubHub Center.

"Haymon reserved prime locations such as Staples Center and The Forum so that they could not be booked by the competition, and then canceled after the competitors were forced to seek other locations," the suit said. "The tactic unfairly injured his competitors and deprived consumers of access to events with no legitimate business purpose other than to unfairly harm competition."

The suit specifically sites the March 28 featherweight title bout between Jhonny Gonzalez and Gary Russell Jr., saying Haymon booked the StubHub Center for the fight but as soon as Golden Boy and Banner Promotions, co-promoting the Lucas Matthysse-Ruslan Provodnikov bout, moved that fight to a new date and venue because StubHub was booked, Haymon moved Gonzalez-Russell to The Palms in Las Vegas.

The suit said, "Haymon's purpose in locking up the StubHub Center and alternative Southern California venues (through his network of frontmen) was unmistakable: to lock out the Provodnikov-Matthysse fight and prevent any possible cannibalization of tickets sales in the same local area" for Chavez-Fonfara, which was scheduled for three weeks later.

The suit further alleges that Haymon forbids boxers under contract to him from being promoted by Top Rank and other promoters.

"Haymon is exploiting his dominance in the management market to harm and exclude legitimate promoters from the promotion market," the suit said. "If this conduct continues unabated, and Haymon becomes the de facto sole promoter of Championship-Caliber Boxers, it will become increasingly difficult for any remaining non-Haymon boxers to gain exposure and quality opponents. In order to salvage their careers, non-Haymon boxers will have no choice but to sign up with Haymon -- on both the management and promotion sides. As Haymon's power and influence in both markets grow, he will be able to exert even more control over the entire boxing industry."

The suit points out that in April, the Association of Boxing Commissions asked U.S. Attorney General Loretta Lynch to have the Department of Justice investigate the business practices of Haymon and the PBC, and that Francisco "Paco'' Valcarcel, president of the WBO, applauded the request.

The suit also alleges that Haymon has paid boxers to refuse to spar with fighters promoted by Top Rank and refuses to permit boxers to fight others not controlled by Haymon.

"For decades, the boxing business earned a poor reputation because of some unsavory characters," Petrocelli said. "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."