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  • Lueckenhoff 2015 Letter

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    Jay Hart
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    Mazzulli Letter to Ag Lynch

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    Mazzulli Letter to Ag Lynch

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    © All Rights Reserved
    Baixe no formato PDF ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    6K visualizações29 páginas

    Lueckenhoff 2015 Letter

    Enviado por

    Jay Hart
    Mazzulli Letter to Ag Lynch

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato PDF ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    de 29
    eatarit — April 28, 2015 Honorable Loretta Lynch Attorney General of the United States, USS. Department of Justice 950 Pennsylvania Avenue, NW ‘Washington, DC 20530-0001 Dear Attorney General Lynch: The Association of Boxing Commissions (“ABC”) is an association composed of boxing ‘Commissions located in the United States and Canada. It is a non-profit organization formed to, ier alia, encourage adherence to and enforcement of applicable federal laws regarding boxing and foster standardize reporting of results and uniformity of supervision ‘of the sports which the member Commissions gover. It is charged by the Muhammad Ali Act (15 U.S.C. § 6301 et. seq. with promulgating uniform regulatory guidelines for boxing) (eg. 15 U.S.C. § 6303, 15 U.S.C. § 6307 a and § 6307 b handling suspension appeals within certain circumstances (15 U.S.C. § 6306 (b) (2). ‘The ABC has received complaints regarding the activities of an individual named Alvin Haymon and various companies associated with him.’ We think it appropriate to refer this matter to the Attomey General for investigation and enforcement pursuant to 1S US.C. § 6309. * Haymon appears fo work though atleast two companies, Hayman Sports, LLC and Al Hayson Development In Honorable Loretta Lynch Attorney General of the United States April 28, 2015, Page 2 It appears that numerous provisions of the Muhammad Ali Act are being broken, and ‘most importantly, 15 U.S.C. § 6308 (b) which is designed to create a firewall between promoters and managers. 15 U.S.C. § 6308 (b) reads as follows: “(b) Firewall between promoters and managers (In generat eis unayeful for— (A) a promoter to have a direct or i management ofa boxer; or (B) a manager— () to have a direct or indirect financial interest in the promotion of a boxers i) to be employed by or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager's ‘contract with the boxer, lirect financial interest in the @) Exceptions Paragraph (1)— (A) does not prohibit a boxer from acting as his own promoter or manager; and (B) only applies to boxers participating in a boxing match of 10 rounds or 15 U.S.C. § 6301 (5) defines manager as follows: “The term “manager” means a person who receives compensation for service as an agent or representative of a boxer.” Me. Haymon, through various companies which he controls, claims to have in excess of 150 boxers under contract. Copies of agent's and of managerial conttaets are annexed as Exhibits "to this letter with Exhibit “C” being only a signature page In a 2014 recent filing {or his manager's license he claimed to have agreements with some 43 fighters. Exhibit “D” ‘That number is now claimed to exceed 150. Eg. hitpd/wwrw.boxinascene,com/sammy- vasque7.it-inks-agreement-with-al-haymon--8668 2 These conrcts have been redacted to protest sources. None were fled withthe applicable State Commissions Honorable Loretta Lynch Attorney General of the United States April 28, 2015 Page 3 Mr, Haymon, again through companies which he contols, has gained substantial financing from investment groups and, through his companies, has entered info “time buy” cards with numerous television networks including NBC, CBS, ESPN, and Spike. A “time buy” is where a promoter pprchases time from a television network rather than the traditional telecast method where network pays a rights fee to promoter to purchase rights to telecast an event According to press releases, these contracts are directly between the networks and Haymon controlled companies, again with the funding supplied by investment groups. While Haymon hires certain promoters to run the local aspect ofthe show, the television contracts run through the Haymon controlled entities, purses for the major fighters on the card are set by Haymon controlled entities, the production format is set by the Haymon controlled entities. The series of events is called PBC (short for Premier Boxing Champions) and the announcements state that PBC is controlled by “Haymon Sports.” 15 U.S.C. § 6301 (9) defines “Promoter” as follows: “The term “promoter” means the person primarily responsible for organizing, promoting, and producing a professional boxing match.” ‘As the funding for the PBC series comes exclusively from Haymon controlled entities, the purses are set by Haymon controlled entities, the selection ofthe main event fighters is controlled by Haymon controlled entities and the format is controlled by Haymon controled entities. There are even copies of checks for purses from Haymon Sports, LLC which have been posted online. See Exhibit“E.” Iti clear that he, operating through his entities, operates as a promoter as well 1 appeats that this model isa direct violation of the Firewall provision of the Muhammad Ali Act, The role of manager (who has a fiduciary responsibility to the fighter) and the role of a promoter (who does not and who has in this case a fiduciary responsibilty to investors), is completely incompatible, At the time the Mubammad Ali Act was being drafted testimony was given as to the need fora firewall between promoters and managers. See, eg. Testimony of Jim ‘Thomas before the House Subcommittee on Commerce, Trade and Consumer Protection (a Subcommittee of the Committee on Energy and Commerce), September 9, 2004 (US. Government Printing Office). See House Report 106 - 449 (106® Congress) (U.S. Govt, Printing Office), p. 13; Testimony of Patrick C. English before the Senate Committee on Consumer, Seience and Transportation, March 24, 1998; Testimony of Patrick C. English, before National Association of Attomey’s General Task Force on Boxing, January 20, 1999 pgs. 303- 304, 334:335; 34 Columbia Journal of Law and the Aris, 422 (011); Testimony of Joseph Honorable Loretta Lynch Attorney General of the United States April 28, 2015 Page 4 Spinelli before the Permanent Subcommittee on Investigations, August 12, 1994) US. Gov't Printing Office); Coruption in Professional Boxing — Inadequate State Regulations, Minority Saf of the Permanent Subcommittee on Investigations, March 10, 1993 (p. 23). The Senate report on the Muhammad Ali Aet could nat be more clear. “It remains essential that ... the manager serve and protest the interests of the boxer. They should not be serving the financial interests of the promoter .. Itis not plausible for a boxer to receive proper representation if the manager is also on the payroll of a promoter. This is an obvious conflict of interest .. A manager must be a determined advocate for the boxer's interests and not be influenced by financial inducements from a promoter.” S. Rpt, No, 106-83 at 9 (U.S. Gov't Printing Office). aymon and related companies make no attempt fo hide that they operate inthe dual capacities of Promoter and manager. It was the Vice President of Operations "Haymon Boxing” which sat fn the dais and participated in the announcement ofthe PBC’ series on NBC. No other promoter 1was present. Frankly Haymon seems to be flouting this breach of the Fiewall provision of the Muhammad Ali Act. By virtue of the management contracts which require that no boxer may enter into any fight contract without his permission, Haymon ean ensure and has ensured that his fighters will fight only for his series the PBC series By way ofillustation, recently there was a PBC show in California, The ostensible promoter \Was an entity called TB Goosen. All promotional advertising for the show reflected that it was & PBC show and according to news reports every single featured boxer (of which there were six) were signed to Haymon management or advisory contracts. However, no contracts were filed reflecting Haymon’s involvement either as a manager or @ promoter’ This is an apparent violation of 15 U.S.C. § 6307 e (1) which requires that a promoter file “a copy of any agreement in waiting to which the promoter is @ party with any boxer participating in the match.” The purses for the four main fighters on the card were reported as $1,900,000.00. The typical Haaymon contract provides that he will receive 15% of the fighter’s purse, inthis case that would ‘be $285,000.00. Yet there was no disclosure to the Commission as would be required under 15 U.S.C. § 6307 e (3) (A) requiring thatthe Commission be informed of “all fees, charges and expenses that will be assessed through the promoter, including any portion ofthe boxer's purse > itis ironic thatthe initas used by Haymon forthe boxing series are the sume as those ofthe proposed “Professional Boxing Corporation”, ropesed fist by then Senator Roth in 1992 ns «Federal Regulating ‘Agency, See 5.2852 (102 Congres (1992) * There would also appear to be competitive harm to promoters and managers who follow the dictates of {he Muhammad Ali Act. This shouldbe noted though itis outside the scope ofthis let. "This information has been confirmed with the Exscutve Ditector of the Califomia Athletic Commission Honorable Loretta Lynch Attorney General of the United States April 28, 2015 Page s that the promoter will receive...” Thus 15 U.S.C. § 6307 e (3) (A) appears to have been directly violated. 11 also appears that 15 US.C. § 6307 b (1) (A) and (B) is being violated. As best we can ascertain, inorder to appear in a bout on Haymon’s PBC series fighters must be under contract to Haymon. Those contracts have terms in excess of 12 months. See Exhibits “A” and “B.” A coercive contract is a “contract provision which grants any rights between a boxer and a promoter... if the boxer is required to grant such rights ... as a condition precedent to the boxer’s participation in professional boxing match against another boxer who is under contract to the promoter.” 15 U.S.C. § 6307 b (a) (B). Such contracts, if they exceed in months acconting to the Muhammad Ali Act “in restraint of trade” and “contrary to public policy.” 15 USS. § 6307 b (1) (A). Further, it appears tha 15 U.S.C. 6308 () is being violated. This takes abit ofan explanation. A “sanctioning organization” is defined as ganization that sanctions professional boxing matches in the United States ~ A) between boxers of different States or B) that are advertised, otherwise promoted, or broadeast (including closed cireuit television) in interstate commerce.” 15 U:S.C. 6301 (14).” One of the express purposes of the Muhammad Ali Act was to regulate “the sanctioning, ‘organizations which have proliferated in the boxing industry” which “have not established credible and objective criteria to rate professional boxers and operate with virtually no industry ‘or public oversight. PL 106-210 § 2, May 26, 2000, 114 Stat, 321 However, it is obvious that the PBC is following the model used by MMA promoters’ which are not covered by the Mubammad Ali Act, to wit, having their own “in house” champions. ‘Managers working with the PBC have publicly reported that thi tile belts are being made." the model ’, and reportedly Both the UEC and Bellator, Major MMA promoters, have this model. OF course, MMA isnot covered bythe Muhanad A Act jae andy lee $9702 Honorable Loretta Lynch Attorney General of the United States April 28, 2015 Page 6 15 US.C. § 6308 (¢) prohibits any “officer or employee of a sanctioning organization” from receiving “any compensation, gifts, or benefit, directly or indirectly from a promoter, boxer or manager. Here, just as with the UFC or Bellator the promoter is the sanctioning organization. Obviously things of benefit are being granted. For instance: 1) The Promoter pays forall costs associated with the sanctioning of the PBC bouts. 2) The boxer is granting @ benefit by signing with Haymon since Haymon gets the ‘manager s/advisor’s fee, promotional benefits, and controls who will ight fr the PBC title. ‘While this step has not officially occurred, according to credible reports plans are underway that it occur in the near future, certainly a legitimate area for injunctive relief pursuant to 15 U.S.C. 6309 (, ‘The ARC has no resources or authority to investigate Further of to take action with respect 10 is, However, we can and do request that there is “reasonable cause to believe” that Haymon is “engaged in a violation ofthis chapter" [I5 U.S.C. § 6301 et, seq] and that 15 U.S.C. § 6309) ives express authority to the United States Attorney General’s Office to investigate and to take action. We ask that you do so. Very tly your lan Leh AZ Timothy 3. Eueckenhot President Association of Boxing Commissions Enclosures EXHIBIT A ADVISORY AGREEMENT ‘This ADVISORY AGREEMENT (this “ Apreemeat”) effective as of of Devember, 2014 (Ellzive Dai entered into by and between Cette”), ‘and HAYMON SPORTS, LLC, a Delawate limited liability company with its principal place of business in Nevada (“Advisor FOR AND IN consideration of the mutual promises, covenants, warranties and agreements set forth herein, the legal sufficiency of which ishereby acknowledged, and for other good and valuable consideration, the following, when signed, will constitute a ‘complete and binding agreement between thepartiesheret; 1 Advisory, (@) Grant. Fighter herby grants to Advisor daring the Tem (as defined below), the right and opportunity to advise Fighter throughout the world in connection with Fighter's participation in professional boxing contests ani exhibitions and with respect to Fighters activities within boxing, including (without limitation) ‘outsexhibitions and other boxing-rlated events, personal appearances, endorsements andlor sponsorship opportunities arising out of or felated in any way to Fighters boxing career and activities (collectively, "Boxing Activites"). (©) Advisor's Duties. Advisor hereby agrees to (i) advise and counsel Fighter in the development and advancement of Fighters professional boxing career; (ji) exercise ‘commercially reasonable efforts to advise and counsel Fighter regarding remunerative boxing contests and/or exhibitions; (ii identify proper taining facilities and equipment for Fighter; (iv) publicize and promote the talents and abilities of Fighter trough the various forms of media, and (¥) seek commercial endorsements, personal appearances andlor performances a6 a performer in movies, stage, radio, television, or forms of media oF (©) Agreements and Obligations © Advisor Authority. In furtherance of the rights granted to Advisor hereunder, during the Term, Fighter hereby authorizes Adviser to represeat and negotiate contracts on behalf of Fighter in connection with Boxing Activities; provided, however, ia ‘no event shall Advisor (A) be authorized to execute any contacts on Fighter's bealf, or (8) make aay commitments to which Fighter is bound, without the prior writen consent of Pighte. @ Fighter Actions. From and after the Effective Date and continuing for the duration of the Term, Fighter shall not (direstly or indretly) enter into any agreement for arrangement (writen or verbal), or grant any autbrty oF power, relating to any Boxing ‘Activities, without the prior written consent of Advisor, subject to applicable lw. (G@) Promotional Agreements. If during the Term hereof, Fighter desires to ‘ater into any promotional agreement or bout agreement to which Fighter is not then bound, selection ofthe promoter shall be at thesole discretion ofthe Advisor. (iv) Offers. Fighter shall immediately advise Advisor of ll offers relating to Boxing Activities submitted to Fighter (or on Fighter's behalf) and refer any inquiries conceming Fighter's eves to Advisor, so that Advisor may determine whether same ama ‘are compatible with Fighter's career,pureuant tothe terms hereof. (@ No Match Guarantees. Fighter acknowledges and agrees that neither Advisor nor anyone acting on its behalf has committed ce promised to make or set any particular bout for Fighter, and no bout has been made or set, Without limiting the feregoing, no inference may be made about thepossibilty of miy given bout being made for Fighterbecause, interalia, Advisor representsother prominent fighters. 2. Term and Termination, (©) _ Term. The initial term of this Agreement (Ihe “Fenn") shall commence on the Effective Date and continue until thefitth (5%) anniversary ofthe Effetve Date. The Term ‘ay be extended one or more times as set forth herein, ©) Extensions of Term, © _ Incapacity, If at any time (or from time to time) during the Term (as may be extended), Fighter becomes physically, mentaly or legally incapacitated such that he is rendered unable to participate in professional boxing contests (at a level commensurate with his traditional ability) (each, an ("incapacity"), then the Term of this “Agreement shall be automatically extended during such petiods in which Fighters unable to sopartcipate, subject to Section 2(c) below. GH Other Extensions A. If'during the Term (es may be extended), Fighter competes fn a bout for a World Championship Title sanctioned by either the WBC, WBA, IBF, WBO, or successors thereto then, subject to Section 2(¢) hereof, the Term hereof shal automatically extend for twenty-four (24) menihe B. Additionally, ifduring the Term (as may be extended), Fighter enters into mulifight agreement with any television network (include free, cable, stellt, or internet), then, subjéct 10 Section 2(0) eteof, the Term hereof shall ‘automaticaly extend for the greater of (1) twenty-four @4) months, or (2) the tenn of such mullfight agreement (asmay be extended or renewed). (©) Applicable Law. The Term hall be subject 10 all spplicable State and Federal laws and may not be for & term inconsistent with said laws, but in all other respect shall be valid gad binding upon al the parties. Notwithtending the foregoing, if applicable lar (as may then exis) restricts or limits the dumtion of this Agreement 10 a period ess than the then applicable Tem hereof (as may be extended), such Term hereof shall be futematically reduced to auch applicable period (@___ Early Termination. Bither party hereto may earlier terminate the Term immediately upon a material breach of this Agreement by the other party following ‘written notice to such breaching party and such breaching partys failure to cure any such ‘breach within thity (30) days of written notice thereof. Further, Advisor shall have the right to terminate the Tem immediately upon notice thereof if) Fighter commit, is indicted for, nd/or a complaint is filed alleging a felony ot misdemeanor involving moral turpitude, and/or Gi during the Tem Fighter ispublicly alleged Gegardless as to the date of sich act OF omission) to have engaged in any acl(s) or omission that brings Fighter into nd public disrepute, contempt, scandal or ridicule or that shocks or offends the community oF any group or class thereof, or that reflects wnfwvorably on Advisor, with such allegation being via any report(@) in'a reputable local or national media oullet (eg, ESPN, Ring Magazine, New’ York Times, Los Angeles Times, Sports ustrated, Newsweek, Hillington ost, and/or major boadeasVeablenetworks). 3, Advisor's Compensation. (@) Commission, In consideration of Advisor's services hercunder, Fighter ‘agrees to pay to Advisor, as and when received by Fighter (or on account of Fighter), ring the Term hereof, 2 commission (he “ Commissions") equal to fifteen pereent (45%) of all monies and remuneration, whether based on agreements and/or activit entered into ortaking placeduring the Term, as a result of all of Fighter's Boxing

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