KingsOfKings
♟️ GRANDMASTERS ♟️
By Paul Magno
Don’t pretend you know anything more about Al Haymon’s level of culpability than anyone else.
With lawsuits seeking damages from both Golden Boy and Top Rank, Haymon faces charges of shady business tactics as well as widespread violations of the Muhammad Ali Act. But, again, don’t pretend that you know anything regarding whether those allegations are actually true. The media doesn’t really know and you, the reader, only know what the media would like you to believe.
Efforts will have to be made to determine the nature of Haymon’s business dealings and the actual legal nature of his role in running shows featuring “his” fighters. The courts will sift through all the papers and determine whether Haymon’s advisor role is actually one of manager, promoter, both, or neither.
That is, of course, if the lawsuits ever go to court– which they probably won’t.
Going to court means going through a discovery process that would flatten all parties involved and, likely, open the doors for the world to see that those filing the lawsuits have been using some of the same shady business practices they attribute to Haymon. Top Rank and Golden Boy are smart enough to realize that.
So, then, why file lawsuits that are not likely to actually produce a court decision? To find out the possible answer to that question, one needs to look at the money behind the Premier Boxing Champions (PBC) power broker and what the PBC project means to boxing’s core structure.
Investment firm Waddell & Reed specializes in what are called “mom and pop” investors– regular people investing their money in business ventures under the guidance of the firm’s financial team. Reports have stated that Waddell & Reed has gathered as much as $400 million for the PBC project.
Per the Wall Street Journal, this type of mom and pop base “makes it more susceptible to shifts in popular sentiment than larger competitors.” And, likely, those investors involved with funding PBC are not savvy boxing insiders familiar with the feints, bluffs, and hustles that make up a good portion of the sport’s business practices.
A regular, every day investor– which make up about 86% of Waddell & Reed’s clientele– only reads news reports and website articles.
Who would not panic at article headlines proclaiming that the object of their hard-earned monetary investment is “surrounded” or “under fire?” What Waddell & Reed investor would not wince at Top Rank attorney, Daniel Petrocelli’s insistence that Federal laws have been violated with the “financial backing, complicity, and material assistance of Waddell & Reed?”
It’s easy to understand how investors would be quick to distance themselves from PBC and, quite possibly, Waddell & Reed as well.
And that may be the very reason behind the two lawsuits recently filed.
Forget about the $300 million wanted by Golden Boy and the $100 million wanted by Top Rank, the real goal of these high profile lawsuits could be to rattle investors enough to remove their funds from Waddell & Reed and immediately defund Al Haymon and Haymon Boxing.
Without the war chest money, Haymon cannot continue with the PBC project and, while remaining a major player in the game with plenty of assets, he won’t have the funding to be anything more than a cog in the machine.
The Boxing Tribune’s own Fox Doucette, who has a bachelor’s degree in accounting from the University of Nevada, Reno, took a look at Waddell & Reed’s earnings, strategies, and general investor profile and found it, by nature, to be a firm ruled by a “restrictive financial model for capital budgeting” due to the nature of its investors.
“They don’t stick around when an investment starts to go sour,” Doucette said. “Top Rank and Golden Boy know it…
“Arum and Oscar don’t have to bankrupt Haymon. They just have to drive his ROI down below the opportunity cost of his investors just bailing on him and putting that money somewhere else.”
In other words, a really good bluff may be all that’s needed to break apart the coalition funding of Haymon and PBC.
Believe me, there is a great interest in “defeating” Haymon and eventually removing him from the sport. There’s a reason he is attacked with the wave after wave ferocity reserved for trouble-making outsiders and those trying to work outside of the existing constructs of the game. And there’s a reason this has been the case ever since he first got into the game as the moonlighting manager of Vernon Forrest.
Like him or not, agree with his business tactics or not, a successful Haymon (as well as a successful PBC) represents a complete restructuring of the sport. It represents a turning away from the current system where the promoters wield every bit of the power, from control over sanctioning bodies to TV deals, and right down to the specifics of judging, officiating, and working with commissions (that are often beholden to those same promoters). A shift in power that puts more control into the hands of the fighter, manager, and TV people would immediately strip guys like Bob Arum of his omnipotent power broker status and turn him into someone who “just” promotes fights.
Obviously, this is not good for those promoters who currently wield the most power. It’s also not good for the sanctioning bodies, which are little more than puppets for the promoters in power, or for select stooges placed in state commissions, who make a killing from playing dumb for the benefit of keeping favored promoters happy.
So, the Crush Haymon initiative, if there is one, is a no-brainer.
And, in boxing, where the will of the promoters goes, so does the willing flesh of the media.
We’ve talked about this before in the Monday Rant and will talk about it again, but boxing’s media is, in great part, subsidized or, in some cases, flat-out owned by boxing’s promoters. A great many media jobs are owed to promoters who know that a fat, complacent, conveniently inept media is pure advertising power– and nobody is even trying to hide it anymore.
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