Tuesday, 8 October 2013

Quid Pro KO?

A Quick Look at Whether a Legal Barrier to Managers Providing Boxers in Exchange for Compensation from Promoters Truly Exists in the U.S.

Ask any number of boxers who they would ideally have as their manager/ advisor in the sport today and most would probably say Al Haymon, and with good reason.  Haymon is the advisor and/or manager of a broad swath of professional boxing’s elite United States prospects and contenders and has a close working relationship with Golden Boy Promotions, who is widely regarded as the destination of choice for boxing’s free agents.  It is that well-documented connection to Golden Boy Promotions which reportedly helped lead Argentinian welterweight contender Marcos (El Chino) Maidana and his manager Sebastian Contursi to enter into an agreement with Haymon back in August.  Indeed, Contursi himself apparently indicated as much to ESPN’s Dan Rafael when a deal between Team Maidana and Haymon was “imminent.”  Sure enough, within a matter of weeks of the addition of Maidana to Haymon’s clientele, a bout between Maidana and Golden Boy-promoted and Haymon-managed Adrien (The Problem) Broner was made.  The ability to arrange bouts such as Broner-Maidana in short order is part of the allure of signing with Haymon and others who have exceptionally close working relationships with top promoters. But can such close relationships walk a fine line of legality? A quick look follows.

Under the Ali Act, “[i]t is unlawful for…a promoter to have a direct or indirect financial relationship in the management of a boxer” and for “a manager…to have a direct or indirect financial interest in the promotion of a boxer; or…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.”   Notably, however, the Ali Act’s “[f]irewall between promoters and managers” “only applies to boxers participating in a boxing match of 10 rounds or more.”  Under certain state regulations, such as those in New York, “[n]o principal, director, officer, employee, shareholder or owner of a promoter shall, directly or indirectly, serve or act as the manager, assignee, or second of any boxer, or be employed by or be in any way commercially connected with the manager, assignee, or second of any boxer unless otherwise directed or authorized by the commission.” (emphasis added).  

When read together, the above-quoted federal law and state regulation suggest that not only is there no prohibition on a manager being employed or receiving compensation from a promoter if his boxer competes in bouts between one and nine rounds in length, but that, in some instances, there may be no prohibition on managers being directly or indirectly compensated by promoters in exchange for certain services at all, so long as the relationship is formally approved by a given athletic commission.  In sum, it would appear that if a given manager/advisor and a promoter operate under a certain quid pro quo whereby the manager provides a steady stream of talent to a promoter and the promoter then compensates him in financial and/or other ways, it may walk the line with regard to a manager’s fiduciary responsibilities to a given boxer (if, for example, the boxer actually had better opportunities available from another promoter), but it cannot be said with universal certainty that it would walk a line of legality.
 Paul Stuart Haberman, Esq. is a New York-based health and sports law attorney.  He is also a New York State licensed boxing manager and the Chairman of the Sports Law Committee of the New York County Lawyers Association. Paul can be e-mailed at haberman@8countnews.com. He can also be followed on Twitter at @Standing8Court.

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