Comments Thread For: Top Rank Sues Al Haymon For Over $100 Million

[DeadLikeMe]

You get free cable?

He's in Australia, where every American, British, and Canadian PPV gets treated as a PPV. P4P the worst place on the planet to be a boxing fan imo.

[Hougigo]

Have to wonder if these investors had any idea these kinds of lawsuits were coming, and if it will have any effect on them pulling there $....

I think they could've possibly known... unless they just heard free boxing and said screw it, let's jump in

[Mitchell Kane]

http://www.bizjournals.com/kansascit...l.html?ana=twt



Was this in the main article?

I think the part about "the company canceled the consulting agreement only a few days later, offering no explanation" might be new.

Some was probably taken from the original Sports Business Journal article that focused heavily on Caldwell's role.

http://www.sportsbusinessdaily.com/J...epth/Main.aspx

This is why Haymon brought Caldwell.

Caldwell was there to show NBC that Haymon Boxing had the wherewithal to not only launch the PBC, but sustain it, with the pledge of upward of $425 million from a $40 billion fund that he co-managed for Waddell & Reed, the same fund that had invested about $1.5 billion in Formula One

We laugh about it today, said Caldwell, who eventually left Waddell & Reed to join Haymon as chief operating officer of the PBC. Here is Al, who is legitimately successful multiple times over, the most powerful guy in the sport by a long shot, and the only thing they cared about initially was: Is the money real? That was where it all had to start.

With Haymon's approval, however, Caldwell and Reed agreed to discuss the venture with SportsBusiness Journal, but declined to reveal financials. The investment detailed in this story came from the most recent quarterly portfolio list of the fund Caldwell co-managed, Ivy Asset Strategy Fund, which included among its holdings an investment that those familiar with the deal confirmed was Haymon Boxing: Media Group Holdings LLC, Series H.

While Waddell could hold a seat on the board of directors and give advice, Caldwell was precluded from taking an active role in management. But he had a wealth of ideas, including a logical build-out of the business that would start with two of the assets over which they had the most control digital and social and then move quickly to securing TV deals.

[Hougigo]

Thread on reddit on GBP's case.

https://www.reddit.com/r/Boxing/comm...trust_lawsuit/

[AddiX]

The complaint shared one boxing industry expert***8217;s estimation that the business plan would sustain more than $200 million in losses in the first 24 months of operation. But after driving out competition, the complaint argues, the company would be in a strong position to quickly make up those losses and become far more profitable than it would have been otherwise.

Jesus, PBC is legitimately just going to throw 200$ mill away basically to take out top rank.

Once top rank is gone, the rest of the smaller and foreign promoters will basically be forced to work with Haymon.

I knew PBC was blowing through cash but didn't expect it to be this much.

[Mitchell Kane]

Thread on reddit on GBP's case.

https://www.reddit.com/r/Boxing/comm...trust_lawsuit/

Really good update on the GBP case.

Thanks for posting that link, there's defintely some good stuff in there.

Here's some highlighst those NSB'ers on here who won't read all of it...

Since we last checked in, GBP dismissed Waddell & Reed (Haymon's financiers) from the lawsuit without prejudice (we'll come back to the probable reason). The Haymon defendants (I'll just use "Haymon") filed a motion to stay the proceedings (pause the litigation) pending the outcome of arbitration. GBP is expected to oppose that motion.

There are two initial issues: (1) are GBP's claims in this lawsuit subject to arbitration? (2) who decides - the court or the arbitrator?

First, are GBP's claims subject to arbitration?

...

My intuition is that these are new claims that are not subject to arbitration but I could easily see a judge going the other way.

On the second question (who decides if there is arbitration), courts defer to arbitrators only when the parties intent to arbitrate is plainly clear.

...

I think this question, in reality, will be determined by where the court comes out on the first question. That should not be the case, but it would be irrational for the court to decide these claims do not fall in the scope of the arbitration clause, but it's actually up to the arbitrator to decide.

If the court decides the arbitrator determines jurisdiction, the case could still come back if the arbitrator decides these claims are outside the scope of the settlement. GBP could also "appeal" the arbitrator's decision to the court, claiming that the arbitrator stepped outside of his/her authority.

As to dismissing Waddell & Reed as a defendant, they were dismissed without prejudice. That means GBP can join them to the lawsuit later or file a separate lawsuit against them. I believe they were trying to avoid looping Waddell into the arbitration in order to preserve a court case against them. It also might give GBP a better negotiating position for a settlement, as the arbitration won't decide claims against Waddell.

[The Big Dunn]

good read. thanks dude.

[Mitchell Kane]

Kind of an interesting update from the lawyer on reddit, regardign Waddell & Reed...

https://www.reddit.com/r/Boxing/comm...suits_are_gbp/

In the Top Rank lawsuit, Waddell's lawyers are planning to file a motion to dismiss for lack of jurisdiction. The proposition is laughable. This is just a delaying tactic. They have revealed something interesting, though:

"[Media Group Holdings (MGH), Waddell's investment vehicle for Haymon Boxing] is merely an investor in Haymon Holdings, LLC. MGH's financial investment was fully funded in the fourth quarter of 2013."

That is INTERESTING if accurate. Is Waddell really saying that they fully funded a $500 mil+ investment into a startup that had no assets or revenue with no control over the company and no way to pull back any of the money? If they did, I see a serious securities lawsuit coming. Waddell manages mutual funds. They have duties to the fundholders. Even under the most lax standard of review (the "business judgment rule"), that investment would be hard to justify. A typical venture capital investment involves much smaller sums at the beginning, multiple rounds of fundraising and tight benchmarks. Real estate investments often involve amounts that large, but there is a tangible asset that can be sold if things go south. I'm not aware of any other investments of that initial size in a startup with no assets. It's not clear how they could arrive at a valuation that large. I have to wonder if there aren't law firms already looking into filing suit on behalf of the fundholders.

If I've put things together correctly from different sources, this group funded Haymon before GBP/Schaefer split and before Waddell offered to buy GBP. GBP alleged in their complaint that it was really Haymon trying to buy GBP so this fits into that story. I don't think Haymon had any infrastructure at the time. I assume the "assets" were Haymon's managerial contracts, which are personal service contracts that cannot be sold without the fighter's consent. I, like Top Rank, find this extremely difficult to believe.

I never said they had to turn a profit or have revenue. I was pointing out that this purports to be a situation where a mutual fund invested (1) $500 million+ in (2) a startup that (3) had no assets or (4) no revenue with (5) no control or (6) no way to pull back the money. All six factors are important. The fighters contracts are a potential revenue stream, but they can't necessarily be sold. Startups either need assets that can be sold or multiple rounds of funding to get to $500 mil+ in investment capital, which should mean that the company's valuation is much higher than $500 mil+.

In the jets.com example you gave, there were multiple rounds of funding and, while the company has been valued at over $600 mil, only $220 mil has been invested by multiple firms, not one firm at one time: http://www.businessinsider.com/jetco...nd-fail-2015-2

In the article you linked to, every single company involved is described as a big company. They are not startups. With the exception of CAA (an enormous and established agency of which only 35% was acquired), none of these investments came anywhere close to $500 mil.

No, we're calling it a startup because it's a different business model. While Haymon made money as a manager, he did not run a television series or a league or promote the fights (I'm using "promote" as shorthand for sell tickets, contract with venues, market and publicize events and offset the attendant costs and losses). They've also completely removed the former revenue stream, as Haymon Boxing is paying the fighters' purses now with little to no income. This is a different business with a very risky investment strategy. It is not an investment intended to grow an existing business with stable revenues.

[Mukuro]

This is getting interesting. Thanks for the updates from Reddit.

[Beercules]