Comments Thread For: Top Rank, Al Haymon Lawsuit To Proceed: Judge Issues Order

[El-blanco]

Even if that is true, the real victory for TR here is being able to obtain information on its chief competitor (more on that in a sec).

Before anyone makes any "Internet lawyer" jokes, I am a December 2015 law school graduate studying for the February Bar right now, not talking out of my ass.

The theory that TR is advancing (aside from the Ali Act stuff, which is separate) is that PBC has engaged in predatory pricing to drive out competitors in the hopes of creating a monopoly. That's why it is classed as an antitrust lawsuit.

The standard of proof for TR's allegations is very high: TR would have to prove that not only is PBC's intentional overpaying for fights going to (1) kill off TR, but also that (2) it's likely to kill off all other competitors and (3) any future PBC monopoly, once established, is likely to persist long enough for PBC to drive out competitors and THEN dramatically underpay for fights such that they will be able to recoup their initial losses and thensome (i.e., that PBC will be able to exploit their monopoly for a long enough time before any new promotional companies pop up and sign talent away from PBC because they are offering better money)

Item (3) has to do with what is called barriers to entry in a market. A classic example of a market with ENORMOUS barriers to entry is building airplanes (e.g., Boeing). It takes 10-20 years to bring a new airplane to market, and you may well invest billions in designing, building, testing, and marketing before you even begin to recoup your investment and make profits when you finally start getting orders from the airlines for your new planes.

If Boeing had infinite stacks of cash and sold their airplanes at a bargain basement price, willfully losing tons of money, they could probably kill of their main competitor (Airbus) and because the barriers to entry in the airplane market or so high, it is extremely unlikely that a new company would pop up to challenge a potential Boeing monopoly. So predatory pricing by Boeing would result in a massive lawsuit by Airbus, and it would be one that would be easy for Airbus to win.

However, while entering the game of boxing promotion certainly requires some deep pockets to meaningfully compete with a behemoth like the PBC, it's simply not even remotely on the same level of airplane manufacturing in terms of initial capital investment required to be competitive.

THIS MEANS THAT TR is likely to LOSE their case against PBC in the end (which may not come for years).

BUT, winning THE CASE ITSELF may not be TR's endgame. Because so much of item (3) has to do with the internal financial workings of the PBC enterprise, virtually ALL of that information is now fair game for discovery.

And now TR can find out (A) how much was spent on all the time buys, (B) how much PBC has lost on their first year's worth of cards, (C) how much ad revenue is coming in to offset the cost of the time-buys, (D) how much is coming in from foreign broadcasting rights agreements and *ultimately* (E) HOW MUCH LONGER DOES TR HAVE TO SURVIVE BEFORE THE PBC BUSINESS PLAN BEGINS TO SUFFER & WILT BECAUSE THEY HAVEN'T MANAGED TO SUCCESSFULLY CREATE A MONOPOLY.

When your adversary/competitor is a privately held company, it's very difficult to get "intel" on them because they are not required by law to release financials. Now TR is going to have access to all of that. In my personal opinion, that was always the main goal of their entire lawsuit

Great insight. All that information will be interesting, and like you, I believe that's their motive.

[Nubia]

Bob Arum's pockets are gonna feel a little lighter after it's all said and done. He'll be left with nothing but wasted time and money. They may have both went to Harvard, but it appears that it was Haymon who was actually listening. Or at least he was the one who soaked up all of the knowledge. He has backup plans for his backup plans. The guy is basically a genius and Bob won't be able to outsmart him.

[KnickTillDeaTh]

Even if that is true, the real victory for TR here is being able to obtain information on its chief competitor (more on that in a sec).

Before anyone makes any "Internet lawyer" jokes, I am a December 2015 law school graduate studying for the February Bar right now, not talking out of my ass.

The theory that TR is advancing (aside from the Ali Act stuff, which is separate) is that PBC has engaged in predatory pricing to drive out competitors in the hopes of creating a monopoly. That's why it is classed as an antitrust lawsuit.

The standard of proof for TR's allegations is very high: TR would have to prove that not only is PBC's intentional overpaying for fights going to (1) kill off TR, but also that (2) it's likely to kill off all other competitors and (3) any future PBC monopoly, once established, is likely to persist long enough for PBC to drive out competitors and THEN dramatically underpay for fights such that they will be able to recoup their initial losses and thensome (i.e., that PBC will be able to exploit their monopoly for a long enough time before any new promotional companies pop up and sign talent away from PBC because they are offering better money)

Item (3) has to do with what is called barriers to entry in a market. A classic example of a market with ENORMOUS barriers to entry is building airplanes (e.g., Boeing). It takes 10-20 years to bring a new airplane to market, and you may well invest billions in designing, building, testing, and marketing before you even begin to recoup your investment and make profits when you finally start getting orders from the airlines for your new planes.

If Boeing had infinite stacks of cash and sold their airplanes at a bargain basement price, willfully losing tons of money, they could probably kill of their main competitor (Airbus) and because the barriers to entry in the airplane market or so high, it is extremely unlikely that a new company would pop up to challenge a potential Boeing monopoly. So predatory pricing by Boeing would result in a massive lawsuit by Airbus, and it would be one that would be easy for Airbus to win.

However, while entering the game of boxing promotion certainly requires some deep pockets to meaningfully compete with a behemoth like the PBC, it's simply not even remotely on the same level of airplane manufacturing in terms of initial capital investment required to be competitive.

THIS MEANS THAT TR is likely to LOSE their case against PBC in the end (which may not come for years).

BUT, winning THE CASE ITSELF may not be TR's endgame. Because so much of item (3) has to do with the internal financial workings of the PBC enterprise, virtually ALL of that information is now fair game for discovery.

And now TR can find out (A) how much was spent on all the time buys, (B) how much PBC has lost on their first year's worth of cards, (C) how much ad revenue is coming in to offset the cost of the time-buys, (D) how much is coming in from foreign broadcasting rights agreements and *ultimately* (E) HOW MUCH LONGER DOES TR HAVE TO SURVIVE BEFORE THE PBC BUSINESS PLAN BEGINS TO SUFFER & WILT BECAUSE THEY HAVEN'T MANAGED TO SUCCESSFULLY CREATE A MONOPOLY.

When your adversary/competitor is a privately held company, it's very difficult to get "intel" on them because they are not required by law to release financials. Now TR is going to have access to all of that. In my personal opinion, that was always the main goal of their entire lawsuit

You forgot a few things here, Boxing is a sport, just like the NFL, NBA, and MLB cannot be considered monopolies, the same is true of PBC. Top Rank has to prove that Haymon's intent was to freeze them out by making backroom deals with networks and so on, merely proving Haymon purposefully out bids his competetors will yield nothing, especially when you consider the structure that was created by sanctioning bodies, where the intent is for one party to out bid the other at the highest money possible. You also forgot to mention that during discovery, Top Rank has to fork over anything PBC requests as well, so Top Rank is just as naked. The judge already admitted the suit was weak, seems to me that this is a means to an end for Top Rank.

At the end of the day PBC will get a good look at the ins and outs of Top Rank as well, and thats way too risky for a company whos already feeling the press from its competitors. Based on this, I doubt Top Rank's intent was to get a look at PBC's business. This was a hail marry from Top Rank which is why they included the Ali act violation, because they are trying to dent PBC, or at the very least slow Haymon down.

2 years criminal law.

[djt117]

You forgot a few things here, Boxing is a sport, just like the NFL, NBA, and MLB cannot be considered monopolies, the same is true of PBC. Top Rank has to prove that Haymon's intent was to freeze them out by making backroom deals with networks and so on, merely proving Haymon purposefully out bids his competetors will yield nothing, especially when you consider the structure that was created by sanctioning bodies, where the intent is for one party to out bid the other at the highest money possible. You also forgot to mention that during discovery, Top Rank has to fork over anything PBC requests as well, so Top Rank is just as naked. The judge already admitted the suit was weak, seems to me that this is a means to an end for Top Rank.

At the end of the day PBC will get a good look at the ins and outs of Top Rank as well, and thats way too risky for a company whos already feeling the press from its competitors. Based on this, I doubt Top Rank's intent was to get a look at PBC's business. This was a hail marry from Top Rank which is why they included the Ali act violation, because they are trying to dent PBC, or at the very least slow Haymon down.

2 years criminal law.

(1) MLB is a legal monopoly by an act of Congress

(2) Antitrust law is not like criminal law, you don't need to prove intent.
--> some people think you should and that the law should change, like this guy: http://law.emory.edu/elj/content/volume-61/issue-4/comments/reintroducing-intent-predatory-pricing-law.html

But the law as it stands now doesn't require proof of intent.

(3) Top Rank is indeed equally "naked" as you say, but I think that doesn't hurt them as much. PBC is the new kid on the block and they are so tight-lipped and secretive about everything (to the point where the CEO has a total media blackout policy) that getting a look at their business model (which is totally new and totally different from the model of all other competitor companies) and finding out precisely how well it is working (or not) is much more beneficial to TR than the reverse.

[HanzGruber]

I just don't get why arum is so set on suing. The guys almost 90 lol, I guess when he has nothing left to do he'd die. But is he really just trying to get more money that he'll never spend?

[KnickTillDeaTh]

(1) MLB is a legal monopoly by an act of Congress

(2) Antitrust law is not like criminal law, you don't need to prove intent.
--> some people think you should and that the law should change, like this guy: http://law.emory.edu/elj/content/volume-61/issue-4/comments/reintroducing-intent-predatory-pricing-law.html

But the law as it stands now doesn't require proof of intent.

(3) Top Rank is indeed equally "naked" as you say, but I think that doesn't hurt them as much. PBC is the new kid on the block and they are so tight-lipped and secretive about everything (to the point where the CEO has a total media blackout policy) that getting a look at their business model (which is totally new and totally different from the model of all other competitor companies) and finding out precisely how well it is working (or not) is much more beneficial to TR than the reverse.

Possibly. Unless of course, everything that has been said about Top Rank is true. You know as far as them stealing money from fighters, not paying full purses, reporting less earned income from events in order to pay fighters less of a percentage. Remember why Haymon and Schaefer never wanted to deal with Arum, because Arum refuses to open his books, to allow managers, promoters, and fighter's knowledge of Top Ranks actual earned income. Top Rank has been around for a long time, as such they have more dirt under the carpet, which ultimately means more to hide, there for more to be revealed. I think discovery might prove to be worst for Top Rank, although the crux of it is, we may never even know.

[Jubei]

That is some Breaking Bad stuff right here with Haymon as Gus Fring. Sooner or later he will make some mistakes that will get to him.

This all seems like money laundry to me while Weddel & Reed give their name for it as the investors.

[Hougigo]

Oh yea, time for NSB lawyers to get their notepads out and lay some knowledge on us

[Dr Rumack]

Even if that is true, the real victory for TR here is being able to obtain information on its chief competitor (more on that in a sec).

Before anyone makes any "Internet lawyer" jokes, I am a December 2015 law school graduate studying for the February Bar right now, not talking out of my ass.

The theory that TR is advancing (aside from the Ali Act stuff, which is separate) is that PBC has engaged in predatory pricing to drive out competitors in the hopes of creating a monopoly. That's why it is classed as an antitrust lawsuit.

The standard of proof for TR's allegations is very high: TR would have to prove that not only is PBC's intentional overpaying for fights going to (1) kill off TR, but also that (2) it's likely to kill off all other competitors and (3) any future PBC monopoly, once established, is likely to persist long enough for PBC to drive out competitors and THEN dramatically underpay for fights such that they will be able to recoup their initial losses and thensome (i.e., that PBC will be able to exploit their monopoly for a long enough time before any new promotional companies pop up and sign talent away from PBC because they are offering better money)

Item (3) has to do with what is called barriers to entry in a market. A classic example of a market with ENORMOUS barriers to entry is building airplanes (e.g., Boeing). It takes 10-20 years to bring a new airplane to market, and you may well invest billions in designing, building, testing, and marketing before you even begin to recoup your investment and make profits when you finally start getting orders from the airlines for your new planes.

If Boeing had infinite stacks of cash and sold their airplanes at a bargain basement price, willfully losing tons of money, they could probably kill of their main competitor (Airbus) and because the barriers to entry in the airplane market or so high, it is extremely unlikely that a new company would pop up to challenge a potential Boeing monopoly. So predatory pricing by Boeing would result in a massive lawsuit by Airbus, and it would be one that would be easy for Airbus to win.

However, while entering the game of boxing promotion certainly requires some deep pockets to meaningfully compete with a behemoth like the PBC, it's simply not even remotely on the same level of airplane manufacturing in terms of initial capital investment required to be competitive.

THIS MEANS THAT TR is likely to LOSE their case against PBC in the end (which may not come for years).

BUT, winning THE CASE ITSELF may not be TR's endgame. Because so much of item (3) has to do with the internal financial workings of the PBC enterprise, virtually ALL of that information is now fair game for discovery.

And now TR can find out (A) how much was spent on all the time buys, (B) how much PBC has lost on their first year's worth of cards, (C) how much ad revenue is coming in to offset the cost of the time-buys, (D) how much is coming in from foreign broadcasting rights agreements and *ultimately* (E) HOW MUCH LONGER DOES TR HAVE TO SURVIVE BEFORE THE PBC BUSINESS PLAN BEGINS TO SUFFER & WILT BECAUSE THEY HAVEN'T MANAGED TO SUCCESSFULLY CREATE A MONOPOLY.

When your adversary/competitor is a privately held company, it's very difficult to get "intel" on them because they are not required by law to release financials. Now TR is going to have access to all of that. In my personal opinion, that was always the main goal of their entire lawsuit

It will be a great insight into what's happening for fans anyway, whatever about Top Rank. A lot should come out not only on the nature of PBC but on the backroom dealings between networks and promoters in general.

The barriers to entry part is probably impossible to prove in the end, but what in this context would qualify as predatory pricing?

[Lester Tutor]

Haymon's lawyers present Top Rank's lawsuit count going back from its foundation.

"Irrelevant!"

Haymon's lawyers present Top Rank's earnings and losses for 2015, including, again, Top Ranks fiasco lawsuits coming solely from May 2nd... also reasons to benefit a Top Rank fighter fighting outside of the USA because of Tax indictments a couple years before.

"Irrelevant!"

Haymon's lawyers share disclosed information that Arum consulted other affiliates to create the Ali Act... Haymon also shares that Top Rank has the most winning cases when the Ali Act was applied.