Thursday, March 24, 2011

Top Rank v. Golden Boy -- the Sequel

Although legal disputes involving boxing do not occupy a large portion of my class time, there have been cases, notably involving breaches of contracts among boxers and promoters, that make for interesting reading and discussion. I use one or two to prove breach, damages and remedies. One of my favorites is Lewis v. Rahman, a courtroom brawl (if you will) that involved heavyweights Lennox Lewis and Hasim Rahman, where the court enjoin Rahman from engaging in any other fights over a 18-month period under he fight Lewis for the championship. For those teaching, it merits discussion of the outer limits of a "negative" injunction.

Here's another potential case. One of my MBA students pointed to potential controversy involving the promoters Top Rank (of Bob Arum fame) and Golden Boy Promotions (founded by Oscar de la Hoya about 10 year ago). The dispute involves the signing of highly-touted Philippine bantamweight champion Nonito Donaire by Golden Boy this week. Reports state that Golden Boy offered Donaire a bigger purse for an upcoming fight for the WBA bantamweight championship. However, Top Rank claimed he is presently under contract and is considering legal action.

According to the article, the issue involves the expiration date of Donaire's present contract with Top Rank. Signed in June 2008, it would normally expires this June, but Top Rank is claiming that the expiration date tolled due to two "medical suspensions" of six and four months of Donaire during the contract period. Top Rank was quoted as saying that such a tolling provision was in Donaire's contract.

The stakes are high because Donaire already won the bantamweight championship of two of boxing's myriad governing bodies last month, the World Boxing Council and World Boxing Organization, raising his profile and market value. Yet, the case is reminiscent of a similar dispute about five years between the same parties of the fate of another Philippine boxer, Manny Pacquiao. That case was settled by arbitration in 2007, although there is subsequent litigation over claims that Top Rank underpaid Pacquiao.

The Donaire - Top Rank dispute will also likely go to arbitration. Issues would involve the meaning of a "medical suspension," whether Donaire's injury constituted such a suspension (difficult to prove to the contrary since he was suspended by one or more boxing bodies) and what remedy or remedies may apply if the arbitrator concludes a breach occurred.

Since both contracts are promising to arrange the same bout, injunction is not a practical remedy. But, just to hypothesize, what is the Golden Boy deal offered a different fight in June? Would Donaire be determined "unique" to stop him from boxing? My guess would be yes -- as a boxing champion and a potential moneymaker.

[Thanks to Hermogenes Perez for alerting me to the case]