Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Cal.: Discovery in boxing promoter monopolization suit gets time-out, (Sep 18, 2015)

By Greg Hammond, J.D.

The federal district court in Los Angeles has stayed discovery in a suit alleging that a professional boxing manager and his controlled business entities used their dominance in the boxing management business to monopolize that business by locking in top boxing talent and excluding legitimate promoters from the market. The court determined that a brief stay is warranted until the defendants’ motions to dismiss are decided (Top Rank, Inc. v. Haymon, September 17, 2015, Walter, J.).

Alan Haymon advises and manages professional boxers in the United States through a group of controlled entities. Waddell & Reed Financial, Inc., an asset management and financial planning firm, and Media Group Holdings, LLC, a venture capital company, provide financing to Haymon’s entities.

Top Rank, Inc., a licensed boxing promoter, filed suit against Haymon in July 2015, claiming that Haymon functioned as an unlicensed promoter for certain boxers, in violation of the Muhammad Ali Boxing Reform Act, which outlaws conflicts of interests between promoters and managers. The complaint further alleged that Haymon, by acting as both a manager and promoter, has enjoyed an unfair and illegal advantage over legitimate boxing promoters, and engaged in anticompetitive and exclusionary conduct in many forms. Specifically, with massive funding from Waddell & Reed, Haymon purportedly sought to buy up and monopolize every vertical channel—from locking up all of the top boxing talent to excluding legitimate promoters from the top boxing matches, major venues, and exhibition on network television. Haymon and other defendants filed a motion to dismiss the amended complaint and are seeking a stay of discovery pending decision on dismissal.

The court concluded that a brief stay is warranted until the motion to dismiss is decided. In particular, the court noted that the discovery requests are already voluminous and compliance will be costly and time-consuming. Further, any prejudice that Top Rank may suffer will be extremely limited, because the motions to dismiss are scheduled to be heard in less than three weeks. The court assured Top Rank that it will promptly rule on the motion and if the complaint is dismissed and Top Rank is given leave to amend, the court will ensure that the second amended complaint is promptly filed.

The case number is CV 15-4961-JFW (MRWx).

Attorneys: Daniel M. Petrocelli (O'Melveny and Myers LLP) for Top Rank, Inc. Howard Weitzman (Kinsella Weitzman Iser Kump and Aldisert LLP) for Alan Haymon. Barry H. Berke (Kinsella Weitzman Iser Kump and Aldisert LLP) for Haymon Boxing LLC, Haymon Sports LLC, and Haymon Holdings, LLC. Russell F. Sauer (Latham & Watkins) for Waddell and Reed Financial Inc. and Media Group Holdings, LLC.

Companies: Top Rank, Inc.; Haymon Boxing LLC; Haymon Sports LLC; Haymon Holdings, LLC.; Waddell and Reed Financial Inc.; Media Group Holdings, LLC

Cases: Antitrust CaliforniaNews