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April 30, 2014

MAIN EVENTS SUES STEVENSON, HAYMON, GOLDEN BOY, SHOWTIME AND GYM OVER FAILED STEVENSON-KOVALEV BOUT
By Scott Shaffer

With the deal for an HBO-televised bout between Adonis Stevenson and Sergey Kovalev now dead and likely replaced by a Showtime bout between Stevenson and Bernard Hopkins, Kovalev's promoter has sued several of boxing's most powerful entities over the fallout. Main Events, who promotes Kovalev, filed suit on Tuesday in federal court in New York City. Named as defendants were Stevenson, Stevenson's promoter Yvon Michel and his company GYM, Inc., Stevenson's new advisor Al Haymon, Hopkins' promoter Golden Boy Productions and Showtime Network.
 
According to Main Events, an enforceable agreement was reached between itself, GYM and HBO for a super fight between Stevenson and Kovalev, both of whom hold portions of the light heavyweight championship. Main Events alleges that GYM and Michel breached the agreement when Stevenson backed out of the Kovalev fight. Michel is charged with fraud, and the remaining defendants are accused of tortiously interfering with the agreement.
 
Elsewhere, some of the defendants have defended their actions by saying the formal contract with HBO was never signed and not all of the terms were agreed upon, but Main Events insists the emails between the parties contained all the necessary elements of a legally enforceable agreement.
 
The lawsuit also makes some very detailed allegations about Haymon and Golden Boy CEO Richard Schaefer, accusing them of conspiring to take Golden Boy's assets away from Golden Boy's owner Oscar De La Hoya. Boxingtalk has obtained a copy of the complaint filed in court and it alleges as follows:

Note: below are Main Events' allegations contained in its complaint, which of course are not yet proven. It is unlikely that any of the defendants have even been served with the lawsuit yet, so their time to respond to the charges has not yet come.

MAIN EVENTS' ALLEGATIONS 

For some time prior to November 30, 2013, promoters Kathy Duva of Main Events, Yvon Michel of GYM and representatives of HBO had been discussing a fight card on which both Adonis Stevenson and Sergey Kovalev would appear against separate opponents and which would ultimately lead to a major bout between Kovalev and Stevenson.

The first step was agreed upon and Mr. Kovalev defended his WBO title against Ismayl Sillakh and Adonis Stevenson defended his WBC title against Tony Bellew on the same card, held on November 30, 2013.  Both fighters defeated their respective opponents by knockout.  The concept for having Kovalev and Stevenson on the same card was to build interest in a bout between them.  The card was shown on HBO.

Negotiations continued between Duva and Michel for a unification title bout between Kovalev and Stevenson to be co-promoted by Main Events and GYM. Those negotiations culminated in conversations and an exchange of emails on January 23, 2014 where a co-promotion agreement was reached.

Following a telephone conversation Duva sent a deal memo reflecting what she believed had been agreed upon.  That memo detailed the material points of the co-promotion.  That email was sent at approximately 1:53 p.m.  At this stage, both parties understood that the deal was subject to the approval of the respective fighters.

Michel responded with an email containing some additional less significant points.  Michel’s email was sent at approximately 2:48 p.m. on January 23, 2014.

The exchange of emails covered all material points including how U.S. television revenues were to be split, how Canadian revenues were to be split, how international revenues were to be split, the target date for the fight, and the rights fee which would be acceptable for the bout in discussions with HBO which were contemplated to take place the following day, on January 24, 2014.

Both promoters were to go to the respective fighters which their companies promoted to gain approval and confirm when they had done so. Duva did so, and at roughly 4:27 p.m. on January 23, 2014 wrote by email that, “This is acceptable to us.  I have just spoken to Sergey’s manager.  We have a deal on our end.
Best Kathy”

Some 3 hours later Michel replied to Duva with the following:
“We also have a deal on our side!!:-) Let’s make a good sale to HBO and Peter [Nelson of HBO]!  Can you make sure this between us until we find the most timing to make an announcement?... See you shortly. Yvon Michel”

On January 24, 2014, Michel and Duva had their conference call with HBO’s Peter Nelson.  After some negotiations, Nelson offered a rights fee of 2.4 million dollars for the Kovalev-Stevenson unification bout.

On behalf of the co-promotion, Michel accepted the offer of 2.4 million dollars.  Duva also agreed, although she felt a greater amount could have been forthcoming.

As of January 24, 2014, with the acceptable rights fee offer made to the co-promoters, there was a consummated agreement for a co-promotion Kovalev-Stevenson bout by Main Events and GYM.

On several occasions after January 24th, Michel and other GYM representatives repeated verbally that there was an agreement in place to co-promote a Stevenson-Kovalev bout.  Direct representations were made that acceptance had been approved by Stevenson and his attorney.

One such conversation occurred on February 18, 2014, after defendant Al Haymon had become involved with Stevenson. Because of Haymon’s involvement that conversation was memorialized in writing by counsel for Main Events: “In light of recent reports regarding the entering of Al Haymon into the Adonis Stevenson picture, as a matter of prudence we find it appropriate to outline our understandings and concerns...  You [Michel] have told Ms. Duva that you have informed Mr. Haymon that we have an agreement for the bout.”

Michel continued to assert in conversations with Duva that a co-promotion deal had been made and, further that Haymon had told him that there was no desire on his part to upset that deal.  Those representations continued into March.

Al Haymon identifies himself as a manager or advisor to boxers. In fact, Haymon’s power and actions go well beyond being a manager.  He in fact in many instances performs as a promoter, an inconsistent position which is barred by [United States federal law known as the Muhammad Ali Act].

Haymon currently has a relationship with Showtime wherein certain promoters rely upon him to allocate television dates and rights fees rather than negotiating those dates and fees directly with Showtime.

Haymon has entered into an alliance with Richard Schaefer, the CEO of [boxing promoter] Golden Boy.  Upon information and belief one object of this alliance is to wrest control of Golden Boy from owner Oscar De La Hoya for their own financial gain.

As part of this scheme, Schaefer has in some instances relinquished and in other instances not required promotional agreements with fighters which Golden Boy has built into attractions, in violation of his fiduciary duties [to Golden Boy], relying instead only on Haymon’s good will, placing [Golden Boy] in  a weakened position.  The concept is for Haymon and Schaefer to use Haymon’s fighter contracts to seek financing to both buy out De La Hoya and continue their violation of the Muhammad Ali Act in other respects for their own financial gain.

Also part of this scheme, Haymon and Schaefer must show potential investors assets, including fighter contracts, and control of fighters and major fights to show that there is substance to potential investors.  Upon information and belief the potential investors are not sufficiently sophisticated to recognize the illegality under the Muhammad Ali Act, nor that there are potential criminal penalties.  Upon information and belief one investment group which has been contacted is the prominent firm of Wadell & Reed.

It is in connection with this scheme that Mr. Haymon’s interference with Main Events’ co-promotion agreement for the Stevenson-Kovalev bout becomes relevant.

A management agreement with Adonis Stevenson is obviously a significant asset to show potential investors.  Better still as an asset is an agreement for a major bout between a Golden Boy fighter and Stevenson.

After the co-promotion deal for a Kovalev-Stevenson bout had already been agreed upon there came to be rumors of Haymon’s attempted involvement with.  Given Haymon’s reputation and ties to Schaefer this raised concerns and Duva expressed those concerns to Michel. Through the date of the letter to Michel, he repeatedly assured Duva that the deal for Kovalev-Stevenson was not in jeopardy but that Haymon was simply attempting to obtain a higher television rights fee for an interim Stevenson bout against Andrzej Fonfara.  

Michel stated that Haymon had told him (Michel) that he was satisfied with the Stevenson deal and that Haymon could not legally object due to the existing GYM contract with Stevenson, that Stevenson had previously agreed to the bout and, further, that in any case GYM’s contract with Stevenson gave it the right to bind him to the bout.

It was later learned that Haymon was attempting to set up a bout between Stevenson and Golden Boy’s fighter, Bernard Hopkins, with Haymon negotiating directly with Showtime to the alleged exclusion of Michel.  Negotiations of this nature, as well as his other activities, squarely place Haymon in the category of promoter as defined in the Muhammad Ali Act.

In March, Main Events learned that GYM had presented a Showtime proposal to HBO pursuant to a “right to match” clause that HBO had in its contract with GYM from the November 11, 2013 bout.  Upon information and belief that proposal only included the interim bout, not any subsequent bout.

In order to protect itself, Main Events sent two letters on March 26, 2014.  One was to Michel.  The second was to the Executive Vice President of Showtime in charge of sports programming.  In both letters the same point was made, that Main Events had no interest in the interim bout of Stevenson against Andrzej Fonfara but that Main Events had a binding agreement for a subsequent Kovalev-Stevenson bout.  

Haymon, through his entity Alan Haymon Development Company, Inc., obtains a power of attorney for boxers and requires that the boxer solely “render services solely and exclusively for ADVISOR and agrees that he will not take part in or negotiate for any professional boxing contest whatsoever without obtaining the written approval of advisor.”   Such clauses are common in promotional contracts and less common in management contracts and gives Haymon more than simply “advisory” power.  If Haymon's contract with Stevenson contains the same terms, it would give Haymon veto power over who Stevenson may fight and for what promoter Stevenson will fight.  
 
Stephen Espinoza, Vice President of Showtime, has publicly admitted that he is aware that Main Events/Kovalev are committed contractually to HBO. Nonetheless, Showtime made an offer negotiated through Haymon to telecast a Stevenson-Hopkins bout with, inter alia, the clear intent of disrupting the Stevenson-Kovalev bout.

Since Michel had already acknowledged that he had reached terms for a co-promotion of a Stevenson-Kovalev bout between GYM and Main Events.  Hence it was necessary for him to come up with an excuse to refuse to proceed with the co-promotion. Mr. Michel’s public position as to why he is not proceeding with the co-promotion for Kovalev-Stevenson bout is an after the fact attempt at legal exculpation, built on a falsehood.  As examples:

Yvon Michel has alleged to HBO that he had no conversations with Showtime prior to receipt of a proposal from them and that the proposal had been negotiated by Al Haymon.  Yet in response to reporters questioning Espinoza stated his negotiations were “primarily with Yvon Michel.” 

Yvon Michel sent only terms for a single interim bout to HBO to match. Espinoza, again in response to a reporter’s questions, has stated that there is a multi-bout structure in place.

As late as February 19th Michel stated to reporters that the Stevenson-Kovalev bout would go forward, despite the involvement of Haymon.  In point of fact, he has now stated that it will not and that Stevenson will instead be fighting a Golden Boy fighter.

END OF MAIN EVENTS ALLEGATIONS
 
The lawsuit seeks an unspecified amount of damages.



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