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16 APRIL 2014

 

How fighters can protect themselves outside the ring: Part One


By Jim Thomas, Esq.

All good fighters know how to protect themselves inside the ring, but many fighters have little or no knowledge of how to protect themselves outside the ring. The true stories of fighters being taken advantage of are too numerous to count. Most of the blame for these sad stories is properly placed upon unscrupulous people who use superior power or knowledge or experience to harm fighters, but some of the responsibility must rest upon the shoulders of the fighters themselves. Just as fighters have a responsibility to take the time and effort to learn how to protect themselves in the ring, they have the same responsibility to take the time and effort to learn how to take care of themselves outside the ring.

For more than a decade, I have been fighting to protect the rights of Evander Holyfield and other fighters. Evander is well known as one of the most successful fighters in history, not only inside the ring, but outside as well. I realize that Evander has financial resources available to him that many other fighters do not have and that he can afford to hire whoever he thinks is the best in each position on his team, and I know that is not the case for many other fighters. But I also believe there are some rules of self-defense in business matters that any fighter can follow that will help him or her avoid becoming one more sad story, regardless of financial resources. The one thing all of my suggested rules have in common is that they are all aimed at helping the boxer surround himself with the right people. Just as a fighter relies upon his cornermen in the ring, outside the ring the fighter’s defense relies heavily on having the right people in his “corner”.

Rule No. 1: Understand the difference between a manager and a promoter and what their respective duties and obligations are.


Many people, not just fighters, are confused about the differences between the duties and obligations of a manager, and the duties and obligations of a promoter. There are fundamental differences that must be thoroughly understood for a boxer to be properly protected and have appropriate expectations.

A fighter’s manager is typically the fighter’s primary negotiating agent and representative. A manager typically has what is called a “fiduciary duty” to his fighter, which means the manager must act in the fighter’s best interest, and the fighter has the right to trust the manager to work to advance and protect the interests of the fighter. One of a manager’s most important functions is to do his best to negotiate on behalf of the fighter to obtain for the fighter as much compensation as possible for each bout. In most cases, that means the manager is negotiating for the fighter and against the promoter of the fight, who is typically attempting to pay the least the promoter can pay for the services of the fighter. In may ways, the manager-fighter relationship is similar to the attorney-client relationship in that both managers and attorneys are obligated to fight on behalf of their “clients”, and to avoid conflicts of interest as much as possible. Typically, a manager’s compensation is, and should be, a percentage of the fighter’s compensation so that the manager’s financial interests are completely aligned with the fighter’s financial interests.

The relationship between a fighter and a promoter is fundamentally different from the relationship between a fighter and a manager. Whereas the relationship between a fighter and his manager is primarily a personal relationship based upon trust, the relationship between a fighter and a fight promoter is primarily a business relationship based upon economics. The promoter’s function is entirely different from the manager’s function. The promoter is the producer of the boxing event, not the representative of any of the participants. It is entirely proper for a promoter to attempt to maximize his own profit from each fight promotion, because the promoter is supposed to be the party that takes the financial risk of the fight promotion. Each fight promotion has projected revenues (reward) and projected expenses (risk). The promoter increases his profit potential and decreases his risk of loss by maximizing revenues and minimizing expenses. The primary way the promoter increases revenues is by “promoting” the fight by attempting to create interest in the fight to maximize sales of tickets and television viewership. By far, the greatest expenses of a fight promotion are the purses paid to the fighters. Consequently, the primary way a promoter minimizes expenses so as to maximize profit is to pay each fighter as little as possible. The bottom line is that there is a limited “pot” of net revenues (total revenues minus expenses) available from each fight promotion. That “pot” is divided among the promoter and the fighters based upon the bout agreements entered into between the promoter and the fighters. The more the fighter is paid, the less profit the promoter makes, and the less the fighter is paid, the more profit the promoter makes.

There is absolutely nothing wrong with this economic model. It reflects the fundamental American economic ideal of free enterprise, but it also demonstrates that the economic interests of the promoter and the fighter with respect to any given fight are diamentrically opposed. A full understanding and acceptance of this reality is the first and necessary step for a fighter to take in protecting himself outside the ring. No matter how many times a promoter calls himself a fighter’s promoter, the fighter should not look to the promoter to protect his economic interests. That is the fighter’s manager’s job. The promoter’s job is to promote the fight event, and, absent a contractual obligation to pay more, he has every right to try to make as much profit for himself as possible by paying the fighter as little as the fighter and his manager will accept.

As a result of the fundamental conflict of economic interests between the promoter and the fighter, the law generally does not impose upon a promoter a “fiduciary duty” to the fighter. In other words, the fighter has no legal right to expect the promoter to protect the interests of the fighter. The law does typically impose upon the promoter an implied duty to perform his contractual obligations to the fighter in good faith and in a fair manner, but beyond that implied duty, the law typically does not create duties of the promoter to the fighter beyond the duties set forth in the promotional contract between the fighter and the promoter.

All of this is not to say or imply that a good promoter cannot help advance the career of a fighter signed to the promoter. A promoter certainly does have that ability, and many promoters have done so for many fighters. Although the economic interests of the promoter and the fighter are in conflict with respect to the expense side of a promotion, in the long-term, the interests are somewhat aligned on the revenue side. The more a promoter can do to create interest in a fighter signed to the promoter, the more revenue the promoter can generate in future events and the more the promoter can afford to pay the fighter while still making a fair profit. On this aspect of the promotional relationship, the promoter and manager need to work together as a team on behalf of the fighter because the economic interests of the fighter, his manager, and the promoter are all advanced by building the popularity of the fighter, which ultimately increases the “pot”.

In summary, there are fundamental differences between the relationship between a fighter and his manager and the relationship between a fighter and the promoter who has the promotional rights to the fighter’s fights. These differences do not make managers better or worse than promoters, they simply mean that the fighter needs to look for different things from the two. A promoter is fulfilling his obligations to a fighter when he is living up to his promotional contract. A manager is doing his job when he is making sure the promoter is living up to the promoter’s contractual obligations to the fighter. There are several consequences of these differences.

A) Obviously a manager must be knowledgeable and competent, but once that is established, the most important factor in choosing a manager is whether he is trustworthy. The manager is the fighter’s representative; his loyalty must be unquestionable. No matter what a manager’s contract provides, if he is not truly on the side of the fighter, he will be in position to harm the fighter or allow the fighter to be taken advantage of.

B) Obviously, a promoter must be competent and have sufficient resources (such as television access) to promote fights effectively, but once that is established, the most important factor in choosing a promoter is what the promoter is willing to commit to in writing in a promotional contract. The promoter is not the fighter’s representative, and has no duty of trust or loyalty. The promoter’s duty is to do what the promotional contract says he will do, although he must do so in good faith and in a fair manner. Too many fighters sign with a promoter based upon oral assurances that he will do things other than what the contract says. That is a mistake. Every promotional contract provides that the promoter’s obligations are limited to the written provisions of the contract. When everyone is getting along, promoters often go beyond their written obligations, but when the relationship is strained for any reason, a fighter can expect to receive only what the promoter has committed to do in writing, even though the law may impose other implied duties, enforcing those additional implied duties usually requires litigation, which is expensive, time-consuming, and uncertain.

C) In choosing both a manager and a promoter, a fighter must consider carefully the relationship between the manager and the promoter. There have been well-known instances in which the manager’s relationship with a given promoter has been more important to him than his relationship with the fighter. After all, some managers reason, “fighters come and go, but the promoter will be here for a long time.” Even worse is the completely incomprehensible situation in which a manager actually works for, or is otherwise under the control or influence of, the fighter’s promoter. If a manager is not willing and completely free to go to war with his fighter’s promoter, if and when necessary and appropriate, the manager cannot represent his fighter adequately.

D) Beware of managers who are also promoters. With some exceptions, the Ali Boxing Reform Act prohibits any individual from simultaneously acting as a manager and a promoter with respect to any given fighter and event. This does not literally prevent a fighter’s manager from acting as, or on behalf of, a promoter of an event that does not involve the fighter, but this can create a more subtle conflict of interest in the attitude of a manager. I believe a manager can best represent a fighter’s interests by consistently being on the side of the fighter in all boxing transactions. I have generally avoided representation of parties whose interest are in conflict with fighters. My job is to protect and advance the interests of fighters, and I try to avoid being on “the other side of the table”. A manager can adequately represent a fighter and be a promoter of other events, but it requires a difficult change of orientation.

Summary and Conclusion

Learning how to protect oneself outside the ring is a critically-important part of the job of being a professional boxer. Boxing is a tough way to make a living, and involves risks most other professions do not require. Those risks are worth taking only if a fighter receives in return for his services what he deserves. People watch boxing to see the boxers. The other people in boxing are important and necessary, but the boxers should receive the bulk of the profits made from their efforts. By following the advice set forth above, boxers can learn to defend themselves outside the ring as well as inside and make sure they are the primary beneficiaries of their own courage and efforts.

***

Jim Thomas helped finance his College and Law School education by teaching karate classes as a fourth-degree black belt and Eastern Collegiate Champion. After graduating as the top student at the prestigious William & Mary Law School, Jim began his law practice as a Litigator in a ten-lawyer firm. Jim’s firm, McKenna, Long & Aldridge, LLP, has since grown to approximately 400 lawyers in eight cities in the United States and Europe. Jim runs the firm’s Sports & Entertainment law practice as well as the firm’s Sports Management Company and serves as Chairman of the firm’s Ethics & Professional Responsibility Committee. In 1991, Jim began representing Evander Holyfield and in 1995, Jim became Evander’s Boxing Management Advisor and attorney. Jim now also serves in that role for Michael Grant and serves as President of World Class Boxing, LLC, which manages 2000 Olympian Middleweight, Jermain Taylor, 2000 Olympian Super-heavyweight, Calvin Brock, NABA Heavyweight Champion, Sergei Lyakhovich, and other carefully-selected boxers.



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