(Sport) Boxing: Is Al Haymon's boxing empire unravelling?

As things currently stand, Al Haymon is by far the most powerful man in the sport of boxing but with his NBC outfit Premier Boxing Champions bleeding money, Waddell and Reed (his financial backers) in turmoil, and rival promoters taking turns to file damaging and costly antitrust lawsuits against him, it seems like it's a matter of time before Haymon's dream of bringing order to the chaotic sport of boxing unravels in the most dramatic fashion possible. 

However, you won't get far betting against possibly the most skilled and ruthless business figure in American sports who has so far managed to successfully get a dying American institution back on TV after years in the wilderness and snap up its most promising stars which has made him one of the most polarizing figures in a sport full of them. 

When you look at most American sports, they're highly centralized and regulated in just about every facet of the game from how contracts are negotiated to rules players and coaches abide by even down to on and off field conduct. However boxing, the grand old wizard of American sporting entertainment, is anything but as everything from what network a match may air on to who enters the ring first is up for grabs which makes boxing a very chaotic yet strangely very predictable sport to follow.  

In this environment, the guy with the biggest purse often wins and more often than not that guy in recent years has been Al Haymon and rival promoters, principally Bob Arum's Top Rank and boxing legend Oscar De La Hoya's Golden Boy Promotions, can’t stand the power former music promoter Haymon has managed to amass in a sport almost designed to eat outsiders alive. 

Haymon earned his dominant position in boxing by playing by the rules set by promoters: cornering money divisions (in this case, the welterweight division)  by signing champions, top contenders and prospects then securing relationships with networks to sell fights. He effectively managed to do that in one fell swoop by securing a relationship with by far the most gifted fighter of his generation, Floyd "Money" Mayweather who at the time was smarting from a tumultuous relationship with Arum. However, what rankles rival promoters is that he effectively cornered the lucrative welterweight division by raiding Golden Boy's promising stable of fighters that included stars such as Danny Garcia, Amir Khan and Adrien Broner signing them up to contracts which recognised him as their "adviser". 

Haymon would then use his relationship with former Golden Boy CEO Richard Schaefer as well as other promoters such as Lou DiBella and Gary Shaw to promote fights featuring boxers under contract then sell their fights almost exclusively to Showtime sports. To this day Golden Boy aren't even half the force they were six years ago because of Haymon's ruthless tactics and since then have joined forces with former enemies Top Rank who had also been locked out of a number of lucrative fights with the notable exception of the underwhelming Mayweather v Pacquiao money bonanza.  

With Haymon now the undisputed king of boxing with a heavyweight champion in the shape of Deontay Wilder, promoters and fans for a whole year were forced to grit their teeth or complain impotently on the sidelines as Haymon continued to acquire talent to add to his already large stable of boxers. Promoters and fans justifiably quibbled about quality of the matchups (the infamous Garcia v Salka mismatch still rankles fight fans to this day) and his tendency to protect his fighters from real competition but fans largely praised Haymon for returning boxing to television after years in the wilderness. However, the damning irony is  that while getting boxing back on television will stand as the crowning achievement of Haymon's rule, it may just bring his empire crashing down around him. 

The ink barely dried on Haymon's exclusive time buy deal with NBC  before Golden Boy and Top Rank cried foul accusing Haymon of anti-competitive market practices as Haymon was effectively buying air time instead seeking a licensing fee. Haymon's plan to buy air time to get boxing on free television wasn't cheap and was largely bankrolled by mutual fund Waddell and Reed as NBC didn't believe in boxing enough to pay for it outright. Haymon then secured similar time buy deals TV deals with CBS, ESPN, Fox Sports and Spike  which angered  Top Rank and Golden as they saw Haymon's exclusive time buy deals (with the exception of CBS which was a non exclusive and short lived time buy deal) as a way to shut them out of potentially lucrative content licensing deals with networks. 

Seeing Haymon's exclusive TV deals as threat to their business, both Top Rank and Golden Boy have launched antitrust cases with Top Rank filing a lawsuit back in 2015  and Golden Boy filing against Haymon and Waddell and Reed also in 2015 claiming Haymon violated the Muhammad Ali act which prohibits promoters from moonlighting as managers of boxers. While Top Rank settled their 10 month case against Haymon last may, Golden Boy's case against Haymon is still going strong and could go to trial this March.   

While the chances of Golden Boy winning aren't great as antitrust cases are notoriously hard to prove and Haymon's advisory contracts with his boxers and relationships with other promoters side steps but doesn't exactly breach the Ali act, Golden Boy's case has definitely succeeded in piercing the veil masking Haymon's shadowy business dealings and possibly bring Haymon's PBC boxing series to its knees.  

Haymon's PBC series has been losing millions throughout it's three year run inspiring apoplectic Waddell and Reed's shareholders to file a lawsuit against them for pouring a reported $925 million into what they described as a "potentially criminal company". The lawsuit also revealed just how unprofitable PBC has been for Waddell and Reed so far as according to Bloody Elbow, the alleged $925 million investment funneled into Haymon companies has a market value of $357, 747, 414 which means PBC has allegedly  lost Waddell and Reed and its shareholders well over $500 million in three years.  

While most investments involve making losses initially, losing that amount of money in such a sport space of time suggest it's only a matter of time before Waddell and Reed either stop backing Haymon entirely or sternly encourage him to devise a path to profitability and fast. That time may come quicker than Haymon planned as Wallace and Reed are in freefall as the company had a nightmare 2016 where it had to lay off staff, suffered three losing quarters in a row (the fourth yet to be reported but likely to follow suit) and suffered downgrades and sell ratings by a slew of credit rating agencies and banks including Moody's and Citigroup. 

Waddell and Reed have been in decline for the last three years as it has gone from managing  $123 billion in assets to only $86.4 billion in just over 15 months as the company continues to lose investors hand over fist. Haymon is no fool and must know that sooner or later Waddell and Reed will pull the plug on PBC which would almost instantly bring all of Haymon's interests in boxing to a halt. 

Should Waddell and Reed pull the plug in Haymon, Haymon would be forced to seek funding from other sources but thanks the lawsuits filed by Waddell and Reed shareholders, Top Rank and Golden Boy, the pool of funds and investment firms looking to invest into Haymon's plan to bring order to boxing is shallow to say the least. 

The biggest losers other than Haymon should Waddell and Reed cut their substantial losses will be the fighters he advises as they'll no longer be exposed to a large network television audience and because Haymon's relationship with other promoters have been less than copasetic over the years, may find it hard to get their fights promoted.  

In sum, while Waddell and Reed may not cut its losses and Haymon improves his relationship with other promoters, it's quite clear the uncrowned king of boxing of sits upon a throne that could fall apart at any minute.   

(Sports) UFC: Why The UFC's Deal With Reebok Might Bring Them To Their Knees

If the true measure of a company is how it treats its workers then the UFC is seriously lacking as the MMA organization fails to address its chronic problem of making major decisions with, it seems, very little input or notification of the 600 plus fighters under its banner

The UFC is great at a number of things including marketing itself better than about every combat sport or organization and actually being able put on fights people want to see but the announcement of the sponsorship deal with Reebok and the recently announced introduction of a drug testing program has shown that the interest of fighters aren't considered.

The UFC's six year apparel deal with Reebok that will see UFC fighters wearing Reebok apparel during fight week. Fighters will be paid according to five tiered system based on fights fought with the organization which may benefit seasoned UFC campaigners such as Joe Lauzon, former WEC champ Urijah Faber and Donald Cerrone (all of whom could probably earn much more in sponsorship but it may screw 90% percent of the MMA organization's female roster and as well as new up and coming talent who are likely to populate the lower tiers.

Even those who may stand to benefit most from the deal have reservations as while they might be in the higher tiers and therefore earn more sponsorship money, many of them could earn more through securing their own sponsors than they would get when the Reebok deal takes effect next month.

Fighters are already losing money with sponsors ending deals with fighters because the Reebook deal ensures fighters can't promote other brands on their training or fight apparel. This means that regardless of where a fighter ends up in the five tier payment system, they lose money before and after the deal takes effect.

This has led to a public outbursts from a number of UFC stars who have revealed the earnings they'll lose out on because of the Reebok deal. Heavyweight Matt Mitirone, a 13 fight UFC veteran took to twitter to register his disdain for the Reebok deal quipping that the sports and fitness apparel brand secured a great bargain according to him "at the cost of the fighters".

In his interview with MMA Fighting, UFC fighter James Krause revealed that he lost $20,000 in canceled sponsorship deals and with the loss of income could find himself struggling to meet his commitments as he points to the fact that the fighters life is riddled with insecurity as every fight you have could be your last no matter how good you are. The insecurity is made worse as the UFC is not shy to cut a fighter from their roster that, in the words of UFC president Dana White, fails to "move the needle" even when they're a top ten contender as former UFC fighter Jon Fitch found out to his chagrin.

The UFC can cut a fighter as and when they please as technically, fighters under the UFC Banner aren't employed by the UFC as they're recognized as "independent contractors" which means they have little to none of the rights an employee would have. This also means that fighter contracts are ridiculously one sided in the favor of the UFC and gives the organization the power to literally make or break a fighter's career because of it. Under these conditions, can you blame the onslaught of fighters who are not sold on the Reebok deal? Krause, like you would expect from a UFC fighter, describes the situation pretty bluntly as he points out that "In the UFC, our contracts don't mean sh*t. For us, anyway. For them, they do. There's no security behind it"

The insecurity of the fighter's life in the UFC is why there has been talk about fighters banding together to setup a union but with none of the top stars (maybe with the exception of UFC champion Joe Aldo) or even a good deal of the mid carders in the mood to unionize, fighters collectively bargaining with the UFC over pay is a distant reality to say the least.

This is a shame as if fighters under the UFC banner unionized, it would instantly remedy the UFC's chronic problem of announcing initiatives, deals and policies with little to no consultation with the fighters, especially when it affects them directly. It's a smart bet that there wouldn't be this much public uproar on the part of the fighters if the UFC sat the fighters down and talked them through deal but, time and again, the UFC has pretty much streamlined changes that affected fighters with little to no opposition as fighters have no leverage or even representation to make demands.   

However, if fighters did set up a union to represent their interests, the UFC would have no choice but to listen to the demands and concerns of fighters as the UFC's worst nightmare are their fighters going on strike given its relentless fight schedule, sponsorship deals and TV commitments. A union would ensure that fighters have a seat at the table when moves are made that affect them but as things stand, the UFC will continue to have its way.

How the UFC runs its business is not necessarily wrong as they can run their business however they please under the purview of the law but with the Reebok deal set to take effect next month, the UFC may just find itself in a real pickle as the MMA organization could miss out on new talent as fighters realize that the UFC's Reebok deal will drastically effect their earning power when it comes to securing sponsorships and even cause them to lose money if they had fight apparel deals of their own.

While the UFC has the best talent and is so dominant in the MMA promotion business that the sport itself and the UFC brand is damn near synonymous, fighters in MMA and other combat sports are all too aware of the short space of time they have to capitalize on their talents and how one false move could end their career which means fighters will have to make a choice between joining other MMA organizations such as Bellator and the World Series of Fighting who have no apparel deals or join the UFC and lose out financially even if they succeed against the best talent the UFC has to offer.

In sum, The UFC is truly playing with fire forcing fighters to make this decision knowing full well sponsors is how fighters really make money and in some cases can triple their fight purse just from sponsorship income per fight. With the Reebok deal set to run for at least six years, the UFC could be brought to its knees in this time as competitors could be the real beneficiaries as far as we can see, the fighters hate the deal, new prospects will hate his deal and/or may avoid joining the UFC because of it, and, if they're not careful, the UFC will hate this deal when fans divert to other MMA organizations who will attract more sponsors and better talent than the UFC over time because of one deal they might live to regret.