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Mike Coppinger, ESPN
For the second time in four years, Oscar De La Hoya’s Golden Boy Promotions finds itself in a legal battle with its top star.
Canelo Alvarez, boxing’s No. 1 attraction, was released from his 11-fight, $365 million deal with Golden Boy in November 2020 after he sued the promotion.
Now, it’s Ryan Garcia, who alleged in June via a demand letter that his promotional contract with Golden Boy had been breached. Mediation between the star boxer and De La Hoya’s promotion will begin Oct. 18, sources told ESPN, while the sides continue to plan Garcia’s return to the ring.
Garcia (19-1, 23 KOs) suffered his first career loss in April when he was stopped in Round 7 of a superfight with Gervonta Davis that earned Garcia an estimated $30 million.
The 24-year-old’s comeback bout could land on Nov. 18, per sources. Garcia will continue his fight outside the ring as he looks to remedy what he claims are violations of the promotional agreement as well as California and federal law that invalidate the contract.
The allegations laid out in that June demand letter prompted a response from Golden Boy in the form of a lawsuit filed later that month in the U.S. District Court of Nevada to enforce its contract with Garcia.
Garcia’s manager and lawyer, Guadalupe Valencia, was accused of tortious interference in the suit. Last month, Garcia petitioned for the lawsuit against him to be dismissed.
“Ryan is letting his team of lawyers handle the Golden Boy litigation,” Garcia’s representative, Darin Chavez, told ESPN on Friday. “Ryan is confident in a favorable outcome, and he is focused on fighting this year and having a favorable outcome where it matters most to him — in the ring.”
What does this mean for Garcia’s fighting future? Is there a path to reconciliation? Let’s answer those questions and more as the legal proceedings begin to play out:
Will Garcia be sidelined for an extended period of time?
Former champions Andre Ward and Mikey Garcia endured long layoffs in the past decade while engaged in legal battles with their promoters, the late Dan Goossen and Top Rank, respectively.
Alvarez gained a resolution mere months after his suit was filed, and he ended up fighting under the Matchroom Boxing banner one month after he gained his release.
Chavez said mediation between Garcia and Golden Boy will commence in October “and then we plan on getting Ryan a fight in late November or the early part of December. And it’s likely going to be a non-pay-per-view fight.
“I know Lupe [Guadalupe Valencia] is working with Golden Boy to try to secure the opponent, the date and location.”
While the Garcia side and Golden Boy look to finalize his first fight since his loss to Davis in April, they’ll also continue to plan the mediation process, Chavez said.
“Some [mediator] names have been thrown out by both sides,” Chavez said. “Hopefully the exact mediator and the date of the mediation should be finalized over the next couple of days.”
Garcia’s contract with Golden Boy — an extension he signed in September 2019 — mandates mediation for any disputes before they play out in court. That’s the same basis Garcia used in his motion to dismiss Golden Boy’s lawsuit.
De La Hoya, meanwhile, told ESPN on Friday that mid-November is targeted for Garcia’s return while they work to secure an opponent for a fight on DAZN or DAZN PPV.
“It’s business as usual,” De La Hoya said. “We have a couple of pending issues that should not impede any type of progress moving forward. I truly feel that we’re going to get this behind us and then move on with his career.”
“The worst-case scenario — going through mediation — is actually not that bad,” he added. “We’re not in a bad place. We’re actually in a good place and we want to see Ryan fight in November.”
De La Hoya listed Las Vegas, Arizona and Texas as possible locations for Garcia’s return bout.
What is the crux of Garcia’s claim against Golden Boy?
There are three key claims from Garcia, chief among them that a carve-out in Garcia’s deal to fight on pay-per-view platforms besides Golden Boy broadcast partner DAZN wasn’t honored.
According to Garcia’s demand letter sent to Golden Boy in June, the fighter was advised that his April superfight against Gervonta Davis “could not happen unless it was broadcast on DAZN because of an exclusive agreement Golden Boy had separately negotiated with DAZN.”
The PPV fight against Davis, which Garcia lost via seventh-round TKO, was broadcast by Showtime (a broadcast partner of PBC, Davis’ promoter). DAZN also carried the fight on its streaming service and was paid a $1.25 million fee to step aside as the exclusive broadcaster, $120,000 of which Garcia personally paid to DAZN, per the letter.
Showtime was the chief broadcaster, shared the PPV profits and used its commentary team while the PPV was also available for purchase on DAZN.
Isn’t that claim similar to the one Alvarez made when he secured his release?
On the surface, it sounds very similar in nature.
Alvarez in 2020 contended that Golden Boy entered conflicting agreements with its star boxer and its broadcast partner, DAZN. Canelo signed an 11-fight, $365 million deal with DAZN that contained no language about a long-awaited trilogy bout with rival Gennadiy Golovkin.
“This is different because nobody wants out here. Ryan Garcia does not want out of his contract. We still have three years left in the contract and we don’t want out. So, the reason why we filed a lawsuit is just to make sure they know, meaning Ryan’s side, that we still have a valid contract.” Oscar De La Hoya
However, Golden Boy’s deal with DAZN stipulated that the promotion must deliver the third meeting, but Alvarez showed no interest in the fight at the time.
De La Hoya was on the hook to personally guarantee all payments, and that helped lead to Alvarez’s release. By the time Alvarez finally fought GGG a third time on DAZN last year, the matchup had lost much of its luster.
And now, Garcia is alleging that his contract with Golden Boy allows him to fight on PPV platforms besides DAZN. If it’s discovered DAZN’s deal with Golden Boy includes Garcia’s exclusivity, it could be a repeat of the Alvarez drama.
But De La Hoya believes this situation is much different from the Ward, Garcia and Alvarez situations, which all ended with the fighter splitting from his longtime promoter. Why?
“This is different because nobody wants out here,” De La Hoya claimed. “Ryan Garcia does not want out of his contract. We still have three years left in the contract and we don’t want out. So, the reason why we filed a lawsuit is just to make sure they know, meaning Ryan’s side, that we still have a valid contract. That’s basically it.”
What else is Garcia claiming?
Garcia also argues that Golden Boy violated California’s seven-year rule for personal service agreements, which stipulates those deals can’t exceed seven years in length. He signed with the promotion on Nov. 1, 2016, and re-signed on Sept. 18, 2019. Garcia claims the contract should terminate on Nov. 1 of this year, seven years after he first signed with Golden Boy.
De La Hoya himself argued that Top Rank violated the seven-year rule when he sued Bob Arum’s company in 2000. That claim led to De La Hoya’s departure from Top Rank and the start of Golden Boy Promotions.
The mediator will have to consider whether Garcia’s deal signed in 2019 is an entirely new contract or an extension which violates that California rule.
Garcia also accuses Golden Boy of failing to satisfy the terms of the Ali Act. The Ali Act is a federal law that protects the rights of boxers. It requires that financial disclosures related to profits from a boxer’s events must be made by the promoter to the fighter.
Garcia also claims Golden Boy breached the non-disparagement provision in the contract following multiple tweets from De La Hoya on June 1 in which he told Garcia to accept the blame for the loss to Davis and to also blame Valencia, “who pushed you to accept that insane rehydration clause.”
Garcia’s two previous fights took place at 140 pounds, but the fight versus Davis was contested at a 136-pound catchweight. Neither fighter could weigh more than 146 pounds the morning of the bout.
Lastly, Garcia accuses Golden Boy of trying to avoid paying out bonuses because he lost the fight, even though the agreement said that suffering his first loss to Vasiliy Lomachenko, Devin Haney and Davis would be exceptions to the bonus structure.
What are Golden Boy’s arguments?
Golden Boy claims it fulfilled all of its contractual obligations and that Garcia is forbidden from negotiating or contracting for any fights not promoted by Golden Boy.
The promoter also accuses Garcia’s attorney, Valencia, of directly interfering with “Golden Boy’s ability to communicate with Garcia and negotiate the best deals and fights for Garcia.”
GBP claims that Valencia violated its agreement with Garcia by engaging in talks with other promoters and boxers for fights in “an effort to drive a wedge between Garcia and Golden Boy.”
Golden Boy says it attempted to resolve the matter but was rebuffed and instead received claims from Garcia in the form of the demand letter.
Golden Boy’s suit attempts to enforce its exclusive promotional agreement with Garcia, damages to be decided at a trial and attorneys’ fees.
What are the possible outcomes?
Once mediation is underway, the person appointed to hear arguments from both sides will have much to weigh as the mediator looks to bring both sides to the middle for a resolution.
Unlike arbitration — the process that led to the mandated third fight between Tyson Fury and Deontay Wilder — the mediator won’t make any ruling. If the sides can’t resolve their differences, more lawsuits could follow.
The mediator could believe that Garcia’s contract is valid and Golden Boy did no wrong. In that case, Garcia could reimburse his promoter for legal fees while they continue to work together for the remainder of the deal.
The mediator could also determine that Garcia’s PPV carve-out clause wasn’t honored and advise Golden Boy to amend agreements with DAZN to say Garcia isn’t exclusive to the streaming service.
In that instance, Golden Boy could reimburse Garcia some or all of the $120,000 he paid DAZN in addition to legal fees.
The goal in mediation is to avoid further acrimony and reach an understanding without litigation. That process begins on Oct. 18.
Source: www.espn.com