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rejecting irreparable harm to reputation where the embarrassing fact was "already known in boxing circles" so "whatever embarrassment could arise . . . ha[d] already occurred"
Summary of this case from Usherson v. Bandshell Artist Mgmt.Opinion
02 Civ. 8446 (GEL)
December 19, 2002
Attorney for Plaintiff: Barry H. Berke, Kramer Levin Naftalis Frankel LLP, New York, NY,
Attorneys for Defendant: Judd Burstein, New York, NY,
OPINION AND ORDER
Plaintiff Star Boxing, Inc. ("SBI"), a boxing promoter, seeks a preliminary injunction to prevent boxer Antonio Tarver from breaching his exclusive contract with it. An evidentiary hearing was held on November 20, 2002, concerning the likelihood of irreparable harm to plaintiff should defendant use another promoter while this dispute awaits arbitration. Because the Court finds that plaintiffs anticipated damages are predominantly monetary in nature, and that the potential for any truly irreparable harm from Tarver's breach during the limited time period pending arbitration of the dispute is highly speculative, the motion for a preliminary injunction will be denied.
BACKGROUND
Tarver entered a contract with SBI on October 19, 2001, that purports to grant SBI "exclusive promotional rights" with respect to Tarver's bouts for three years. (Def. Ex. B, at 1). It requires SBI to arrange at least four bouts in each contract year, with the purses to be "negotiate[d] . . . in good faith" according to the nature of the bout.Id. Tarver is not bound to accept any fight that SBI arranges; the consideration on his side appears to be the exclusivity clause, and, of course, SBI's cut of any purses earned. The first three bouts, for which the contract specifies minimum purses and the stature of the opponents were to take place within nine months. Id. at 1-2.
In early October, 2002, Tarver filed a demand for arbitration in accordance with the contract's arbitration provision, asserting that the contract is unenforceable and that he was free to use another promoter to arrange fights for him. He proceeded through his "advisor" Charles Muniz, to negotiate independent of SBI for a match with Roy Jones Jr., the universally-recognized world champion boxer in the light-heavyweight division. Muniz informed Jones's representative that SBI was no longer authorized to negotiate for Tarver.
When the parties first appeared before this court. Tarver was negotiating for a bout with Jones. Evidence presented at the hearing established that such a match was likely to be lucrative for all participants. Expert testimony offered by both parties agreed that Jones, an extremely popular fighter, is one of the handful of major attractions who can guarantee widespread fan interest and significant revenue. The match was to have been televised on Home Box Office ("HBO"), a significant factor in assessing the likely profitability of the fight for the participants. Unlike other boxers Jones had taken on in recent years. Tarver was viewed by many as a serious contender for the title (Tr. 41), having recently won a major fight that, by the terms of a deal SBI had negotiated with the International Boxing Federation ("IBF"), Mandated a Tarver-Jones title match. Indeed, Tarver was recognized by all three of the main ranking organizations (the World Boxing Association, the World Boxing Council, and the IBF) as Jones's number one challenger. For all these reasons, the proposed fight would not only offer Tarver the opportunity to topple Jones, but would also, regardless of the outcome, earn Tarver and SBI a purse vastly larger than they had made from Tarver's earlier fights, one likely in excess of $5 million. (Tr. 17).
By the time of the November 20 hearing, however, Jones had publicly expressed his intention to vacate his light-heavyweight title in order to pursue a championship match in the heavyweight division. By two letters dated November 25, 2002, which have not been disputed by SBI, Tarver's counsel informed the Court that Jones has in fact vacated the title, and that the IBF has directed Tarver to begin negotiations for a fight against Montell Griffin to fill the resulting vacancy. Though this would also be a championship match, the witnesses agreed that it would be a much less lucrative event than the projected fight with the more popular Jones. Thus, unless Jones has a change of heart, what is at stake for Tarver and SBI as of this date is a much smaller purse — well under $1 million — than would have accompanied a Jones fight. (Tr. 20).
SBI asserts that Tarver's actions not only breached an enforceable contract, but that his defection will cause economic and noneconomic damages well beyond simply the loss of its share of the purse in the Jones or Griffin fight. Those additional losses, SBI claims, constitute irreparable harm because of Tarver's "unique and extraordinary talent" (DeGuardia Aff. at 4), and the prestige and opportunities that would accompany the promotion of the anticipated world championship match. Specifically, since SBI is not one of the handful of premier nationally-recognized boxing promoters, but one with only a regional reputation, Tarver's defection will cost it the opportunity to make contacts and enhance its reputation and visibility among the industry's major players. SBI also claims that, since Tarver's success is in part creditable to its own efforts, his inevitably well-publicized decision to switch promoters will cause it embarrassment and irreparably injure its relationships with its other fighters.
Tarver argues that it is not uncommon for boxers to abandon promoters under these circumstances, and that if the arbitrators decide that this contract is enforceable, any harm suffered by SBI between now and the conclusion of the arbitration is Ultimately economic, and therefore compensable through an award of damages.
DISCUSSION
SBI appears to assert four types of damage potentially arising from Tarver's alleged breach of the contract during the period that would be covered by preliminary injunction: (1) the loss of its share of the purse from Tarver's next fight; (2) the embarrassment and reputational injury of being dropped by its best fighter; (3) the lost opportunity in connection with Tarver's upcoming World championship bout, to negotiate with and establish a reputation among the most important industry players — the boxing press, broadcasting networks ratings organizations, and other promoters; and (4) the loss of the opportunity to direct and influence the career of this exceptional boxer. Based upon the evidence at the hearing, the Court finds that none of these constitute damage of the irreparable nature required to justify injunctive relief.
(1) SBI's loss of the purse is obviously purely monetary. Such a loss would qualify as irreparable harm only if SBI's skills as a promoter were likely to play a significant role either in determining whether Tarver gets to fight Jones (since the purse would be much larger in that case), or in determining the size of the purse for that fight or the more likely fight against Griffin.Should Tarver as a result of his defection squander this opportunity, there would be no pot of money from which SBI could collect damages. However, testimony at the hearing demonstrated that whether Tarver fights Jones is entirely up to Jones (Tr. 29-30), and that the size of the purse for either bout is dictated by market forces and would at most be only modestly affected by the quality of SBI's negotiations and promotion (Tr. 27-28, 78). Indeed, SBI at the hearing expressly denied that its claim of irreparable injury is based on a claim that it is uniquely qualified to get the best deal for Tarver. (Tr. 180-81).
(2) Any harm SBI sustains as a result of any embarrassment or injury to its reputation among boxers and other industry players is also economic, in that it would affect its ability to sign other boxers and to arrange and effectively negotiate other fights. To the extent such reputational damage occurs, it is of a sort commonly assessed by courts and arbitrators and remedied through monetary awards. Moreover, the court credits expert testimony that the reputational damage arising from losing a star fighter is, in the absence of any accusations by the fighter of wrongdoing, modest, and reversible if and when the promoter vindicates his contractual rights in court or in an arbitration. (Tr. 15-16, 48-50). Furthermore, unchallenged testimony indicates that it is already known in boxing circles that SBI no longer represents Tarver. (Tr. 130-31, 142-43). Thus, whatever embarrassment could arise from Tarver's breach has already occurred. Even where accusations of wrongdoing are circulated, as has not been the case here, it appears from the testimony that a promoter with ability can quickly recover and continue to attract top boxers. (Tr. 162).
(3) Any harm SBI suffers from the loss of the opportunity to make connections and develop its reputation among the large national players in the boxing industry is also essentially economic, but because the nature and magnitude of this injury are speculative, it is fairly arguable that damages would not be an adequate remedy. SBI claims that arranging the championship bout for Tarver would open doors that would enable it to make other deals for Tarver and its other boxers. SBI claims that the next few months present a unique opportunity for a promoter with only a regional reputation to "play with the big boys."
At stake here, however, is only the opportunity associated with promoting a single match, since SBI's opportunity to promote subsequent Tarver matches will be determined in arbitration. That single opportunity will not by itself propel SBI into the national arena. (Tr. 74). Furthermore, it is highly speculative whether that opportunity has any substantial value that could not be recovered later, since either of two events could render it relatively meaningless. First, if Jones persists in his present course of action and does not fight Tarver — which testimony indicated will almost certainly be the case (Tr. 17, 41) — Tarver's next fight will not capture the nationwide attention that the Jones fight would have (Tr. 45-46). Second, if Tarver actually becomes the world champion by fighting either Jones or someone else, the benefits of having promoted Tarver in that fight will be minor compared to the benefits of subsequently promoting him in future fights as the reigning world champion. (Tr. 44, 73, 159). If SBI wins in arbitration, those greater benefits will accrue to it in the form of either damages awarded in arbitration or Tarver's being compelled to comply with his contractual obligations.
Even with a preliminary injunction, moreover, there is no guarantee that Tarver will accept whatever package SBI would be able to offer him for the championship fight. Indeed, Tarver, in the first year of his relationship with SBI, did not accept every offer SBI negotiated for him. (Tr. 114). In the context of a mandatory bout for the championship. Tarver's rejection of the deal put together by SBI would throw the fight open to other promoters in a "purse bid," according to industry practice and as contemplated by the contract at issue here. That process might well result in someone other than SBI promoting the fight for Tarver. Thus the opportunity lost in the absence of a preliminary injunction has the significance attributed to it by SBI only if Jones changes course and reclaims his light heavyweight championship, SBI is able to negotiate a package satisfactory to Tarver, and Tarver then loses the fight and no longer has opportunities to box on the larger national arena in which SBI hopes to gain a foothold.
(4) Finally, SBI's loss of the opportunity to direct or influence Tarver's career is purely noneconomic and, under the right circumstances, might justify a finding that injunctive relief is required. But the factual record here indicates that over the first year of their contractual relationship, SBI was unable to direct or strongly influence Tarver's decisions; Tarver very much chose his own course. The first fight SBI arranged, against Reggie Johnson, took place at Tarver's initiative and against the wishes of SBI, which would have preferred, and would have benefitted more, from a "Star Boxing show" scheduled for December 2001. (Tr. 147-49; DeGuardia Aff. Ex. P.) It was in the negotiations for the Johnson fight that SBI succeeded in getting a guarantee of a title fight against Roy Jones in the event Tarver defeated Johnson. (Id.) After the Johnson fight, SBI again aimed lower than Tarver himself, suggesting a "tune-up" bout against a "relatively easy" opponent in the spring of 2002. (Id.) Tarver rejected this and asked SBI to instead arrange a fight against David Telesco. (Id.) SBI complied, although Tarver eventually chose not to accept the offer. (DeGuardia Aff. ¶¶ 32-36, Ex. B-F.) It was in the wake of Tarver's rejection of the Telesco fight that SBI arranged the Harding fight that solidified Tarver's number one ranking. Even in arranging the Harding fight, it was Tarver's instincts, not SBI's, that led to what "turned out to be a spectacular decision." (DeGuardia Aff. Ex. P, at 2). SBI acknowledges that in arranging the Harding fight, it put Tarver's "desires first . . . in spite of the relatively minimal profit earned by [SBI]." (Id.; see also Tr. 151). After defeating Harding, Tarver pushed for, and was offered, the third bout to which he was entitled in the initial nine-month period of his contract, with a minimum purse of $150,000 notwithstanding SBI's advice that he should go through with the Jones fight before risking his ranking by taking on anything other than a "safe" opponent. (DeGuardia Aff. ¶¶ 42-50 Ex. M.N.O). Ultimately, Tarver did not accept that offer. (DeGuardia Aff. ¶ 50).
The Court also credits expert testimony that in the short run. Tarver's options are few, and will not depend on the identity of his promoter: It is in Tarver's interest to fight Jones if Jones so desires, and Griffin in default of a Jones match, in an effort to claim the light-heavyweight title. (Tr. 29-30). Taking all of these facts together. and without disparaging SBI's undoubted skills as a promoter and contributor to Tarver's success. the Court cannot find that SBI will lose a significant opportunity to guide Tarver's career if another promoter negotiates the terms of Tarver's next bout.
SBI cites various cases to support its quest for a preliminary injunction. But they are all distinguishable. In Arias v. Solis, 754 F. Supp. 290, 291 (E.D.N.Y. 1991), the defendant, Julian Solis, was a bantamweight boxer who, late in his career, signed a two-year exclusive contract with the plaintiff, manager Ciriaco Arias. Solis violated the contract by entering a second agreement with a promoter, who arranged a fight against Calvin Grove. The court granted Arias's request for an injunction barring that fight Id. at 295. But the injunction was justified by particular facts not present here. The court found that Solis would be overmatched in a fight against Grove, that Solis was unfit to fight because of an arm injury. and that the state athletic commission had cancelled an earlier fight against Grove because Solis had failed a neurological examination. Id. The manager, in short, had established that "the fight ought not take place and that it would not be in the best interests of Solis' career." Id. In contrast, Tarver is a rising star who all agree is eminently fit to fight Jones or anyone else in his weight class. There is no claim that he or his new advisors plan to undertake a reckless course that could damage his future. In contrast to Arias, Tarver's career, and therefore his value to whoever acts as his future promoter or manager, will be unaffected by the choice he has made to break his agreement with SBI. Should SBI win on the merits in arbitration, it will regain a fighter as or more valuable that the fighter it signed to begin with. The plaintiff in Arias, in contrast, sought to prevent a fight he would never have authorized because it would likely destroy the defendant's value as a boxer to himself or anyone else. It was in that sense that the court found that the plaintiff would "suffer irreparable harm in the absence of an injunction." Id.
In Madison Square Garden Boxing, Inc. v. Shavers, 434 F. Supp. 449, 450-51 (S.D.N.Y. 1977), the plaintiff sought an injunction preventing heavyweight contender Earnie Shavers, who had signed a contract to fight Muhammed Ali for the heavyweight championship at the Garden, from signing up with another promoter to arrange the fight elsewhere. The court based its finding of irreparable harm on the fact that plaintiffs "credibility could be destroyed in the eyes of boxing managers, as well as various media representatives . . . or others, who, in reliance, enter into further contracts that in fact may well represent the major source of income from the event being promoted . . . ." Id. at 452. SBI similarly alleges that its credibility will suffer as a result of Tarver's defection. But here, too, there are significant distinguishing facts bearing on the irreparability of the alleged harm: Shavers had already concluded a deal to fight Ali at the Garden, and the Garden had already negotiated a "multi-million dollar agreement . . . to televise the fight" with NBC. Id. at 450. Here none of the specifics of Tarver's next fight have been negotiated, and no third parties have negotiated collateral deals in reliance on such specifics. Tarver is not walking away from a deal; he is walking away from the promoter he had authorized to make a deal. As Judge Cedarbaum stated, in a similar boxing dispute to be discussed below, the "harm to the Garden's reputation and credibility" inShavers would have been "less significant . . . where the television and marketing arrangements have yet to be made." Lewis v. Rahman, 147 F. Supp.2d 225, 238 n. 7 (S.D.N.Y. 2001). Since, as discussed above, testimony at the hearing before this Court indicated that actions such as Tarver's are not uncommon and not necessarily damaging, at least in any permanent way, to a promoter's reputation, the factors that led theShavers court to find irreparable damage are absent here.
The instant case is more similar to Lewis v. Rahman, in which the court denied promoter. Cedric Kushner Productions' ("CKP") request for an injunction prohibiting world heavyweight champion Hasim Rahman from breaching a provision of his contract granting CKP the exclusive right to promote Rahman's rematch against former champion Lennox Lewis. Although adjudication of the promoter's right to preliminary relief had been consolidated into a bench trial on the merits, the considerations were the same as those involved here, since the irreparable harm claimed by the plaintiff would arise from the loss of the opportunity to arrange and promote a single fight. In finding that "the loss resulting from a breach by Rahman can be measured in money," Judge Cedarbaum found unpersuasive plaintiffs claim that, in the context of a single fight," the heavyweight champion has access to business opportunities that other promoters do not have." Lewis, 147 F. Supp.2d at 238. Rather, "[t]hose opportunities generally arise in circumstance[s] in which the promoter has continuing rights in the fighter." Id. Here if SBI indeed has continuing rights under its agreement to Tarver, they will be restored in arbitration. As in Lewis, all that is at stake here is a single fight, for which SBI can be "compensa[ted] in money." Id.
A boxer's career is measured in years, not, as for most promoters and lawyers, in decades. In reflecting on the harms SBI faces if Tarver negotiates his next fight using another promoter, the Court is mindful that ultimately, as exemplified by the damaged fighter in Arias, 754 F. Supp. at 295, the individual who most tangibly faces the prospect of "irreparable harm" is the boxer who walks into the ring to engage in physical combat. For everyone else, all that is at stake is money.
CONCLUSION
For the foregoing reasons, the Court finds that plaintiff has not shown it will be irreparably harmed by Tarver's alleged breach of contract. The motion for a preliminary injunction is therefore denied. Since no further relief is sought from this Court, and the underlying dispute will be resolved in arbitration, the Clerk is respectfully directed to mark the case closed.
SO ORDERED.