A Quick Look at the Potential Contractual Implications of Nicholas Walters’ Controversial Effort against Vasyl Lomachenko

On November 26, 2016, what had been one of the most anticipated showdowns in professional boxing this year, the HBO-televised bout between WBO super-featherweight champion and two-time Olympic gold medalist Vasyl (Hi-Tech) Lomachenko’s defense and vaunted Jamaican puncher Nicholas (Axe Man) Walters, became, after seven completed rounds, the modern day answer to Robert Duran’s famous “No Mas” fight with “Sugar” Ray Leonard after Walters repeatedly and unambiguously advised the referee that he was not coming out for round eight. While Lomachenko, perhaps the best overall boxer in the sport today, was routing Walters at the time of Walters’ retirement, the surrender came as a shock to many in the professional boxing community who felt, among other sentiments, that Walters had the one-punch power to turn a bout at any time, no matter how bad he or others felt that he was losing a given bout. Indeed, many have called for Walters, who had previously furnished explosive knockouts of Vic Darchinyan and Nonito Donaire among many others in compiling a 26-1-1 (21 KOs), to be banished from HBO and terminated by his promoter, Top Rank, for his actions. The question is thus begged as to what kind of contractual protections a boxer’s promoter or management create for themselves in the event that such a loss makes them lose faith in their boxer, or otherwise substantially alters their plans for him? A quick look at the most standard types of provisions follows.

The Right to Terminate Following a Loss or Draw

It is common to see language in a promotional or management agreement that empowers a manager or promoter to terminate the agreement, at their sole discretion, in the event that the boxer “shall fail to have been declared the winner” of one or two matches during the term of the agreement. As it sounds, this provision means that if a boxer is either the recipient of a loss or a draw, he may soon be a free agent if his manager or promoter so decide. While a boxer may view this provision as a right for manager or promoter to kick him when he is down, think of it from a manager or promoter’s point of view; do they want to continue to be contractually and financially obligated to someone that might reveal themselves as a dog in a given loss, as many believe Walters did against Lomachenko?

The Right to Re-Negotiate Terms Following a Loss or Draw

A promoter or manager who aware that he either may be taking on damaged, but marketable, goods at the start of a given agreement, or is simply cognizant of the fact that no one is unbeatable but believes every boxer deserves the chance to redeem themselves, may reserve the right to renegotiate certain terms of their agreements, such as the minimum number of guaranteed bouts, the amount of a monthly stipend, or the minimum purses, in the event that a boxer “failed to have been declared the winner” of a bout or two during the term. While such a provision may result in the boxer having less activity or less income generated under a given management or promotional agreement going forward, it also means that he or she is not left out in the cold as a free agent after a loss or draw and will be given the opportunity to come back from his or her setback without a drastic change in the make-up of his or her team. In sum, a renegotiation could be far better than nothing for a boxer who may otherwise have nowhere else to turn following an embarrassing loss such as the incurred by Walters.

The Right to Toll the Term of the Agreement

Perhaps a boxer is unable to fight for several months due to a medical suspension or decides he needs some time to re-evaluate his career and thus takes a year or two off following a loss or a draw. Indeed, Walters will likely be placed on medical suspensions since he officially lost by technical knockout. Further, he may wish to take some time off to reevaluate his career and take inventory about what led to the events of November 26, 2016. A tolling provision in a promotional or management agreement would cover such scenarios and allow a boxer’s team to continue to benefit from its agreements with him in times of uncertainty. A typical tolling provision allows a promoter or manager to extend the term of their agreement with a boxer in the event of a postponement of a given fight, or in the event that the boxer becomes injured, suspended, or permanently/ partially disabled. This provision is placed in an agreement to help ensure that the promoter or manager has every opportunity to get a return on their investment in a boxer no matter what happens during the term of their relationship. It can have advantages for the boxer too, as it makes certain that he has a promoter and/or manager to continue his career with following injuries, personal troubles, suspensions, and other events that keep him out of the ring for appreciable lengths of time.

Morals Clause/Effort Clause

A typical morals clause allows one or both parties to a given agreement the option of terminating the agreement in the event that the other party does something to either bring ill-repute to himself, does something to sully the other party’s name or image, or otherwise does something which, in the opinion of the one party, makes said party believe that it will be hampered going forward in advancing the objectives of a given agreement because of the other party’s misdoings, such as a lack of effort during a particular bout. Sometimes such language is split into different sections in a management or promotional agreement; one which simply addresses the boxer’s deeds (the morals clause) and the other his effort in performance. Walters’ retirement from the Lomachenko fight could potential trigger each such provision given the implications it has as to his toughness and willingness as a boxer and thus allow Top Rank, or Walters’ management, the option of terminating their agreements with him.

Takeaways for Managers and Promoters

A smart manager would do his part to both negotiate the above-summarized protections into his own agreement with a boxer and lessen the impact of any such protections when negotiating a boxer’s promotional agreement. Likewise, a promoter would be smart to make the aforementioned protections as strong as he feels a particular situation warrants so that he is not compelled to carry any boxer perceived as dead weight following a bad loss or draw. With these protections available for both their management and promotional agreements, the boxers themselves are best served to simply do their part to show up for each of their bouts in the best mental and physical condition that they can be and give the best effort that can be expected of them. Otherwise, when a performance such as that turned in by Walters against Lomachenko occurs, they will be at the mercy of the whims of those in charge of handling their professional careers.

Please do not hesitate to contact the Law Offices of Paul S. Haberman LLC with questions on any legal, regulatory, or contractual issues that you may encounter in the combat sports world.