How to Avoid Getting Burned by Manager-Promoter Firewalls

A Quick Look at the Limitations of Boxing Manager-Promoter Firewall Regulations

Since the rise of Al Haymon and Premier Boxing Champions, the question has repeatedly been asked, and on a few occasions litigated, as to what limitations there are on a manager acting as a promoter, or vice versa, in professional boxing. A popular refrain to this question is that such a duality of roles is summarily violative of the so-called “firewall” provision of the Ali Act. This, however, is not entirely true. Under the Ali Act, “[i]t is unlawful for…a promoter to have a direct or indirect financial relationship in the management of a boxer” and for “a manager…to have a direct or indirect financial interest in the promotion of a boxer; or…to be employed by or receive compensation of other benefits from a promoter, except for amounts received as consideration under manager’s contract with the boxer.” Notably, however, the Ali Act’s “[f]irewall between promoters and managers … only applies to boxers participating in a boxing match of 10 rounds or more.” The Ali Act thus permits someone to act as both a manager and promoter for a professional boxer in relation to contests that are scheduled for one (1) through nine (9) rounds or, practically speaking, four (4), six (6), or eight (8) round contests. The logical next question is whether there are any other circumstances that would allow for someone to breach the “firewall” and act as both a manager and promoter. A quick look follows, using New York, New Jersey, and Connecticut regulations governing professional boxing as samples.

New York

Under Section 208.21 of the New York State Athletic Commission Rules and Regulations (“Promoter not to act as manager”), “[n]o principal, director, officer, agent or owner of a licensed promoter shall, directly or indirectly, serve or act as the manager, assignee or second of any boxer or mixed martial artist, or be employed by or be in any way commercially connected with the manager, assignee or second of any boxer or mixed martial artist, unless otherwise directed or authorized by the Commission.”

New Jersey

Section 13:46-23.7 of the New Jersey Administrative Code (“Promoter prohibited from acting as manager or second of participant”) provides that “[n]o person, partnership, firm, corporation or association licensed by the Office of the State Athletic Commissioner to hold or conduct boxing bouts, wrestling exhibitions or sparring exhibitions pursuant to 13:46-4.1, nor any person or entity holding an interest in said licensee of the nature described in 13:46-23.2, nor the spouse, child, parent or sibling of any such individual, shall serve or act as the manager or second for a licensed athlete or shall have any direct or indirect financial interest in any manager’s or second’s contract with any athlete licensed by the Office of the State Athletic Commissioner or in any assignment thereof unless such interest is disclosed in a writing sent by regular or certified mail or hand delivered to the Office of the State Athletic Commissioner, Richard J. Hughes Justice Complex, Trenton, New Jersey, at least 10 days prior to the time of the authorized event.”

Connecticut

Section 29-143j-10a of the Regulations of Connecticut State Agencies (“Disclosure of financial dealings or family relationships”) provides that “[t]he promoter producing a contest or exhibition shall have no financial dealings, directly or indirectly, with a manager, boxer or mixed martial arts competitor who is engaged in a bout produced by the promoter, nor shall the promoter produce a contest or exhibition in which the manager, boxer or mixed martial arts competitor is a member of the promoter’s immediate family, unless the financial dealings or relationship is disclosed to the commissioner or such commissioner’s authorized representative prior to the time that the contest or exhibition is approved by the commissioner or such commissioner’s authorized representative.”

Based on the above regulations, it would appear, subject to the further inquiry into these provisions and other similar ones if ever so compelled by litigation, that there are hypothetically situations in which a state athletic commission may approve of, direct, or authorize the manager or promoter of a professional boxer to act as both the manager and promoter. The takeaway from this is not to encourage any managers or promoters to aggressively try to assume both roles in the United States, but that if they choose to do so, they must make sure that they are either acting as such for boxers who are not yet competing in 10 or 12 round bouts, are fully transparent about such a relationship with a given state athletic commission, and/or receive express authorization from a given state athletic commission to hold that dual role. But Mr. Haberman, don’t boxing’s “advisors” walk that line with regularity without much overall regulatory oversight or concern? Well, that is a topic for another day…

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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.

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