International Boxing Club of New York v. United States

• Citation: 358 U.S. 242,3 L.Ed.2d 270,79 S.Ct. 245
• Decision Date: 12 January 1959
• Docket Number: No. 18,18
• Parties: INTERNATIONAL BOXING CLUB OF NEW YORK, Inc., a Corporation of New York; International Boxing Club, Inc., a Corporation of Illinois, et al., Appellants, v. UNITED STATES of America
• Court: United States Supreme Court

358 U.S. 242

79 S.Ct. 245

3 L.Ed.2d 270

INTERNATIONAL BOXING CLUB OF NEW YORK, Inc., a Corporation of New York; International Boxing Club, Inc., a Corporation of Illinois, et al., Appellants,

v UNITED STATES of America.

No. 18.

Argued Nov. 13, 1958.

Decided Jan. 12, 1959.

[Syllabus from pages 242-243 intentionally omitted]

Mr. Kenneth C. Royall, New York City, for appellants.

Mr. Philip Elman, Washington, D.C., for appellee.

Mr. Justice CLARK delivered the opinion of the Court.

This civil Sherman Act¹ case was here four years ago on direct appeal from a dismissal by the District Court, which had held that the Act did not apply to the business of professional boxing. We reversed, finding that 'the complaint states a cause of action (under the Act) and that the Government is entitled to an opportunity to prove its allegations,' and remanded the case for trial on the merits. United States v. International Boxing Club, 1955, 348 U.S. 236, 75 S.Ct. 259, 263, 99 L.Ed. 290. The complaint charged the appellants with a combination and conspiracy in unreasonable restraint of trade and commerce among the States in the promotion, broadcasting, and televising of professional world championship boxing contests, as well as a conspiracy to monopolize and monopolization of the same. After a trial, the District Court, in an opinion incorporating detailed findings of fact and conclusions of law based on the principles laid down in our earlier opinion, found that the allegations of the complaint had been sustained. 150 F.Supp. 397. After further hearings on the nature and extent of the relief necessary to protect the public interest, the court entered its final judgment dissolving two of the corporate appellants, directing divestiture of certain stock owned by the individual appellants and granting injunctive relief designed to open up the market in the business of promoting professional world championship boxing matches. 171 F.Supp. 841.

The appellants, while not attacking any specific finding as clearly erroneous, claim that the proof did not show that they violated Section 1 or 2 of the Act. In this regard appellants level their strongest blows at the District Court's definition of the relevant market. Out of the entire field of professional boxing, the District Court carved a market in championship contests alone, hold- ing it to be the relevant market at which the conspiracy was aimed. In the alternative, appellants insist that the relief granted the Government was 'unnecessarily punitive, even if liability is assumed. On a direct appeal to this Court we noted probable jurisdiction, 1958, 356 U.S. 910, 78 S.Ct. 668, 2 L.Ed.2d 584. We have concluded that the findings of the District Court are not clearly erroneous and that in view of our former holding on the sufficiency of the complaint the judgment on the merits was properly entered. As to the relief granted we find that the court did not exceed the limits of allowable discretion in framing a decree 'that will, so far as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance.' United States v. United States Gypsum Co., 1950, 340 U.S. 76, 88, 71 S.Ct. 160, 169, 95 L.Ed. 89.

Our previous decision herein having decided that the promotion of professional championship boxing contests on an interstate basis constituted trade and commerce among the States, within the meaning of the Sherman Act, there is no contest here either on the findings or the law on that point. Since on that appeal we discussed in some detail the allegations of the complaint, which the trial court has now found amply proven by the evidence, we shall only summarize the findings here.

The Findings.

The conspiracy began in January 1949, when appellants Norris and Wirtz, who owned and controlled the Chicago Stadium, the Detroit Olympia Arena and the St. Louis Arena, made an agreement with Joe Louis, the then heavyweight boxing champion of the world. Wishing to retire, Louis agreed to give up his title after obtaining from each of the four leading contenders² exclusive promotion rights including rights to radio, television and movie revenues. Upon securing these exclusive contracts Louis assigned them to the appellant Internation Boxing Club, Illinois, which was organized by Norris and Wirtz for the purpose of promoting boxing for the combination in Illinois. They paid Louis $150,000 cash plus an employment contract and a 20% stock interest in I.B.C., Illinois.

In March 1949 Norris and Wirtz approached appellant Madison Square Garden, in which they had for many years owned 50,000 shares of stock. It was the 'foremost sports arena in New York City and is the best known arena of its kind in the United States, if not the world.'³ However, its facilities were tied up by an exclusive lease it had granted to Mike Jacobs' interests—the leading professional boxing promoter in the field at that time. Norris and Wirtz proposed that they should all 'work together now and keep the events for our buildings and not create a competitive situation that would be harmful to all.' In order to effectuate this program, appellant Madison Square Garden bought out Mike Jacobs' interest, including, in addition to his lease on Madison Square Garden, his exclusive leases to Yankee Stadium and the St. Nicholas Arena and his contract with the then welterweight champion Sugar Ray Robinson. These contracts were assigned to Internation Boxing Club, New York, organized for the purpose of promoting boxing for the combination in New York.

Once Jacobs' interests had been acquired, there remained only one substantial competitor in the field of promoting championship boxing matches. That was Tournament of Champions, Inc., owned in part by the Columbia Broadcasting System. It owned an exclusive lease on the Polo Grounds as well as an exclusive promotion contract covering the next two fights of the then middleweight champion of the world. In May 1949 Madison Square Garden bought all of the stock of Tournament of Champions at a cost of $100,000 plus 25% of the net profits on the next two middleweight championship matches. The assets thus acquired were likewise assigned to I.B.C., New York. By a simultaneous separate agreement, Columbia Broadcasting System agreed for a five-year period not to invest in or promote any professional boxing matches in return for a first refusal right to the broadcasting of certain boxing matches staged for a like period in Madison Square Garden.

This series of agreements, concummated within four months' time, gave appellants exclusive control of the promotion of boxing matches in three championship divisions, i.e., heavyweight, middleweight, and welterweight. Not satisfied with this temporary control, however, appellants perpetuated their hold on championship bouts by requiring each contender for the title to grant to them an exclusive promotion contract to his championship fights, including film and broadcasting, for a period of from three to five years. Over the facilities for the staging of contests appellants exercised like control, owning or managing the 'key' arenas and stadia in the Nation.⁴

Tightening the ropes around the ring thus built, Norris and Wirtz increased their stockholdings in Madison Square Garden to where they controlled it and were able to 'dictate its policies and boxing activities.' This has continued their control over I.B.C., New York, the stock of which is now wholly owned by Madison Square Garden.⁵ They are the sole stockholders of Chicago Stadium Corporation which in turn is the sole stockholder of I.B.C., Illinois. Their control over this boxing empire is revealed by the fact that Norris is president of each of the four top corporations, i.e., Madison Square Garden, I.B.C., New York, Chicago Stadium Corporation, and I.B.C., Illinois. He and Wirtz are directors in all four, while I.B.C., Illinois and I.B.C., New York, which have owned all of the promotion contracts with the contenders, have a joint board of directors.

The effect of the conspiracy is obvious. Using the facilities of I.B.C., Illinois and I.B.C., New York, appellants entered into exclusive promotion contracts with title aspirants, requiring exclusive handling agreements in the event the contender became champion. In amassing their empire, appellants obtained control of champions in three divisions. The choice given a contender thereafter was clear, i.e., to sign with appellants or not to fight. With appellants in control of the key arenas and stadia of the country through Madison Square Garden, Chicago Stadium Corporation, and others, an event could not be successfully staged in any of these areas, the most fruitful in the Nation, without their consent. The exercise of this power brought immediate results. From June 1949, when appellants staged their first championship fight, until May 15, 1953, the date of the amended complaint, they staged or controlled the promotion of 36 of the 44 championship battles held in this country, giving them approximately 81% of that field. In two of the classifications, heavyweight and middleweight, the combine staged all of the contests. The power of the combine to exclude competitors in the championship field is graphically shown by their promotion of 25 out of 27 fights in all divisions, a total of 93%, during the two-and-a-half-year period ending with the filing of the amended complaint. This power extended to the sale of film and broadcasting rights—most valuable adjuncts to successful promotion in the business.

Appellants launch a vigorous attack on the finding that the relevant market was the promotion of championship boxing contests in contrast to all professional boxing events. They rely primarily on United States v. E. I. Du pont De Nemours & Co., 1956, 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264. That case, involving an alleged monopoly of the market in cellophane, held that the relevant market was not cellophane...