America Presents, Ltd. v. Hopkins

• Decision Date: 12 August 2004
• Docket Number: No. 99-K-344.,99-K-344.
• Citation: 330 F.Supp.2d 1217
• Parties: AMERICA PRESENTS, LTD., a Colorado Corporation Plaintiff and Counterclaim Defendant, v. Bernard HOPKINS, Defendant and Counterclaim Plaintiff.
• Court: U.S. District Court — District of Colorado

Page 1217

330 F.Supp.2d 1217

AMERICA PRESENTS, LTD., a Colorado Corporation Plaintiff and Counterclaim Defendant, v. Bernard HOPKINS, Defendant and Counterclaim Plaintiff.

No. 99-K-344.

United States District Court, D. Colorado.

August 12, 2004.

Lee D. Foreman, Haddon, Morgan, Mueller, Jordan, Mackey & Foreman, PC, Charles L. Casteel, Kristin W. Dale, Michael Powers, Davis, Graham & Stubbs LLP, Carole K. Jeffery, Horowitz, Wake & Forbes, Denver, CO, for Plaintiff.

Kelly Moureen Condon, Holme, Roberts & Owen, LLP, Denver, CO, Adam Ross Eaton, Englewood, CO, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

KANE, Senior District Judge.

Jurisdiction in this case is uncontested. It is based on diversity of citizenship and the amount in controversy exceeds $75,000. The law of the State of Colorado applies because the parties elected it.

Defendant Bernard Hopkins is a professional boxer of considerable renown. Included in a growing list of honors, he is recognized as the middleweight champion by the International Boxing Federation (IBF) and other boxing organizations. Plaintiff America Presents, Ltd. (America Presents) promotes boxers and boxing matches.

In December 1996, the parties entered into a promotional rights agreement in which Hopkins granted America Presents exclusive rights to stage, sell tickets for and market all of his professional boxing engagements for a two-year term. America Presents agreed to offer Hopkins the right to participate in a minimum of eight boxing matches with stated minimum purses. Hopkins agreed to cooperate and assist in pursuing the objectives of the contract.

Their ensuing relationship was fractious. On February 23, 1999, America Presents seized the initiative by filing a complaint against Hopkins claiming, not breach of contract, but rather disparagement of America Presents' services and business in violation of a Colorado statute, and interference with America Presents' continuing and prospective business relationships. This complaint was soon withdrawn and an amended complaint was filed based on breach of contract. Hopkins filed an answer and counterclaim for breach of contract, breach of fiduciary duty and duty of good faith, and tortious interference with prospective business advantage. As a matter of law, I ruled that a fiduciary relationship did not exist.¹

The case came on for retrial on January 16, 2001. A previous trial to a jury, which began August 21, 2000, had ended in a mistrial after eight days when the jury was unable to reach unanimous verdicts. For reasons I will explain later in this opinion, America Presents did not appear by counsel for the retrial. When the case was called, Hopkins waived his right to a jury trial and moved to dismiss America Presents' complaint. I accepted the waiver and granted that motion.

Hopkins moved for judicial notice and consideration of the evidence presented to the jury during the original trial. I granted that motion. Hopkins testified in his own behalf and rested his case. Preparation of a transcript of the entire aborted trial, including America Presents evidence and its cross-examination of Hopkins' witnesses, was ordered. Thereafter new counsel entered his appearance on behalf of America Presents and was permitted to file post-trial motions, proposed findings and objections to Hopkins' proposed findings.

BACKGROUND.

Most of the revenue for today's boxing industry comes from television. Boxing is telecast on both network and pay per view channels. Home Box Office (HBO) is the premier boxing broadcaster. It produces three programs: TVKO, HBO CHAMPIONSHIP BOXING (HBO-I), and HBO BOXING AFTER DARK. Other producers include the national networks, ABC, NBC, CBS and FOX along with ESPN, USA Cable, SHOWTIME and FOX Sports Net. The prices these organizations pay to broadcast fights are subject to numerous factors determined to a great extent by revenue received from advertisers and subscriptions for pay per view.

A significant price consideration is the "star quality" of the boxers. Generally speaking, the producer with the highest viewer participation has the greatest revenue and is thus able to pay the most to the best boxers and their promoters for broadcast rights. HBO is in the catbird seat in this regard and its premier program, "HBO I," presents boxers with the greatest star quality.

One of the very top stars, indeed a celebrity or superstar, who has boxed in various weight divisions is Roy Jones. Challenging Roy Jones in a championship fight is highly desirable both for the money and the prestige. Defeating Roy Jones in a title match practically assures the victor of star status.

Even more so than with other professional sports, boxing has little room for losers. Because boxing is a very dangerous sport with grave risk of injury and perhaps the most physically demanding of all highly competitive sports, the time during which a fighter can be at the top of his game is highly restricted. With very few exceptions, a boxer's professional career is over before age forty. Additionally, because the sport requires recuperation after a fight and demands rigorous training and conditioning in preparation for each event, the number of boxing matches in which a fighter may engage is finite.

Success as a boxer is limited not only by physical ability, talent and stamina, but also by time, opportunity and fortune. What may otherwise seem to be enormous amounts of money paid to boxers for a single event, must be viewed in the context of a highly risky and short professional life coupled with the lengthy and intense demands of training and physical discipline.

Providing a boxer with opportunities to fight for both financial profit and career enhancement is the promoter's job. Though specific contracts may differ from the customary practice in the industry, the promoter usually advances training expenses and incurs other promotional costs, not the least of which are for travel, publicity and accommodations. If the fighter loses, the promoter earns much less or loses its investment entirely and the prospects for that fighter are almost always significantly diminished. Fight promotion is a high-risk business.

Unlike the fighter, however, the promoter is not limited to a single career. It is standard for a promoter to have a number of fighters under contract and most promotional rights agreements, including the instant one, contain a declaration that the promoter is free to engage in promotional activities for other fighters including those in competition with the fighter under contract. Unless specifically provided to the contrary, a promoter has no obligation to secure any particular bout with any other particular boxer. Obviously, the better the fighters under contract are, the better the promoter's chances are for financial and long-term success.

The IBF is one of several private membership organizations formed to regulate and sanction world championship professional boxing. The IBF, WBC (World Boxing Council) and WBA (World Boxing Association) are the three leading organizations in this arena. Each has its own "world champion" in each of approximately 10 weight divisions. Thus, there can be more than one "world champion" in each weight division at any given time.

Each champion is awarded a belt. If a boxer is awarded a belt from each organization, he is said to be the undisputed world champion. The process by which a boxer achieves that distinction is called unification. Losing a belt or being stripped of a belt are colloquial terms meaning that the boxer has lost his championship status with the particular organization.

Under IBF rules, a title holder may fight in either optional or mandatory title defense bouts. For optional title defense bouts, the champion and his promoter can choose the opponent from the IBF's list of the top 12 ranked fighters. For mandatory title defense bouts, the IBF requires the reigning champion to defend his title in a match against the number one or leading available contender approximately every nine months. If a champion fails or refuses to participate in a mandatory bout, the organization can strip him of his belt and declare the world title position open.

The weight limits for the boxers in this controversy are middleweight, super middleweight and light heavyweight. Weight is determined shortly before a bout. At the weigh-in for championship bouts, a middleweight boxer may weigh no more than 160 pounds, a super middleweight may weigh no more than 168 pounds and a light heavyweight may weigh no more than 175 pounds. A boxer may be a champion in a higher weight division, but the converse is not true. For example, a middleweight may compete for the super middleweight title, but a light heavyweight may not. Given the superb physical condition of most championship level boxers and the force with which blows are struck, weight is a critical factor.

When the champion and his promoter cannot reach agreement with the selected contender and his manager over who will promote the fight or how much each will be paid, either party may request the IBF to hold a "purse bid."² If negotiations are not completed within a prescribed period, the IBF may require a purse bid. The purse bid is open to any registered promoter. The right to promote a purse bid fight can be sold to another qualified promoter. A sealed bid auction is held and the IBF designates the promoter who is the highest qualified bidder to promote the particular fight. The purse, or proceeds from the fight, is divided according to a formula with the champion receiving 75% of the total bid and the challenger receiving 25%. See Schulz, 105 F.3d at 133, n. 12 (citing IBF Rule 23, App. 285).

THE EXCLUSIVE PROMOTION AGREEMENT.

On December 19, 1996, America Presents and Hopkins executed a promotional rights agreement (the Agreement). Hopkins granted America Presents the right to promote all professional boxing contests engaged in by...