Saul "Canelo" Alvarez, boxing's biggest box office draw and a multi-weight class champion, has sued DAZN, Golden Boy Promotions and Golden Boy principal Oscar De La Hoya for $280 million for breach of contract. In addition to the $280 million, the lawsuit seeks punitive damages and, most importantly to boxing fans, a "judicial determination [that] Alvarez is eligible to participate in bouts arranged and promoted by entities other than Golden Boy and broadcast by entities other than DAZN." The lawsuit was filed in United States federal court in the Central District of California, where Golden Boy is based. Although the lawsuit is carefully worded, it appears that the major legal hurdle for Alvarez will have to overcome is that he does not have a contract directly with DAZN. It appears that Golden Boy, as Alvarez's promoter, has the contract with DAZN, and that Golden Boy has a separate contract promising to pay Alvarez the money it receives from DAZN. If that is the case, in order to win his lawsuit against DAZN, Alvarez must prove he is a third-party beneficiary of the DAZN-Golden Boy contract, something that is a lot harder to do in a court of law than it sounds. Generally speaking, there is a legal presumption against third-party beneficiaries and the Alvarez lawsuit did not quote any specific contractual language that would overcome the presumption.
The lawsuit admits Alvarez has never seen the DAZN-Golden Boy contract, alleging he repeatedly requested copies from both Golden Boy and DAZN, but both refused to share it with him.
Alvarez's lawsuit has some additional legal theories against DAZN, including that DAZN tortiously interfered with the Golden Boy-Alvarez contract as follows: "DAZN's conduct prevented Golden Boy Promotions from arranging, promoting, and paying Alvarez for his bouts as required under the [Golden Boy-Alvarez] Agreement. Due to [this] interference, Alvarez has suffered harm and damages, including, but not limited to, the denied guaranteed payments, lost gate revenue, and opportunities for ancillary revenue associated with bouts, such as sponsorships and apparel revenue."
Alvarez also alleges that Golden Boy promised DAZN that it would deliver a third fight between Alvarez and Gennadiy Golovkin even though, says Alvarez, that Golden Boy had no authority to promise such a fight. According to Alvarez, the Golden Boy-Alvarez contract did not require Alvarez to box any specific opponent other than Fielding. Instead, it specified that Alvarez’ opponents would “be mutually selected by [Alvarez] and [Golden Boy Promotions], subject to [Alvarez’] final approval, not to be unreasonably withheld.” Thus, Alvarez believes he was damaged by Golden Boy trying to deliver a third fight between Alvarez and Golovkin, which, before Alvarez left the middleweight division, was one of the most in-demand fights in the sport.
Alvarez also alleges he was never told that Golden Boy "had entered into an agreement with DAZN that gave DAZN a role in approving his future opponents. Neither did Golden Boy [...] disclose that they had represented to DAZN that Alvarez would have a bout with Mr. Golovkin in 2019. Golden Boy [...] intentionally failed to disclose that they had made representations and/or promises to DAZN that exceeded or were inconsistent with the terms of the [Golden Boy- Alvarez] contract. Had Golden Boy [...] disclosed that their representations and/or promises to DAZN exceeded or were inconsistent with the terms of the [Golden Boy- Alvarez] contract, Alvarez reasonably would have behaved differently, negotiated differently, and may not have agreed to the [Golden Boy- Alvarez] contract without further protections. Alvarez is informed and believes that DAZN is now using the previously undisclosed representations and/or promises of Golden Boy [...] as excuses for its failure to approve of and pay for Alvarez bouts in the fall 2020 and beyond.
All of the following details are based on the allegations contained in Alvarez's complaint, which is his side of the story only, not yet proven as fact and not even evidence. The defendants will have at least thirty days to file answers or motions telling their sides of the story.
In October 2018, Golden Boy and DAZN entered into a contract for DAZN to broadcast boxing matches to be promoted by Golden Boy. The contract also gave Golden Boy additional shows on the DAZN streaming service. According to Alvarez's complaint, the DAZN-Golden Boy contract required DAZN to pay to Golden Boy a license fee of $40 million dollars per bout for ten Alvarez bouts expected to occur in the years 2019 to 2023. Alvarez was not actually party of the negotiations for the DAZN-Golden Boy contract. Instead, Alvarez signed a separate contract with Golden Boy that required Golden Boy to pay Alvarez guaranteed payments totaling $365 million for his next eleven boxing matches: $15 million for the December 2018 bout with Rocky Fielding and $35 million dollars for each of his ten bouts thereafter. The ten bouts were expected to be on or about May 5th and September 15th of the years 2019 to 2023.
De La Hoya, Golden Boy's CEO, is named as a defendant because he personally assumed, along with Golden Boy, liability to Alvarez for making all guaranteed payments to Alvarez. The last fight Alvarez participated in was his win over Sergey Kovalev in November 2019, meaning he missed his first fight of 2020 and is about to miss his second unless this lawsuit gets resolved very quickly.
In late 2019 and early 2020, the parties began discussions regarding potential opponents and venues for Alvarez’ 2020 bouts. In March 2020, there was agreement regarding an opponent and venue for Alvarez’ May 2020 bout, but that bout was never finalized announced due to the coronavirus pandemic. In May 2020, the parties resumed negotiations for Alvarez’ 2020 bouts. They discussed holding boxing matches at unusual venues such as the top of skyscrapers to elevate an Alvarez boxing match into a historic event. Both Alvarez and Golden Boy acknowledged that bouts without fans would deprive them of the gate (ticket sales), but agreed that they were willing to forgo that revenue. During these discussions, DAZN inquired if Golden Boy and Alvarez would be willing to accept payment of less than the $40 million license fee for 2020 bouts in exchange for delayed or alternate compensation. Golden Boy and Alvarez agreed they would evaluate such offers in good faith if they were made, but that time was of the essence because Alvarez was ready, willing, and able to fight in both September and December 2020 so Alvarez wanted the bouts to be arranged quickly.
Despite repeated promises that an offer was imminent, DAZN failed to make a proposal for several months. When Golden Boy and Alvarez proposed opponents, DAZN refused to confirm that it would broadcast Alvarez’s September 2020 bout or pay the contracted $40 million license fee. On June 24, 2020 – approximately ten weeks before Alvarez’s expected September bout date and the time when Alvarez would need to begin training camp-- Alvarez’s attorney wrote to Golden Boy and DAZN to confirm that Alvarez was prepared to face multiple opponents, but that DAZN and Golden Boy needed to affirm their commitments so that the bout could be finalized, promoted, and his training could commence.
In response, DAZN [according to Alvarez's allegations] responded with an anticipatory breach of contract. DAZN stated that it would not pay the required license fee, and provided a series of excuses, including the fact that Alvarez had not fought Gennadiy Golovkin [for a third time] in 2019 and that Golden Boy had not put forth a plan for a second Alvarez fight in 2020. After extended discussions between the parties, [Alvarez admits] that DAZN offered to pay Alvarez and Golden Boy a fraction of the contracted $40 million license fee, part in cash and part in DAZN stock, in advance of a potential initial public stock offering. However, the entire value of the package was substantially less than Alvarez’s contractual guarantee. Throughout the spring and summer of 2020, Alvarez repeatedly asked Golden Boy to explore alternative broadcast options for a fall 2020 bout. Although Golden Boy said it was talking to various broadcasters, it never put forth a plan to pay Alvarez the $35 million it had promised him for each of his fights.
Alvarez has fought the first three of his eleven fights under the Alvarez and DAZN Contracts, and says he is owed remaining guaranteed payments of $280 million.