While many of us were relaxing this past Labor Day weekend, Saul “Canelo” Alvarez was meeting with lawyers in preparation for the biggest boxing lawsuit in recent memory. The celebrated Mexican star and top Pound 4 Pound fighter filed his complaint yesterday in California federal court against streaming platform DAZN and his promoter Oscar De La Hoya/Golden Boy Promotions, alleging breach of contract.
The contact was Canelo’s 10-fight, $350 million deal to fight exclusively on DAZN, guaranteeing him at least $35 million per fight. The contract, signed in October 2018, is the largest in boxing history and the problems began swiftly. So far, Canelo has fought three fights on the DAZN platform: Rocky Fielding, Danny Jacobs and Sergey Kovalev. The friction has come from Canelo’s choice of opponents and what the network deems as “premier” fights. According to some sources, DAZN has not considered Jacobs and Kovalev to be premier fights, and likely that sentiment is coming from the service not seeing the expected subscriber bump from those contests.
It’s been no secret that the network has been pushing for a rubbermatch with Canelo’s rival Gennday Golovkin, who the network also signed to a robust contract (six fights for $100 million). Canelo initially rebuffed the idea of a trilogy fight last year but conceded to the bout this year. The fighter was also in negotiations earlier this year for a May bout with Billy Joe Saunders.
Then the pandemic hit.
With no fans, DAZN could not honor Canelo’s $35 million guarantee. The fighter then pushed for his promoter Golden Boy to find another network after an agreement couldn’t be made on a lower fight purse nor an opponent (Writer’s Note: Canelo was eyeing Avril Yildirim for the vacant WBC super middleweight title while DAZN was interested in fights with crossover potential like MMA stars Jorge Masvidal and Khabib Nurmagomedov). In his complaint, Canelo claims the lawsuit was filed when Golden Boy failed to do so.
Turns out 2020 Mexican Independence Weekend is the beginning of one of Canelo’s toughest fights, just not one taking place in the ring. BeatsBoxingMayhem takes a look at the good, the bad and the ugly from this lawsuit fallout.
- Canelo gets to control his destiny. Things with Golden Boy have been bad for a long time now. In his words, the relationship with Golden Boy CEO Oscar De La Hoya is strictly business, and to that end they haven’t been on the same business page in well over a year. Last year, Canelo was stripped of his IBF middleweight title for failing to face mandatory challenger Sergiy Derevenyenchenko. Canelo chastised Golden Boy for this, blaming for clumsily handling the negotiations and missing a deadline. Canelo’s star is big enough where he can work with promoters on his terms on a fight by fight basis, much like Mayweather did for a time after leaving Top Rank and working with the likes of Goossen Tutor and Golden Boy. And more recently, we’ve seen Miguel Cotto and Mikey Garcia have success utilizing this business model.
- Divisions now have to move on. In the past year, Canelo has fought between three divisions (160-175). For nearly every fighter on those weight classes, a Canelo fight represents their biggest payday. This has caused stagnation with fighters waiting around to see who Canelo picks as his next opponent. The problem is very pronounced at 168, with Billy Joe Saunders and Callum Smith being two names in a 2020 limbo. Now with Canelo possibly on the shelf for the remainder of 2020, we’ll hopefully see a scramble for the other top fighters to face each other.
- Transparency. Like most private companies, DAZN keeps their financial figures and subscriber numbers close to the vest. Should this go to trial, or even a prolonged negotiation to reach a settlement outside of the courts, we may finally get some concrete info on the business practices of all involved.
- Canelo on the shelf. It’s never a good thing when great fighters can’t compete. No matter what you think of his style or negotiating tactics, Canelo brings the sport mainstream attention. Having him miss a year during his prime years is devastating for him and the sport.
- A GGG lawsuit could follow. A big reason for Golovkin signing with the DAZN was the promise of getting a third fight with Canelo. That fell by the wayside last year when Canelo claimed to be uninterested and considered the rivalry done when he defeated GGG by majority decision in September 2018. But earlier this year, Canelo relented and was willing to face Golovkin this September. Now, Golovkin was the reluctant one, wanting to first complete an optional IBF title defense against Kamil Szeremeta. With Canelo’s lawsuit taking him off the board and likely headed to a complete contract termination at some point, that leaves Golovkin without the big fight he signed up for. Would he be content to finish out his contract against the likes of fellow middleweight titleholder Demetrius Andrade or possibly move up to 168? Worst-case scenario, GGG sees the Canelo situation as the writing on the wall and looks to sever his DAZN ties with his own lawsuit or buyout.
- Golden Boy’s financial future. Much attention has been on whether DAZN can survive in the U.S. market without their biggest fighter on this side of the pond. However, the real attention needs to be on Golden Boy Promotions. DAZN is strong in several other international markets; Golden Boy has been solely dependent on Canelo’s fight generating revenue. The last big lawsuit Golden Boy was involved in was against Premier Boxing Champions, who the former sued in an antitrust lawsuit back in 2017. The discovery process showed Canelo accounted for a staggering 94% of Golden Boy’s income in 2015 and 107% in 2017. The company has yet to build a star even close to Canelo since that time, making it likely the company is still dependent on the Mexican star and potentially in danger of financial ruin should Canelo sever ties.
- DAZN gets out of boxing and leaves a cautionary tale. Boxing is one the hardest businesses to jump into. There’s so many moving parts between promoters, networks, managers and fighters that it’s damn near impossible to thrive without deep knowledge and first-hand experience in the sport. Money is just one component and not the most important — just ask Roc Nation (Throne Boxing) and 50 Cent’s SMS Promotions about that. DAZN could very well decide on an out of court settlement with Canelo and cut their losses by either drastically reducing or completely dropping their boxing coverage. As an international company with billionaire shareholders that’s successfully integrated in other sports markets, what does it say to the business world about boxing? It says the sport is more trouble than it’s worth, and likely creates less platforms being willing to take the risk of investing in the Sweet Science.
Stay tuned here on BeatsBoxingMayhem for more Canelo vs. DAZN/Golden Boy news as it develops.