Waddell investment down to the last 82M? OUT of (521M)

[El-blanco]

It's not my fault that Garcia is overrated. Anybody who knew anything about boxing realized that Peterson would be tough for Garcia. Those were Haymon's 2 best 140lbers too btw.

That was a great fight. I think Lamont won. He is criminally underrated in the boxing world.

[bigdunny1]

It's not my fault that Garcia is overrated. Anybody who knew anything about boxing realized that Peterson would be tough for Garcia. Those were Haymon's 2 best 140lbers too btw.

The fact Peterson made Garcia look bad is NOT the point. That's just a cherry pick gone wrong as they say. And garcia shouldn't of been fighting a catchweight against a 140lb fighter in the first place not when Haymon had tons of better and bigger names to match Garcia up with like Broner, Porter, Thurman, Mayweather, Spence, ect. and again that's all in house fights that Haymon could of made off the top of my head and the list is like 10 deep if you open it up to fights with other promoters. It was his own league he chooses the fights for these guys he has the money to pay them and tell them who they are fighting next. He had no pressure from networks, other promoters ect no external politics he controlled it all and chose these type fights. No other entity in boxing had this type of power or control of the matches they could make. With that kind of control we should of gotten better fights.

[bigdunny1]

Peterson had already lost to Lucas in horrible manner and done nothing to redeem himself or earn that fight there were many bigger and better fights for Danny. Little to no fans were calling for this fight. Fans were calling for Danny to fight the guys at 147 or fight Broner the fact that Danny looked bad in this fight and it was closer then everyone thought going in doesn't change that. Wasn't the whole point of PBC that now everyone under 1 roof we will finally get the best vs the best. that was NOT the best opponent Haymon had to offer to fight Danny. And this is one of PBC's best fights? SMH

[bballchump11]

That was a great fight. I think Lamont won. He is criminally underrated in the boxing world.

Yeah definitely. Lamont is vulnerable early in fights, so I knew Matthysse was going to stop him. But he was always going to give Garcia problems. Obviously I'm a Garcia fan, but I had the fight a draw.

[bballchump11]

The fact Peterson made Garcia look bad is NOT the point. That's just a cherry pick gone wrong as they say. And garcia shouldn't of been fighting a catchweight against a 140lb fighter in the first place not when Haymon had tons of better and bigger names to match Garcia up with like Broner, Porter, Thurman, Mayweather, Spence, ect. and again that's all in house fights that Haymon could of made off the top of my head and the list is like 10 deep if you open it up to fights with other promoters. It was his own league he chooses the fights for these guys he has the money to pay them and tell them who they are fighting next. He had no pressure from networks, other promoters ect no external politics he controlled it all and chose these type fights. No other entity in boxing had this type of power or control of the matches they could make. With that kind of control we should of gotten better fights.

That fight was a cherry pick only to people who don't know anything about boxing. Did you not think Peterson who beat Khan, Holt, Diaz, and Cayo, strong as hell and good inside fighter was not going to give Garcia issues? The same Garcia who's not that good in the pocket.

And Spence was in no position to fight Garcia in April of last year. Cut that out. Thurman and Broner had just fought a month earlier. Mayweather was fighting Pacquiao a month later. So no, there were no other opponents available. You'll have to try harder than that.

Plus stop acting like Garcia was fighting a smaller man. Peterson gained 22lbs over night and he hasn't fought at 140 since 2014.

Peterson had already lost to Lucas in horrible manner and done nothing to redeem himself or earn that fight there were many bigger and better fights for Danny. Little to no fans were calling for this fight. Fans were calling for Danny to fight the guys at 147 or fight Broner the fact that Danny looked bad in this fight and it was closer then everyone thought going in doesn't change that. Wasn't the whole point of PBC that now everyone under 1 roof we will finally get the best vs the best. that was NOT the best opponent Haymon had to offer to fight Danny. And this is one of PBC's best fights? SMH

I was calling for the fight. When Peterson fought Santana on the undercard of Garcia vs Salka, fans were asking why Peterson and Garcia weren't fighting each other. The fans got their wish.

[bigdunny1]

Peterson didn't beat khan first off the fight was a robbery and one of shadiest fights I've ever seen from the ref to the judges and this was before Peterson got busted for being on PEDS and stripped of one belt, then got stream rolled by lucas. No one wanted this fight and Danny was a huge favorite it was not a 50/50 fight going in. The fact Danny looked like garbage in the fight don't change that.

Don't give me crap about the schedule and no opponents...Haymon controls all these fights he set the damn schedule if he wanted Thurman could of fought Danny day one instead both guys facing lesser competiton a month apart against a faded Guerrero who went life and death with a journey man the fight before and Peterson who was flattened by lucas. No excuse except haymon was trying to protect his top assets rather then make the fights fans wanted and had he done that maybe PBC would of caught on to casual fans and united boxing fans.

You can polish a turd all you want it's still a turd. compared to the fighters haymon has and the amount of fights PBC staged there were simply too many mismatches and meaningless fights. He could of done way better with the fights and had nothing standing in his way preventing him not money, not promoters, not networks he had all the power and chose bad fights that were criticized by boxing fans and that casual fans didn't care about and the ratings reflect that.

[Eff Pandas]

I'm not even talking about the his best vs the best overall I'm giving him a pass and not even making that argument right now because you have multiple promoters who have the best fighters and you have to deal with politics to make those fights. when you have multiple promoters it's hard to get on the same page and have the same agenda about making a fight at that same time that is best for YOUR company. So put that aside and just focus on his own stable. He had all the fighters under one roof where he didn't need any help from other promoters and large sums of money to pay them and his own platform to air it. So there was no excuses and based on the roster he had he could of made MUCH better fights that would interested and united boxing fans and had a better chance of producing exciting fights to draw new casual sports fans.

Yea, but what I'm saying is he doesn't have many of the best guy in any division really. Or its disputed at least in most divisions. No one gives THAT much of a f#ck about the #4 vs the #5 guy. There is a lot of talent & very few names among the Haymon roster. So I think the road that was being taken was attempting to grow some guys into bigger names before making bigger fights. At least thats what I feel was taking place.

And I say this not as a fan of that method as I just want everyone to have the best fight the best all the time (which no one in the business is doing I think you'd agree), but as a guy who's understanding that his roster gets diminished by more bigger name guys fighting & losing in this era when you ain't **** once you lose a fight in many fans minds.

I wanna see what the UFC is doing in boxing every month, but the reality is you can't just pull that outta your ass right now when you don't got the best guys in most divisions & you are just knocking off or lowering the value of the guys who could become the #1 guy at some point. I think there was probably some appeal at just having guys gaining ground via attrition as bigger names lose outside of PBC too while they try to have multiple guys rise up.

I don't think I'm explaining this well, but my main point is idk that there is only one way to go about making the NFL of boxing when the current atmosphere of boxing isn't conducive to doing so, the overall fans watching the sport is probably at an all time low & you need to grow some guys into bigger names to make big fights feel more like big fights while trying to do all of this.

Also I feel he could of made better fights if he limited the amount of channels PBC was one. Instead of trying to fill 100 cards he could trimmed the fat and done 24 cards twice a month on one network and made sure those cards were loaded with great fights.

Don't disagree with this at all.

And having one network would of meant you get a carry over effect and build a network following for those fighters who new fans know where to find them the next time they fight. If you were NBC fan and liked one of those fighters last year you never saw them again because they went to Showtime, Spike, FS1 or who knows where. You are not going to get a casual fan just starting out to follow all these different fights on lord knows what network on random days and times.

Definitely agree with this. There isn't a narrative to follow with most of these fighters. Like you gotta be a boxing nerd to be following the story for almost every guy on the roster which is counterproductive to bringing a new audience to boxing or bring back ex-boxing fans. They had these introduction videos for several fighters at the start & I imagine some of those guys never even fought on the channel (NBC iirc) that those intros were played on. It was a very scrambled message that was presented.

[Weebler I]

Why do fans still say silly **** like this? Look at the schedule for the rest of the year and tell me who is putting on the best fights? HBO is putting Crawford vs Postol on ppv and wouldn't even pay for Lomachenko vs Walters.

Now Lomachenko has to fight Martinez who is a AL HAYMON fighter btw.

You either don't understand, or don't want to understand.

Let me ask you, do you think Showtime would be putting on these match-ups, or Haymon would be letting fighters go to HBO if he still had the PBC investor's budget?

Of course not, but feel free to delude yourself to the contrary.

[bballchump11]

You either don't understand, or don't want to understand.

Let me ask you, do you think Showtime would be putting on these match-ups, or Haymon would be letting fighters go to HBO if he still had the PBC investor's budget?

Of course not, but feel free to delude yourself to the contrary.

So you agree that Haymon is putting on the best fights for the rest of the year? Whatever his motive may be is irrelevant. You agree that he's been putting on the best cards.

[bigdunny1]

How do you allegedly lose over $500 million in three years? Read here and find out.

$925 million lawsuit filed over investments with PBC's ‘shady entrepreneur’ Al Haymon

By Paul Gift

Boxing fans who enjoyed last Saturday's rematch scrap between 2011's Fight of the Year winners Andre Berto and Victor Ortiz are no doubt familiar with Premier Boxing Champions (PBC), the television series helmed by power manager Al Haymon.

PBC rocketed to prominence early last year with its frequent and sometimes compelling matchups on channels including NBC, NBCSN, ESPN, CBS, FOX, Fox Sports 1, Spike TV, and Bounce. It garnered even more attention on the business end as a time-buy with money flowing from Haymon's corporate en****** to the television networks instead of the other way around.

Naturally, this requires massive amounts of funding - hundreds of millions of dollars - which came from the asset management company Waddell & Reed via fund manager Ryan Caldwell. As Caldwell put it, "You have to be capitalized for three to five years to do this. To weather the storm. Because in some regards you were going to be the irrational player for a while...You're turning the model completely upside down."

Well turning the business model upside down seems to have made some shareholders of Waddell funds extremely unhappy. Fight Opinion's Zach Arnold was first to discover a February lawsuit in Kansas City federal court filed against Waddell by shareholders of funds purportedly invested in Haymon's corporate en******. The investors are looking to recover "at least $300 million, and perhaps as much as $925 million, of losses and other damages" as a result of "willful and gross breaches of fiduciary duty towards shareholders to i) prudently monitor and supervise the Funds' investments to meet the investment objectives as stated in the Funds' Prospectuses, ii) supervise the Funds' portfolio managers, and iii) rigorously enforce the Funds' compliance and ethical codes of conduct."

The complaint describes Haymon as a "shady entrepreneur" of a "potentially criminal" company.

"Unbeknownst to investors, starting in or about April 2013, the Trustees permitted and approved purchases by Ryan Caldwell, one of the two portfolio managers of the Funds, of approximately $925 million of private securities in a start-up and potentially criminal company in the field of professional boxing promotion. These purchases had no economic justification, but rather were motivated by Caldwell's personal interest and benefit. In fact, Caldwell acknowledged at or about the time that this boxing promotion company faced short-term losses of hundreds of millions of dollars (the Funds' money), and personally attended business meetings on behalf of this company's shady entrepreneur, Alan Haymon, to pledge future financial support from the Funds."

The "potentially criminal" element derives from Haymon's "possible indictment by the U.S. Department of Justice" and the ongoing antitrust lawsuit filed by Golden Boy Promotions and Top Rank against Haymon and his corporate en****** in Los Angeles federal court for alleged attempts to monopolize and alleged violations of The Muhammad Ali Boxing Reform Act.

A part of the PBC story that's always seemed curious is that not long after completing Haymon's funding, Caldwell left Waddell to become COO of the then fully-funded PBC, a nugget that didn't slip past plaintiffs in their complaint.

"As a portfolio manager, Caldwell was supposed to be allocating the Funds' money based on the objective merits of the prospective companies and the investments, not acting to personally ingratiate himself with a boxing promoter or attempt to assist in the management of a private company... In fact, in June 2014, Caldwell actually resigned from the Funds, supposedly to join one of Haymon's companies as ‘Chief Operating Officer.' Caldwell's resignation raises issues over whether he was fired by the Trustees for making these investments, or whether he had a quid pro quo agreement with Haymon's company."

Caldwell is described as the driving force behind the funds' investments in Media Group Holdings (MGH) which plaintiffs believe is a shell holding company that then invested in one or more of Haymon's corporate en******.

According to the complaint, an unnamed hedge fund had previously declined to invest in a boxing promotion company "because revenues went to the fighters, making the investment unprofitable." In discussions with a contact at the hedge fund, Caldwell allegedly learned of Haymon's plans "to buy up the management deals for a ‘critical mass' of fighters and use their leverage to dictate profits."

According to the plaintiffs, Caldwell believed Haymon's "loss leading" purchase of fighter contracts was "an undervalued call option, with the high risk but very high return." But from the look of things so far, it's been all risk and very little return.

The complaint reports alleged investment amounts which allowed Bloody Elbow to calculate each fund's apparent to-date losses in market value. According to the complaint, there were six investments into the MGH holding company for a total of $925,339,000.

[Writer's note: The complaint appears to contain a math error in The W&R Fund section which should total $94,684,000.]

According to Waddell's website, as of Mar. 31, 2016 these six investments now have a total market value of only $357,747,414, which implies that the investments allegedly used to finance the PBC have collectively lost over $567 million in a little less than three years.

Losses are a part of investing, but in this case the plaintiffs argue that Waddell did not make material disclosures about MGH, made erroneous reports in financial statements, and failed to disclose the risks of its MGH investments. "The Trustees should never have allowed Caldwell to use almost $1 billion of the Funds' assets to participate in boxing promoter ‘fantasy camp,'" plaintiffs write.

The federal lawsuit was voluntarily dismissed on Apr. 18 with a new case filed in state court the very next day. Bloody Elbow has not yet obtained the state court complaint, but it stands to reason that the contents would likely be similar or the same.

How does one allegedly lose over $500 million in a combat sports organization in just under three years? Boxing's mega-manager Al Haymon might have just provided the blueprint: time-buys, loss leaders, allegedly spend hundreds of millions of dollars buying boxers' contracts.

This is the "weather the storm" part of the investment, something Caldwell thought would take three to five years and we're just starting year four. We seem to have some pretty unhappy Waddell fund shareholders and Haymon's facing an antitrust lawsuit from boxing's big promoters, but only time will tell how much value the PBC call option will maintain.

Visit Fight Opinion for Zach Arnold's take on the lawsuit. Paul is Bloody Elbow's analytics and business writer.