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Middendorf Sports v. Top Rank, Inc.

United States District Court, D. Nebraska

April 9, 2018

MITTENDORF SPORTS, a Maryland Sole Proprietorship, Plaintiff,
v.
TOP RANK, INC., a Nevada corporation, and TERENCE CRAWFORD, an individual, Defendants.

          MEMORANDUM AND ORDER

          John M. Gerrard United States District Judge

         The defendants in this case are successful boxer Terence "Bud" Crawford and his promoter, Top Rank, Incorporated. The plaintiff is Mittendorf Sports, a sole proprietorship of Chris Mittendorf (collectively, Mittendorf). At issue is a 2011 contract between Mittendorf and Top Rank that allowed Top Rank to become Crawford's promoter: Mittendorf claims that Top Rank breached that contract by not paying Mittendorf a percentage of the purse from Crawford's championship title defenses, as Mittendorf claims the contract requires.

         Specifically, Mittendorf claims the contract gives him a piece of the action any time Top Rank promotes a Crawford title defense. Top Rank, on the other hand, claims the contract only gives Mittendorf a cut of a title defense promoted pursuant to a specific 2011 promotional rights agreement between Top Rank and Crawford-a promotional rights agreement that, Top Rank points out, ended in 2014. But the Court agrees with Mittendorf's reading of the relevant contractual language and will, therefore, deny Top Rank's motion for summary judgment.

         BACKGROUND [1]

         In 2010, Crawford entered into a promotional rights agreement with TKO Boxing Productions, a Nevada boxing promoter. Filing 90-3 at 2. TKO was granted exclusive rights to promote Crawford's bouts, including ticket sales, broadcast rights, advertising, and merchandise sales. Filing 90-3 at 2-4. In return, as relevant, TKO paid Crawford $7, 500 and guaranteed Crawford a certain number of bouts during each year of the agreement, with a minimum purse per bout based on the number of rounds in the bout. Filing 90-3 at 5. If Crawford challenged for a world championship title recognized by one of boxing's four major sanctioning bodies, [2] TKO guaranteed a purse of at least $40, 000, and if Crawford was recognized as a world champion by a major sanctioning body, his minimum purse for a title defense would be $100, 000. Filing 90-3 at 7.

         The initial term of the 2010 promotional rights agreement was 3 years. Filing 90-3 at 4. But if Crawford was designated the highest-ranked mandatory contender in any weight class by a major sanctioning body, the term was extended by 24 months to provide TKO with the opportunity to arrange a title challenge. Filing 90-3 at 7. And if Crawford was recognized as a world champion by a major sanctioning body, TKO had the exclusive right to promote his first 5 title defenses, and the term of the agreement was extended for the time needed to present those bouts, so long as the extension did not exceed 30 months. Filing 90-3 at 7-8. If, on the other hand, Crawford failed to engage in the number of bouts offered by TKO, did not fight an opponent he had approved, or failed to win a bout, then TKO could terminate the agreement. Filing 90-3 at 4-5.

         At some point in late 2010, Top Rank-among the top boxing promoters in the country-became interested in signing one of TKO's other fighters. Filing 109-4 at 24. TKO was in some financial distress, and TKO assigned that fighter and several others to Mittendorf, who held a 35 or 40 percent share of TKO. Filing 90-4 at 6; filing 109-4 at 23-25. Mittendorf then went about releasing or reassigning the rights to those fighters, to Top Rank or another promoter. Filing 109-4 at 25, 27.

         On June 30, 2011, TKO and Top Rank entered into the contract that is primarily at issue in this case: the "Agreement and Release." Filing 109-2. In the Agreement and Release, TKO agreed to release Crawford from the 2010 TKO promotional rights agreement. Filing 109-2 at 2. Top Rank agreed to pay TKO $7, 500 immediately. Filing 109-2 at 2. And, in paragraphs 4 and 5 of the Agreement and Release (which are key to this dispute so they will be set out in full):

4. Top Rank Promotional Rights Agreement. TKO hereby consents and agrees that [Top Rank] may enter into a promotional rights agreement ("Promotional Rights Agreement"), bout agreements, and other boxing-related agreements and understandings with [Crawford] and his manager, on terms acceptable to [Top Rank] in its discretion and that TKO shall have no ownership or participation rights in such agreements or the proceeds therefrom.
5. Fee. For each Title Defense (for either the WBC, WBO, WBA, or IBF, and as defined in the Promotional Rights Agreement) of [Crawford]'s promoted by Top Rank pursuant to the Promotional Rights Agreement, TKO shall be paid a fee equal to eight percent (8%) of the purse payable to [Crawford] for such Title Defense, which amount shall be paid to TKO within five (5) business days of each bout.

Filing 109-2 at 2-3. Top Rank made the required $7, 500 payment, and TKO assigned its rights under the Agreement and Release to Mittendorf. Filing 90-5; filing 90-10 at 2.

         On the same day the Agreement and Release was executed, Crawford and Top Rank entered into a new promotional rights agreement, which was structured similarly to Crawford's previous promotional rights agreement with TKO, and began with a 5-year term dated from Crawford's first bout pursuant to the new promotional rights agreement. Filing 104. But as with the previous agreement, Crawford's new promotional rights agreement with Top Rank provided that Top Rank could terminate the agreement if Crawford didn't fight in the prescribed number of offered bouts, didn't fight an opponent he had approved, or failed to win a bout. Filing 104 at 4-5.

         Crawford went on to win several bouts from 2011 to 2013, and on March 1, 2014 defeated Ricky Burns to win the WBO World Lightweight Title. Filing 90-8 at 3. He successfully defended that title against Yuriorkis Gamboa in June 2014, and Top Rank paid Mittendorf pursuant to the Agreement and Release. Filing 90-8 at 3; filing 90-10 at 2.

         After the Gamboa bout, Crawford and Top Rank renegotiated their agreement, and their new "Exclusive Restated Promotional Rights Agreement" "supersede[d] and replace[d]" the 2011 promotional rights agreement between Crawford and Top Rank. Filing 90-9 at 2. The Exclusive Restated Promotional Rights Agreement was similar in structure to the previous promotional rights agreements, beginning a new 3-year term with Crawford's next bout, but guaranteeing Crawford substantially larger purses per bout, including additional compensation based on the gate revenues for bouts occurring in Omaha. Filing 90-9 at 4-7. Top Rank could still terminate the agreement if Crawford didn't fight as required or failed to win a bout. Filing 90-9 at 4-5.

         Crawford defended his WBO World Lightweight Title against Ray Beltrán in November 2014, and Top Rank again paid Mittendorf pursuant to the Agreement and Release. Filing 90-8 at 3; filing 90-10 at 2. Crawford then moved up a weight class and defeated Thomas Dulorme for the vacant WBO World Super Lightweight (or junior welterweight) Title. Filing 90-8 at 2. Crawford and Dulorme were fighting for a vacant title, so it wasn't a "title defense" and Top Rank didn't pay Mittendorf pursuant to the Agreement and Release. Filing 108 at 44. But Top Rank did pay Mittendorf after Crawford successfully defended his new title against Dierry Jean in October 2015 and Hank Lundy in February 2016. Filing 90-8 at 2; filing 90-10 at 2-3.

         In July 2016, Crawford put his WBO title on the line in a "unification bout" against Viktor Postol, who held the WBC World Super Lightweight Title. Filing 90-8 at 2. Top Rank did not pay Mittendorf after that bout. Filing 89 at 5. (The parties dispute whether a "unification bout" is also a "title defense" within the meaning of the Agreement and Release, but that dispute is not implicated by the present motion for summary judgment.) Crawford won both titles, and defended them against John Molina Jr. in December 2016 and Félix Díaz in May 2017. Filing 90-8 at 2. But Top Rank did not pay Mittendorf after the Molina or Díaz bouts. Filing 89 at 5. Finally, Crawford defeated Julius Indongo in another ...


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