MIAMI — Florida's Third District Court of Appeal KO'ed a trial court’s decision to award $8.5 million to All Star, Inc., the former promoter for boxing superstar Canelo Alvarez.
The appeals court reversed the trial court decision on Sept. 12, finding that All Star Inc. lacked the evidence to prove that it deserves $8.5 million in damages.
According to the opinion, All Star, Inc. first filed the lawsuit against Alvarez when the boxer allegedly decided to sign an exclusive promotional agreement with a different promoter, Golden Boy Productions Inc.
All Star Boxing had provided promotional services to Alvarez for a 15-month period, from September 2008 to December 2009, when Alvarez was 18 years old, the opinion states.
The court said All Star obtained nine fights for Alvarez that prepared him for boxing stardom – seven fights in Mexico and two fights in the United States.
“The driving force behind All Star was Feliz Zabala Jr.,” the court said. “Zabala has previously been named Latino Promoter of the Year by the World Boxing Organization.”
After Alvarez signed an agreement with Golden Boy Productions Inc. on Jan. 21, 2010, All Star sued Golden Boy for tortious interference and sued Alvarez for breach of contract and unjust enrichment, the court said.
“The jury rejected All Star’s claims for tortious interference against Golden Boy and for breach of contract against Alvarez. But it found that Alvarez was unjustly enriched by All Star’s services and awarded $8.5 million in damages,” the district court said.
Alvarez appealed the ruling, arguing that the amount of the damages was not based on competent substantial evidence, the judge wrote.
“All Star did not present evidence of a specific dollar figure to reflect the amount of its unjust enrichment damages,” the district court said. “Instead, All Star’s theory was apparently that the damages for unjust enrichment should be an unspecified percentage of Alvarez’s subsequent earnings for all or part of his lifetime.”
According to the court, All Star relied on the testimony of its financial expert, Carl Fedde, who assumed All Star would have made the same as Golden Boy, who in turn would have made the same as Alvarez.
The court said Fedde projected that gross revenues from Alvarez’s future fights from 2016 to 2026 would reach 1.9 billion.
“From this amount, Alvarez’s net profits would be $219,969,428, which Fedde reduced to a present value of $135,042,147 using a five-percent discount rate,” the opinion stated.
Fedde first estimated that Alvarez earned $27 million from boxing from 2010 to 2015, but then reduced the amount to $24 million when shown an error in his calculations on cross-examination, according to the court.
According to the opinion, a crucial part of Fedde’s calculation concerned how Alvarez and his promoter shared their portion of the take.
“Some fighters receive zero percent while others receive eighty percent or more,” the opinion stated. “Fedde settled on an estimate of a 50/50 split for both his estimates of past earnings (2010 to 2015) and projection of future earnings (2016 to 2026). During cross-examination, Fedde struggled to explain how he reached the figure of 50 percent.”
The opinion added that Fedde never testified as to how Alvarez’s earnings could be used to calculate the amount that Alvarez was unjustly enriched by All Star’s services.
“In other words, Fedde never testified how a particular percentage, range, or portion of Alvarez’s earnings during all or any part of the 16-year period from 2010 to 2026 could be attributed to the promotional services performed by All Star during the 15-month period from September 2008 to December 2009,” the opinion stated.
The district court said there was a total absence of any evidence or explanation on how the $8.5 million was derived from the $24 million.