George Foreman Associates, Ltd. v. Foreman

Boxer George Foreman (plaintiff) signed a contract with George Foreman Associates, Ltd. (Associates) (defendant) pursuant to which Associates would employ Foreman and his manager and trainer, Dick Sadler. The contract was made in California. Per the contract, Foreman was responsible for the timing, location, and financial arrangements for Foreman’s fights. However, Associates had the right—subject to a reasonableness requirement—to veto Foreman’s proposed financial arrangements. The contract entitled Associates to a percentage of Foreman’s receipts from his boxing matches, endorsements, and personal appearances in return for paying Foreman for training expenses and for Forman’s service as an Associates employee. Associates’ payments to Foreman represented advances against Foreman’s obligation to share certain receipts with Associates. After a dispute arose between the parties regarding the contract, Foreman argued that the contract was invalid because Associates was a boxing manager under California law and the contract did not comply with the requirements of the California Athletic Commission (commission) for contracts between professional boxers and managers. Associates opposed Foreman’s argument on the ground that Associates was not a boxing manager. Foreman responded that Associates was a manager because Associates controlled Foreman’s professional boxing activities due to Associates’ rights to (1) reject Foreman’s proposed financial arrangements and (2) receive more than 10 percent of Foreman’s gross boxing purses as payment for services relating to Foreman’s fights. Associates countered that (1) its right to veto financial arrangements was insufficient to constitute control over Foreman’s boxing activities, (2) it was willing to waive its veto right, and (3) Foreman’s required payments to Associates were not for fight-related services because Associates did not negotiate or promote Foreman’s fights. Associates also argued that California’s boxing law applied only to fights that occurred in California and that none of Foreman’s relevant fights took place in California. Foreman moved for summary judgment.