Madison Square Garden Boxing v. Shavers

In the spring of 1977, Earnie Shavers (defendant) negotiated with Madison Square Garden Boxing, Inc. (MSG) (plaintiff) for Shavers to box Muhammed Ali at MSG’s arena. MSG held an option (that would expire on July 1) to host an Ali fight by October 10. On May 16, Shavers’s representative, Frank Luca, sent MSG’s Teddy Brenner a telegram—signed by Shavers and Luca—outlining MSG’s “offer” and stating that Shavers “accepted” it. In reliance on the telegram, MSG contracted with a television network to broadcast the bout. The next day, Brenner sent Luca a letter agreement documenting the parties’ arrangement. The letter agreement differed slightly from the offer as described in the telegram, but the parties resolved these differences. Luca then asked for a $30,000 advance against Shavers’s $200,000 purse; the telegram had not mentioned an advance, but Brenner agreed to $20,000 and stated that he would seek approval to advance more. Ninety minutes later, Luca informed Brenner that Shavers had an offer from another competing promoter, Top Rank, Inc., to promote an Ali-Shavers bout, which Shavers signed on May 26. MSG sued Shavers, seeking a preliminary injunction prohibiting Shavers from boxing until he honored his MSG contract. MSG posted a $100,000 bond in support of its request. Per MSG, although there was no signed document, the parties reached a valid contract based on the telegram, the letter agreement, and their subsequent discussions. At a hearing regarding MSG’s request, Shavers and Luca testified that they believed there would be no contract until MSG advanced $30,000 and that Luca told Brenner he would keep negotiating with Top Rank until Shavers received the advance. Brenner denied these claims.