Golden Boy Promotions president and principal owner Oscar De La Hoya and Richard Schaefer, his former CEO, reached a settlement on the $50 million De La Hoya was seeking in an arbitration case filed in June, a source with knowledge of the agreement told ESPN.com on Friday night.
As part of the deal, multiple sources said De La Hoya also cut ties with the numerous top fighters he had been promoting from the stable of powerful adviser/manager Al Haymon. Schaefer resigned in June after a decade in charge as the only chief executive in company history, after which De La Hoya filed the arbitration accusing him of breach of fiduciary duty to the company, which Schaefer has denied.
The central issue was that under Schaefer's watch many of the promotional contracts Golden Boy had with Haymon's fighters expired and were not renewed, leaving Golden Boy in a vulnerable position. Golden Boy continued to put Haymon's fighters on high-profile cards but without having nearly as much say-so over opponents or financial details had they had contracts.
As part of the settlement, Schaefer, whom Golden Boy claimed was still under an employment contract through March 2018, will be barred from promoting for an unspecified length of time, according to one of the sources. It is between one and two years, according to the source. The sources spoke on the condition of anonymity because they were not permitted to speak publicly due to the terms of the settlement.
Schaefer also owns about 8 percent of Golden Boy stock and it would be likely that he would have to give that up as part of any settlement. When Schaefer resigned, there was wide speculation that once his Golden Boy issues were worked out, he would either create his own promotional company to handle Haymon's vast stable or go to work at the promotional company of Haymon's No. 1 client, Floyd Mayweather Jr.'s Mayweather Promotions. Schaefer may do that eventually, but not until he sits out for the length of time agreed to in the settlement.
Schaefer declined to comment, as did De La Hoya. Haymon does not speak to the media. In addition to settling with Schaefer, the sources also said that De La Hoya severed ties with most of the Haymon fighters that Golden Boy had been promoting on a fight-by-fight basis in return for what one of the sources said was "substantial financial compensation" from Haymon.
So while Golden Boy will likely receive millions of dollars, it also means numerous big-name fighters, many built over the years by Golden Boy, will no longer be associated with the company. They include
Andre Berto, Victor Ortiz, Devon Alexander, Shawn Porter, Robert Guerrero and heavyweight contender Deontay Wilder, who will have his final Golden Boy fight on Jan. 17 at the MGM Grand in Las Vegas, where he will have a chance to win a world title against Bermane Stiverne.
Also leaving Golden Boy are several 2012 U.S. Olympians, including welterweight Errol Spence Jr., and light heavyweight Marcus Browne, two of boxing's most promising prospects.
It is particularly difficult for Golden Boy to part ways with Wilder (32-0, 32 KOs), whom it has promoted since his pro debut in 2008, following his bronze-medal run in the Olympics, because he could achieve significant stardom and increase his earning power dramatically if he beats Stiverne and becomes the first American heavyweight titleholder since Shannon Briggs won a belt in 2006.
"Oscar is still looking forward to the fight next week," one of the sources said. "Yes, Golden Boy is losing some top fighters as part of this, no doubt about it. That is hard, but this is a long-term plan. Oscar is happy and comfortable with the decision, and this is the next step. He could have continued to go on like this and continued to work with Haymon but that doesn't benefit anyone if there is no long-term plan.
"With this decision, there is a very good feeling around the office. Golden Boy still has some horses and will just do what it has proven it can do, which is to develop the younger guys it promotes."
Golden Boy still promotes superstar Canelo Alvarez, along with a number of other quality fighters. It also announced the signing of a dozen boxers on Thursday. The sources said Golden Boy will continue to promote a handful of fighters aligned with Haymon, who still have promotional contracts with the company, including Amir Khan, Leo Santa Cruz, Lucas Matthysse and Paulie Malignaggi.
"Oscar has deals with a number of Haymon's fighters and those will continue," one of the sources said. "The idea is they finish their contracts and then they go somewhere else."
Haymon has a few promoters he uses to put on his fighters without having them signed to that promoter, including Lou DiBella, Goossen Promotions and Warriors Boxing. Those are the promoters expected to handle the cards Haymon has purchased time for on NBC Sports Net and NBC. That series begins in March, and a news conference is scheduled to announce it Wednesday in New York.
"It's no way to do business. We were totally hamstrung," one of the sources said. "Every time there was a fight Oscar wanted to make the question was would Haymon's guy fight him? That's how you end up with Rod Salka [as the opponent for Garcia in one of 2014's most egregious mismatches] and the weak guys Leo Santa Cruz has fought. We couldn't make the fights we wanted to. What's the point of having fighters in the stable if they don't fight anyone?
"Oscar has been clear as a bell with what he wants to do. He wants to make the best fights possible for the fans. He has said it time and again and he means it. Oscar came to the conclusion that he couldn't make the fights he wanted to make by continuing to do business like this. There was so much drama surrounding everything. Everyone at Golden Boy had to operate in a box. Now everyone is free."