The Spence-James Spar Reminds Us Contracts Are Key

Apr 30, 2024

By Gregory M. Smith, Esq.

Although boxing is a global sport in which participants can generate fortunes in a single night, those in the business recognize that boxing a small community where deals are often based on long-standing relationships. More than occasionally, this leads to handshake deals or poorly drafted contracts prepared by unsophisticated parties.

A pair of recent lawsuits filed between former world champion Errol Spence Jr. and his trainer, Derrick James, underscore the ways a verbal agreement can lead to problems. The lawsuits, both filed in Dallas County, Texas, on April 17, 2024, each allege that for 29 bouts over 11 years, James trained Spence and, pursuant to an oral agreement, Spence paid James 10% of his purse money.

James’ suit (No. DC-24-05605) alleges that following Spence’s July 29, 2023 bout against Terrence Crawford, Spence paid James only $350,000–less than 2% of the $25,000,000 Spence earned for the bout. James alleges that the shortfall caused him to question whether or not he had actually been paid 10% of Spences full earnings for any of his prior pay-per-view bouts. James’ suit also alleges that he is due at least 5 million dollars, from not only the Crawford fight, but also, Spence’s prior fights with Mikey Garcia, Shawn Porter, Danny Garcia, and Yordenis Ugas.

The account in Spence’s lawsuit (No. DC-24-05598) is not materially different, but it alleges that the agreed upon 10% was never to be calculated from Spence’s total pay for any fight, but only from his fight purse. Spence’s suit does not seek damages from James, only a court order confirming his interpretation of the parties’ oral agreement.

At this point, with no evidence or testimony, it is impossible to know who might win the pending lawsuits. However, it is clear that this situation could have been avoided with a well-written agreement that specified not just that Spence would pay James 10%, but more specifically what that 10% would be calculated from – guaranteed purse or total compensation. A well-written agreement might also have provided the parties with audit rights so that disputes as to how much money Spence actually receive for each bout could be resolved without heading to court. Although James and Spence would have each paid modest legal fees to have such an agreement drafted, they will certainly each spend several times more money on their lawsuits.

Gregory M. Smith is a business litigator who often presents professional boxers. He is general counsel for Canelo Alvarez, and has represented champions, including Sugar Shane Mosley, George Kambosos Jr., Franchon Crews-Dezurn, Andy Cruz, and Luis Nery, and contenders including Filip Hrgovic, Edgar Berlanga, Richardson Hitchins, Xander Zayas.

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