## Facts

- Madison Square Garden Boxing, Inc. (MSG) held a time-limited option to promote a Muhammad Ali heavyweight title bout scheduled between September 1 and October 10, 1977, and faced an imminent deadline to exercise that option.
- MSG negotiated with heavyweight contender Earnie Shavers through Shavers’ business manager and manager regarding Shavers as Ali’s opponent.
- After negotiations reached essential agreement, Shavers and his representatives sent MSG a signed telegram expressly stating that Shavers “accepted” MSG’s “offer,” and the telegram set out key deal terms (including bout timing and purse).
- Relying on the telegram acceptance, MSG entered into a multi-million dollar television agreement with a national broadcaster for the bout.
- MSG then prepared a follow-up letter agreement described as memorializing an existing “understanding,” with certain differences from the telegram (including changes to the option exercise date, purse wording, and an express non-competition term).
- A dispute arose over an advance against Shavers’ purse; Shavers contended there was no contract unless MSG paid a $30,000 advance, while MSG contended the advance was a later accommodation request, not a condition to contract formation.
- Shortly after the advance discussions, Shavers signed with a competing promoter for the same fight, prompting MSG to seek a preliminary injunction barring Shavers from boxing inconsistently with MSG’s claimed promotional rights.

## Issues

1. Whether MSG showed a likelihood that a binding promotional contract was formed through the signed telegram acceptance and surrounding circumstances despite contemplation of a later formal writing.
2. Whether the alleged $30,000 advance was a condition precedent that prevented contract formation.
3. Whether MSG satisfied the requirements for a preliminary injunction, including irreparable harm and a balance of hardships favoring injunctive relief.

## Decision

- The court granted MSG’s motion for a preliminary injunction.
- The court found MSG demonstrated a probability of success on the merits that an enforceable contract existed.
- The court rejected the contention that the $30,000 advance was a condition precedent to contract formation, treating it as a post-agreement request concerning payment terms or security.
- The court found irreparable harm based on MSG’s reliance, the time-sensitive nature of the Ali option and bout promotion, and the difficulty of measuring disruption and reputational injury in money damages.
- The court concluded the equities favored MSG and required MSG to post a bond (reported as $100,000).

## Legal Principles

- A binding contract may be formed by informal writings when the parties’ objective manifestations show offer, acceptance, and agreement on essential terms.
- The fact that parties contemplate a later, more formal document does not preclude contract formation if their words and conduct indicate an intent to be bound in the interim.
- A claimed condition precedent to contract formation must be supported by credible evidence of mutual assent to that condition; later bargaining over ancillary terms does not necessarily negate an already-formed agreement.
- Preliminary injunctive relief may issue where the movant shows likelihood of success, irreparable harm not adequately remedied by damages, and a balance of hardships favoring enforcement of the status quo consistent with the asserted contract.

## Conclusion

The court preliminarily enjoined Shavers from participating in bouts inconsistent with MSG’s promotional rights because MSG likely formed an enforceable agreement through a signed telegram acceptance, and MSG’s reliance and the time-sensitive nature of the event supported a finding of irreparable harm and favorable equities.


Madison Square Garden Boxing, Inc. v. Shavers, 434 F. Supp. 449 (S.D.N.Y. 1977)