The reason for the new UFC-NY lawsuit

September 30, 2015

The UFC surprised many with another lawsuit in federal court in New York challenging the constitutionality of the state’s ban on professional MMA.  This time, the UFC is seeking a preliminary injunction to hold an event in the state this April.

The news of a new lawsuit comes when the original lawsuit is in the Second Circuit Court of Appeals.  Paul Clement, the renowned appellate lawyer and former U.S. Solicitor General is representing Zuffa and filed their appeal brief this past August. New York’s response is set for the beginning of November.

But perhaps the road map for the lawsuit filed this week was provided by Judge Kimba Wood, the trial court judge that dismissed Zuffa’s case.

In deciding to dismiss Zuffa’s case, it offered the following in its conclusion (click to enlarge):

Kimba Wood opinion

The opinion is mere “dicta” meaning that Judge Wood’s suggestion is not law or precedent which others may cite as guiding authority. Yet, it created the opportunity for the UFC to open up another line of action in attempting hold an event in New York.

Unlike the November 2011 lawsuit, the UFC is the only plaintiff. The UFC focuses on the claim that the New York law, the Combative Sport Law (“CSL”), violates due process rights as it is unconstitutionally vague as to its application.

UFC Complaint p10

The UFC points out that the CSL exempts “martial arts” from its ban stating that “martial arts shall include any professional match or exhibition sanctioned by any” of the organizations listed in the statute.

It notes in the Complaint that “standing,” the right to bring an action in the court, “could not be clearer.” This directly addresses the previous lawsuit in which Judge Wood determined that there was no standing due to the fact that the UFC had not suffered injury and did not contact a promoter to hold an event in New York. In its Complaint, it now states that it is working with WKA.

Screenshot 2015-09-30 17.27.53

Based on setting a UFC event for April 2016, the UFC states that it will lose “millions of dollars in ticket sales.”  It also will lose a source of marketing for its UFC-branded gyms in New York, as well as for the DVDs, consumer products, video games and other products that it sells.

Notably, the UFC indicates that it has “lost sponsorships and has suffered reputational damage around the world because of its inability to hold professional MMA events in New York.”  It will be interesting to see what evidence it may bring to prove these allegations if it comes to that point.

The UFC Complaint cites the differences from the beginnings of the CSL indicating that the legislature was concerned with “no-holds-barred fighting.” In her opinion Judge Wood states “MMA has changed substantially since the Ban was enacted.”  This provides some guidance as to what a court may decide with respect to the CSL.

Payout Perspective:

It’s clear that the roadmap was provided by Judge Wood for this lawsuit with the exception that it has filed the lawsuit in federal court as opposed to state court as suggested in her opinion. The lawsuit is premised upon the determination by the prior court as this filing is tighter and a shorter (only 37 pages as opposed to 100 plus pages) complaint. It appears that there is a better chance for the UFC in this lawsuit although you should expect stiff opposition from New York. The state will likely argue what it did in the prior lawsuit which is that laws need not change over time.  And despite the change within the sport of MMA, it will focus on the intent of the law with its primary purpose to ban MMA.

UFC files preliminary injunction in New York case

September 30, 2015

The UFC filed its motion for preliminary injunction on Tuesday.  It argues that the UFC is likely to prevail on its claim and should be granted the injunction to hold its event at Madison Square Garden this April.  Notably, it has already spent a non-refundable $25,000 for the anticipated event in April.

No hearing date has been set and we’ll likely see opposition from New York.

Similar to its complaint filed on Monday, it stresses the contention that the statute banning professional MMA in the state is inherently vague.

“Much of the law’s problems stem from its failure to explain with any reasonable degree of clarity what exactly a “combative sport” is,” reads the moving papers submitted by the UFC.  “Rather than define the term expressly, the statue attempts to reverse engineer a definition by exempting from its prohibitions certain sports, including “martial arts.””

Again the UFC stresses its belief that any issues on standing are now answered: “Whatever uncertainty may have existed on the matter in the past, it is now crystal clear that the estate interprets the law to prohibit Plaintiff from doing so.”

The UFC utilizes deposition from the Jones v. Schneiderman lawsuit to provide evidence that even NY officials provided contrary testimony to how they interpreted the statute.

In addition, the UFC notes that it has contracted with the World Kickboxing Organization, an “exempt organization” allowed to hold events in the states.  The motion states, “To eliminate any potential concerns about the imminence of its injury, Plaintiff has contracted to host a live professional MMA event sanctioned by an Exempt Organization.”

It also indicates that it has committed $25,000 as a non-refundable deposit and stands to lose millions of dollars in ticket sales and media revenue.

As we’ve learned from previous injunction requests in MMA, there are hurdles the injunction-seeker must prove that “the probability of his prevailing is better than fifty percent.”

  1. “a likelihood of success on the merits [of the lawsuit],”’
  2. That it will suffer “irreparable harm” with a preliminary injunction, and
  3. “that a preliminary injunction is in the public interest.”

We should also note that the UFC also challenges NY Liquor Law as it did in the November 2011 lawsuit as that law mirrors the Combative Sports Law (or “CSL” as it is referred to in the pleadings).

Payout Perspective:

This will be an interesting, and an important injunction for the UFC in its fight to hold an event in New York.  I believe that the first element, “likelihood of success on the merits,” is the biggest hurdle for the UFC.  Obviously, the monetary investment in holding an event reflects the “irreparable harm.”  You can argue the “public interest” element.  Despite the ban, and the inability to get a law passed in Albany to legalize MMA, there is still a lot of support for the sport in the state.  The “likelihood of success” could be a toss-up and based on the court’s interpretation of the CSL ban.

Jon Jones avoids jail time in plea deal from April incident

September 29, 2015

Jon Jones appeared in a Albuquerque, New Mexico courtroom today regarding last April’s hit and run accident which injured a pregnant woman.  Jones will not receive any jail time as part of a plea agreement.

Jones agreed to plead guilty to leaving the scene of an accident causing great bodily harm.  He will serve community service hours and be placed on 18 months probation.  The plea agreement was made in part due to the fact that Jones had no prior felony convictions.

The penalty for Jones’ charge carries a jail sentence of not more than 18 months in jail and/or a $5,000 fine followed by one year on parole.  Jones will avoid this if he abides by the terms of the plea deal.

Via the District Attorney News Release:

On September 29, 2015 Jones entered into a Pre-Indictment Plea with the State of New Mexico pleading Guilty to Leaving the Scene of an Accident (Great Bodily Harm), a fourth degree felony offense.  He was granted a Conditional Discharge, and ordered to serve a term of up to 18 months on Supervised Probation.

Appearing in court, Jones apologized and stated he accepts full responsibiulity for his actions.  Jones was ordered to complete 72 appearances, one for each of the 72 weeks in the 18 month Probation period.  Second Judicial District Court Judge Charlie Brown ordered those appearances should be at local martial arts academies, grade schools, and middle schools.  There, Jones will speak with Bernalillo County children about the importance of making good choices and how oine wrong decision can ruin everything for which they work so hard.

Jones offered an official statement expressing regret for his actions:

With regards to today’s decision made by the court, I am very happy to now be able to put this incident behind me. My actions have caused pain and inconvenience in the lives of others and for that I am truly sorry and I accept full responsibility. I have been working hard during this time away from my sport to grow and mature as a man and to ensure that nothing like this happens again. I have learned a great deal from this situation and I am determined to emerge a better person because of it. I apologize to those who were affected by my actions in this incident and I am hopeful that I will be given the opportunity to redeem myself in the eyes of the public, my family and friends as well as my supporters. I am not sure what the future holds for me but I plan to continue to do the work needed to be productive and successful in every aspect of my life. “

Dana White was present in the courtroom during the hearing.  The UFC offered its own statement (via MMA Fighting) in which it indicated that Jones was still suspended but their law firm would review the plea prior to a possible reinstatement.

The UFC organization is aware that Jon Jones reached a plea agreement with authorities in Albuquerque, New Mexico this morning stemming from charges associated with a motor vehicle accident earlier this year. As a result, UFC, through Las Vegas-based law firm Campbell & Williams, will thoroughly review the agreement before discussing Jones’ possible reinstatement to return to competition.

More information will be made available following completion of this review.

Payout Perspective:

This is likely the best outcome for Jones and the UFC.  Jones avoids any jail time (subject to following the terms of the plea agreement) and the UFC will likely reinstate him.  With this being Jones’ first offense and no major injuries from the accident, no jail time was a likely result.  White being in the courtroom was no surprise.  Despite the suspension, Jones is a vital part of the company’s success.

UFC Fight Night 75: 841,000 viewers; prelims 270,000

September 29, 2015

UFC Fight Night 75 drew an average viewership of 841,000 863,000 viewers on Saturday night on FS1 via Sports TV Ratings. The rating reflects a slight increase from Sunday’s UFC Fight Night 74 from Saskatoon.  In addition, the prelims drew 270,000 viewers.

UPDATED: TV By Numbers notes that UFC Fight Night 75 drew 841K viewers.  The 841,000 viewers is correct.

In the main event, Josh Barnett defeated Roy Nelson via unanimous decision.

UFC Fight Nights 2015
Main Card (Live +SD)
UFC Fight Night 59 2,751,000
UFC Fight Night 60 913,000
UFC Fight Night 61 1,200,000
UFC Fight Night 62 617,000
UFC Fight Night 63 389,000
UFC Fight Night 66 575,000
UFC Fight Night 67 813,000
UFC Fight Night 68 950,000
UFC Fight Night 70 (prelims on FS2) 909,000
UFC Fight Night 71 801,000
UFC Fight Night 72 508,000
UFC Fight Night 73 1,159,000
UFC Fight Night 74 796,000
UFC Fight Night 75 841,000

Payout Perspective:

Decent numbers considering that the event which aired from 10-1:15am ET went up against 3 Pac 12 college football games on ABC (2.38M avg over course of game), Fox (3.4M) and ESPN (2.1M) (all 3 turned out to be blowouts) as well as crossing over with PBC on NBC.  The event is a slight increase from the last event but a drop off from an early August event that occurred on a Saturday night.  The average viewership for the years is at 946,000.

We will update with prelims soon.

Bellator 143: 669,000 viewers

September 28, 2015

Bellator 143 drew an average of 669,000 viewers on Friday night on Spike TV per Sports TV Ratings.  It’s 17% decrease from Bellator’s tent pole event last week but was a slight increase from Bellator 141.

UPDATED 09/29/15 – Per Nielsen source, the peak occurred during Beltran/Grove match which drew 885K viewers at 10:25pm.  The main event drew an average of 777K viewers.

In the main event, Joe Warren defeated L.C. Davis by unanimous decision.  The event aired from 9-11:13pm ET.

Bellator TV 2015
Overnight Peak
Bellator 132 767,000 1,200,000
Bellator 133 565,000 967,000
Bellagtor 134 872,000 1,200,000
Bellator 135 607,000 922,000
Bellator 136 655,000 900,000
Bellator 137 594,000 768,000
Bellator 138 1,580,000 2,100,000
Bellator 139 764,000 988,000
Bellator 140 722,000 977,000
Bellator 141 666,000
Bellator 142 800,000 867,000
Bellator 143 669,000  885,000

Bellator 143

A college football game between Boise St and Virginia drew 1.752M viewers on ESPN on Friday night won the night.

Payout Perspective:

There was another college football game on FS1 which likely seeped away viewers from Bellator’s show.  The average viewership for 2015 is at 771,000 viewers while in non-tent pole shows it is at 688,000.

UFC announces April 2016 event in New York but it hinges on new lawsuit

September 28, 2015

The UFC has announced per press release that it is filing a new lawsuit in federal court in New York once again challenging the legislative ban on professional MMA in the state.  In a show of confidence, it has also scheduled an event on April 23, 2016 in New York’s Madison Square Garden assuming that the court will grant a preliminary injunction.

Via UFC press release:

“We believe fight fans have waited long enough to experience live UFC events in the state of New York and we are thrilled to announce our first event at Madison Square Garden,” UFC Senior Executive Vice President and Chief Operating Officer Lawrence Epstein said. “Professional MMA is legal around of the world and it is about time New York followed suit.”

In August, UFC filed an appeal in the United States Court of Appeals for the Second Circuit – the federal appellate court with jurisdiction over New York – stating that New York’s prohibition of regulated professional MMA events violates the First Amendment rights of athletes and fans throughout the state.

On September 28, UFC filed a new case in federal court, reiterating its claim that the New York law banning MMA events is unconstitutional.  This out-of-date law is too unclear for the public to understand, and has allowed regulators in New York to pick and choose arbitrarily what events they will permit.  Events featuring every combat sport except MMA seem to be allowed in New York, though this is not explicitly stated in the law.  The statute, and the state’s pattern of enforcing it, violates the Constitution’s prohibition on unconstitutionally vague laws.

Later this week, UFC will ask a federal judge to issue a preliminary injunction against New York state officials enforcing its unconstitutional law. Without such an injunction, the event at Madison Square Garden will not be able to proceed.

The appeal by the UFC of its original lawsuit against New York filed in November 2011 is still ongoing with Paul Clement filing a brief on behalf of the UFC in early August and the state set to file its brief at the beginning of November.  The lawsuit filed by the UFC today looks to be different than the appeal currently pending.

A preliminary injunction seeks equitable relief (as opposed to monetary damages) from a court prior to a final determination of the merits.  A key distinction here for the UFC to get an event in New York by this spring.

In general the factors determining whether a court will grant a preliminary injunction are:

  1. The substantial likelihood of success on the merits of the case;
  2. The party seeking the injunction faces a substantial threat of irreparable damage or injury if the injunction is not granted;
  3. The threat is immediate;
  4. The balance of harms weighs in favor of the party seeking the preliminary injunction;
  5. There is no other available remedy;
  6. The grant of an injunction would serve the public interest.

Notably, MMA has seen its share of preliminary injunctions recently.  Eddie Alvarez sought a preliminary injunction in a New Jersey state court case when he sought to be released from Bellator to fight in the UFC.  He lost.  However, as we now know, he made it to the UFC.

Bellator MMA filed a preliminary injunction in New Jersey attempting to prevent Rampage Jackson from fighting at UFC 186.  The trial court granted the injunction but the state appellate court overturned the injunction and allowed Jackson to fight at UFC 186.

Payout Perspective:

It’s a risky gamble by the UFC.  Before the event can even happen in April, the court must grant a preliminary injunction to allow the company to hold it.  Thus, the UFC could be out a lot of money.  But that’s the strategy.  Planning the event in April will shows there’s a “threat of irreparable damage,” it is “immediate” and “would serve the public interest.”  Thus, three of the requisite 6 factors (possibly more) to grant a preliminary injunction would be satisfied.  The legal strategy seems to hang on the opinion which dismissed the original lawsuit as Judge Kimba Wood seemed to entertain the argument that the statute banning professional MMA was vague but since no event actually occurred in the state, there was no harm.  Judge Wood stated that Zuffa could not establish “injury in fact.”  However, in what probably precipitated this new effort, Judge Wood indicated that it might have a claim based on events occurring after the filing of the November 2011 lawsuit.  But, Judge Wood stated that a re-filing likely would be better if it was in state court.  According to the press release, the new lawsuit is in federal court.

We have not seen the lawsuit as since it was filed today, it is still not up on Pacer.  MMA Payout will keep you posted

Nick Diaz petition reaches over 60,000 signatures

September 28, 2015

An online petition to the White House to overturn Nick Diaz’s 5 year suspension rendered by the Nevada State Athletic Commission this month has surpassed 60,000 signatures.

Nick Diaz tweeted the following:

A fan started the petition on September 14th and it is up to 61,283 signatures as of this writing.  It needs to reach 100,000 signatures by October 14th.  What happens if it reaches its goal?

According to the web site, if it reaches the signature threshold the White House will review the petition and then make a decision whether to do something or nothing.

The White House plans to respond to each petition that crosses the signature threshold, which you can view on the Terms of Participation page. In a few rare cases (such as specific procurement, law enforcement, or adjudicatory matters), the White House response might not address the facts of a particular matter to avoid exercising improper influence. In addition, the White House will not respond to petitions that violate We the People’s Terms of Participation. In some cases, a single response may be used for similar petitions.

The web site explains the right and reason to petition here.

Previously, an MMA fan started a petition to have Paige VanZant shave her head after she apparently promised to do so but never did.  That petition only has 139 signatures.  It needs over 99,000 by October 6th for review by the White House.

Payout Perspective:

Realistically, the White House petition will not overturn the NAC decision even if Diaz’s petition reaches 100K signatures.  It is unlikely that the White House will deal with a state administrative matter.  This issue would and should be handled by the state.  We will likely see this in the form of a lawsuit to seek judicial review.  However, the groundswell of support for Diaz may get local Nevada lawmakers to take note and seek to address the NAC.  Moreover, it will educate people about the NAC, its rules and how individuals are appointed to the position.  There is an opening on the Commission and certainly this is an opportunity for a politician to grab the momentum in seeking an appointment from the Governor.

PBC on NBC Saturday night draws 1.6 overnight rating

September 27, 2015

Sports Media Watch reports that PBC on NBC Saturday drew a 1.6 overnight rating.  The rating is down from the network’s two previous PBC primetime cards.

Although no actual viewership numbers have been posted, Television By Numbers reported that the 3 hour time block from 8-11pm on NBC drew just 1.96 million viewers and an 0.5 rating for the 18-49 demo.  Boxing (in addition to The Carmichael Show) in that 3 hour block, was last in network ratings for Saturday night.  Notably two college football game ran on Fox and ABC during PBC.

SMW also notes that the 1.6 overnight rating is the lowest ever for the UFC on Fox in its 16 telecasts.

Payout Perspective:

We will try to gather more specific information on the NBC ratings later this week but it appears that PBC did not have a good outing Saturday night.  It did not help that there were two games at the same time.  However, it also lost out to CBS in overall viewership and in the 18-49 demo which aired a rerun of Limitless and 48 hours.  Sure, boxing skews older but these ratings can be seen as concerning.  Perhaps it was a case of bad luck to run up against 2 football games, but this was to be the coming out party for America’s next best heavyweight – Deontay Wilder.

UFC Fight Night 75 attendance and bonuses

September 27, 2015

MMA Junkie reports the attendance and bonuses for UFC Fight Night 75 taking place Saturday night from Japan.  Notably, the attendance was the lowest for a UFC show in Japan since March 2013.

Per MMA Junkie, there was no official attendance announced for UFC 144 in February 2012 although it was an estimated crowd of 21,000 and confirmation that at least 15,000 seats were sold for the event at the Saitama Super Arena in Japan.

March 2013 – UFC on Fuel TV 8: 14,682

September 2014 – UFC Fight Night 52: 12,395

September 2015 – UFC Fight Night 75: 10,137

Uriah Hall led the bonuses of the night with his upset victory, via the help of his spin kick, on Gegard Mousasi.  Josh Barnett, Diego Brandao and Keita Nakamura also received $50K.

Payout Perspective:

Before we bad mouth the attendance figures, we note that this show was being held Sunday morning in Japan.  Last year, the show was later in the day in Japan (late Friday night in the U.S.) to accommodate the fans.  We may be seeing fans starting to decide, based on the card, whether or not they want to see the fight live.  Japan is a prime area for the UFC in its strategy to build an Asian market for the organization and while the attendance figures are down, subtle tweaks could facilitate growth.  One need only look to see what Bellator is doing to understand the Japanese influence in MMA and understand that it’s a prime market.

But, if the cards are inconvenient timewise, fans might not be motivated to buy tickets.  We shall see if the UFC decides to localize the event for a Fight Pass audience and allowing the fans more of a convenience.

Judge denies UFC’s Motion to Dismiss antitrust lawsuit

September 26, 2015

Judge Richard Boulware denied UFC’s Motion to Dismiss the antitrust lawsuit brought by former UFC fighters at a hearing in the U.S. District Court of Nevada Friday.  The lawsuit will continue with the parties hammering out a process to conduct discovery.

The UFC provided a statement after the Friday afternoon hearing:

The United States District Court in Las Vegas, Nevada held a hearing on UFC’s motion to dismiss today.  The Court correctly explained that on a motion to dismiss it must consider all the factual allegations in the complaint as true, and the complaint must be liberally construed in favor of the plaintiffs.  Using that standard, the Court denied the motion to dismiss.  As we have consistently stated, UFC competes in a lawful manner that benefits athletes around the world and has created a premier organization in the sport of mixed martial arts (MMA).  We look forward to proving that the allegations in the complaint are meritless.

BE’s Paul Gift provided a running commentary on the courtroom arguments.  As the moving party (i.e., UFC’s motion to dismiss), it was the UFC’s burden to prove that the plaintiffs’ motion failed to state a claim for which relief could be granted.

Almost in anticipation that the motion would be denied, the parties filed a Joint Status Report on Friday which outlines the status of the case.  There’s no trial date as of yet as the parties continue to map out discovery which will probably entail a voluminous amount of documents.  It appears that the parties will quarrel over the amount of information to be produced (a standard that occurs in almost every lawsuit).

Payout Perspective:

Good news for the plaintiffs but not a monumental loss for the UFC.  Although people watching this case may see the court’s denial of the motion to dismiss as a huge precedent victory, the plaintiffs are not out of the woods yet.  As we’ve discussed (and maybe someone actually reading this has followed), the Motion to Dismiss was just a standard part of the litigation playbook.  Thus far, the UFC has succeeded in transferring the case to Vegas and the parties are grappling over discovery issues.  At some point, the UFC will once again attempt to dismiss the case on a Motion for Summary Judgment.

But, the plaintiffs will get a chance to probe UFC documents and potentially depose some UFC officials.  This may reveal some information that may help their case as well as paint the UFC in a bad light.  We shall see.

MMA Payout will keep you posted.

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