UFC sponsoring Outsports LGBTQ Pride March in New York

June 22, 2018

MMA Fighting reports that the UFC is sponsoring the LGBTQ Pride March in New York for SBNation web site Outsports.  It is the presenting sponsor of the Outsports NYC Price March.

Outsports covers LBTQ athletes and is a sister-site of MMA Fighting and Bloody Elbow.

Tecia Torres, Nina Ansaroff and Sijara Eubanks will be part of the march this weekend.  All 3 are openly gay.

Payout Perspective:

The sponsorship for the event makes sense considering the number of openly gay athletes in the UFC.  Perhaps there’s a scheduling issue but I’m surprised Amanda Nunes is not a part of the event.  Ansaroff and Nunes are engaged.  Torres also is dating fellow UFC fighter Raquel Pennington.  A couple years ago, the UFC made an effort to reach out to the LGBTQ community and its nice to see them lend their support once again.

TUF 27 Episode 10 draws 218,000 viewers

June 21, 2018

The Ultimate Fighter 27 episode 10 drew 218,000 viewers per Nielsen via ShowBuzz Daily.  Despite being down in the live + SD ratings this week, the DVR viewership is on the rise.

This week’s show featured the fight for a slot in the featherweight tournament finals on July 6th at the TUF Finale.  Brian Katona faced Bryce Mitchell in a battle of Team Cormier teammates.  Katona ended up winning via submission in the third and final round.

 

Live and DVR + 3 Ratings Increases

1          201,000           298,000           +48%

2          186,000           296,000           +59%

3          246,000           366,000           +48%

4          207,000           357,000           +72%

5          176,000           362,000           +106%

6          196,000           398,000           +103%

7          275,000           437,000           +58%

8          248,000           443,000           +79%

9          290,000           462,000           +59%

Payout Perspective:

While the live + SD ratings may not be trending in a verified direction, the viewership via DVR is going up as the season is ending.  The last 5 episodes have seen a steady increase in viewership via recording the episode for later consumption.

Josh Barnett and UFC parting ways

June 21, 2018

Josh Barnett is negotiating his release from the UFC due to the lack of trust he has in USADA.  Barnett received an admonished but no suspension for a flagged drug test administered by the UFC’s third party anti-doping officiant.

Barnett was the first UFC fighter to “prevail” in an arbitration for a failed test.  The former UFC heavyweight champion was able to prove that he did not knowingly take a banned substance.  This was due in part to a detailed accounting of supplements which led to the finding that a supplement by tbe name of Tributestin purchased at a store in Los Angeles contained Ostrine (a banned substance) although it was not labeled on the product.  He has filed a lawsuit against the drug maker which appears to be the reason for the flagged test.

“I don’t’ feel comfortable giving the control necessary to USADA that would continue my career in the UFC,” Barnett told ESPN.com about his pending release.  Barnett had been with the promotion 5 years after leaving the company in 2002.

Payout Perspective:

It would seem that Barnett would be Bellator-bound if he wanted to continue to fight.  The circumstances surrounding Barnett’s departure are a first and may bring more scrutiny to the UFC’s Anti-Doping Program.  It is a requisite to be registered with USADA to be a UFC fighter, and due to the issues Barnett faced with the provisional suspension and subsequent arbitration, he has drawn a line regarding the policy which is costing him his job with the UFC.

World Series of Fighting and PFL file appeal against former officers of WSOF

June 20, 2018

The World Series of Fighting litigation continues in Nevada.  Despite re-emerging earlier this month as the Professional Fighters’ League, the lawsuit(s) continue over the power struggle between individuals, entities and now with a new investment group, more litigants. In this instance, the lawsuit hinges on a licensing agreement which contained an arbitration provision.

The licensing agreement between the parties described below is related to a prior Settlement Agreement and Operating Agreement between the two sides.  As you might infer, this business divorce is a mess.

There has been a plethora of lawsuits filed by different people and entities and this one is the latest involving the inception of WSOF.  The lawsuit in question pits rival entities over the split up and sale of World Series of Fighting when it was sold to investors that repackaged it as the PFL.

In this lawsuit plaintiffs are WSOF Global and its head Vince Hesser and Zion Wood Obi Wan Trust (Zion) and Shawn Wright (collectively referred to as Plaintiffs).  The defendants include MMAWC, LLC doing business as World Series of Fighting, MMAX Investment Partners, Inc., doing business as PFL, Bruce Deifik, Carlos Silva, Nancy and Bruce Deifik Family Partnership and Keith Redmond, Inc.

The lawsuit claimed that MMAWC, LLC, which did business as WSOF experienced several financial shortfalls during 2012 to 2015.  The plaintiffs had made “extensive loans” to the promotion to allow the promotion to continue and operate.  But, WSOF refused to repay the loans.

Zion Wood Obi Wan Trust Complaint by JASONCRUZ206 on Scribd

Additionally, Shawn Wright and Vince Hesser had written agreements with WSOF for other contractual payments and worldwide licensing.  WSOF Global had acquired rights to the intellectual property of WSOF overseas and had invested in the brand under the assumption it was planning to expand.  But, WSOF refused to honor the terms of the agreement per the Complaint.  Zion’s membership interest was 10.5% and WSOF executed agreements that it was non-dilutable.

The dispute was thought to have been resolved after the organizations entered into a Settlement Agreement.  As part of the agreement, Zion agreed to reduce its 10.5% non-dilutable interest in WSOF to 4.50% of the total outstanding ownership units in WSOF, which interest shall remain non-dilutable.  But, Zion believed that Bruce Deifik created a new entity and put all of the WSOF assets into the PFL organization.

Zion did not have an interest in the “Successor Company,” PFL.  As a result, it believed that its shares were being diluted.

The Complaint stated WSOF sold the company for $15 million, but without input from Zion and WSOF Global, Inc., who held shares in the WSOF.  Additionally, Plaintiffs claimed it was being shut out from finding out the real value of the deal which would help them assess the purported amount that they would have been entitled.

The Complaint also mentioned a WSOF event in New York City on New Year’s Eve 2016.  The WSOF reported $0 income from broadcasting rights to New York State.  But, it reported to Zion that they spent $190,000 in broadcasting revenue from NBC to the NYC event.  This would be inconsistent reporting.

But, the big issue here is the licensing deal between Vince Hesser, the owner of WSOF Global, and WSOF.  An Amended Master License Agreement gave Mr. Hesser the exclusive right to license the WSOF brand outside the United States.  A dispute arose over the licensing agreement and was thought to have been subsequently settled.  WSOF Global claims to have rights that “consist of over 100 international events per year, at a cost to produce of tens of millions of dollars, which dwarf the mere 8-10 events per year” from WSOF.

But, when the WSOF sold to PFL, it failed to comply with the licensing agreement.  The obvious breach was the change of the name to the Professional Fighters League which plaintiffs claimed damage them.  The PFL did not grant WSOF Global the right to use the PFL name in the Settlement Agreement and Amended License Agreement.

Prior to the name change, WSOF Global claimed that it was working on a sports partnership to bring MMA content to China.  It claims it received $16 million to further the promotion of WSOF in China and to promote foreign fighters in their events alongside Chinese fighters.  This would appear to be part of the damages to be claimed in this lawsuit.

WSOF stated that the parties should be compelled to arbitration to resolve these disputes and pointed to the clause in the Amended Licensing Agreement.

The arbitration clause in the parties’ licensing agreement compels the Court to dismiss this case and force the parties to arbitration.  But, the plaintiffs contend that they did not specifically authorize the arbitration agreement.  Under the state law in Nevada, a party must grant “specific authorization” that they have agreed to their arbitration provision otherwise it is void.  Plaintiffs cite the lack of specific authorization in the contract to show that the arbitration provision was void.

In its reply to the opposition of moving the case to arbitration, WSOF argued that the parties jointly drafted and authorized the agreement which included the arbitration clause.  Thus, despite WSOF’s assertion that Plaintiffs had knowledge of the clause and the opportunity to point out the issue, it did not.  Moreover, it agreed to the overall agreement.

The Court found in favor of Plaintiffs’ arguments and voided the arbitration provision and denied WSOF’s motion to compel arbitration.  Shortly after the ruling, WSOF filed to appeal the decision.

In its appeal statement WSOF noted, “When the parties finalized the Arbitration provision, however, the parties did not include language and initials or separate signatures to further manifest their agreement to the Arbitration provision…”

WSOF Case Appeal Statement by JASONCRUZ206 on Scribd

Despite the fact that WSOF believed that the Arbitration provision should have been allowed, the Court found it void due to the lack of a “specific authorization.”

The appeal will be heard in the state appellate court in Nevada.  The lawsuit was filed in the District Court of Clark County, Nevada.

Payout Perspective:

While there is the possibility that the Plaintiffs in the lawsuit may amend its RICO claim, it was dismissed by the Court.  However, the case is not going to Arbitration due to the fact the Court voided the provision.  While WSOF may allege that having the parties sign a section consenting to Arbitration is duplicative if you consider they signed the Agreement.  Also, in this instance, the parties allegedly collaborated on putting together the Agreement.  Yet, the Nevada state rules are explicit that there must be a specific authorization which appears to be more than just signing the contract overall but making an affirmative concession to the clause.

As it goes for the overall transaction, it appears that Hesser and Wright are creditors to the WSOF entity and were not privy to the sale of assets to the successor company, PFL.  While there was a transaction to do business under the WSOF brand, there was not one to do under any successor brand.  It would seem that either poor business acumen, lack of communication or a bad business deal has transpired.  Maybe all of the above.

One thing is for certain, both sides have shown errors in contractual drafting.  Plaintiffs should have included clauses that would have protected itself form any sale of assets from the debtor (i.e., WSOF).  For WSOF, it should have drafted an Agreement in compliance with the Nevada state law that would ensure specific authorization for Arbitration.  While Arbitration may have been a faster, cost-efficient way to resolve a dispute, it looks like this case will be litigated.  But first, the appeal.

MMA Payout will keep you posted.

Plaintiffs in UFC Antitrust Lawsuit oppose sealing of documents

June 19, 2018

Plaintiffs in the UFC Antitrust Lawsuit are opposing a Motion to Seal brought by Zuffa to seal documents in Plaintiffs’ Motion to Seal Plaintiffs’ Reply in Support of Motion to Certify Class and Related Materials.  The opposition is the first in this litigation which has gone without any challenges to the redaction and/or sealing of documents.

Plaintiffs’ Opposition to Motion to Seal by JASONCRUZ206 on Scribd


Plaintiffs cite 4 points why the Court should deny Zuffa’s Motion to Seal:

  • The materials Zuffa seeks to seal are not trade secrets, but rather largely, outdated aggregate data, and Zuffa would suffer no competitive harm if they were disclosed;
  • Zuffa’s justifications for sealing do not satisfy the applicable “compelling reasons” standard;
  • The right of the public, the press, the named Plaintiffs, and Class members to access judicial materials is especially robust….; and
  • Zuffa is attempting to gain an advantage by overdesignating materials that support Plaintiffs’ claims and their motion for class certification, when Zuffa has selectively revealed similar information that served Zuffa’s purposes.

Plaintiffs argue that Zuffa’s claim that redacting certain section of its documents “could permit..competitors to gain unfair insights into Zuffa’s strategic business practices and gain an unearned advantage in competition” is a red herring.  It contends that it is sealing information to control the flow of information to the public, the press, the named Plaintiffs’ and the class members, and prevent Plaintiffs from telling their side of the story to the public.  It’s not that its protecting its trade secrets argues plaintiffs it is concerned about the public learning about its misconduct.

Focusing on the issue of unsealing documents for the media, John Nash of Bloody Elbow sent correspondence to the Judge Richard Boulware requesting access to certain documents including portions of the expert reports that were redacted. Nash pointed out inconsistencies with what was being redacted, withheld for public consumption with what was allegedly trade secrets.  Zuffa’s counsel responded to the letter indicating that the likes of Nash, Paul Gift and yours truly had ample information to pontificate on the subject.  It claimed that the information sealed was trade secrets and precluded from public consumption.  Zuffa argued that the right to access of pleadings was not absolute.  Nash responded with a detailed letter outlining the reasons why certain sections should not be redacted.  The letter also cites a federal court judge order from last month in which it sanctioned attorneys for frivolous motions to seal.  The pertinent section that is applicable is as follows with emphasis being ours:

At the hearing on the order to show cause, there was discussion of the fact that attorneys – particularly attorneys for corporate clients – are under great pressure to file motions to seal information that their clients would prefer to keep secret, even if there is no legitimate basis to keep the information secret. This is no doubt a significant issue for corporate lawyers, but the answer is not to file frivolous sealing requests. The answer is to firmly explain to their clients that litigation is a public process, and that the public has the right to know what the litigation is about, subject only to very limited exceptions. Mere embarrassment to a corporation is not one of those exceptions

In that case, the Judge fined the law firm filing frivolous sealing requests $500 per lawyer involved (which was 5) for a total of $2,500.

2018-06-10 S Grigsby Ltr to Judge Boulware Re J Nash Email by JASONCRUZ206 on Scribd

Response to Ms Grisby Jun 10 2018 Letter by JASONCRUZ206 on Scribd

Payout Perspective:

According the plaintiffs’ motion, a party seeking to seal a judicial record bears the burden of overcoming “a strong presumption in favor of access” by meeting the “compelling reasons” standard.  While the disclosure of information might prove embarrassing, incriminating or put the party in a false light, it is not a reason to seal information from a public court filing.  From a media perspective, it is hard to be accurate if the information is not provided.  One need only look to Zuffa’s attorney proclaiming an industry insider report that UFC 225’s buy rate was less than 150,000 was a “material misrepresentation” and off by six figures.  But, the attorney did not correct the information with accurate data.  A later report, noted that the buy rate including streaming and traditional PPV buys was 250,000.

The federal court order from last month is persuasive considering the overarching theory is that sealing documents has “very limited exceptions.”  The burden is on Zuffa to show why they are allowed to redact certain sections.  Previously in this lawsuit, these types of motions were not opposed and therefore the court did not really examine the information sealed.  Now, it appears that the Court might review the redacted sections.

The motion creates more work for Zuffa and plaintiffs with another motion to handle.  However, this is not a frivolous motion from the perspective of the media.  There are a lot of instances where things like this go by without being questioned.  Here, at least there will be some examination as to the veracity of what can and cannot be sealed.

Spence-Ocampo fight on Showtime drew 683,000 viewers

June 19, 2018

The Errol Spence-Carlos Ocampo fight on Showtime this past Saturday topped out at 683,000 viewers according to Nielsen via ShowBuzz Daily.  Spence downed his overmatched opponent in the first round with a body shot.

The main card drew 301,000 viewers in the A18-49 demo and a 0.43 household rating.  The first round stoppage peaked at 726,000 viewers.  On the undercard, the Adrian Granados-Javier Fortuna fought in a battle of junior welterweights.  The bout ended when Fortuna was pushed out of the ring and was unable to continue.  The fight drew 396,000 viewers, 164,000 in the A18-49 demo and 0.24 household rating.  It peaked at 441,000 viewers.

Granados believes that Fortuna was looking for a way out of the fight.

The first fight of the night drew 478,000 viewers, 181,000 in the A18-49 demo and a 0.30 household rating.  It peaked with 547,000 viewers.  The fight took place between Daniel Roman and Moises Flores.  Roman won via unanimous decision.

Payout Perspective:

Spence’s last fight against Lamont Peterson drew 637,000 viewers and peaked at 695,000 viewers.  There were no combat sports events opposite the Showtime Boxing telecast this weekend.  Although a short fight, it was a good showing for Spence and a future fight possibly against Terence Crawford down the road.

Report: UFC 225 drew 250,000 PPV buys factoring in TV and streaming purchases

June 19, 2018

Dave Meltzer reports that UFC 225 drew 250,000 PPV buys.  The PPV buys was the subject of scrutiny when an LA Times report noted that UFC 225 drew “less than 150,000 buys” per an industry source.

A UFC attorney came out to call it a “material misrepresentation” indicating it was short by “something in excess of six figures,” but did not provide a correct number.

But the key paragraph on Meltzer’s report on MMA Fighting notes:

Industry sources with knowledge of the number pegged that as of the end of last week, it was estimated at doing about 250,000 buys, a number that would combine both the traditional television purchases and the streaming purchases. That would be lower to what would be expected for the show.

One might suggest that the LA Times report could have factored in traditional TV purchases and not the streaming purchases which could make all parties correct.

UFC 225 was headlined by Robert Whittaker and Yoel Romero in what was to be a bout for the middleweight title.  But, Romero failed to make weight and the fight was declared a non-title bout.  The semi-main event saw Colby Covington win the UFC interim welterweight title with a victory over Rafael dos Anjos.

CM Punk made his second appearance in the UFC with a loss in the first fight of the PPV against Mike Jackson.

Payout Perspective:

 From a tech perspective, one might suggest we see more people buying online rather through their TV distributor.  This could be a result of people cutting the cord.  The 250,000 PPV buy report reflects the lack of drawing power on the card.  Despite the fact that Punk’s last appearance on PPV drew 450,000 buys, it was clear that the draw was just a one-time curiosity.  Arguably, with this being the strongest card put together this year, the PPV buy rate has to be fairly disappointing.

The Interview: USF Law Student Zachary Tomlin

June 17, 2018

I had the opportunity to speak with University of San Francisco Law School student Zachary Tomlin.  He recently won an award in the annual Sports Lawyers Association student writing competition for a paper he wrote about the NLRB and the UFC.

Tomlin SLA Submission by JASONCRUZ206 on Scribd


During my talk with Zack, we reference an 11 part test applied by the NLRB to determine whether or not workers are employees or independent contractors.

The NLRB 11 Factor Test

  1. Extent of control by the employer
  2. Whether or not the individual is engaged in a distinct occupation or business
  3. Whether the work is usually done under the direction of the employer or by a specialist without supervision
  4. Skill required in the occupation
  5. Whether the employer or individual supplies instrumentalities, tools, and place of work
  6. Length of time for which individual is employed
  7. Method of payment
  8. Whether or not work is part of the regular business of the employer
  9. Whether or not the parties believe they are creating an independent contractor relationship
  10. Whether the principal is or is not in the business
  11. (New:) Whether the evidence tends to show that the individual is, in fact, rendering services as an independent business

Also discussed is the NLRB decision in the case of the Northwestern Football player case.  The board unanimously decided to decline jurisdiction.

The Velox decision is below:

Administrative Law Judges Decision in re Velox Express, Inc. by JASONCRUZ206 on Scribd

I also apologize for the abrupt ending.  I am still working on my editing skills.

Roster payouts from Horn-Crawford event

June 17, 2018

MMA Payout has obtained the official payout sheet from last Saturday’s Jeff Horn-Terrence Crawford fight taking place at the MGM Grand Garden Arena in Las Vegas.

Terrence Crawford earned $1.75 million for his TKO victory over Jeff Horn.  Crawford won the WBO World Welterweight Title.  Horn earned $500,000 according to the disclosure from the Nevada State Athletic Commission.  Notably, Horn did not make weight for the fight.

The other payouts on the card are as follows.

Antonio Moran – $12,500

Jose Pedraza – $35,000

 

Maxim Dadashev – $17,500

Darleys Perez – $35,000

 

Frank Rojas – $15,000

Jose Benavidez – $35,000

 

Shakur Stevenson – $20,000

Aelio DeMesquita – $8,000

 

Steven Nelson – $5,000

Deshon Webster – $7,500

 

Gabriel Flores, Jr. – $5,000

Jorge Rojas Zacatzontetl -$1,000

 

David Kaminsky – $2,000

Trevor Lavin – $8,000

UFC calls report of UFC 225 PPV buys “material misrepresentation”

June 15, 2018

The UFC has refuted an LA Times report that UFC 225 scored just less than 150,000 PPV buys.  UFC attorney Hunter Campbell told the LA Times that the number was a “material misrepresentation” of the actual buys and short by “something in excess of six figures” although he did not provide an actual figure.

UFC 225 featured Robert Whittaker taking on Yoel Romero in a non-title middleweight fight after Romero missed weight.  It also had Colby Covington take on Rafael dos Anjos for the interim welterweight title.

The report of less than 150,000 buys would be a disappointment for the UFC considering it was one of the better cards this year.

Payout Perspective:

In general, the legal definition of a material misrepresentation is the act of intentional hiding or fabrication of a material fact which, if known to the other party, could have terminated, or significantly altered the basis of, a contract, deal, or transaction.  But, truth would be a defense to a claim of material misrepresentation.  Moreover, the UFC would have to prove that the industry source intentionally knew the PPV price and then gave a false number.

Having an attorney come out to refute a report and then provide the legal term “material misrepresentation” is a bit ominous.  Certainly, if the reports were not true, its within the right of the UFC to respond.  But, to provide a response with actually correcting the number seems short of a full explanation.  Being “six figures” short could mean that it did less than 150,000 as well as doing six figures more than 150,000 buys.  The inference here in the response is the possibility for legal action if there are inaccurate reports.  But, how do we know that they are inaccurate if not provided the real number.

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