Egg whites and a UFC contract: Cung Le depo transcript reveals his signing with Zuffa

August 22, 2018

Cung Le met with Dana White and Lorenzo Fertitta in person to discuss signing with the UFC over egg whites at the UFC’s offices according to the released depo transcript attached to Zuffa’s Motion for Summary Judgment.  His testimony reveals that he was “stuck” in his UFC contract a year and a half after he retired.

The deposition took place in April 2017 in Las Vegas at the offices of the UFC’s lawyers, Boies, Schiller & Flexner.  Le testified that he negotiated his entrance into the UFC himself and was not represented by an agent or manager.  He indicated that he flew to the Bay Area to Vegas on his own and made his way to the UFC offices.  In the depo, he testified that he had an interest in the UFC and White and Fertitta were big fans of his from Strikeforce and when he competed on ESPN.

Exhibit 18 – Cung Le Depo by JASONCRUZ206 on Scribd

White and Fertitta had their chef cook Le egg whites and he was presented with a UFC contract.  Le stated that he wanted to look it over before signing.

It appears that they were discussion of his Identity Rights in the contract.  Since Le was doing movies, he was concerned about a conflict with his Zuffa contract.

Le testifies that he retired but was precluded from doing work with any other organization for a year and a half because he still had two fights left on his contract.  He stated he couldn’t do commentating and was not able to negotiate with Bellator.

For a look at our summary of the deposition of Ike Epstein, click here.

Payout Perspective:

There is a portion redacted where Le goes into who he contacted prior to filing the lawsuit.  It also may explain why he decided to file the lawsuit and become the named plaintiff in it.  Prior to this lawsuit, he had never been involved in any other legal proceeding.  The testimony on Identity Rights is interesting considering Le’s movie career and celebrity outside of the UFC.  What may be helpful for his cause his his testimony that he was “stuck” for a year and a half from doing anything because he was still under UFC contract.  This includes being foreclosed from doing commentary with another organization due to his contract with the UFC.  Le may be a perfect plaintiff for this case since he had an established MMA career prior to the UFC, negotiated his own deal and has a career outside of MMA.

Bellator 204 peaked with Gallagher fight with 699K viewers on Paramount

August 22, 2018

Bellator 204 peaked for the James Gallagher-Ricky Bandejas fight with 699,000 viewers  on Paramount according to Nielsen.  The event drew 413,000 in DVR + 3 ratings.

The event drew 319,000 viewers in Live + SD ratings on Friday night.  The event featured Darrion Caldwell as he defeated Noad Lahat.  Gallagher was a top prospect and patterned himself after Conor McGregor.  But, he ran into Ricky Bandejas who scored the upset over Gallagher.

Payout Perspective:

The peak occurred prior to featured main event which reflects the interest in Gallgher as he is a McGregor disciple.  The ratings reflect a decline in viewership from the previous weeks which may be a concern.

Court changes course, rules in favor of Zuffa to seal and redact docs in Mark Hunt case

August 21, 2018

The Court in the Mark Hunt lawsuit against Zuffa, Dana White and Brock Lesnar granted Zuffa’s Renewed Motion to File Exhibits Under Seal and To Redact a Portion of Their Reply Brief.

Notably, Plaintiff did not file a response to oppose the “renewed motion.”  Originally, the court denied Zuffa’s request which seeks to seal and redact portions of the 2017 Promotional Agreement with Hunt.  The Court ruled that since this is a dispositive motion (a motion that may bring an end to the lawsuit), the party seeking to seal the record “must articulate compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure…”  Included in the request to redact documents, the Zuffa Dana White attached Hunt’s Bout Agreement for UFC 200 and other Bout Agreements from previous fights on as exhibits to its Motion to Dismiss Hunt’s First Amended Complaint.  Denial of its Motion to Seal these documents presumptively means that they would be available for public viewing.

Order on Renewed Motion to Seal by JASONCRUZ206 on Scribd

Zuffa “Renewed” its motion although it did not cite to specific and compelling reasons to seal or redact. It did argue that it was “sensitive commercial information of the parties, the disclosure of which would cause the parties harm and jeopardize their competitive standing in the professional MMA industry.”

In the only two sentences which enlightens the reader on the rationale for the decision, the Court states, “[D]efendants claim that the agreements contain proprietary information, and that competitive standing with MMA promoters.  The court finds that defendants have identified compelling reasons that warrant sealing the exhibits…”  This explanation does not seem compelling at all.

 Payout Perspective:

This is a surprising and disappointing ruling from the perspective that the Court rationale was limited and did not offer up an explanation as to what had changed from its original ruling.  It also promotes the further practice of sealing and redacting based on vague notions that the information is “sensitive commercial information.”  It also may impact the Zuffa Antitrust lawsuit as that case is also in a battle with redaction of Zuffa business information.

Top Rank Boxing on ESPN draws 686,000 viewers

August 21, 2018

Top Rank Boxing on ESPN drew 686,000 Saturday night on the network which improved on the three prior cards on ESPN.

According to Nielsen (via ShowBuzz Daily), the 110 minute event drew 0.20 in the A18-49 demo.  The event saw Bryant Jennings win via 9th round TKO  over Alexander Dimitrenko.  In the opener of the doubleheader, Jesse Hart earned a 3rd round TKO victory over Mike Gavronski.

This summer’s Top Rank Boxing on ESPN Ratings:

August 18 – 686,000 viewers

July 14 – 518,000 viewers

July 7 – 534,000 viewers

June 30 – 632,000 viewers

Payout Perspective:

The ratings are either an anomaly or a sign that boxing fans are getting used to boxing on ESPN.  The ratings are far from what the network has received earlier this year and in 2017 but with the many up and coming fighters that most casual fans do not know, the ratings are pretty good.

Details of Zuffa exec deposition reveals questions on exclusivity provisions, right to match and toy deals

August 20, 2018

Zuffa filed its Motion for Summary Judgment in which it wishes to dismisses the antitrust lawsuit filed by ex-fighters.  MMA Payout takes a look at some of the deposition testimony attached as exhibits to the motion.  This is the first of a series.

In order to prove its case, Zuffa attaches portions of the deposition testimony it cites in its motion.  The depositions are not the full transcript but small snippets of pages from the depositions.  There are a portions that are redacted for the public so we cannot see the full transcript.

For instance, Sean Shelby’s deposition attached to the motion reveals nothing. The first question is visible, but the rest of the deposition is redacted.  The question posed to Shelby was an Exhibit which is a text completion between “multiple parties.”   One could only assume that the texts may be between Shelby and/or Dana White, Joe Silva or another UFC employee.

Depo of Sean Shelby by JASONCRUZ206 on Scribd

But, not all transcripts are like Shelby’s.  For instance, UFC Executive, Ike Epstein includes some interesting testimony.

Exhibit 8 – Depo of Ike Epstein by JASONCRUZ206 on Scribd

Reason for Exclusivity

The snippets that were provided in the exhibit provide Epstein’s testimony with respect to the purpose of exclusivity provisions in athlete contracts.  He testified that the UFC were “putting on 40 fights per year, and in order to put on 40 plus fights per year, you have to know that fighters are available to put on those events.”  He added, “[i]f the fighters were not exclusive to us, we could never put on 40 plus events per year, and our output would significantly decrease.”

He stated that the provision was a benefit for all UFC fighters and that no one would be affected negatively by the clause.  He did qualify this statement by testifying “all fighters are different.”  Although lured into the trap that exclusivity prohibits fighters from finding other opportunities elsewhere, Epstein stated that the sole purpose of the provision was to ensure that the company could do 30-40 events per year.  He qualified his answer to the UFC lawyer’s “narrow question” by stating that he disagreed with the “underlying assumption” in the question that assumed there were more opportunities for an athlete but for the exclusivity provision in UFC contracts.

At this point in the testimony it seems to get contentious, as the parties fight over the semantics of the questions.  Here, the plaintiffs’ attorney would like Epstein to agree to the question that based on the UFC’s exclusivity provision, the fighters cannot seek opportunities to fight elsewhere.  However, Epstein is wary of the trap and will not cede to this admission.  He does note that the viewpoint of the question infers something that the UFC does not want to admit, but plaintiffs cannot provide.  And that is that if fighters were given an opportunity to freely contract with others, they would earn more money, find more fights and/or both.

When asked by plaintiffs’ attorney Joseph Saveri whether boxing has the “same sort of exclusivity problems,” Epstein said yes.

He also agrees that most fight contracts are for 4 fights or 20 months, whichever comes first.  However, some fighters have longer terms.

He also testifies about the negotiations surrounding the Gilbert Melendez contract and how they thought the matching offer given to the lightweight was unreasonable.

There is an interesting exchange where Epstein discusses the willingness to match the offer made to Cheick Kongo.  However, the company decided to let the heavyweight go and he signed with Bellator.

Jakks and Round 5

Epstein is questioned about a toy deal with toy makers  Jakks Pacific and Round 5.

The limited testimony addresses Round 5’s ability to sign exclusive agreements with certain fighters.  Epstein notes that Round 5 was able to secure exclusive contracts to do toy deals with UFC fighters and were paid directly.   Jakks Pacific had the official license to replicate UFC fighters but, for a time, were foreclosed from making certain UFC fighters due to an exclusive contract with Round 5.

In 2009, Jakks, the master toy licensee for the UFC sub-licensed with Round 5 Corp to share UFC and MMA talent in the selling and distribution of action figures.  This brought all of the UFC athletes under the same umbrella and all were paid the same.

The example underscored the limited freedom that athletes had to resource other forms of revenue.  Ultimately, this was consolidated within Zuffa.  This testimony also related to Identity Rights for fighters.

Who is this?

There is a snippet where they discuss an individual that is hard to decipher without more information.  All that can be gathered is that “he regularly reports on ratings of UFC events,” and Epstein viewed reports as “business intelligence.”

Payout Perspective:

We’ll take a look at other depo transcripts as we await the plaintiffs response to this motion.  Epstein, a lawyer, understands the depo process so its no surprise that his testimony did not illicit anything of substance aside from the fact he liked Cheick Kongo.

Bellator 204 draws 319,000 viewers

August 20, 2018

Bellator 204 on the Paramount Network drew 319,000 viewers according to Nielsen via ShowBuzz Daily.

Bellator 204 featured Darrion Caldwell as he defended his Featherweight title against Noad Lahat.  Caldwll won via TKO in the second round.  The telecast also featured the stunning upset of prospect James Gallagher as he was stopped by Ricky Bandejas in the first round.

Payout Perspective:

It was the second-lowest rating of the year for Bellator and brings down the average to 471,000 for 2018.  There has not been an event over 500,000 viewers since Bellator 199 in May.

After ESPN deal, White says UFC now worth $7 billion

August 20, 2018

Dana White states that the UFC is now worth $7 billion after the ESPN deal.  In an interview with Tony Robbins, White stated that the company has improved since Endeavor purchased the UFC for $4.025 billion in August 2016.

White spoke in front of a crowd with Robbins for one of the motivational speaker’s seminars on Business Mastery.  He spoke about managing Chuck Liddell and Tito Ortiz when he learned that the UFC was in financial trouble and discussed purchasing it with Lorenzo and Frank Fertitta.

White talked about the “burn of $40 million” during the down years of the UFC when the promotion was in a hole.  At that time, White was asked about trying to sell the UFC and could only get $6-7 million.

UFC inked a new media rights deal with ESPN for $1.5 billion for five years earlier this year.  Despite the fact that television ratings have been on the decline and PPV buy rates have been less-than-pleasing, the company still has definitive revenue drivers.  This past week saw the UFC get the second-highest gate of all-time for October’s anticipated UFC 229 featuring the return of Conor McGregor.  Its international business is on the rise and with another show this November in China could open up more business in the country.

Payout Perspective:

The $7 billion figure stated by Dana White may not be accurate since he was talking to an audience ready to hear about the successes of the business (and they want to hear success stories).  But it may be in the ball-park.  While there are a lot of reasons to believe that the company is losing money since its acquisition by Endeavor, it is actually doing much better.

PFL 6 draws 138,000 viewers on NBC Sports Network

August 18, 2018

The Professional Fighter’s League on NBC Sports Network drew 138,000 Thursday night in its sixth event in the current season format.  The event improved upon PFL 5.

PFL 6 took place in Atlantic City and was capped by an impressive 18 second ref stoppage by Rey Cooper III to earn the number 1 seed in the welterweight playoffs.

Also on the telecast was Kayla Harrison as she earned her second pro victory in the third round over Jozette Cotton.

PFL 1: 116,000 viewers

PFL 2: 150,000 viewers

PFL 3: 146,000 viewers

PFL 4: 101,000 viewers

PFL 5: 112,000 viewers

PFL 6: 138,000 viewers

Payout Perspective:

Good ratings for a tough night of programming on cable as the NFL Preseason is back and the top cable telecast on Thursday night was ESPN’s game between the NY Jets and Washington.  FX’s Snowfall (923,000) and A&E’s Nightwatch Nation (1.437M) are among the shows that drew higher viewership in the same time slot.

Rockhold awaiting right contract from UFC to fight Weidman

August 16, 2018

UFC middleweight Luke Rockhold indicated that he will not fight Chris Weidman until he has a new contract. The rumored rematch between the two was set for one of the big events this fall at UFC 230 in New York but Rockhold is making a stand for better pay.

Rockhold spoke with reporters at an event with his sponsor American Ethanol in Sioux Falls, South Dakota.  He indicated that he had to be shown the right contract.  “Business is good,” Rockhold said inferring that his other interests outside of the Octagon were lucrative enough that a UFC fight was not a necessity.

Rockhold seemed to intimate that athletes have learned how to game the UFC Anti-Doping Policy and he does not like it when fighters like Brock Lesnar or Jon Jones are able to be inserted into the main event after a long time away.

H/t: MMA Junkie

Payout Perspective:

You might recall that Rockhold agreed to fight Yoel Romero despite Romero not making weight at UFC 221.  He lost via TKO and his chance for a middleweight title shot.  So, you can see why Rockhold may be wanting more money to get back into the Octagon.  Rockhold is playing it close to the vest as he indicated that he’s almost ready for a return to fighting after being injured but won’t fight without it making sense.  He stated that he was not “going to lose money fighting” which goes to say that he’s been able to make money outside of the Octagon.  Certainly, it’s a good thing for Rockhold to establish other business ventures that don’t include getting punched in the face.  While it seems that his competitive fire is still there for fighting, he is sick of the politics in the promotion.  I think that Rockhold does come back against Weidman and that his interview is just venting his frustration.

UFC official sponsor, BodyArmor receives big investment from Coca Cola

August 16, 2018

UFC official sponsor BodyArmor is receiving an influx of case thanks to soft drink maker Coca Cola.  It is buying a stake in BodyArmor making it the second-biggest stakeholder in the company.

The deal, according to the Wall Street Journal, allows Coca-Cola to take a full ownership of the startup company which lists Kobe Bryant as one of its backers.  Bryant’s invested $6 million in the company in 2014 and since the acquisition by Coca-Cola, the former NBA champ’s shares are now worth $200 million.  UFC bantamweight Cody Garbrandt is also a sponsor of the drink.

Coca-Cola’s investment in BodyArmor is an attempt to cut into PepsiCo-owned Gatorade’s dominance in the market.  It sells its sports drink as healthier and recruited younger athletes to appeal to the demo.

The deal with the UFC is one of the tactics in which it seeks to promote the drink to a younger demo.

The WSJ states that the U.S. sports drink market is about $8 billion in with Gatorade having about ¾ of the market. BodyArmor is expected to have about $400 million in revenue this  year and could be valued between $1-$2 billion.

Payout Perspective:

The sponsorship deal between BodyArmor and the UFC seems to be a good match in terms of growth.  The Official Sports Drink of the UFC is looking toward international distribution and we could look to see its signage in the cage for overseas event.  It is also seeking to grab a foothold in the younger demo and sponsoring UFC events should help with its visibility and promotion.  If Coca-Cola were to attain full ownership, it would benefit BodyArmor and perhaps lure the brand to the UFC.

« Previous PageNext Page »