16 for 16: No. 12 Alliance MMA goes public

December 22, 2016

Alliance MMA went public on the NASDAQ stock exchange in October.  The company describes itself as a “premier development league for aspiring mixed martial arts fighters.”

In an interview with CNN Money, its Alliance MMA (no relation to the SoCal Fight Gym) CEO Paul Danner outlined a plan in which it would sponsor fights across the country through regional promotions.  Its revenues will be drawn from the attendance, live fight access and attraction of national sponsorships.

More information on the stock can be found on Nasdaq.com.  Its stock symbol is (AMMA).

According to its company financials, its net income is -$223,941 and its total assets is $56,766.  Its total liabilities are $661,874.

Its initial share price is $4.50 per share.  As of Thursday, December 22nd, it is trading at $3.61.

In an interview with Alliance MMA’s Robert Haydak, the company wants to have a similar footprint to that of the WWE when Vince McMahon, Jr. acquired smaller regional promotions and became a national presence. They consider themselves the “NCAA to the NFL.”  Essentially, a feeder league for the UFC, Bellator, OneFC and others.  At this point, Alliance MMA has acquired 6 regional promotions with the intentions of more.

The company has retained former UFC fighter relations pro Burt Watson to be on its Board of Directors and serve as its head of fighter relations.

It’s an interesting strategy to raise capital and we will keep an eye on Alliance MMA in 2017 to see if it can execute its strategy.  Placing itself as a feeder league for the bigger organizations is an interesting niche and we shall see if there is a sufficient amount of interest from the public in purchasing its stock.

16 for 16: No. 13 GSP declares himself a free agent

December 21, 2016

How different would UFC 206 in Toronto would have been if Georges St-Pierre made his return to the Octagon?

However, that was not the case and with his declaration this fall that he was a free agent and his alignment with MMAAA its unlikely we’ll see him in the UFC anytime soon.

In October, GSP stated that he was a free agent after the UFC breached its contract with him.  The UFC responded by stating that the former welterweight champion was still under contract with the company.  GSP’s lawyer, Jim Quinn, maintains that GSP’s contract is terminated.  Quinn indicated that the UFC has options including offering GSP a new contract or taking legal action against the fighter.

One of the contentions made by Quinn on behalf of GSP was that the UFC had not offered St-Pierre fights.

Via our post in October:

One of the issues GSP’s lawyers contend that caused a breach was the lack of fights given the St-Pierre.  His lawyers state he has never received an actual bout agreement.  St-Pierre’s lawyers gave the UFC 10 days to offer St-Pierre a fight.  According to his lawyers, the UFC responded on the final day in which it offered St-Pierre former welterweight champion Robbie Lawler.  But that did not come to fruition.

GSP’s current contract was signed in 2011 per ESPN.  Of course, the UFC has evolved since then.  Notably, as pointed out in the ESPN story, is that the UFC has Reebok as its official clothier.  Also, fighters are no longer able to have outside sponsors (aside from official UFC sponsors) to promote during fight week.  St-Pierre had (or has) a deal with Under Armour in addition to other non-UFC sponsors.

Both sides are likely still in at an impasse with the contract.  Neither party has filed a lawsuit against the other for breach of contract.  It’s not known if there is a timeline at this point but there will likely be movement in this situation in 2017.  With St-Pierre entering his late 30s, one should expect something to happen sooner than later.

16 for 16: No. 14 Bellator 149

December 20, 2016

In match-ups that reflect the organization’s penchant for odd attractions, Bellator 149 featured former street fighters Kimbo Slice and Dada 5000 and fighters past their prime Ken Shamrock and Royce Gracie.

Actually, you could argue that all four of the featured fighters should not have been in the cage on February 19th.  Yet, it was the biggest audience for Bellator in 2016.

In the last fight of the night, Gracie defeated Shamrock in round 1.  While we could digest this since it didn’t last long, Slice-Dada was unbearable to watch after the first minute of the fight.

Booked as a brawl between two ex-street fighters, Kevin Ferguson and Dhafir Harris ran out of gas after the first minute of the fight and, as we learned later, Harris almost died in the cage as he essentially gave up due to exhaustion.  Ferguson tested positive for the banned substance nandrolone post-fight and his win was overturned to a no-contest.

In addition, Shamrock tested positive for the banned substance nandrolone and methadone.

Despite the main event of Slice and Dada and the post-fight failed tests, the event was the highest-rated event for the company.  Each fight on the telecast drew over 1.9 million viewers while the fights between Ferguson-Harris (2.9M) and Gracie-Shamrock (2.8M) surged to over 2 million viewers on Spike TV.

The Bellator tentpole model has worked and this event highlights the sports entertainment aspect of MMA.  The Slice-Dada promos for the fight were “must see” television.  The actual fight was not.  But, viewers were drawn to watch.  Ferguson, who passed away this past June, was a ratings magnet which likely helped the ratings.  Nostalgia of Shamrock-Gracie also brought casual viewers to watch.

One of the big questions about the event was how the main event participants were able to obtain a license to fight.  While there is no link between Ferguson’s death and his fighting career, one has to wonder what was included in his medical information to the Texas Department of Licensing and Regulation.  Same could be asked of Harris.  It was clear he was in no condition to fight, yet was still granted a license.   While he met the requirements, one has to wonder how stringent they were at the time.

16 for 16 – No. 15 CM Punk debuts

December 20, 2016

After a prolonged wait, CM Punk made his professional MMA debut at UFC 203 in September 2016.  Punk took on Mickey Gall in a one-sided match which saw Punk do nothing until he tapped to a rear-naked choke.

While there was a UFC title defense by heavyweight champion Stipe Miocic, it was clear that Punk was the headliner.  FS1 did a three-part documentary on Punk’s transformation from WWE performer to MMA fighter at the age of 37.  He was also a prominent figure on the Embedded episodes leading up to the PPV.

Punk earned $500,000 for his debut fight which was the same amount made by James Toney in his unsuccessful MMA debut against Randy Couture.  Punk proved his payout as the PPV buys for UFC 203 were up from a normal PPV rate: 425K-475K PPV buys.

The Punk experiment was backed by the UFC.  He was one of the first fighters to train at EXOS.  He had a three-part FS1 series leading up to UFC 203 which documented his training.  The investment in Punk paid off even if he did not do well against Gall.  The PPV drew more than the typical UFC buy rate baseline.  While the fans in Cleveland were behind Miocic, he was not the PPV needle mover, it was Punk.  One might infer from the buy rate that Punk had a great WWE following.

It will be interesting to see if Punk returns to fight in MMA, whether it is in the UFC or elsewhere.  On another note, will Punk speak out about fighters organizing.  Surprisingly, he’s not come out with a statement about the possibility.  For someone that hated the WWE, he has been mum about what he thinks about fighters organizing in the UFC.

16 for 16: No. 16 Former Bellator employee sues company, organization sues back

December 19, 2016

As 2016 comes to an end, we take a look back at some of the bigger legal and business issues in MMA this year.  It’s clear we know the top 3 or 4 business stories but in the coming days we’ll walk you back through some other stories.

  1. Former Employee sues Bellator, company sues back

In May 2016, Zachery Light sued Bellator and parent company Viacom for wrongful termination.  The lawsuit includes allegations of disobeying laws by forging medical information for fighters.  He also claims that he was pressured by Scott Coker and Rich Chou not to press issues related to this.  He also claimed that Mike Kogan was hired by Bellator in an executive capacity while at the same time managing fighters that were put on Bellator cards.  Light claimed that due to stress from the job he took a leave but was terminated upon his return.

Zachery Light vs Bellator Sport Worldwide LLC by JASONCRUZ206 on Scribd

In response to the lawsuit, Bellator filed a Cross-Complaint citing Light for conversion, theft and a breach of written contract.

X Complaint to Zach Light by JASONCRUZ206 on Scribd

The Bellator Cross-Complaint claims that Light requested a loan from the company and was given $9,403 and entered into a written agreement with Light that made him pay back the money on an agreed schedule.  Bellator claims that he never paid back the loan.  In addition, Bellator claims that he did not return “thousands of dollars in VIP ticket sales” related to Bellator 136 in Irvine, California.

Light filed an Answer in August denying the allegations made in Bellator’s Cross-Complaint.

Zachery Light Answer by JASONCRUZ206 on Scribd

A Case Management Conference was to be heard to give a status on the case in November but it appears that there has been a continuance of this.  Light now works for MMAAA per Bjorn Rebney at the organization’s debut press conference earlier this month.  It will be interesting where this lawsuit will go or if the parties will determine to settle the case before any salacious information about either Light or Bellator’s business practices surfaces for the public.

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