Disgruntled May-Pac fans get oral argument in appeals court

March 12, 2019

On March 7th, the U.S. Court of Appeals for the Ninth Circuit heard oral arguments in the appeal of the lawsuit brought by plaintiffs that purchased the Floyd Mayweather-Manny Pacquiao in May 2015.  The case was dismissed but appealed by the plaintiffs.

The underlying facts of the lawsuit brought by multiple individuals and consolidated into one case claim that they were victims of fraud when they purchased tickets and/or PPV for the fight without the knowledge that Pacquiao had an injured shoulder.  The details of the dismissal of the lawsuit were covered by MPO this past September.

Three parties representing the plaintiffs, the defendants including HBO and Showtime and separate counsel for defendant Floyd Mayweather and his company argued their briefs before the Night Circuit.

The appeal came down to two differing theories.  Plaintiffs viewpoint that the case is a consumer protection action where fans were duped into thinking that they were purchasing tickets and/or a $100 PPV to watch a healthy Paquiao and Mayweather.  But it was not revealed that Pacquiao was fighting with a significant injury.  As a result, consumers were taken advantage of by the promoters and those with business interests tied to the event.  Plaintiffs, in part, infer that the defendants were not going to cancel or postpone the event regardless of Pacquiao’s condition.

Defendants maintain the District Court ruling and uphold the ruling that the case is premised upon a revocable license.  The fans paid for what they received and despite the fact that they did not get the fight they wanted, they received the fight that they paid for.

The appellate court seemed to probe the question of whether Charpentier could be distinguished from this case based on the business-side of sports.  Charpentier was premised upon the fact that in the mid-1990s the Los Angeles Rams franchise was leaving for St. Louis, and despite its knowledge that it would, stated that it was staying.  While in Pacquiao, he indicated that he felt fine going into the fight, Mayweather asserted he knew everything within his opponent’s camp yet did not speak about a shoulder injury pre or post-fight.  HBO and Showtime did not claim to know about a pre-existing injury and promoted the fight as the Fight of the Century  It believed it to be so big that it set the ticket prices and PPV price point at astronomical prices.

Hart Robinovitch, arguing on behalf of the plaintiffs, stressed that facts were intentionally concealed from consumers set against the backdrop upon quotes from commentators inferring that the fight less that what was expected.  He portrayed the plaintiffs as the little guy that paid big prices for the event.

The Court asked about where the line might be drawn on a failure to disclose theory, here the omission of Pacquiao’s injury, where it is common that athletes play with injuries at all times.  Plaintiffs argued that the failure to disclose Pacquiao’s injury was material to this case.  Notably, Pacquiao did not publicly disclose the injury until 30 minutes into the PPV based on his request to the commission for a pain reliever for his shoulder. The Court grilled Robinivitch on the claim that Pacquiao omitted any claim of injury prior to the fight.  But, premised upon the omission, there must be a duty to disclose.  The Court also asked about “puffery” claims made by athletes (i.e., “I feel great,”) and whether something like this would give rise to a claim.

Plaintiffs argue that the license approach is premised on a contract claim, which differs from what it is arguing here.

They claim that the district court erred when it did not interpret Plaintiffs claim that Pacquiao concealed his injury for the sole business reason of making money.  Plaintiffs argue that there is a material fact, which cannot be dismissed on a Motion to Dismiss stage.

During oral arguments, Plaintiffs stressed the Charpentier case which was central to its case.  The case was brought by Los Angeles Rams season ticket holders that claimed the franchise publicly denied moving while concealing material facts that its intention was to move.   The court in that case stated, “Defendant knew these statements were false, but defendant made them purely to maintain and manipulate the sales of tickets.”  In that lawsuit, the court dismissed the contract-based claims but maintained the plaintiffs’ fraud claim.  The distinction is important when set upon the footprint of the Pacquiao case because plaintiffs argue that the material misrepresentation of Pacquiao’s injury in addition to the affirmations that he was fine is sufficient for this case to go forward.

While the question of disclosing an athlete’s injury is a debatable question, Plaintiffs cited the NFL’s policy of injury reports which discloses the nature and reason a player does not practice in the week prior to the game.  It notes this as an example of an affirmative

Daniel Petrocelli represented the defendants except the Mayweather defendants.  He argued that there are reasons why an athlete’s private health information is not disclosed.  First, there is a right to privacy issue regarding health issues.  Second, there should not be an expectation to know an up-to-date status of an athlete’s physical condition.  Finally, its common knowledge that boxers do fight with injuries.

The Court questioned Petrocelli if whether there are cases where there are material misrepresentations or omissions that give rise to a consumer claim.  But, Petrocelli argued that the cases are segmented between off the field business cases versus athletic case.  He argued Charpentier was based on the misrepresentation of the business aspect of sport and differed from Pacquiao’s shoulder.  He claimed that the case was extrinsic to the case and this was where the line can be drawn.  He gave the example of an announcement that a team had signed LeBron James and consumers made purchases based on the representation but in actuality it was another individual, not the famous basketball player.  In that instance, would there be an issue regarding a material misrepresentation.

While the Court did not side with either about the ultimate question of the veracity of the case, it did question Petrocelli if there were material facts about the omission of Pacquiao’s injury with respect to whether or not consumers were defrauded.

Mark Tratos, the attorney for Defendants representing Manny Pacquiao, Bob Arum, Todd duBoef, Top Rank, Inc. and HBO argued that the district court correctly dismissed the lawsuit arguing that the license approach applied.  They also claimed that there is no carve-out exception to the license approach where there is a fraudulent inducement to purchase an event.

Notably, the Defendants argued an alternative scenario in which Pacquiao was cleared by the Nevada State Athletic Commission which would relieve any liability on behalf of the defendants since a third party allowed the fight to occur.  This would place some level of liability on the commission.

During oral arguments, Tratos argued a floodgates of litigation scenario if there is a duty of a fighter to disclose an opponent injury.  The implication here would be that it would be implausible for a fighter to know whether or not there is a pre-fight injury of an opponent.  But there would be hundreds of lawsuits filed if there was an affirmative duty for a fighter to know another’s injury.

Payout Perspective:

One can expect an opinion in this case later this year.  If the court were to side with Plaintiffs, it would go back to the district court and continue as the lawsuit was dismissed just at the pleading stage.  If it sides with the defendants, the case would likely go away.  While most from the outside would see this as an easy case to decide in favor of the defendants, it brings up interesting theories with respect to consumer fraud.

Plaintiffs claim that there are material facts that would overcome a motion to dismiss the case purely on the filed lawsuit.  This is the initial goal of the Plaintiffs. Will this actual happen?  It would be surprising.  The Court seemed to wrestle with the necessity of disclosing an athlete’s injury prior to an event.  While Plaintiffs attempt to carve out the analytical argument that Pacquiao’s omission of disclosing the injury to generate sales as a business reason which would buttress its fraud claim, defendants argue that this is purely athletic strategy.  Defendants note that consumers are only entitled to watch an event and cannot dictate if its exciting or not.  It stresses that Pacquiao fought all 12 rounds and even won certain rounds based on the scorecards.  The cases argued before the court are carved out between a license approach (fans entitled to watch an event and nothing more) and those which follow the Los Angeles Rams case (Charpentier) where the court allowed a fraud claim when the Rams misrepresented that it would not move but did.  It does seem that the case will be decided upon whether there is a belief that there are material facts to determine whether the defendants had a duty to disclose the alleged injury.

The Court will be setting a new precedent when it decides this case as it will guide future lawsuits where sports fans feel duped by sports teams and/or events.

MMA Payout Year in Review: No. 8 – Golden Boy promotes first MMA event

December 27, 2018

Golden Boy Boxing made its debut promoting mixed martial arts this past November with a card in Inglewood, California.  The event was headlined by Tito Ortiz taking on Chuck Liddell.

The event was centered around the main event which was a farce to begin with as it was clear that Liddell was in no shape to fight.  The California State Athletic Commission, the one that issued a license to Jon Jones, provided Liddell with the license to fight Ortiz.  Based on the looks of Liddell, the 48-year-old was in no shape to fight, yet, CSAC granted him the opportunity.  To no surprise, Ortiz put Liddell out of his misery in the first round.

Maybe the only good thing that came out of the event was the UFC signing Deron Winn. The 5’7 205-pound Winn earned a victory over former UFC light heavyweight Tom Lawlor.

The pre-fight press conference was one of the worst showings to promote an event as Oscar De La Hoya appeared to be preoccupied with something else.

De La Hoya hopes to be a disrupter in the world of MMA and become an alternative to the UFC as he took aim straight at White.  The head of the UFC went right after the Golden Boy and even included salary and PPV specifics in a piece authored by Yahoo! Sports Kevin Iole.

For his troubles, Liddell made $250,000 while Ortiz earned $200,000.  The rest of the payouts, attendance and gate from the event are below.

11-24-18 GB MMA Payouts by on Scribd

11-24-18 GB MMA Box Office by on Scribd

The PPV was originally priced at $49.99 but was reduced by $10.00 to $39.99.  According to multiple reports, it was estimated at 40,000 PPV buys and as low as 30,000 PPV buys.

Payout Perspective:

Despite the low PPV numbers, Golden Boy professes to continue promoting MMA events.  While the competition may be beneficial for fighters, I’m not sure its debut was something to redo.  If it can be a place for entertaining fighters that no longer want to be in the UFC or Bellator, there could be a place in for it in the MMA stratosphere.  The question will be if Oscar De La Hoya will be engaged enough with this venture to ensure that he develops a quality product rather than attempting to “hot shot” events with something like Ortiz-Liddell.

DAZN signs Canelo to richest contract in sports

October 17, 2018

Canelo Alvarez has signed a 5-year, 11 fight deal worth $365 million with new streaming service DAZN according to ESPN.  The deal begins with Alvarez’s December fight against Rocky Fieldinng.

The deal is the richest athlete contract in sports history.  According to the ESPN story, HBO had the right of first negotiation and a “last-look” provision for Alvarez’s December fight and it made an offer for an HBO PPV event but decided not to match DAZN’s offer.

Alvarez fought Gennady Golovkin this past September on PPV.  It was his last fight under his promotional agreement with Golden Boy Boxing.  The event drew 1.1 million viewers for at a suggested PPV price point of $84.95.  DAZN’s streaming service is $9.99 per month and offers boxing as well as Bellator MMA.  It started its service in North America this past September featuring an Anthony Joshua fight.

Payout Perspective:

Perhaps following PBC’s strategy of paying up front in hopes of earning money in the end, DAZN has made a huge investment in Canelo Alvarez.  Arguably, he’s the only PPV draw in boxing since Manny Pacquiao and Floyd Mayweather.  Signing with the streaming service marks another sign of the shift of how consumers watch sports.  The question will be how DAZN will be able to recoup on its investment and how soon.

Canelo-GGG II draws approximately 1.1M PPV buys

September 25, 2018

Canelo-GGG II on September 15th drew approximately 1.1 million PPV buys per a report by ESPN which probed multiple industry sources regarding the buy rate.  The report would mean that the rematch fell short of the original fight between the two.

With a suggested retail price of $84.95, the event generated at least $94 million in the United States for the HBO PPV telecast.  The first fight between the two drew 1.3 million buys.  The rematch generated more revenue since the price point was higher.

Golden Boy, the promoters for the event, stated they would not release its official buy rate information but indicated between the gate, PPV buys and digital sales, it did better than their first bout.  The live gate at the T-Mobile Arena drew 423,473,500 from the sale of 16,732 tickets.

Payout Perspective:

The ESPN report notes that streaming PPV increased since the last fight so that may attribute to the low PPV rate.  Regardless of being 1.1 or 1.3, the fight produced and will likely garner a trilogy.

Canelo-GGG II purses: Canelo $5M, GGG $4M

September 14, 2018

The Nevada Athletic Commission have disclosed the purses for this Saturday’s long-awaited rematch between Canelo Alvarez and Gennady Golovkin.

Canelo will make a disclosed $5 million to show while GGG is guaranteed $4million.  It is anticipated that both will make much more than the disclosed amounts based on contractual agreements which likely includes a cut of the PPV buys.

Corrected. I had the payouts from last year.  Here are the undercard payouts per Kevin Iole


Notably, Chocolatito Gonzales makes his return and will make $200,000 to face Moises Fuentes.  Jaime Muniga will make $250,000 to defend his WBO Super Welterweight Title.

Payout Perspective:

The reported payouts for the main event are almost the same from their last fight.  The reported guarantees show that negotiations for the rematch helped a little but its not a 50-50 split.  Perhaps GGG made up for it the non-disclosed payouts but we may not know until the PPV buys are all tabulated.

State appeals court overturns $8.5 million judgment against Canelo

September 14, 2018

A state appeal court in Miami has overturned a trial court ruling which found in favor of Canelo Alvarez’s former manager and ordered the boxer pay $8.5 million.  The Florida District Court of Appeals for Miami-Dade County set aside the judgment.

The appellate court decision filed two days prior to Alvarez’s big showdown against Gennady Golovkin in Vegas stated that the jury verdict awarding promoter Felix “Tutico” Zabala Jr of All Star Boxing $8.5 million was unjust enrichment, speculative and not supported by substantial competent evidence.  While the judgment was vacated, it did state that Alvarez have to compensate Zabala and ruled that the trial court determine the judgment.

Zabala brought the lawsuit against Alvarez and Golden Boy Promotions stating that Canelo signed a 4 year promotional deal and that Golden Boy took the fighter from the promotion.  Golden Boy was dismissed from the lawsuit prior to the trial which took place in June 2016.  A jury awarded the $8.5 million judgment plus 4.75% annual interest.  Alvarez filed an appeal.

H/t: Dan Rafael

Payout Perspective:

Interesting timing of the decision considering Canelo fights on Saturday.  Dependent on the trial court rendering a decision on the judgment, All Star Boxing may appeal the latest decision as the court has taken the decision out of the hands of the jury and installed its own ruling.  There are times when a court believes that he the judgment does not match the evidence, but that would seemingly undercut the rationale behind having a jury as a trier of fact.

GGG-Canelo 2 will be available in movie theaters

August 29, 2018

Gennady Golovkin and Canelo Alvarez are set for their rematch on September 15th and not only will you have the choice of purchasing the event in PPV, you can also attend the card at your local movie theatre.

Dan Rafael of ESPN reports that the fight will be available in more than 450 movie theaters across the country.  Golden Boy Promotions and Fathom Events made the announcement this week.

The price point is usually around $20 for the event.  Fathom Events has collaborated with promotions in the past to show Boxing PPVs.

Looking back at the first fight between the two, Fathom really put together an interesting trailer.

For the rematch, Fathom does it again.

Payout Perspective:

Expect this event to do as well as their first fight.  Fueled by the animosity due to Canelo’s suspension, we can see these two go toe-to-toe for another 12 rounds.

Golden Boy inks deal to air fights on Facebook Watch

July 6, 2018

Earlier this week Golden Boy Promotions and Facebook announced a deal in which fights will be streamed on the social media platform in another move toward sports content online.

According to ESPN, the deal will have a minimum of five fight cards and will be free on the Facebook Watch page in the U.S. and globally on the Golden Boy Promotions’ Facebook Watch page.

Oscar De La Hoya praised the deal as it brings his fighters to “the intersection of live sports mega-casting and ultimate fan engagement.”

Main Events Promotions will also work with Golden Boy in putting together events on the series.

The first card takes place on August 11th.

Payout Perspective:

The deal is another notch for Facebook Watch as it carries Professional Fighters’ League Prelim matches on its channel.  The prize jewel of the platform is its Wednesday afternoon MLB games in which it is the only telecast for the game (not even regional telecasts air the game).  The Golden Boy deal will aid the content for Facebook.  It will be interesting to see if this spreads the Golden Boy stable thin as it has an existing agreement with ESPN.  The content will help with brand visibility as the fights will be free for anyone with wifi use and a Facebook account.

Chuck-Tito sign with Golden Boy MMA for fight

July 2, 2018

Chuck Liddell and Tito Ortiz have signed promotional agreements with Oscar De La Hoya’s Golden Boy Promotions to fight 12 years after their last match in the UFC in December 2006.

ESPN reports the signed deal via De La Hoya.  There is no date, location or timetable for the fight according to the story.  But, the signing of the two former UFC stars indicates that a fight may be happening.

This past May, De La Hoya met with Liddell to discuss a possible comeback for the fighter.

Payout Perspective:

This announcement seemingly jumpstarts De La Hoya’s foray into the world of MMA promotion.  While Liddell-Ortiz was a great rivalry 20 years ago, will it have a realistic competitiveness in present day?  Both are way past their prime and there could be legitimate health concerns for both fighters.  It is a spectacle, but is it the right one?  People do like nostalgia, but I’m not sure this fight is the right one.  We will see if this fight goes forward and what kind of business it does.

De La Hoya looking to start MMA promotion

May 6, 2018

Oscar De La Hoya may be competing with Dana White soon as he revealed plans that he may promote mixed martial arts in the future.

De La Hoya met with Chuck Liddell last week to discuss the possibility of fighting in a new promotion spearheaded by the former Olympian.  De La Hoya and Liddell spoke with TMZ about the possibility.  The two floated the idea that Liddell will face Tito Ortiz as a comeback fight.

Liddell last fought in June 2010, a loss to Rich Franklin at UFC 115.

Payout Perspective:

It’s clear that White is getting into the boxing business.  But, De La Hoya’s announcement that he’s interested is certainly something to keep an eye on in 2018.  It would take a financial backing to do something like this.  I don’t think that a Liddell-Ortiz fight will sustain a promotion.  It would also take a television and sponsorship deal for this undertaking to be successful.

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