Plaintiffs get pre-discovery win in UFC antitrust lawsuit

October 1, 2015

As discovery begins in the UFC antitrust lawsuit brought by former fighters, plaintiffs attained a favorable ruling Wednesday as the court will allow one of the plaintiffs’ attorney, Rob Maysey, to access documents in discovery.  The UFC identified Maysey as a “competitor” and wanted him precluded from access to some of the company’s confidential documents in discovery.

Plaintiff filed a protective order to which UFC attempted to strike.  Magistrate Judge Peggy Leen ruled that the UFC could not keep plaintiffs’ attorney Rob Maysey from certain documents it would turn over in the discovery process.

Zuffa attorneys argued that Maysey was a competitor as part of a Mixed Martial Arts Fighters Association (“MMAFA”) as he may seek group licensing on behalf of UFC fighters.  Maysey stated in a sworn declaration that “he does not own the MMAFA,” nor head the organization.

Maysey stated in his declaration that he was the “principal client liaison” to the fighters. Notably, he did not indicate he was trial counsel.  In the end, it appears that the distinction made no difference to the Magistrate.

Judge Leen did not wall off Maysey from any part of the discovery process.  There is no official opinion from the magistrate (the magistrate sometimes serves as a discovery ‘referee’ as opposed to the trial court judge in federal cases) as to the rationale behind the decision.

The parties have engaged in discussions related to the exchange of documents between the parties.  Obviously, the key information is held by Zuffa.  From the exchange of information, it sounds like a voluminous amount of documents will be handed over to plaintiffs’ encompassing an expansive list of areas.

Specifically, based on a back and forth of letters between the parties’ attorneys, the main argument was the retention and eventual disclosure of documents possess by Zuffa from 2000 to the present.  Zuffa’s attorneys proposed a timeframe of 2010 to the present.  Thus, there was a dispute over 10 years worth of documents.  There was also a question over the preservation of emails as in the “parent/child” format or not.  Yes, they want to look at a chain of emails and their response…and that response…and the response after that…..

As Bloody Elbow lists, the information that plaintiffs seek relate to financial documents, fight contracts, venue contract files, sponsor contract files, merchant contract files, list of TV contracts, 3rd party/analyst consultant reports, FTC Strikeforce documents and list of litigations/arbitrations.

The document production will be done via some form of electronic discovery I presume.  To have the discovery performed via hand would be burdensome, unwieldly, time-consuming and downright difficult.

Thus, while discovery is starting, there is a proposal to have two phases to the production.  But before those two phases, there is a likely document compilation that is happening or already happened.  Basically, Zuffa has to upload documents into a database and run key word searches to find information relevant to what they are being asked.  The company isn’t just going to unload a ton of its private business documents without looking through them.  Moreover, it does not want to give plaintiffs more than it is asking for in their requests.

Thus, Zuffa will not just hand over the documents without review of them.  Obviously, Zuffa attorneys and/or their personnel will ensure that the documents are responsive and do not reveal confidential, private and/or attorney-client/work product.  They may produce docs but redact sections of them for an assortment of reasons.

From a practical standpoint, we presume there will need to be time taken for all of the documents to be amassed and scanned in to some sort of system (e.g., Concordance, KrollOnTrack, etc.).  There will be some third party vendor that will create a database for the parties.  Hence, providing documents in phases may be more a necessity than a proposal.

At that point, they can transfer them over to the plaintiffs who one assumes will have the same capabilities (i.e., databases) to review the documents and code them for responsiveness as well as make other types of notes.  One would assume that they will code them based on subject matter, etc.  This will  help later on as when they go to deposition, they will run key word searches for relevant material and pull them out without digging around for hours.

In all likelihood, we will see additional back and forth related to the discovery requests.

All of the written discovery and production of documents will occur before any deposition for the obvious reason that attorneys will want to have all of the documents before them before deposing a witness.  You only get one “bite of the apple” to depose someone (only in the most extreme circumstances can you get two shots to depose a witness).  Expect the depositions of some of the key Zuffa executives such as Dana White and Lorenzo Fertitta as well as the fighters to last days.

Payout Perspective:

While many people are very excited for the news of the UFC revealing their financials, I would not expect a “smoking gun” document or an “a ha” moment any time soon.  Assuming there is information that Zuffa believes should remain confidential, and that plaintiffs believe they should have, there will be extensive “meet and confers” and even motions before the magistrate.  Get ready and wait.

UFC announces details of drug testing policy

June 3, 2015

The UFC announced details of its new drug policy at a press conference Wednesday.  The United States Anti-Doping Agency will take the reins as a third-party administrator for the UFC policy.

The new rules will take effect July 1, 2015.

Among the new shift in policy is that contracted UFC fighters will be subject to year-round in-and out-of-competition drug testing which includes blood and urine testing regardless of where they are located and whether or not they are scheduled to fight or not.

Jeff Novitsky, Lawrence Epstein, Lorenzo Fertitta and Dana White were at the press conference to announce the new policy.  USADA was represented by Travis Tygart and former Olympian Edwin Moses.

USADA will take the lead on administering the testing of UFC fighters.  The UFC will have no input on the testing process.

MMA Fighting provides a breakdown of the penalties (which were shown as slides at the press conference) which are defined by the WADA code.

Non-specified substances which include anabolic steroids, growth hormones, peptides, blood doping drugs and methods:

1st offense – 2 years (possibility of 4 years for “aggravating circumstances”)

2nd offense – Double the sanction for the 1st offense (possible of 8 years max)

3rd offense – Double the sanction for the 2nd offense (possible of 16 years max)

Specified substances which include marijuana, cocaine, other stimulants and glucocorticosteroids (tested for in-competition only):

1st offense – 1 year (with possibility of 3 total for “aggravating circumstances”)

2nd offense – Double the sanction for the 1st offense

3rd offense – Double the sanction for the 2nd offense

Novitsky, the UFC’s Vice President of Athlete Health and Performance indicated that the UFC is not a signatory to the World Anti-Doping Code and is not subject to the Court of Arbitration for Sport (CAS) to appeal any decision or finding by USADA.  Novitsky did not indicate the UFC’s appellate process although you might assume that it is through the American Arbitration Association.

Payout Perspective:

The overarching question that many will ask is whether or not the new drug policy circumvents the independent contractor status of fighters.  The key buzz words that would make anyone take notice is “unannounced” and “year-round” drug testing.  The new policy would give Zuffa (and thereby USADA) the right to make fighters provide them of their whereabouts whether or not they have a fight schedule or not.

Certainly, there are several issues that still stand out regarding the implementation of the drug testing policy.  The question of whether commissions and athletic regulatory bodies would uphold suspensions of UFC contracted fighters is an issue.  What happens when there is a conflict of suspensions?  How will the policy be enforced when the UFC goes overseas?  Since it is not subject to CAS, what will an international appeals process look like?  Also, would competing MMA organizations follow suit in implementation of drug testing policies?

Will any fighter seek to oppose this new policy?  While the move is a step in the right direction to ensure the integrity of the sport, fighters appear to be giving up a lot of their privacy.

There is a lot to unbundle by July 1st.

Kovalev-Stevenson will not happen this year

April 17, 2015

While we’ve seen Al Haymon’s Premier Boxing Champions come out to mainly positive reviews as his promotion is seemingly everywhere, there is still acrimony between rival promoters due to network affiliations.  Take the ongoing struggle between representatives for Adonis Stevenson and Sergey Kovalev.  Recently, Kovalev’s promoter withdrew from its purse bid for a chance to fight Stevenson later this year.

The two fighters are considered the best light heavyweights out there.  A fight between the two would unify the alphabet soup of boxing titles.  Kovalev is the IBF-WBA-WBO champion and Stevenson holds the WBC title.  The fight was thought to occur sometime in the “fourth quarter” of 2015 after a mandatory title defense by Kovalev sometime this summer and another by Stevenson.

Kevin Iole of Yahoo! Sports reported earlier this week that Kathy Duva, CEO of Main Events, and the promoter for Kovalev decided against a WBC-mandated purse bid.  Previously, Duva requested a Kovalev-Stevenson showdown and a 50-50 purse split.  But, Kovalev is an HBO exclusive fighter which posed an issue.  Haymon backs Stevenson and you might infer he has the money to make a fight which could draw as much, if not more than a Kovalev fight.

Stevenson’s camp indicated he would entertain the thought of fighting on HBO only if Main Events won the purse bid.  But, that would be only if Main Events would be the highest bidder.

In a letter to Kathy Duva, Stevenson’s manager, Yvon Michel claims that Kovalev must have renewed an agreement with HBO based on alleged statements from Duva that Kovalvev was near the expiration of his HBO contract.  Also, in his letter to Main Events, Michel indicated that Stevenson’s fight on CBS drew 1.7 million viewers and peaking at 1.85 million.  This fact, Michel claimed, showed that Stevenson was more popular than Kovalev since none of his HBO fights have ever garnered that amount of viewers.

Of course, CBS is available in more homes than the premium cable subscription network of HBO.

In addition, any fight Stevenson participates in, his management group wants to hold in the fighter’s native Quebec where the group has made monetary guarantees based on his popularity.

Duva has responded to the allegations citing there are still many uncertainties in putting down a purse bid at this time.

Payout Perspective:

If you are looking for another rivalry in boxing where the two sides cannot agree to terms for a fight, you may look to this one. The two promoters have had a bitter relationship stemming from the attempts to make this fight.  Last year, Main Events sued Stevenson, Michel, Al Haymon among others claiming that Kovalev had a deal to fight Stevenson but then the deal was nixed after Stevenson signed on with Al Haymon as his advisor.  The lawsuit was later dismissed but it appears that the bad feelings remain. We will see if this fight will get done quicker than the one occurring on May 2nd.

14 for 14: No. 14 Gil re-signs with the UFC

December 25, 2014

Back in February, Gilbert Melendez re-signed with the UFC after it was initially reported that he had agreed to a deal with Bellator.  But, the UFC exercised its “right to match” in Gil’s contract.  The move showed a newfound Bellator strategy to become more competitive with the UFC

Melendez became a free agent after his contract with Zuffa ended with his fight against Diego Sanchez at UFC 166.  Melendez was given offers from Bellator and the WSOF.  It was thought that Bellator had secured the lightweight but the UFC agreed to match the terms of the Bellator deal.  Melendez also received a title shot for the lightweight title and became a coach on TUF opposite Anthony Pettis.

Via MMA Fighting:

Per the terms of the agreement, according to several sources, Melendez’s deal guarantees that at least 75 percent of the 31-year-old’s fights will be contested on pay-per-view moving forward. Additionally, income earned from Melendez’s contracted pay-per-view points will kick in at a lower minimum buy rate than for any contract in UFC history, meaning Melendez will still earn pay-per-view point earnings on an event that performs poorly at the box office.

Payout Perspective:

The Gil deal makes the list because it revealed some key points that his representation was able to get on his behalf.  This drew the envy, of some fighters.  Shortly after Gil’s deal, Nate Diaz went on a twitter rant about his unhappiness with his UFC contract and asked to be released.  Gil’s deal was a rare example of fighter leverage and the invocation of the “right to match” clause.  We recall the problems occurring with this in the Eddie Alvarez legal battle.  Here, there were no problems, and in fact, Gil made out well.  Of course, his next fight was a loss to Anthony Pettis at UFC 181.  He made a base of $200,000 and should receive PPV points from the PPV buys.

With the recent UFC lawsuit filings in San Jose, new uniform deal, potential new sponsors in the UFC and the rise of Bellator, it will be interesting to see if/when another top free agent comes up, how the UFC deals with the negotiations.

Pacquiao-Top Rank renew contract

May 22, 2014

ESPN reports that Manny Pacquiao has signed a two year extension with Top Rank Boxing.  The deal will go through December 2016 and likely ends talk of a possible Pacquiao-Mayweather fight.

Top Rank Promoter Bob Arum indicated that the financial terms were not disclosed due to a confidentiality agreement.  The deal also extends MP Promotions which co-promotes Pacquiao along with Top Rank.  Mayweather is halfway through a six fight deal with Showtime.

Payout Perspective:

The new deal apparently closes the door on the biggest fight in boxing that never happened.  Let’s face it, the fight everyone wanted to see went away years ago.  Pacquiao will be 38 when this contract ends and it would be prudent for him to retire at that point.  Mayweather has expressed interest to walk away as well after his Showtime contract is up.  While Arum has stated that there still may be a chance for a Pacquiao-Mayweather fight, its unlikely we would want to see it at the end of their respective careers.

Alvarez contract states Chandler rematch next despite Brooks win

May 19, 2014

The MMA Report reports that Eddie Alvarez’s contract has him specifically fighting Michael Chandler.  The apparent clause in the contract would leave Bellator without the opportunity for Alvarez to fight interim champion Will Brooks.

You will recall that Bellator and Alvarez were embroiled in a contentious legal battle which was finally settled.  Although terms of the settlement were not revealed to the public, it appears that Alvarez specifically had set his sights on Michael Chandler.

In the post-Bellator 120 press conference, Bellator CEO Bjorn Rebney stated that Alvarez’s next fight will be on PPV although the issue of Alvarez’s next opponent may be a factor prior to what platform the fight will be shown.

Payout Perspective:

Here we go again with contract issues.  It’s hard to comment on a contract without first seeing it but from what we know from The MMA Report’s report it seems like Alvarez and his camp believed that Michael Chandler was the only opponent for Alvarez.  One would think to ensure that Alvarez fought the champion of the division, his contract would not specifically name an individual, but just that he would face the champion in the lightweight division.  With the Will Brooks upset, Alvarez now is contractually obligated to face Chandler in what would be an entertaining, yet meaningless fight for Bellator’s lightweight division.  Of course, Bellator could persuade Alvarez to take on Brooks and unify the titles.  Alvarez, in one last shot at the company, could decline the offer and take on Chandler.

The Chandler fight still seems like the one that would draw more PPV buys (assuming it’s on PPV), but the Brooks fight would make more sense since there are now two titleholders at 155 and Bellator would probably want to unify the titles as soon as possible.  In the end, Alvarez’s advisers will probably go with the fight that provides the most money for Alvarez.

UPDATE 5/20/14:  In accompanying this post, you should also read Will Brooks recent twitter timeline and John Nash’s piece on Bellator contracts on BE.  I would suspect that Alvarez’s negotiated settlement of his lawsuit included that his contract with Bellator not have a “Champions” clause which may cause him to continue to stay with the company.

CSAC rules Rousey released from fight contract

April 4, 2014

Sherdog’s Mike Whitman first reported that the California State Athletic Commission issued its ruling in the arbitration of Ronda Rousey and Fight Tribe Management.  The commission ruled that Rousey is released from her fight contract but left the commercial aspect of the contract to the court.

Executive Director of the CSAC, Andy Foster heard the arbitration between the parties last week over the dispute between the UFC women’s bantamweight champion and her manager Darin Harvey.  Originally, Harvey had petitioned the Los Angeles Superior Court for the issue regarding the representation agreement between the parties to be decided via arbitration.  However Rousey’s legal representatives claimed that the contract should be determined by the CSAC.  The arbitration was held on March 28 with Foster serving as the arbitrator with the assistance of two attorneys from the AGs office.

Harvey claimed that the representation agreement was drafted as a talent contract and not a fighter-manager contract.  Regardless, Rousey’s attorneys argued that the representation agreement was void under California law.

The facts stated that Rousey and Harvey entered into a 3 year agreement starting on May 15, 2012 and signed on January 29, 2013.  Harvey would receive 10% of Rousey’s income generated from professional fighting, modeling, acting and other commercial activities.  However, the CSAC determined that the agreement “was not prepared on the required, pre-approved forms, nor did both parties appear before the commission at the same time in order to receive the commission’s approval, thereby invalidating the agreement as a fighter-manager contract in California.” (quote via Sherdog)  The CSAC ruled that Harvey was not a “manager” as defined under Business and Professions Code section 18628

The CSAC left open the issue as to the “commercial activities” that were incidental to “fighting activities” to the court.  So, it’s likely that we have not heard the last of this dispute.

Payout Perspective:

MMA Payout will have more on this decision as it becomes available.  The initial read from Sherdog’s report reflects the fact that this contract dispute is not over.  It’s interesting to note  that based on the information available, Harvey sought his manager fee from “commercial activities” which may have been a conflict with Rousey’s agents at William Morris. We note that Rousey signed Fight Tribe’s agreement on January 29, 2013 and then signed on with William Morris in late February 2013.  Whether this was coordinated by Harvey and/or the relationship between Fight Tribe and William Morris became strained over time is an issue that may play out in court proceedings.

Rousey’s management requests arbitration over undisclosed contract issue

March 13, 2014

MMA Payout has obtained documents which shows that Ronda Rousey and her management team are in a dispute over its representation of the UFC women’s bantamweight champion.  Darin Harvey, President of Fight Tribe Management filed a Petition to Compel Arbitration in LA Superior Court last Friday against Rousey.

The documents filed by Fight Tribe Management, LLC request that the Court Compel Arbitration and seek that the briefing in this matter be sealed.  If the Court grants the Application to seal, the documents will unlikely be available to the public.  In his Declaration in Support of the “Application to Seal Briefing,” Darin Harvey states that the terms of the Representation Agreement with Rousey are confidential and cites two clauses in their agreement which support his request.  He indicates the contract states financial disclosure of their agreement is to remain confidential “without the prior written consent of the other Party” unless it is required by law.  It further cites a clause indicating that any dispute over the agreement should also be confidential in its attempt to resolve it.

Sherdog’s Mike Whitman spoke with Rousey’s legal representation in this matter and indicated that there may be an issue as to whether a private arbitrator can resolve the matter or whether the California State Athletic Commission should be in charge of resolving this dispute.  Rousey’s attorney, Steven Bash indicated that the dispute is governed by the California State Athletic Commission and the California Business and Professions Code.  Bash stated that he has yet to file a response and could not give specifics on the nature of what it would be.

Payout Perspective:

This will be an interesting legal fight that we will follow.  Rousey’s lawyer states that the dispute should be resolved under the rules of the California State Athletic Commission while Fight Tribe Management has filed to compel arbitration in Superior Court.  We might see an initial dispute over that procedural issue.  There are rules for managers and fighters under the CSAC but whether they apply to this situation is not known due to the confidentiality of the dispute at this point.

There are arbitration provisions under Article 3, §227 of the California Code of Regulations which relate to contractual issues.  These relate to boxers but we might assume that MMA fighters would fall under this provision.  However, it does not look as though there are rules which would seal briefing (unless the parties agree pursuant to the terms in the agreement in dispute).  The rules state that the parties would have to furnish the contracts that are in dispute at the arbitration hearing.

MMA Payout will keep you posted.

Gilbert Melendez signs with Bellator, UFC maintains matching rights

February 14, 2014

We wrote yesterday about the rocky contract negotiations between Gilbert Melendez (22-3, 1-1 UFC) and the UFC.  Today, Bellator shocked the MMA landscape by announcing a multi-fight deal with one of the best lightweights in the world in Melendez, though the UFC currently maintains matching rights.



Gilbert Melendez sits atop the UFC’s lightweight division. With victories over Josh Thomson, Diego Sanchez, Shinya Aoki and Jorge Masvidal, “El Nino” is ready for a new crop of challengers as the Santa Ana native has agreed to a multi-fight, multi-year deal structure with Bellator that can pit Melendez against some of MMA’s best, including Eddie Alvarez, Michael Chandler, Will Brooks, Dave Jansen and a host of top lightweights from around the world.
“The moment Gil was legally able to explore the free agent market, Gil’s management team reached out to me and we began figuring out how to bring Gil to Bellator,” said Bellator Chairman & CEO Bjorn Rebney. “It’s no secret that I’ve been a big “El Nino” fan for many years. Gil was one of the first fighters I tried to sign when I launched Bellator back in 2008, and he’s grown and developed into one of the best and most exciting lightweights on earth.  Gil has a vision for what he wants to accomplish both inside and outside the cage and we can help make his vision a reality.  We are in the business of developing and showcasing the greatest fighters on earth. That’s what we intend to do here with Gil and it’s what we’ll continue to do in the future.”
The UFC currently holds matching rights on Melendez.


Payout Perspective:

Bellator’s announcement today was pretty shocking and caught many in the MMA landscape off-guard.  Nevertheless, it’s a key strategic move for Melendez, who is trying to maximize his market value.  This is a classic example of pinning bidder A versus bidder B, and illustrates the importance of having more than just one key player in the MMA landscape for fighters.  Whether Melendez ends up in Bellator or UFC matches Bellator’s pay and signs back with the promotion, it will be a win/win for Melendez in the short run.

In the long run, for a fighter who is as exciting as Melendez, you risk making a choice that may seem near-sighted, and could miss out on potential fight of the night or performance bonuses in addition to base pay, which could end up surpassing Bellator’s proposed pay. Although the exact numbers of the deal are not available at this time, MMAPayout will report them as they become available.

Winning a title and getting a push from the UFC is invaluable for a fighter, but Bellator will do their best to match the same benefits as they tried to do with with Eddie Alvarez, such as offering exposure on Spike TV, featured in a potential PPV down the line against either Eddie Alvarez or Mike Chandler, two of the best lightweights in the world, and certainly other Viacom opportunities.

The ball is now in the UFC’s court, and it’s up to them to determine if they want to retain Melendez and match what Bellator is offering or let him walk away to a competitor.

GSP announces indefinite leave from UFC

December 13, 2013

Earlier today, during a last minute scheduled press conference call from Montreal, Georges St-Pierre announced that he is going to take an indefinite leave of absence from the UFC and vacate his welterweight title in order to deal with personal issues.

GSP opened up the conference call with the following statement,

I’ve been fighting a very long time at a high level. It’s a lot of pressure, a lot of criticism, and I’ve decided I need to take time off. I know UFC is a business, and it can’t wait for one person. They have to keep things rolling, so I’ve vacated my title out of respect to the other competitors.

No timetable was given on when GSP would return, or if he would return at all. In his absence, the UFC has scheduled Johny Hendricks vs Robbie Lawler for the vacated welterweight title on March 15, 2014 as the main event for UFC 171, which will take place at the American Airlines Center in Dallas, TX.


Payout Perspective:

We have no idea if GSP will ever be back, and no commitment was made one way or the other, but Dana White pushed the proverbial promoter talk and stated he believed GSP would be back in the Octagon. For years and years, Dana White has trumpeted GSP as the number one draw the UFC has had in its stable, even when Brock Lesnar was around.

Now that he will be gone for at least all of 2014 and considering that the UFC’s stable of champs are ailing from injuries (Cain Velasquez, Jon Jones, Anthony Pettis, Dominick Cruz) and will be out a significant portion of 2014, the impact to the bottom line next year will be noticeable. On the positive side, for fighters such as Jon Jones, Ronda Rousey, and Anderson Silva, the bargaining chips and assumed leverage has never been more on their favor then it is now.

In 2013, after 12 events (UFC 156 – UFC 166), the UFC has averaged an estimated 430K PPV buys.  Without GSP headlining UFC 158 nor UFC 167, the highest PPV buy total would be in the 550,000 range. The average PPV buy number would also dip into the upper 300K range, which would equate close to a loss of roughly 800,000 – 1M PPV buys.

Another interesting note from the presser was Dana White’s comment about GSP’s contract status with the UFC during his leave.  White stated that GSP’s contract would be “frozen” while he is on leave and would continue whenever he returns.  Without any timelines set by GSP and considering that he vacated his belt, it would be interesting to see what parts of his contract are triggered by this scenario, which is one that the UFC has not had to exercise at all in recent years.

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