UFC announces changes to UFC Anti-Doping Policy

November 26, 2019

On Monday, the UFC announced changes to its UFC Anti-Doping Policy as it looks to address issues with contaminated samples.  In addition, it announced Thorne as a certified supplement maker.

The new policy also advises that athletes use only supplements that have been certified by USADA’s approved list of five different certification agencies.  If an athlete tests positive and its proved that the offending substance came from one of the certified supplements, no sanctions will be given to the athlete.

Now, instances of banned substances being found in contaminated supplements will be treated as “atypical” provided the levels sit below the stated thresholds on the UFC prohibited list.  It also validates IV infusions/injections over 100 mL which are now only permitted if they are determined to be medically justified and within the standard of care by a licensed physician and administered by a licensed medical professional.

Also of note, they’ve added a rule in which USADA, in its sole discretion, may elect not to impose an “enhanced sanction” for an athlete that has multiple violations.  The pertinent language is that “USADA’s sole and unreviewable discretion it was unlikely that one or more of the Athlete’s violations was intentional and/or based upon the Athlete’s provision of significant Substantial Assistance or Fulle and Complete Cooperation as determined by USADA.”  The section is screengrabbed below:

Notably, this rule seems to help those like Jon Jones that have had multiple violations in which those violators, under the prior UFC Anti-Doping Policy would have had an immediate suspension (according to the rules) of 2-4 years (dependent on specified or non-specified substance) based upon a second violation.  Obviously, in the past, the finders of fact have mitigated suspensions based on a number of factors but the standard was doubled for at least a second violation.

There may also be a Brock Lesnar rule as now athletes must disclose if they have used the fertility drug, clomiphene, prior to signing a contract with the UFC.  The drug is sometimes used for “off label” purposes as a male fertility drug or for use post-cycle following anabolic steroid use.  It also addresses issues with low testosterone.

The new policy adjustments also spell out that athletes cannot return to compete or start to compete with the UFC until they have been available to testing for 6 months or 1 year after using clomiphene.

Payout Perspective:

The good news is that the updated policy changes seem to take into account issues it has had with its previous iteration of the UFC Anti-Doping Policy.  Most importantly, it addresses the issues with contaminated supplements and recognizes the issues that occur.  Of course, one would have thought there would have been this foresight originally.  Yet, with the Nate Diaz and Jon Jones issues, the UFC needed to recalibrate its policy and balance it with atypical findings.

The only problem is that time is still needed from the time an adverse finding is discovered to when a finding can be made by USADA.  There does not seem to be a policy regarding imminent or emergent circumstances where an athlete has a fight upcoming.

Thorne Research, Inc. is a dietary supplement maker out of Sandpoint, Idaho.  It’s been around since 1984 but is relatively small with only 54 employees.  According to Crunchbase, their estimated revenue range is between $10M-$50M.  In comparison, its competitors in its industry have estimated revenues of $105.3M (Xymogen)and $345M (Metagenics) respectively. It has gone through just one venture funding round with Japanese company Mitsui & Co. as its sole investor.  The new agreement with the UFC, should boost the profile of the company (you may recall it sponsored UFC 244’s Embedded series and was talked about during the lead up to Diaz-Masvidal).

One would hope that the changes to the policy continue to evolve in order to correct issues related to tainting while effectively policing the athletes for performance enhancing drugs.

Court dismisses Hunt’s last claim in lawsuit against Zuffa

November 23, 2019

Mark Hunt’s lawsuit against Zuffa has ended as a federal court in Nevada dismissed the remaining cause of action for claiming a violation of the covenant of good faith and fair dealing in contract.

The meat of Hunt’s lawsuit, which spanned 10 causes of action and included Brock Lesnar and Dana White was dismissed this past spring as the Ninth Circuit Court of Appeals affirmed the District Court ruling siding with the opinion of the trial court that Hunt’s claims lacked factual merit.

There was no further opinion on the dismissal of Hunt’s last claim.

Final Judgment by Jason Cruz on Scribd

Payout Perspective:

As we’ve analyzed Hunt’s lawsuit, it was apparent that while he may have had a viable claim, he could not prove damages for the claim.  Obviously, the need to have a viable, legal claim for damages is a part of winning in court.  And, Hunt just could not prove it.  His claims for loss were remote according to the court.  It does not necessarily mean that his claims that the UFC inability to prevent Lesnar from fighting while using an alleged PED didn’t harm Hunt, it just didn’t in a way which the New Zealander could prove in court.  Moreover, the court’s opinion focused on the fact that there was nothing unusual in which Lesnar harmed Hunt in the Octagon.  While this may sound odd, the court relies on prior case law where the standard for determining personal injuries outside the scope of the sport is premised upon whether the alleged injury was something related to the sport (e.g., a California court found it foreseeable that a baseball player could be injured by a pitcher throwing a baseball at a batter’s head).

It didn’t appear that Hunt’s lawyers put up much of a fight after 9 out of his 10 claims were dismissed.  Rather, it seemed that the lawsuit was disregarded after the appellate court sided with Zuffa.

Report: Ad buyers frustrated with lack of data from UFC on ESPN+, DAZN programming

November 19, 2019

According to a report from Sports Business Journal’s John Ourand advertisers are growing weary of the unknown viewership numbers that are watching online content such as the UFC on ESPN+.  The concern may lead to a demand from advertisers to provide solid numbers for specific program for direct-to-consumer platforms.

At a National Association of Broadcasters panel in New York Adam Schwartz, Horizon Media’s senior vice president and director of sports media noted that his company has pushed for specific numbers as to how many consumers are watching specific programming.  Notably Schwartz buys advertising packages for the likes of Geico, Sprint, Capital One, Burger King and Corona.

He noted that the UFC on ESPN + has been frustrating to decipher because rather than provide advertisers with actual viewership numbers, ESPN+ provides an overall number of subscribers.  According to the SBJ report from Schwartz’ appearance on the panel, there is a UFC sponsor (name not revealed) that entered into a deal with the company prior to the ESPN+ contract and was promised a specific number of viewers.

Additionally, DAZN has not provided concrete numbers for its MMA or Boxing events.  Schwartz cites these two as challenges for advertisers because they must make a monetary decision based on speculation.  Without concrete data, its hard to prove whether or not the advertising campaign was successful, influenced its target audience or was a bust.  Furthermore, it would be hard to convince your buyer of the bottom line if the specific program does not provide ratings that one might be able to assess.

Payout Perspective:

One of the questions that loomed when content moved to digital platforms was how would programming be tracked.  Television ratings are prevalent and are easy to access. Ad buyers are able to analyze the numbers of viewers watching and breaking down the demographics to determine how to target a specific audience.  As we have learned from this report, online content viewership of specific events is not released to even advertisers.  One might also believe this to be true of UFC PPV events.  While DAZN has noted it gained subscribers for big events, it does not disclose specifics.  Similarly, the UFC has not provided solid numbers unless it wants it to be known.  This may not be fair to the media.  But it would be frustrating for an ad buyer that cannot quantify its return on investment.

The panel did note that advertisers may seek to pay a premium for the specific numbers which might entice digital holders to provide them.  Of course, disclosing the information would make tracking the viewership patterns easier and the possibility that the media would get a hold of the information.

AEW revives Bash at The Beach, but WWE still owns similar trademark

November 18, 2019

All Elite Wrestling issued a press release on Monday announcing the reboot of the Bash at the Beach event which was made famous by WCW.  However, the trademark for the event name is facing an issue with trademark registration with the USPTO as an office action details issues with an existing mark.

Bash at the Beach will coincide with Chris Jericho’s second annual cruise from Miami, Florida in January.  On January 15, AEW’s television show on TNT, Dynamite will hold an event at the University of Miami with a “Bash at the Beach” themed episode and then continues with Jericho’s cruise through Jan. 20-24. The week’s following Dynamite episode will take place on the cruise.

The Bash at the Beach was registered by Cody Runnels and his attorneys on March 18, 2019.  The filing was premised upon Section 1B of the Trademark Act which notes that the mark will be used in commerce but had yet to be used.

The mark’s intended use is for:  Entertainment in the nature of wrestling contests; Entertainment services in the nature of a wrestling club, Entertainment services, namely, wrestling exhibits and performances by a professional wrestler and entertainer; Providing wrestling news and information via a global computer network.

On May 20, 2019, a non-final Office Action was issued by the Attorney Examiner citing its initial decision to refuse registration due to a likelihood of confusion with an existing mark which is owned by WWE.  The mark, The Bash, was registered on December 13, 2011 and is still an active mark according to the USPTO.  Notably, the other marks regarding WCW’s Bash at the Beach have been abandoned.

Despite the fact that The Bash and Bash at the Beach do not have the same words, the attorney is refusing registration at this point because of its likelihood to confuse consumers.  Per the Office Action, “the dominant portion of the registrant’s mark, “BASH” is the first and dominant term of the applied-for mark BASH AT THE BEACH.  The marks sound similar and have a similar meaning when viewed in the context of the wrestling services to which they relate.”  Thus, the conclusion that they share the same overall commercial impression.

Payout Perspective:

Even if Cody’s attorneys are able to overturn the decision and allow Bash at the Beach to be registered, one might expect the WWE to step in and oppose the registration.  The question will be whether AEW will be impacted prior to their event in January from using the name.

IBF rules that Pulev to get winner of Ruiz-Joshua

November 14, 2019

MMA Payout has learned that the IBF has ruled on the appeal of presumptive number one heavyweight contender Kubrat Pulev and determined that he will get the next shot at the title.  But that will happen after Ruiz fights Anthony Joshua.

Pulev filed an appeal to the IBF citing that he should be the one to fight Ruiz instead of a rematch against Joshua.  Ruiz upset Joshua this past June in New York and a rematch was set.  But, Pulev citing the fact that he should be next in line at the title, not a rematch with Ruiz, filed an appeal with the IBF in an attempt to force the fight.

Last month, Pulev’s attorneys attempted to obtain Ruiz’s contract in a lawsuit filed against Ruiz by Joshua’s representation forcing the rematch.  However, the Court denied the attempt citing procedural issues.  Notably, the appeal to the IBF was to have happened October 10th however MMA Payout was not made aware of the ruling from the IBF until today.

The ruling as conveyed to MMA Payout is as follows:

Based on the recommendation of the Appeal Panel, and after consultation with the Championships Committee under Rule 12.F., the IBF hereby orders:

  1. The bout between Andy Ruiz, Jr. and Anthony Joshua must take place on or before December 7, 2019.

  1. The winner of that bout shall fight Kubrat Pulev next, with no intervening bouts, in an IBF mandatory bout on or before May 31, 2020.

  1. Andy Ruiz, Jr. and Anthony Joshua must agree in writing to indemnify, hold harmless and otherwise reimburse the IBF for any and all legal fees or other expenses related to the granting of said Exception, including, but not limited to, the costs attendant to any resultant litigation. (IBF Rule 11.F.)

Ruiz and Joshua 2 will happen in Saudi Arabia on December 7th on DAZN in the U.S.

LFA finds home on UFC Fight Pass

November 13, 2019

Legacy Fighting Alliance, a longtime fixture on AXS TV until the recent acquisition by Anthem Sports and Entertainment, has found a new home with UFC Fight Pass.

The first event streams live this Friday, November 15th according to a company press release.

LFA has been a springboard for many fighters looking to make it into the UFC.  The agreement will continue airing the promotion’s event.

The new agreement will live stream the promotion’s last two events in 2019, 20 events in 2020, and 24 events in 2021. It will also have access to the entire LFA event library starting in January.

Payout Perspective:

This seems like the most logical step for both entities. LFA needed a landing spot after its time with AXS TV came to an end and the deal bolsters the UFC’s digital platform with additional live events and content.

College student, Scrap Pack and Yang Gang member Smith ready for fight

November 7, 2019

As Leslie Smith prepares for what may be a number one contender fight against Arlene Blencowe this Friday in Thackerville, Oklahoma, she has learned to manage her time training and going to school.  Smith is working on her Bachelor of Science in Labor and Employment through online courses via Rutgers University.  She has 60 more credits left to finish her degree and then plans on heading east to New Jersey to study for her Master’s degree in the subject at Rutgers.

Courtesy Bellator MMA

Its well-documented Smith’s interest in labor, employment and the law.  She founded Project Spearhead as a means to organize fighters.  She also filed a grievance against her previous contracted employer, the UFC.  Although her case looked promising, the NLRB reversed course and denied her claims that the UFC was treating its contracted fighters as employees.

“I actually am really happy by the fact that I’m doing it,” Smith said of going back to school.  “It makes me a lot more proud of how I spend my time.”  Smith has been taking online courses, studying, writing papers and managing her training schedule.  “I feel really happy that I’m training my body and my mind.”  She emphasized that school and MMA have helped her prioritize her schedule and manage her time more effectively.

Smith joined Bellator this past summer and debuted with a majority decision victory over Sinead Kavanaugh.   She is now positioned to be in line for a shot at the women’s bantamweight title with a win on Friday night.

Smith did the majority of her training at the El Nino Training Center in Northern California with the Scrap Pack for this fight against Blencowe.  Despite the fact that some of the more famed members were in New York to help prep Nate Diaz for his fight at UFC 244 against Jorge Masvidal, Smith had ample training partners and coaches to get her ready for her fight.

Smith is prepared for a standup fight with Blencowe who enters this contest with two KOs in her last two Bellator fights.   “I’m just working on being me,” Smith added about preparing for the former female boxer, “I’m sharper and tighter and even more dangerous.  My style in general is going to match up well.  She’s never faced somebody like me.”

In her promotional debut, Smith was a little surprised that her opponent didn’t “bring it” the entire time.  “I thought [Kavanaugh] she was going to stand a little more instead of kind of running.”  Smith won the majority decision this past July.

Not only is Smith of the Scrap Pack, she is also a part of the Yang Gang as a staunch supporter of Democratic candidate Andrew Yang for President.

To borrow a phrase from fellow stablemate, Nate Diaz, “I’m not surprised,” Smith said of the popularity of Yang’s campaign.  “I think the freedom dividend will do big things for the economy,” said Smith of Yang’s idea to provide $1,000 a month for each adult American.  “He’s got a lot of people who are smart that are very excited about him.”

Smith introduced Yang at a campaign stop in San Francisco this past March.  Notably, Yang has supported the rights of mixed martial arts fighters in organizing a union or association to advocate for their rights as well as an expansion of the Ali Act to cover mixed martial artists.  Smith spoke passionately about the inequality in the United States noting that the disproportionality of income in the nation is at the same levels as it was in the 1920.  “I feel like a part of that is that a lot of these large companies have figured out how to take advantage of the gig economy.”  “Andrew Yang’s plan is going to be huge for the economy.”

As for the showdown against former boxer Belcowe on Friday, she is ready to stand and bang.  Smith sees that with a win against the Australian, she deserves a shot at Featherweight Julia Budd.  “This is really exciting to be in a promotion that is merit based and get the opportunity to fight for the title.”

The Payout Pick: UFC 244 Main Event Masvidal-Diaz

November 1, 2019

It’s the biggest fight of the year thus far and there’s not even bad blood between the two participants.  But Nate Diaz and Jorge Masvidal will be fighting for the UFC’s version of its BMF belt.

Diaz is coming off an impressive unanimous decision win over Anthony Pettis this past August.  Prior to that Diaz, had been on a 3-year hiatus.  Yet, his popularity seems to have grown despite his time away from the organization.

Masvidal’s 5 second KO of Ben Askren was a career defining moment which has propelled him to the elite echelon of UFC fighters that can make demands and the UFC actually listens.

So, who wins the fight?

Masvidal is the #3 ranked Welterweight in the UFC.

Diaz is the #7 ranked Welterweight in the UFC

But, let’s face it.  Rankings don’t matter here. Neither of these guys aren’t really worried about the winner of the Karmaru Usman-Colby Covington winner next month.

Masvidal is coming in as the favorite (-160 per multiple books) having won his last 4 fights via KO.  Diaz is listed as +130 although I would think that the line comes down a little before this fight.

It’s obvioius that the fight stays on the feet as that what the people want and that’s what the fighters specialize in.  Despite Diaz’s superior ground game, expect most of the fight will stay with striking although if this fight were to end up on the mat, Diaz would have the advantage.  Don’t expect Masvidal to take Diaz down unless he’s desperate.  Despite submission victories, there’s no way that Masvidal can tap out Diaz.

Masvidal might be coming in a little more replenished on fight night after making weight.  Yet, Diaz, a triathlete by hobby and someone with excellent cardio, should not tire.  Can Masvidal use what appears to be a strength and weight advantage to bully Diaz up against the cage and win dirty boxing exchanges?  Hard to fathom, but this could be the path to victory.

As this is a five-round fight, its hard to imagine that either Masvidal or Diaz is stopped here.  Diaz has one of the toughest chins in the business.  Conversely, he has not stopped an opponent since 2013.

This fight will go the distance.  Even with the two trading punches most of the 5 rounds, its hard to fathom either one gets knocked out.  One would suspect that a fighter would have to be on the verge of unconsciousness for the referee to stop this one.  As for the winner, I suspect Nate Diaz’s conditioning gets him to victory via split decision.  Still, expect this one to be very close with people clamoring for a rematch.

WWE reports Q3 earnings

October 31, 2019

The WWE announced its 3rd quarter earnings for 2019 on Thursday.  The company beat analyst estimates on its projected earnings, but they are still down compared to last year.

The company announced revenues of $186.3 million in comparison to $188.4 million in 2018.  The operating income was $6.4 million with the adjusted OIBDA (Operating Income Before Depreciation and Amortization) being $25.4 million which exceeded expectations.

The WWE Network averaged 1.51 million paid subscribers in accordance with its guidance.

According to its summary, it appears that the increased revenue in its Media segment was offset by a decrease in sales of live event tickets and merchandise. Media net revenues are up in the three-month period for Q3 ending September 30th to $146.1M in comparison to $142.1M last year at the same time.  Conversely, live events are down from $26.7M last year to $23.2 this year.  This was attributed to lower ticket sales and weaker performance and fewer events in North America.  But International ticket sales have remained flat in comparison to this time last year staying at $2.3M.

Also, down this quarter is the Consumer Products section which was at $19.6M in 2018 but is now at $17M in 2019.

Operating Income declined to $33M from $39.3M in the prior year due to the “impact of increased content-related expenses, which were partially offset by a reduction in accrued management incentive compensation.”

The WWE Network revenue are down this year in comparison to 2018. For the third quarter in 2019, the WWE revealed revenues of $44.2M for the network versus $49.5M in 2018.

The WWE stated that in anticipation of SmackDown move to Fox, it launched a new advertising campaign.  It also highlighted the launch of NXT on the USA Network on Wednesday nights.  The WWE also announced the launching of a new weekly podcast series and a new animated feature film due out in July 2020.

As noted, the revenues for live events declined due in part to a decrease in attendance and staging 19 fewer events.  While attendance declined, the average ticket price increased by 6%$ to $56.64.

Payout Perspective:

The above rundown is a fairly broad view of the finances of the promotion.  What stood out for me is the decrease in attendance in house shows. While the late summer-early fall may not be the opportune time for live WWE events, the ticket price average is still going up. As a result of the lower attendance, venue merchandise was also down from $4.3M in 2018 to $3.5M this year.  Also, of note, consumer products were down the prior 3 months.  The WWE did announce a collaboration of action figures with Mattel to celebrate the 35th anniversary of Wrestlemania and the Ghostbusters franchise.

The WWE Network is still going strong and the licensing of its content continues to grow in revenue while other areas are not.

Today is a big day for the company as most of the talent is in Saudi Arabia for one of its big shows in the region.  Despite the politics concerning the region, the monetary value of the partnership positively impacts the WWE finances.  The company has not confirmed a media rights deal with the Middle East region or a dedicated annual (or semi-annual) event in the region which would probably aid the company’s balance sheets.

 

 

 

USADA clears Diaz to fight at UFC 244

October 25, 2019

Nate Diaz will fight at UFC 244 next Saturday as USADA has cleared the Stockton-native of a drug test which found elevated levels of a banned substance.  Diaz tweeted about the adverse finding and that he would be out of the bout next week.  But, Dana White said on Friday via twitter that the fight was on.

Diaz’s levels of Ligandrol, a banned substance known as LGD-4033 which stimulates muscle growth, was detected at a “double picogram/mL” level.  The source of the substance was traced back to a legal supplement Diaz ingested, which was categorized as an organic, vegan, plant-based daily vitamin.

The lengthy statement from the UFC can be found via Ariel Helwani’s tweet below:

The UFC emphasized that Diaz had not committed an anti-doping policy violation and has not been provisionally suspended and is not subject to any sanctions.  Similar to what we hear from Jon Jones’ exoneration last year, the UFC stated that there was no “appreciable performance enhancing or therapeutic benefit from the significantly limited amount of LGD-4033 that may be present in his system…”

Diaz should be facing Masvidal next week in the main event of UFC 244.

Payout Perspective:

Clearly the news that Diaz may have had an adverse finding from a USADA test was an alarm to the UFC as it was anticipating a huge payday from its annual New York event.  One has to infer that the expedited nature of these findings were done in order to save the main event and a fighter from having to serve the standard provisional suspension which occurs with an adverse finding.  Many athletes have had their careers and livelihoods put on hold due to a contaminated supplement.  Josh Barnett noted this on social media Friday night.  While its great news that fans get to see Diaz fight, its also shows that there is a process for which USADA can determine these findings without having athletes being put on prolonged suspensions.  Hopefully, the policy changes for the better soon.

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