October 24, 2016
Judge Richard Boulware has filed his Order on Zuffa’s Motion to Dismiss Plaintiffs’ Amended Complaint in the antitrust lawsuit venued in Nevada. The hearing was on September 25, 2015. The order was finally entered on October 19, 2016.
Talk about a backlog of work for a federal judge. But, from my understanding, this is typical for federal courts.
As we know, the judge denied Zuffa’s Motion to Dismiss although the written order was signed and dated over a year later by Judge Boulware.
The opinion denying the Motion to Dismiss is below:
Some notable issues in the Order.
Zuffa had the burden to prove that the Plaintiffs had no case since they brought the motion. Under the Federal Rules of Civil Procedure, a court may dismiss a complaint as a matter of law (1) for lack of a cognizable legal theory or (2) insufficient facts under a cognizable claim. The standard under Federal Rule 12(b)(6), it may dismiss a complaint for failing to state a claim upon which relief can be granted.
The court looked at the main arguments set forth by Zuffa in its opinion.
- Strong Competition v. Antitrust Violation
This argument was quickly dismissed by the court. Essentially Zuffa argued that its business practices are examples of “strong competition” whereas Plaintiffs argue that Zuffa’s conduct “has foreclosed competition and thereby enhanced and maintained the UFC’s monopoly power in the Relevant Output Market and monopsony power in the Relevant Input Market.” For purposes of meeting the threshold to satisfy a motion to dismiss, the Court sided with Plaintiffs.
- Properly Defined Relevant Markets
The court looked at whether the plaintiffs properly defined a “relevant market.” Plaintiffs identified two relevant markets: 1) live Elite Professional MMA bouts (Relevant Output Market), and…live Elite Professional MMA Fighter services (the ‘Relevant Input Market’). Zuffa claimed that these definitions were made solely for the purpose of litigation and that they were vague and subjective.
However, the Court sides with the Plaintiffs for purposes of this motion to dismiss. The Court noted that the validity of the ‘relevant market’ is typically a factually element and not a legal element. Remember, here the Court is looking at whether the lawsuit can be dismissed as a matter of law. As the court notes the market may survive an initial scrutiny under the motion to dismiss, but may not under a motion for summary judgment or at trial. But, the Court found that the Plaintiffs’ relevant market is sufficient for “Section 2” antitrust purposes
- Specificity of Anticompetitive Conduct
Zuffa argued that exclusive dealing arrangements are common, procompetitive and a part of sports and entertainment, Plaintiffs failed to allege specific facts showing that the exclusive arrangements foreclosed competition in either the input or output market and the UFC has no duty to deal with competitors.
The Court did not address the last argument (dealing with competitors) as it did not construe the complaint that it had to deal with competitors.
The Court does side with Plaintiffs in finding that its allegations that exclusive dealing arrangements are a part of the anticompetitive scheme. It also dismisses the argument that Plaintiffs’ claims are a “monopoly broth” – the term given to the use of various allegations to satisfy an antitrust scheme.
- Ancillary Rights and Reduced Competition
The Court looked at the rights issue related to fighters signing off on their likenesses for purposes of Zuffa using for things such as video games. Here, the Court utilized the same analysis as it did with the exclusive dealing contracts in finding that Plaintiffs pled sufficient facts to show an anti-competitive scheme. Once again, the Court is not ruling on the actual evidence, but whether the Complaint states a sufficient amount of facts.
The Motion to Dismiss should not be taken as a commentary on the strengths or weaknesses of Plaintiffs’ Complaint as a whole. It is only a ruling on whether or not the Complaint was sufficient to past standards required by the rules under 12(b)(6) of the Federal Rules of Civil Procedure. It was Zuffa’s burden to carry in order to prove that the Complaint could not pat muster. The Judge, weighing the evidence in light of the rules, determined that the Plaintiffs had pled a sufficient amount for the case to go forward. If this case goes to trial, the Plaintiffs would have to prove the claims in its Complaint. Zuffa will likely bring a Motion for Summary Judgment after the discovery stage ends. Essentially, it is similar to the Motion to Dismiss but would argue that none of the facts would support the claims and as a result, the lawsuit should be dismissed prior to trial. Of course, discovery is ongoing so we shall see if there are facts that have been uncovered which would strengthen either party’s case.
October 17, 2016
Georges St.-Pierre is a free agent according to the former UFC welterweight titleholder in an interview on The MMA Hour.
Rumors of GSP’s imminent return were strong but according to GSP his lawyer terminated his UFC contract after the UFC failed to offer him a fight.
GSP’s last fight was in November 2013 at UFC 167 against Johny Hendricks. GSP has remained active despite not being in the Octagon. According to the interview via MMA Fighting, GSP was offered Robbie Lawler but Lawler is taking time off from fighting after losing his title in July.
Obviously, there are two sides to each story and we will have to see if the UFC confirms that St. Pierre is indeed released from his UFC contract. If so, this would be big news for other organizations such as Bellator. GSP is a popular fighter despite being away from active competition since 2013. His return to MMA would spark interest with any promotion he might land with in the near future. Now let’s hope this does not get pulled into litigation which might keep GSP from returning.
October 12, 2016
Dana White announced on the Colin Cowherd show on FS1 that Ronda Rousey will make her return to the Octagon on Friday, December 30th at UFC 207 to take on women’s bantamweight champ Amanda Nunes.
It will be over a year since Rousey fought in the Octagon since she dropped her title to Holly Holm last November. Since the loss, Holm lost in her first title defense to Miesha Tate and Tate dropped the title to Nunes this past July at UFC 200.
This will be an interesting fight at we will see if the Rousey star is still big enough to carry a PPV. The show will be on Friday since New Year’s Eve falls on a Saturday this year. The last time this happened was at UFC 141 with Brock Lesnar headlining against Alistair Overeem. Overeem defeated Lesnar and the show did 535,000 buys which is low considering Lesnar was on the card. You might expect that this card may do much more with Rousey’s return. Moreover, I would guess that there would be another title fight on the card to boost the promotion for this end of the year card.
On another note, the announcement on FS1 as opposed to ESPN which might be seen as a sign of future announcements.
October 10, 2016
Welcome to another edition of Payout Perspective. This time we take a look at UFC 204 from Manchester, England which pitted Michael Bisping defending his UFC middleweight title against Dan Henderson.
Bisping outlasts Hendo
The rematch was 7 years in the making and despite the time in between fights, everyone knew the backstory from UFC 100. Hendo hit an “H Bomb” that knocked out Bisping and then landed on the Brit with another shot while he was on the ground. This was the story that sold the fight otherwise the matchmaking never made sense aside from Bisping wanting to avenge a loss.
The fight itself was great. Hendo almost recreated his KO of Bisping in round 1 and picked his spots which stung Bisping and bloodied his eyes. However, Bisping’s excellent cardio kept him in the fight and staying on top of the 46-year-old appeared to be the critical factor in the decision.
A matchup with Jacare Souza seems like the most logical matchup for Bisping but we’ll see what happens next.
Mousasi stops Belfort
Vitor Belfort’s days as a top-level fighter are over as Gegard Mousasi had little difficulty with the former champion. Belfort looked much different in terms of body composition than previous fights and for a black belt did not handle being mounted too well.
Mousasi called out Anderson Silva in his post-fight interview in what you can call a “resume builder” for the middleweight.
Attendance and Gate
The event took place at the Manchester Arena in Manchester, England and drew 16,000 for a live gate of $1.96 million. The attendance was impressive considering the event took place in the middle of the night to accommodate American PPV.
The attendance and gate come in second to UFC 105 held at the same arena. That event which featured Randy Couture-Brandon Vera drew 16,693 for a $2 million gate.
$50,000 bonuses went to Hendo-Bisping for Fight of the Night and Iuri Alcantara and Jimi Manuwa for Performances of the Night. Mike Perry and Danny Roberts and Stefan Struve could have won bonuses too.
Promotion of the Fight
The UFC did its usual promotional events for the fight. As seen on the Embedded series, Dan Henderson visited the Manchester City Football Club. Bisping is a fan of Manchester United, the rival club.
Monster Energy Drink, UFC Fight Pass and Bud Light were thenotable mainstay sponsors for the night. In addition, video game Gears of War 4 and “What Now?” the upcoming Kevin Hart comedy also had signage in the Octagon. Also, Twinzz.com, a European hat maker was also in the Octagon. IconicFaceOff.com which features a Conor McGregor commercial on its web site was also on the mat. Also, UFC 205 signage including it’s “Can’t Wait” tag was in the Octagon.
Odds and ends
UFC 204 had 500,000 plus searches on Friday in the US. I couldn’t find the number of US searches for Saturday for UFC 204 which might be an oversight or the fact that there were other searches more popular than the event. However, in the UK UFC 204 registered 200,000 plus searches on Saturday
The post-fight show usually on FS1 was switched to FS2 due to college football.
Brian Stann served as the color commentator in place of Joe Rogan and was fantastic.
The trailer for UFC 205 were shown during the telecast.
Appealing to their apparel sponsor, one of the Embedded showed a picture of a young Michael Bisping wearing a Reebok sweatshirt. Also, an episode showed Hendo picking out a cup for the fight.
The PPV ended early due to the early stoppages in the first 4 main card fights and the telecast filled it with the Brad Pickett-Iuri Alcintara fight.
Since this fight did not occur in the U.S., it seems that there was less buzz for it. Then again, if you did not like the main event, there was not much for the casual viewer. While the Bisping-Hendo fight brought some history and curiosity I don’t think Bisping is a PPV draw unless he’s fighting a name brand opponent. Hendo is great but he is not a PPV draw. UFC 199 featuring Rockhold-Bisping drew 320,000 buys. But, with this happening during college football season, the PPV will likely do 275,000 PPV buys.
September 30, 2016
The Wall Street Journal reports that celebrities will hold an ownership interest in the UFC. 23 celebrities including Ben Affleck, Adam Levine and Serena and Venus Williams are investing in the company.
Per the WSJ, it’s the “most significant business move” since the sale of the UFC this past July. Terms of the celebrity investments weren’t disclosed. WME-IMG purchased the UFC for a reported $4 billion. According to the article, Ari Emmanuel sought out the celebrities he knew to be fans of the sport and who would be willing to market the sport and influence their fans that it is more than a niche sport.
The news comes at the beginning of the hype for the company’s debut in New York November 5th.
Updated, per Darren Rovell, here is a list of those celebrities that invested in the UFC. Each paid $250K.
In buying the UFC, WME-IMG let celebrities buy small shares with a minimum investment of $250,000. Here’s the list pic.twitter.com/3whha8eOPe
— Darren Rovell (@darrenrovell) September 30, 2016
The news should not be of a surprise to anyone considering the entity that purchased the UFC this past summer. Certainly the investment is a part of each celebrity’s financial portfolio so I would opine that this is not 50 Cent investing in Vitamin Water. Yet, we are seeing the leverage that the new owners have in promoting and extending the reach of the UFC brand.
September 19, 2016
MMA Fighting reports that UFC 203 early projections have it between 425,000-475,000 PPV buys. The numbers would make it the best UFC PPV not featuring Conor McGregor or UFC 200 which brings up the question of whether the CM Punk experiment helped boost the buy rate.
The event’s main event featured Stipe Miocic defending his UFC heavyweight title in his hometown against Alistair Overeem. But most people were intrigued by CM Punk’s debut against Mickey Gall.
Dave Meltzer of MMA Fighting opined that Punk probably brought in an additional 125,000-225,000 extra buys or between $3.75 million and $6.75 million. This estimate is based on UFC 198’s PPV buy rate which registered slightly under 300,000 PPV buys.
Maybe not a good comparison, but UFC 118 which featured James Toney taking on Randy Couture drew 535,000 PPV buys. Of course, that event featured Penn-Edgar II at a time that The Prodigy was still a very popular fighter.
One must conclude that the uniqueness of CM Punk’s debut attributed to the buy rate. While Miocic-Overeem is a good match-up for most hardcore MMA fans, the casual viewer was likely intrigued by the Punk debut. Does this mean Punk should come back or was this just a one-hit wonder? We now know Punk’s skills and I would suggest that most casual fans would now pass on Punk’s second fight. But, the Punk experiment does seem to have paid off for the UFC.
September 15, 2016
Chael Sonnen is returning to MMA as part of Bellator per an announcement late Thursday. Sonnen, 39, is signing a multi-year, multi-fight contract with the company.
The Bellator press release stated that Sonnen will compete in the 205 pound division although he states in the release that he is not limiting himself to just one division. Sonnen’s last fight was against Rashad Evans at UFC 167 in November 2013. He lost via TKO in the first round.
A press conference is set for Friday.
Murmurs of a comeback occurred when Sonnen indicated that his name went back in the USADA testing pool as he was tested twice under UFC anti-doping policy. Sonnen can still sell a fight and he is another pickup from the UFC that Bellator hopes can still draw ratings. Certainly, Bellator’s tentpole events featuring Tito Ortiz, Stephan Bonnar, Ken Shamrock and Kimbo Slice reflect the fact that older fighters can still be attractions.
September 11, 2016
Welcome to another edition of Payout Perspective. This time we take a look at UFC 203 from Cleveland, Ohio where CM Punk’s debut and Stipe Miocic’s title defense were the headlining events.
Gall mauls CM Punk
We all knew that this was going to happen. 3 pro fights in and Mickey Gall looks like a top prospect. Of course, his opponent was former pro wrestler CM Punk. Despite being a huge favorite, Gall had a game plan which was to take down and grapple Punk. Gall is a brown belt, Punk is a white belt as astutely pointed out by Joe Rogan. Gall had his way with Punk on the ground and eventually choked him out in round 1.
Mickey Gall wants fellow pretty boy Sage Northcutt next. Please UFC, book this. As for Punk, he gave a very nice speech about dreams and believing in yourself. Certainly this was a huge risk for a person in his late 30s but if he does continue his MMA dream it appears that it would be on a smaller, regional card. Or Bellator.
Stipe stops Reem
Stipe Miocic successfully defended his UFC 203 heavyweight title against Alistair Overeem in one of the best and craziest rounds of this year. Miocic was in trouble early in the first and almost was submitted (Reem thought there was a tap) by Overeem.
It looks like that Stipe gets Cain Velasquez next. So long as the fight is at sea level, this will be a tough fight for Miocic.
Cleveland came out for the UFC as the company reported a sell out for the event where the Cavaliers play. The event drew 18,875 for $2.6M.
Bonuses went to Miocic-Overeem for Fight of the Night and Yancy Medeiros and Jessica
Promotion of the Fight
ESPN aided the UFC with the promotion as it had Stipe Miocic on Sportscenter talking up the fight.
Of course, there was the 3-part series on FS1 for CM Punk.
Miocic and Jessica Eye did local promotions since they are from the area.
The Cleveland Cavaliers through their support behind Miocic and Eye.
— Cleveland Cavaliers (@cavs) September 10, 2016
They also let Dana White handle the Larry O’Brien trophy.
— Dana White (@danawhite) September 11, 2016
Eye had a chance to throw out the first pitch at the Cleveland Indians home game as seen on Embedded.
There were tons of tweets from athletes, celebrities and pro wrestlers throwing their support for CM Punk.
The newest sponsor in the Octagon for this PPV was IrishFireVodka.com. The company is based out of Dallas, Texas per its web site. Aside from that, there were the usual sponsors including MetroPCS, Harley Davidson, Toyo Tires, Bud Light and Monster Energy Drink in the center. They also promoted the UFC 204 PPV in the octagon.
MetroPCS had the fighter prep point. Throughout the PPV, they had voiceover ads for Topps Fighter Trading Cards App.
Odds and Ends
UFC offered a 10% discount on purchasing this PPV if you had previously filled out a survey regarding UFC Fight Pass. I’m sure they offer this periodically. It’s just another subtle way to get consumers to gravitate to the UFC web site as opposed to PPV cable and satellite distributors.
CB Dolloway was involved in an elevator accident after the weigh-ins which caused his fight to be cancelled. Expect a lawsuit.
Jessica Andrade looks like a legitimate title contender for the 115 pound women’s division.
What went on in that Browne-Werdum fight? If a fighter asks for a halt to the fight without the referee first calling it, shouldn’t that be a verbal submission? Then there’s the fracas with Edmund Tarverdyan post-fight.
Embedded showed Ronda Rousey’s dog with Travis Browne, but no Rousey. She was in Cleveland as she was present for a pro wrestling show the night before to support her friend and former MMA fighter Shayna Baszler.
The Ohio Athletic Commission allowing the CM Punk license was one thing. Its explanation for doing it was another. Punk has publicly admitted to several concussions while wrestling, is 37 years old and the OAC waived its license requirements citing he was a top end pro wrestler. But, to show its force, it stated it would investigate the Jessica Eye-Bethe Corriea shoving incident at the ceremonial weigh-ins. It also fined Alistair Overeem $500 for being late to the weigh-ins. Speaking of the Browne-Werdum fight, why did the referee allow for Browne to call an injury timeout on his own and not know that if Browne called for a stop to the fight, the fight was over. Will the OAC look into that debacle?
After Joe Rogan interviewed Stipe Miocic who thought he was knocked down by a kick (instead of a punch) and then Overeem believed Miocic tapped to a guillotine, Rogan made the comment that maybe he shouldn’t interview guys after a fight. Especially those that have been knocked out. Makes sense to me although this is unlikely to happen.
I asked the UFC brass if we could please refrain from interviewing fighters after they’ve been KO’ed. I don’t think it’s wise nor fair.
— Joe Rogan (@joerogan) September 11, 2016
Saturday night’s event drew over 1M searches for UFC 203 and another 200,000 for “UFC 203 Fight Card.” Certainly, the attendance at the event was great as it was pushing for Miocic and Eye as hometown favorites. But was the allure of CM Punk reason for casual viewers to purchase the PPV? It may have received a bump from pro wrestling fans but unlikely to move much with the rest. Although the PPV had a heavyweight title fight, Miocic-Overeem are not PPV draws. Since there was a little more marketing behind this event, I think we could see about 325-375K PPV buys.
September 7, 2016
MMA Fighting reports that UFC 202 is currently estimated at doing 1.65 million PPV buys. The number puts it ahead of UFC 196 in PPV buys.
Prior to this year, the top PPV event for the UFC was UFC 100 which posted 1.6M buys on July 11, 2009. In the main event Brock Lesnar faced Shane Carwin. GSP was also a co-main event on the card.
UFC 202 featured Conor McGregor versus Nate Diaz II. McGregor won a majority decision.
Not only did the PPV buys generated from the satellite and cable distributors reflect strong viewership but the direct buys on UFC Fight Pass were strong as well. The buys from the UFC site are not factored into the buys.
The news is better than the estimated 1.2-1.5M PPV buys as previously reported.
Although the buzz might not have been as strong overall, the buys show that people knew about the event. The buys confirm that Conor is valuable commodity for the UFC and likely worth his reported $3M per fight. He’s drawn over 1.2M PPV buys in his last 3 PPV events.
August 26, 2016
UFC 202 is trending to be one of the top PPV buys in the history of the company as Dave Meltzer is reporting that the estimated buys are ranging from 1.2 million to 1.5 million buys.
UFC 202 featured the Conor-Nate II with McGregor taking the majority decision in an epic 5-round battle.
The estimated buy rates show that Conor McGregor is the new PPV king.
In addition, Meltzer reports that the internet sales via the UFC web site were up for the event which reflects a strong buy trend for this PPV.
While reports that ticket sales were lagging which resulted in a drop in prices, it still drew the 5th largest gate in company history with $7,629,010.
Recent McGregor PPV buy rates:
UFC 189: 825,000
UFC 194: 1,200,000
UFC 196: ~1,100,000
As Meltzer points out, all the indicators reflect a strong PPV buy rate. The UFC Prelims drew 1.3 million PPV buys. Google trends registered 5 million searches for UFC 202 on Saturday. With UFC 202 doing over 1 million PPV buys, that would make 3 events (UFC 196, UFC 200 and UFC 202) going over 1 million PPV buys. A pretty good year without event factoring in the New York debut in November. It also confirms that Conor McGregor (and to an extent Nate Diaz) are PPV draws.
In addition, we might want to take note of the purchases on the UFC web site to watch the PPVs. Although no discounts this time around, the company is offering a percentage off UFC 203’s PPV for filling out an email survey. Promos like this are helping lure fans to the UFC site to purchase the events instead of the cable and satellite distributors.