Expert report dissects Lyman Good earnings as court case nears

April 18, 2019

The earnings of an MMA fighter can be hard and the Lyman Good case is exemplifying that the life in the cage may not be lucrative.

Good is currently suing the nutritional supplement company Gaspari Nutrition and Hi-Tech Pharmaceutical.  He claims caused him to fail a USADA drug test leaving him suspended and out of a payday.  The attorneys for the defendants retained an economic expert to assess the possible damages sustained by Good.

Through the discovery process, Dr. Henry Fuentes obtained Good’s tax return for 2011 and stated in a declaration that he was not provided any other complete returns for the fighter.  Dr. Fuentes studied Good’s returns and other information from the case in rendering the opinion that Good did not suffer economic damages based on his lawsuit.

Paul Gift’s Forbes article on Good’s breakdown of earnings also paints the picture of the meager earnings of Good.  Despite some successful years as a fighter, he’s also had some lean ones which is reflected in his tax returns and earnings (or lack thereof).

The breakdown of expenses has the most going to his agent (who is also his attorney in this lawsuit).  He also spends a lot on transportation.  The life of a full-time fighter is a hard one as they rely on paydays from fights as their main source of income.  According to the 2011 tax return, made money through fights and teaching martial arts classes. He did not have any other form of employment since 2009.  In 2011, Good had more unemployment compensation than anything and of the income, he had to spend most of it for training.

It should be noted that Good lists his Reebok royalties of $1,000.  The defense also concluded that Good made $77,236 in 2009,  That year, Good won the Bellator Welterweight World Championship. In 2017, Good made $65,471.  That year he only fought once but scored a $50,000 Fight of the Night bonus on the UFC on Fox 25 card for his bout against Elizeu Zaleski dos Santos.

Good’s attorney (who is also his manager) has filed a motion to preclude the expert report from the yet to be set trial.  If the court agrees, the expert report would not be considered as evidence in trial.

Payout Perspective:

The information is a glaring look at the unstable earnings of a fighter.  Unlike top-tier fighters, the report indicates that Good does not have steady income from sponsors or any other investments which might generate income.  This is one of the reasons why Stipe Miocic keeps his job as a fireman although its clear he could fight full-time.  Yet, for most fighters, they live from fight to fight to make a living.  MMA Payout will keep you posted on the trial.

UFC 236: Payout Perspective

April 15, 2019

Welcome to another edition of Payout Perspective.  In this edition, we take a look at UFC 236 which took place at the Philips Arena in Atlanta, Georgia where fans were witness to two of the best championship fights in recent history.

Poirier earns lightweight title with win over Holloway

Dustin Poirier was too big for Max Holloway and it was clear that his power overwhelmed the 145-pound titleholder.  Poirier hurt Holloway several times in the first round and despite the featherweight champion’s heart, could not fight his way back into the match.

“Paid in full,” was the mantra Poirier proclaimed about his win.  Poirier had made his way back from losses to Conor McGregor and Michael Johnson on his journey to the championship.  He finally got his chance and now has a chance to unify the titles against Khabib Nurmogomedov in what is rumored to be September in Abu Dhabi.

Holloway will be influenced to return to his Featherweight division and the UFC is likely hoping that Alexander Volkanovski can defeat Jose Aldo next month to secure a date between the two for the 145 title.

Adesanya takes middleweight title from Gastelum

In what was a back and forth fight (and likely 2-2 going into the last round) Israel Adesanya defeated Kelvin Gastelum to win the interim welterweight title and a shot at to unify the middleweight title with a showdown against Robert Whittaker sometime in the future in likely a big stadium on the continent of Australia.

There was a point during the fight that Gastelum had Adesanya hurt on his feet but instead of trying to finish him, Kelvin went for the takedown.  One can only assume that Gastelum was tired himself and could not continue on his feet.

But Adesanya poured it on in the 5th round to earn the victory.  One may argue that the ref could have stopped the fight in the final seconds of the fight.  Clearly, Gastelum was in no shape to continue but had the heart to finish.

Attendance, Gate and Bonuses

It was the first time that the UFC awarded two Fight of the Nights with the main and co-main events drawing the $50,000 bonuses.  There were no Performance Bonuses due to the dual FOTNs.

The attendance and gate for UFC 236 did not break records for UFC events at the Philips Arena but it definitely drew a lot of people for this event.  The event drew 14,297 for a gate of $1,908,721.

Past Atlanta, GA UFC PPV events:

UFC 88 (9/06/2008) Evans-Liddell: 14,736 for a gate of $2.6M

UFC 145 (04/14/2012) Jones-Evans: 15,545 for a gate of $2.2M

Payouts

Israel Adesanya and Max Holloway made $350,000 each for their respective fights.  All of the salaries are compiled here.

Promotional Guideline Payouts (compiled via MMA Junkie)

Dustin Poirier: $30,000
def. Max Holloway: $40,000

Israel Adesanya: $30,000
def. Kelvin Gastelum: $30,000

Khalil Rountree: $5,000
def. Eryk Anders: $5,000

Dwight Grant: $3,500
def. Alan Jouban: $10,000

Nikita Krylov: $10,000
def. Ovince Saint Preux: $20,000

 Matt Frevola: $3,500
def. Jalin Turner: $3,500

 Alexandre Pantoja: $5,000
def. Wilson Reis: $10,000

 Zelim Imadaev: $3,500
def. Max Griffin: $5,000

 Khalid Taha: $3,500
def. Boston Salmon: $3,500

 Belal Muhammad: $5,000
def. Curtis Millender: $4,000

 Andre Soukhamthath: $5,000
def. Montel Jackson: $3,500

 Poliana Botelho: $4,000
def. Lauren Mueller: $3,500

 Brandon Davis: $4,000
def. Randy Costa: $3,500

Sponsorships

For the first time, the UFC released a photo of the Octagon match which featured its core sponsors as well as the Cinemax series Warrior.  In addition, in the Octagon was Pari-Match, the international sports betting site sponsor of the UFC.  Also, convenience store RaceTrac shared space on the Octagon with Monster Energy.

The sponsors on the mat were as follows:

Monster Energy: Official Energy Drink of UFC

Modelo: Official Beer of UFC

P3: Official Protein Snack of UFC

Devour: Official Frozen Food of UFC

Nemiroff: Official Vodka of UFC

BODYARMOR: Official Sports Drink of UFC

Warrior: The new original series from Cinemax, premiering April 5

Poker Stars: Official Gaming and Poker partner of UFC

UFC 236 takes place in Atlanta, Georgia at the State Farm Arena.

UFC partner, Heed, offered data on the strikes of UFC competitors via sensors in the gloves of fighters. This was explained during a part of episode 3 of UFC Embedded.

The Embedded events were sponsored by the video game Fallout 76.

Odds and ends

It was the first time that ESPN+ became the sole PPV provider in the U.S.  and it came with headaches for many that decided to make the PPV purchase last minute.  Many were directed to a page that indicated they could not purchase the PPV.  Dana White acknowledged the issues and promised that it would be better by the next PPV.  Another critique of the UFC PPV.  No rewind.  Also, if you missed a portion of the PPV, you could not immediately turn back to the beginning.  Instead you had to wait for the full replay to be uploaded on the web site.  Finally, one last critique is that ESPN + was noncommittal about how long you could view a broadcast after purchase.

ESPN ratings for the Prelims were yet to be released at the time of this post but one might them to be north of 1 million viewers.

Kelvin Gastelum actually took off his fight shorts in his hurried rush to take off his sweats for the Octagon and had to put them back on before entering the Octagon.

With the main and co-main event being so good, there were some outstanding performances that did not receive the official bonuses.  This includes Brandon Davis, Khalid Taha, Nikita Krylov and a revamped Khalil Rountree.

From December, Max Holloway has his own Reebok, “It is what it is, headband.”

Shaq was a notable attendee at UFC 236 as he was shown in the crowd during the PPV.

There were over 1 million google searches for UFC 236 although the number may be misleading as some of these numbers are likely due to the inability to order the PPV.

The UFC marketed the co-main and main event with a Game of Thrones-inspired theme with the popular HBO series returning.

Rich Franklin was announced as heading to the UFC Hall of Fame this July.

Conclusion

We would normally give a buy estimate for this PPV but it’s highly unlikely that ESPN releases any numbers related to the buy rate of UFC 236.  If one had to give an educated guess, I would suggest that despite the buy problems for many fans, it still draws 425,000 PPV buys which is very good.  Adesanya is a rising star in the company and Poirier will get more notoriety as he should face Khabib this fall.

After barrage on Twitter, Conor offers to ‘move forward’

April 3, 2019

Conor McGregor and Khabib Nurmogomedov escalated their war on social media yesterday which required the UFC to step in which may have spurred an “moving forward” mea culpa by the former double champion.

The social media sparring began with McGregor posting a batch of pictures depicting a beaten Pauli Malignaggi after he had sparred the former lightweight champ as he prepared for his fight for Floyd Mayweather.  This was likely due to the Malignaggi getting into an altercation with McGregor stablemate Artem Lobov.  The showdown preceded Malignaggi and Lobov facing one another in a bare-knuckle boxing bout.

After his salvo against his former sparring partner, McGregor took aim at Khabib.  In two social media posts, he posted pictures of Khabib and his wife and made a derogatory comment regarding his wife.  The tweet was deleted by McGregor. However, the damage had been done.  Ali Abdelaziz, Khabib’s manager sent out a tweet attacking McGregor.

Khabib then tweeted an alleged photo of McGregor with a woman that was not the mother of his children.  The man’s face is blocked but the man in the photo is grabbing the woman.  Khabib claimed Conor to be a “rapist” and a “hypocrite.”  This may be in referenced to the allegations which have finally made public that McGregor is accused of sexual misconduct in Dublin stemming from a December 2018 incident.

Dana White issued a statement via Kevin Iole at Yahoo! Sports:

I am aware of the recent social media exchange between Khabib Nurmagomedov and Conor McGregor. The ongoing situation has escalated to a level that is unacceptable. As such, we are taking the necessary steps to reach out to both athlete camps and this situation is being addressed by all parties internally.” — UFC president Dana White

On Wednesday afternoon, McGregor sent out a tweet which seems to claw back the low-class attacks on Khabib:

Payout Perspective:

One has to think that public relations from the UFC and Conor McGregor worked together on the last tweet.  It’s clear that White was concerned about the social media escalation going on between the two fight camps based on the melee that occurred this past October.  The lack of professionalism by McGregor and the inappropriate response by Khabib is a part of the fight game but it doesn’t have to be.  While the social media fighting has become a way to trash talk opponents, there is a fine line of decorum and it seems like McGregor crossed it and Khabib followed along.  It’s clear that while White issued a warning, he has to tame the fued and it alive for a future fight.

Show Money 27 talks UFC-ESPN Deal, Endeavor IPO and DAZN price structure

April 2, 2019

Show Money is back as I jumped on with Paul Gift and John Nash to talk the ESPN + exclusive PPV deal, the looming Endeavor IPO and the DAZN price change.

Report: Endeavor to file IPO by the end of the year

March 29, 2019

The Wall Street Journal reports that Endeavor, the owner of the UFC, is planning for an IPO by the end of the year.

According to the report, the IPO will be used to broaden Endeavor’s businesses beyond film and television.

Endeavor purchased the UFC in 2016 for $4 billion.  It also acquired sports marketing agency 160over90 for approximately $200 million.  It also owns the Professional Bull Riders and the Miss Universe organization.

The proposed IPO may allow private-equity firms Silver Lake and Japanese conglomerate SoftBank Group to obtain their initial investment.

According to the Financial Times, Endeavor was valued at $6.3 billion in August 2017 including its debt when it raised money following a $1 billion investment from the Canada Pension Plan Investment Board and GIC, Singapore’s sovereign wealth fund.

Payout Perspective:

Moody’s reported that Endeavor had “suffered from weaker than expected results due to lower levels of profitability from multi-year international media sports rights contracts that will lead to elevated leverage levels going forward.”  The debt load increased to 8.4x multiples as of the third quarter in 2018 which represented a rise causing a concern over default potential.  It would seem that an IPO would allow for cash flow to allow for more investment while allowing for it to address the concern over debt. It would also mean greater transparency as the company would have to make quarterly reports and deal with conference calls and all that goes with public filing.

Conor McGregor announces retirement again

March 26, 2019

Conor McGregor wrote on twitter Monday night that he is retiring from “Mixed Martial Art.” Whether or not the retirement will stick will be a good question.

The retirement announcement is his second after having announced a similar retirement in 2016.  As we know, he returned to the Octagon.

Notably, Ronda Rousey, another former UFC star, chimed in with congratulations.

ESPN’s Brett Okamoto obtained a text statement from Dana White who seems to endorse his announcement:

Notably, McGregor was on Jimmy Fallon on Monday night and talked about a return to fighting this July.  McGregor scoffed at a proposed co-main event fight during International Fight Week.  It was explained that a proposed Heavyweight title fight (perhaps between Jon Jones and Daniel Cormier or Brock Lesnar and Cormier) would be the main attraction.

Payout Perspective:

Conor is not retired and I highly doubt many think he will stay out of the limelight of the fight game.  The announcement seems to be yet another negotiating tool for the former champ to get an advantageous deal for his next fight.  He realizes he’s a big draw, the UFC and its business partners know this too.  Even if it means sitting out July, one might expect McGregor back in the game by the f

Loss of supplement bottle at center of Motion to Dismiss Lyman Good’s case

March 22, 2019

The drug maker and distributor in Lyman Good’s lawsuit for a tainted supplement brought a motion to dismiss his claims for spoliation of evidence last month.  The UFC fighter took a supplement which caused him to fail a USADA drug test and miss out on a bout.  The motion to dismiss claims that Good and/or his lawyer did not retain the alleged supplement which caused the failed test.

Good’s lawyer and fight manager David Fish indicated that it was lost in the mail after it was sent to a laboratory for testing.  However, the drug maker and distributor contend that this is a false narrative.

Defendants Gaspari Nutrition, Inc., Hi-Tech Pharmaceuticals, Inc., and Vitamin Shoppe, Inc.   have brought this motion for spoliation of evidence.  The motion is based on the discovery rules which allows for the dismissal of a lawsuit if a party does not preserve evidence.  According to Good, the remedy is an extreme one as the fighter’s attorney argued that the “missing Anavite bottle” is not the key piece of evidence and is not the ultimate question for the trier of fact.

The elements for destruction of evidence are:

  1. That the party having control over the evidence had an obligation to preserve it at the time it was destroyed;
  2. That the records were destroyed “with a culpable state of mind”;
  3. That the destroyed evidence was “relevant” to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.

“Culpable state of mind” essentially means that there was knowledge and intent to destroy the evidence.  Even if there was mere negligence on the part of the party, it would still qualify.

In its opposition to the moving papers, Good argues that there is nothing to justify dismissal of his lawsuit due to the allegations of “spoliation” of evidence.  He further argues that the “missing Anavite bottle” is not essential to the heart of the lawsuit. Calling it a “red herring” Good argues that the identity of the manufacturer of the product and the existence of a product defect are issues of fact capable to prove via circumstantial evidence.  This would mean that Good could prove the defect even if the actual bottle of alleged tainted product was not present.

In its moving papers, defendants point to Good’s initial argument that it had sent a bottle of Anavite to be analyzed by LGC Science, Inc. (“LGC”). Per defendants, LGC could not identify the anabolic steroid despite representations by Good in his first lawsuit that it did.  It was not until LGC corrected Good did he change his lawsuit to reflect this.  The episode infers a pattern by Good of not stating the truth.  If a court were to accept such an argument, it may side with defendants in dismissing the case.

Defendants also point to the fact that Good did not list the use of Anavite on his USADA “Declaration of Use” form.  Even when he clarified his form to include another supplement, Anavite was not listed.  Defendants create the suspicion based on these “lapses of memory” that Good was selectively recalling information for his benefit.

The misplacement of the bottle of Anavite by Good is called into question as when it was requested of Good, he indicated that he gave the bottle to his attorney and manager David Fish.  Fish indicated that he had it and sent it to counsel for testing but it was never received.

Defendants proclaim this to be a case of spoliation of evidence where Good has destroyed the Anavite bottle on purpose to ensure that it would not be tested.

Defendant Vitamin Shoppe argued that Good could not establish the manufacture of the product ingested could not be identified by “circumstantial evidence” as argued.

While the defendants had claimed that Good’s attorney should recuse himself due to the loss of the evidence, they backed off from this threat claiming that it would cause an undue hardship on Good.  Still, the dismissal of the case would be another extreme measure if they can convince a court that the loss of the bottle is central to the lawsuit.

Certainly, the lack of product may have been evidence which defendants could have tested and mitigated their liability.  If it was found not to have the banned substance, they would be not liable.  If it had the banned substance, they can assess the origins of it determine its origins.

Since the Motion to Dismiss was filed, Good has filed a motion to preclude the defendant’s experts which would exclude their testimony at the time of trial.  This is in anticipation of the Court denying the motion and the case moving to trial.

This would seem to be a safe assumption.  The Motion to Dismiss is a home run in this instance.  While the rules for destruction of evidence has dismissal of the case as a repercussion.  This does not seem to be what has happened here.  Although defendants make the argument that even gross negligence should be considered as a means of spoliation with intent, the Court will likely side with Good here.

Show Money discusses UFC-ESPN deal and other media deals in combat sports landscape

March 20, 2019

Another Show Money is up with Paul Gift and John Nash to discuss how the UFC is doing with the ESPN deal, the PFL’s move to ESPN+, DAZN, Bellator and more.  The taping occurred prior to the news that ESPN+ would be the exclusive PPV provider for the UFC in the United States.

Report: Endeavor wanted 65-35 split with DirecTV

March 18, 2019

John Ourand of the Sports Business Journal reports that sources stated that Endeavor wanted a 65-35 split of the PPV revenue from DirecTV before deciding to sign a deal with ESPN+.

On Monday, it was announced that the UFC and ESPN had entered into an agreement which would place ESPN+ as the exclusive provider of UFC PPVs.  The move terminated the UFC’s relationship with its other satellite and cable PPV distributors.

Although not confirmed, the standard revenue split between is 50/50 with the distributor assist in promoting the event over its own platform while the UFC providing the event.  It’s been clear that the UFC was seeking a way for better terms or leave altogether.

First, its UFC Fight Pass allowed for fans to purchase the PPV digitally without going through a middle-man.  As fans became comfortable with the technology, fans became more confident in the product.  It has offered fans the opportunity to purchase it through other means that traditional cable/satellite such as through Amazon.

Rumblings began that the UFC sought better terms from distributors.  There was the possibility that DirecTV would not show UFC 234.  However, Dana White brokered a last minute deal with DTV so that subscribers would be able to see 234 through the satellite company.

A deal with InDemand seemed set according to Ourand, but was never signed.  Per Ourand, he was told that the UFC wanted 65% of the PPV revenue from its events.  But, DirecTV balked.

Payout Perspective:

What we can initially glean from this is that the UFC believes it has bargaining power with distributors.  There position is likely strengthened from how well its done thus far on ESPN and its recent success with several PPV events.  While not every event will draw 500K buys, it still is in the black when it comes to events.  It also reflects the belief that there is a shift in viewership.  The UFC and ESPN fan base are comfortable with technology and are willing to move to ESPN+ as the sole provider of its content (outside of bars and restaurants that contract with the UFC to air PPVs).

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.

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