Canadian MMA promotion sues WSOF for breach of Franchise Agreement

February 15, 2018

A Canadian mixed martial arts regional promotion has filed a lawsuit against MMAWC, LLC and associated entities with the World Series of Fighting promotion in Clark County Superior Court in Nevada.

The lawsuit, filed on February 1, 2018, also names Carlos Silva, Ray Sefo and Keith Redmond.  Aggression Fighting Championship (“AFC”) claims that in mid-2013 was approached by WSOF looking to expand its business into the Canadian market.  WSOF claimed it wanted to acquire AFC and rename it World Series of Fighting Canada.  According to the lawsuit, it claims that WSOF represented that it had “substantial money behind the company” and an “ironclad network deal with NBC” and had retained IMG to sell events internationally.  AFC claims that WSOF would “cover all increased costs of events to rebrand the AFC, and Plaintiff would be reimbursed all event expenses.”  WSOF claimed it would share all broadcast revenues.

AFC executed a 5-year “licensing agreement which began on August 21, 2013 and expired on August 21, 2018.  But, AFC claims WSOF never provided a Franchise Offering Circular, financial statement or any of the required disclosures for selling a Franchise.

The lawsuit states that after WSOF took over AFC, that WSOF was “forcibly evicted from their office space and there was internal fighting related to non-payment of loans, expenses and vendors.”

AFC claims that it “advanced several tens of thousands of dollars for costs and expense for these events.”  It also paid a “monthly stipend” to WSOF.  Despite requests for payment, WSOF did not “honor the terms of the Franchise Agreement.”

AFC claims that WSOF has failed to pay any Canadian broadcast or streaming revenue to AFC or merchandise revenue.

Interestingly, AFC notes that as part of the “Franchise Agreement,” AFC can use the “Professional Fighters League” name in Canada.

There are ten causes of action in the Complaint, among the claims AFC claims breach of contract of the Franchise Agreement, the implied covenant of good faith and fair dealing in contract, failing to inform AFC that they did not honor the obligations of the Franchise Agreement, intentional interference with prospective economic advantage and tortious interference with contract. It also claims that Silva, Sefo, Redmond and Bruce Deifik breached their fiduciary duty as managers, directors and/or officers of WSOF/PFL. There is also a Civil RICO claim as a result of these claims.

Payout Perspective:

Notably, next week a hearing is scheduled fora Motion to Dismiss and/or compel arbitration in the case of WSOF and Shawn Wright as trustee for a company (WSOF Global, LLC) that provided loans to WSOF.  That case also deals with the issues related to the WSOF and PFL.  Here, it appears that the Canadian company is attempting to recoup money after a broken franchise deal from WSOF.  Since the new ownership took over, AFC probably feels duped that they were not compensated from the still existing franchise agreement.  One would assume that the new investors would take over the liabilities of the previous regime.  Then again, the multitude of lawsuits reflect ongoing issues with the structure of the prior company.  One would think we see this case go to arbitration as well as the Shawn Wright situation.  MMA Payout will keep you posted.

 

UFC 221: Payout Perspective

February 13, 2018

Welcome to another edition of Payout Perspective.  This time we take a look at the UFC’s first event in Perth for UFC 221.

Romero misses weight but KO’s Rockhold

Yoel Romero missed weight which threw the main event into question.  Romero was fined 30% of his fight purse which was given to Rockhold.  The awkward stipulation was that Rockhold could win the interim title but Romero could not.  It was expected that Rockhold likely received further incentives to fight Romero.

And hopefully he did because Romero KO’d Rockhold in Round 3 to destroy his chances of winning the interim middleweight title and a showdown with Robert Whittaker.

For Rockhold, it has to be a disappointing result. One might suggest he not go through with the fight since Romero missed weight but I’m sure it was a matter of getting paid for the event.  It sounds as though he is looking to move up to light heavyweight next.

Blaydes earns decision over Mark Hunt

Curtis Blaydes earned a unanimous decision victory over Mark Hunt.  The New Zealander was the fan favorite but the now 10-1 (5-1 in the UFC) Blaydes earned the biggest win of his UFC career.  The good news for Blaydes is that he it was the penultimate fight on his UFC fight contract which means he has some leverage going into negotiations for a new deal.

On the other end, Hunt, who is still embroiled in a lawsuit against the UFC, Dana White and Brock Lesnar indicated that he would be ending his time with the UFC.

The UFC may need Blaydes.  Currently 9th in UFC rankings, the division is suffering from lack of known fighters and/or injuries.  Perhaps he is paired with another UFC 221 star, Tai Tuivasa, who defeated Cyril Asker.

Attendance, gate and bonuses

UFC 221 did well despite the Sunday morning start in Perth.  It drew 12,437 fans for a live gate of $3.6 million Australian dollars (or $2,810,520 American).

The bonuses went to Israel Adesany, Jussier Formiga, Jake Matthews and Li Jingliang.  Adesanya and Formiga earned Performance Bonuses while Matthews and Jingliang drew the “Fight of the Night.”  All received $50,000 bonuses.  There was some controversy in Jingliang’s receipt of the Fight of the Night since he eye-gouged Matthews while attempting to get out of his guillotine.  No foul was called despite calls for at least a point deduction.

Sponsorships

Air Asia, Hudson Shipping Lines, Fetch, General Tire and Monster Energy had the center of the octagon.   I do not believe Modelo was a part of the signage for this event.

Fetch is an independent internet pay television provider.

Odds and ends

The promotion in the U.S. was minimal.  The UFC Countdown Show on Sunday night did register in the Nielsen 150 with 102,000 viewers and 0.04 in the A18-49 demo.  The post-fight show on FS1 drew 188,000 viewers.

The UFC 221 Prelims on FS1 drew 697,000 viewers on FS1.  It was the lowest-rated UFC Prelims event since UFC 216 on FX drew 653,000 viewers.  UFC 216 drew about 120,000 PPV buys.

Luke Rockhold arriving to open workouts on a camel was some Ricky Jarrett from HBO’s Ballers-type stuff.

Tai Tuivasa could be a fighter to watch out for in the heavyweight division.  Drinking out of the shoe was different.

Tyson Pedro also gave a great post-fight promo and Jon Anik was able to catch his attempt at a mic-drop.

There were over 200,000 google searches for UFC 221 on Saturday.

Conclusion

One might expect that this PPV to do very poorly.  Romero not making weight may have added some intrigue to the matchup.  This card would have been an interesting FS1 card but to pay $65 for the card is very hard to reconcile if you are a casual viewer.  Moreover, the fact that there is another UFC card next weekend makes skipping a PPV like this easier.  One might expect a buy rate of around 125,000.

The Interview: Jeff Unay

January 30, 2018

I had the opportunity to interview filmmaker Jeff Unay whose debut documentary, “The Cage Fighter,” opens this Friday, February 2nd in select theaters across the country and video on demand.  It’s an interesting interview about the behind the scenes of the independent film-making process and one man’s MMA passion.

For more on the film, visit www.thecagefighterfilm.com

UFC on Fox 27 draws all-time low: 1.59 million viewers

January 28, 2018

UFC on Fox 27 drew 1.59 million viewers on Fox Saturday according to Television By Numbers.  The event is the lowest rating for UFC on Fox since its inception.

The event featured Ronaldo Souza taking on Derek Brunson.  Souza stopped Brunson after a head kick in the first round.

The event drew 0.5 in the A18-49 demo and a 2 share.  The NBA Countdown show (0.7 and 3 share) in the first half-hour of the 8pm time slot and the subsequent NBA game between the Celtics and Warriors (1.2 and 5 share) drew the most in the A18-49 demo for the night.  The countdown show on ABC drew 2.53 million viewers and the game drew 3.7 million viewers.

UFC on Fox had the lowest viewership in terms of overall viewers for the night. An NCIS rerun on CBS drew 4.02 million viewers in the 8pm time slot and Dateline NBC drew 3.96 million viewers in the A18-49 demo.

Payout Perspective:

It’s unlikely there will be a big overrun boost from the 1.59 million viewers as the Souza-Brunson fight ended at the top of the hour.  The low ratings could be anticipated based on the fights set up for this event.  Also, the NBA game between Boston and Golden State drew a lot of casual sport fans away from the UFC.

McMahon revives XFL

January 25, 2018

The XFL reboot is going to happen.  Vince McMahon is scheduled to make the announcement on Thursday.

Speculation about bringing back the XFL surfaced last month when SEC filings from the WWE indicated that McMahon sold 3.34 million shares of the company to fund a separate entity, Alpha Entertainment, LLC.  The company was established “to explore investment opportunityes across the sports and entertainment landscapes, including professional football.”  In addition, USPTO applications for XFL and Alpha Entertainment provided further clues that the football league was coming back.

Payout Perspective:

Dependent on how this is set up, a spring football league would not be a crazy idea at this point.  Notably, Tom Brady’s agent, Don Yee, was looking into establishing a league for those players that could not or did not go to college.  It would be similar to a developmental league like the NBA.  If it is structured like this, and not as a direct competitor to the NFL, there could be a viable market.  We shall see.

UFC 220: Payout Perspective

January 22, 2018

Welcome to another edition of Payout Perspective.  This time, we take a look at UFC 220 taking place at the TD Garden in Boston, Massachusetts.

Miocic handles Ngannou

Stipe Miocic defeated Francis Ngannou via unanimous decision in what was an easy win for the defending champion.  Despite Ngannou’s punching power, he did not have any cardio or any type of grappling acumen to defend himself against Miocic.  This is confounding since this was the obvious test for the challenger since most of his fights are standing up.  Ngannou had no defense to the ground game by Miocic and was visibly exhausted most of the fight.

Truly a disappointing showing for Ngannou who was thought to be ready for his shot.  Obviously, he is a one-dimensional fighter at this point.  The good news is that he is still a very good one-dimensional fighter.  He just needs to extend his grasp of MMA and more cardio.

For Miocic, it truly was a very good game plan.  Even when he was not doing anything to Ngannou, he was leaning on him getting him tired.

Dana White indicated that a Daniel Cormier-Miocic fight would be a good matchup although DC confirmed that he would like to see his stablemate, Cain Velasquez get a shot by the end of the year.

For Ngannou?  Derrick Lewis, a guy who has had his own trouble with cardio was trolling the man from Cameroon last night and that might be a fun fight to see so long as it lasts just one round.

Cormier outclasses Volkan

Daniel Cormier proved that there are different levels of UFC fighter as he soundly handled Vokan Oezdimir and stopped him in the second round.  Cormier, still haunted by the ghosts of Jon Jones, gave a post-fight promo talking about getting his championship back.  Regardless of how much he tucks in his shirt to his pants and has a dad bod, he is still one of the top pound-for-pound fighters in the sport.  As he says, it’s not easy going against him.

Attendance, Gate and Bonuses

Boston fans came out for UFC 220 as the event was a sellout or close to it with the most fans-ever attending a UFC event at the TD Garden.  There were 16,015 fans in attendance with a gate of $2.45 million.  The gate was slightly less than UFC 118’s $2.8 million which had a main event of Edgar-Penn II.

The demand was down on the secondary market with the median price for tickets falling as of this past Thursday from $384 per ticket to $368 per ticket.  The get-in price on the secondary market was $136.  Ticketmaster had seats available although they were close to a sell out as of Friday.

The bonuses went to Cormier, Abdul Razak Alhassan, Calvin Kattar and Shane Burgos.  Each earned $50,000.  Alhassan and Cormier earned the Performance bonuses while Kattar and Burgos drew Fight of the Night.

Promotion of the Fight

This felt like a big event for the UFC as it tried to kick off 2018 on a high.  Embedded was front and center as the tool to promote the event via social media.  This time around, there were no sponsors attached to the event.  It did show a lot of the promotion (i.e., media obligations, ESPN interviews, appearances) in addition to the training the main camps endured.

One of the more unique opportunities was Daniel Cormier being interviewed for Complex Magazine regarding his shoe game.  As someone that is somewhat of a sneakerhead, this was a good way to tie in Cormier with a personal interest with the underlying goal of promoting UFC 220.

Sponsorships

It was the first time that Modelo was a part of a UFC PPV.  The beer maker took over for Bud Light as the “Official Beer” of the UFC.  It was front and center during the UFC Prelims as the studio shots had the logo prominently displayed.  It was also on the canvas and Octagon posts.

BodyArmor also made its first appearance on a UFC PPV with the stools, drinks and towels having the logo.

Although no announcement has yet been made, Wish Shopping may be the next sponsor to fall in line with the UFC.  The company, which features online shopping, was one of the sponsors for The Money Fight this past August.  It also sponsors the Los Angeles Lakers.  During the PPV, it sponsored the Fighter Descriptions.

Gruntstyle.com, MetroPCS, Body Armor, Toyo Tires, Performance Inspired, Modelo, EA’s UFC 3, Monster Energy had the center of the Octagon.  7-11 shared an Octagon post with Monster Energy.   The upcoming video game also had the fighter prep point.

MetroPCS offered its Periscope analysis during the event with Forrest Griffin, Demetrious Johnson, Tyron Woodley and Cody Garbrandt.

Performance Inspired also sponsored the UFC bonus announcements.

EA UFC3 offered up the video game versions of the main event participants.

Odds and Ends

As most know, the event went up against Bellator 192 on the reboot of SpikeTV now known as The Paramount Network.

Francis Ngannou, a native of Cameroon, had some choice words for the President.  I also wrote about it here.

The weirdest news out of this week was the internet feud between Daniel Cormier and professional wrestlers, The Young Bucks.  The two went back and forth before third parties decided to be jerks and both sides decided for cooler heads to prevail.

There were over 1 million google searches for UFC 220 on Saturday.  In comparison Bellator 192 had over 200,000.

UFC 220 was $5 more ($64.99) than PPVs last year.  If you wanted the 4K version it cost $74.99.

Luke Rockhold, a training partner of Cormier, trained in Florida with Volkan which caused somewhat of a stir but for the fact Rockhold immediately dispelled a myth of a fissure between himself and DC.

Conclusion

The google searches and promotion of the event leads me to believe that we should see a better than normal buy rate for this event.  While UFC 219’s mid-300s was a success despite the consensus feel that it was not, look for UFC 220 to do slightly better.  Perhaps the 350-375K range.

Rivera issued 4 years ban for submitting false evidence to USADA

January 21, 2018

Francisco Rivera was handed a 4-year suspension from the UFC for “aggravating circumstances” stemming from a violation of the UFC Anti-Doping Policy.  The arbitrator determined that Rivera knowingly took clenbuterol and attempted to falsify evidence to conceal the wrongdoing.

A USADA arbitrator issued the ruling on Friday.

USADAv.rivera Award by JASONCRUZ206 on Scribd

The arbitration is a result of a flagged urine sample taken from Rivera on July 23, 2016.  The A and B samples contained clenbuterol, a Prohibited Substance that is not a Specified Substance.  At the time, Rivera was preparing for a fight on July 30th

Notably, at about the same time, UFC welterweight Li Jingliang avoided punishment for a positive test of clenbuterol when it was determined that it was due to consuming contaminated meat in China.  Hoping to obtain the same outcome, Rivera claimed that it was possible that the positive finding was due to consuming meat at a family barbecue in Mexico.  In order to bolster his alibi, he produced a receipt from a Costco, a falsified bank statement and two falsified witness statements claiming that he was in Mexico visiting family.

As part of the investigation, USADA sent a representative from New York to Los Angeles to accompany Rivera to a local Chase bank branch to obtain a bank statement to confirm the authenticity of the receipt.  However, Rivera did not show up and when his attorney attempted to contact him, the fighter did not respond.  At that point, his attorney threatened to withdraw from representation due to his failure to show up at an agreed time.  USADA informed the arbitrator of what had happened and soon thereafter Rivera emailed USADA stating he was in Mexico.  It was later determined that he was actually in San Diego.

In order to save himself, Rivera claimed that his attorney had falsified the information in the Arbitration Brief.  But, the Arbitrator did not buy it.  Even though there were circumstantial facts, the Arbitrator notes the short notice of his bout in mid-June, the proximity of time (July 23) that the test was taken to his fight on July 30th and the nature of the finding led to the conclusion that Rivera used clenbuterol to lose weight while maintaining strength and endurance.

The Arbitrator found that Rivera did not meet his burden to show that the period of ineligibility should be reduced to less than two years based on the alibi that he used tainted supplements or ate tainted meat from Mexico.

 

The Arbitrator notes that USADA does not cite a definition for “aggravating circumstances” in its Arbitration brief which is meant to enhance a punishment.  Also, the UFC Anti-Doping Policy does not define “intentional” for purposes of the “aggravating circumstances” definition.  This might provide a sliver of hope for Rivera if he determines to appeal the 4-year sentence.  Yet, the Arbitrator found sufficient evidence to add on 2 years to the requisite 2 for a violation of the UFC Anti-Doping Policy.

The good news for Rivera was that the Arbitrator noted that the parties bear their own attorney fees and costs.  Certainly, the flight for USADA to go from NY to LA to meet Rivera could have been an expensive cost for Rivera.

Payout Perspective:

This was a case that USADA is using as an example of what happens if you attempt to beat the system.  The attempts by the 36-year-old Rivera to falsify evidence is not only against the rules, it may have put the attorney in trouble for the claim that he attempted to falsify evidence in a proceeding.  Even if it was not in court, an administrative hearing likely carries the same ethical penalties for misrepresentation and falsifying evidence.  The punitive nature of the 4 years is warranted in this case considering the circumstances of the investigation with Rivera not showing up at an agreed upon meeting at a bank and admitting to falsifying the bank records.  Of course, the underlying was that Rivera attempted to use the banned substance to make weight for a fight he was taking on short notice which was also the last fight on his contract.  So, there was pressure to win in his last fight.  The fact he took it on short notice may be a consequence of needing the money.

Belfort asks for pay after Hall pulls out of UFC St. Louis

January 15, 2018

MMA Fighting reports that Vitor Belfort has asked the UFC to pay him for being ready to fight at UFC St. Louis but it appears that Dana White is claiming that due to the fact that he turned down replacement fights, he will not be compensated.

Belfort’s opponent, Uriah Hall, was unable to weigh-in on Saturday before Sunday’s event and the fight was cancelled.  White blamed Hall for not being able to fight as he claims that he was not taking training seriously.

On social media, Belfort asked for his pay as he trained for the bout and made weight.

Antes de qualquer coisa só gostaria de dizer OBRIGADO! Obrigado a todos! Todos que me acompanham, torcem por mim e minha família! Mas hj especialmente quero fazer um agradecimento especial ao colunista @chicobarney pela matéria q publicou no Site uol.com.br Lendo o q escreveu me fez lembrar de cada momento descrito no texto. As críticas, meus sentimentos, sonhos, ideias etc… Em um momento como hj, em q o agora não me faz muito sentido… Difícil entender depois de tanta dedicação e sacrifício. De ter me preparado psicologicamente para me aposentar de um esporte q basicamente ajudei a criar… e simplesmente isso não ter acontecido…Tenho sentimentos conflitantes a respeito do q aconteceu… Mas como disse, lendo a matéria também me lembrei de q muito do que fiz, muitas das ideias e muito do q disse anos atrás, não faziam pleno sentido para mim. Eu simplesmente acreditava q daria certo… Q o Vale Tudo na época se tornaria um esporte. Que nós lutadores, não éramos bárbaros se digladiando e sim atletas. Que tínhamos potencial de sermos “uma empresa” de representarmos marcas e valores. Nada disso fazia muito sentido na época, mas dentro do meu coração, sempre fez … Minha luta de despedida não ocorreu como havia planejado, mas no meu coração sei q de alguma forma lá na frente, TUDO isso fará sentido. Mais uma vez, como sempre fiz e muitas vezes fui ridicularizado por isso. Entrego a minha vida nas mãos do meu Pai q está no Céu. Pq Dele sempre veio a minha paz… Bjo no coração de todos vcs. Agora uma mensagem para o @ufc . Estou à espera do meu pgto @ufc afinal de contas, fiz o que tinha que ser feito ( treinei , estive presente na semana da luta, bati meu peso….) Onde está o respeito!?

A post shared by Vitor “The Phenom” Belfort (@vitorbelfort) on

White rebutted the notion of paying Belfort by claiming that he had turned down a replacement fight and another for next week in Boston.

Payout Perspective:

It’s clear that there must be an actual policy for payment which should be in a fighter’s contract that the fighter is guaranteed at least his purse (and maybe win bonus) if he or she is able to make weight and their opponent cannot fight.  Offering a replacement is a solution but a flawed one for the simple fact that Belfort has trained specifically for one fight and is now presented with another.  Moreover, a loss would impact their ranking and earning potential.  Not to mention loss of win bonus.  From the UFC perspective, it’s the best that they can do.  But, it would seem fair that since the fighter did everything possible to fulfill the terms of the contract, there should be some sort of mechanism where they are compensation in the event the other party fails to fulfill their terms of the bout agreement.  It would seem finding a replacement would put the fighter in a “take it or not get paid” position.  I’ve been told that this scenario does not just happen in MMA but also in boxing which is unfortunate.  The solution, of course, is to push for a better deal in the bout agreement.  This is easier said than done because the bargaining leverage is skewed toward the promoter.

2017: The year in boxing

January 6, 2018

2017 was a great year for boxing which saw some great fights and the spectacle that was Mayweather-McGregor.

The year started off with the talk about Mayweather-McGregor as the UFC’s lightweight champion stirred the pot by going on a rant on Instagram where he wrote “F*** the UFC.”  Dana White warned that if Conor went on without the UFC it would be an “epic fall.”

January also saw Al Haymon get a court victory with a dismissal of Golden Boy’s Antitrust lawsuit.  In a ruling which did not include oral argument, the Judge determined that Golden Boy did not come fort with genuine issues of fact to support its claims.  Most importantly, and a word of caution for the Plaintiffs in the UFC Antitrust lawsuit, the Judge reiterated that the antitrust laws protect competition, not competitors.

Although Golden Boy suffered the loss in court, it inked a deal with ESPN with 42 fights airing on ESPN starting in March 2017.  As the prevailing party, they requested legal costs in the amount nearing $35,0000.  Golden Boy appealed the dismissal but it appears that the sides resolved the case as the appeal was dismissed by agreement of the parties.

The Deontay Wilder-Alexander Povetkin/World of Boxing lawsuit went to trial in February and it did not take long for a jury to decide that Povetkin took Meldonium after January 1, 2016.  However, the case continues with the parties litigating the other claims as well as the issue who receives the millions of dollars that has been placed in escrow.

Wilder was also sued by rival Dominic Breazeale for a hotel melee.  The case was thrown out as the episode happened in Alabama but Breazeale sued in California.

Showtime Boxing had the highest rating of 2017 with Adrian Broner taking on Adrian Granados drawing 779,000 viewers.  The fight also aired on Twitter as the service continued to expand its offering of streamingClaressa Shields became the first female boxer to headline an event on premium network television. In March.

The GGG-Daniel Jacobs PPV drew between 130-150K PPV buys.  GGG’s next PPV appearance against Canelo would draw much higher as the draw drew 1.2 million buys.  The fight also had a higher price tag than usual:  $79.99 HD.  A rematch for May 2018 seems imminent.

March saw the second highest-rating for network viewership as Keith Thurman faced Danny Garcia in the battle of unbeatens on CBS.  The fight drew 5.1 million viewers while the overall telecast drew 2.7 million viewers.

After going through a lot of money, the viability of the PBC obtaining a media rights deal was brought into question.  Its deal with Spike TV ended but the organization found a home on FS1.

In 2017, it seemed as those everyone applied for a boxing license:  Conor, Nate Diaz, Cyborg…

Anthony Joshua faced Vladimir Klitschko in one of the biggest fights of the year.  The event aired live on Showtime and tape delay on HBO.

May’s Canelo Alvarez-Julio Cesar Chavez, Jr. PPV drew 1.3 million buys and its replay on HBO drew 769,000 viewers.

In May, we took a look at where was Boxing’s next PPV star.  Aside from Canelo Alvarez, there are several contenders to be the next star on PPV including Anthony Joshua.

In June, The Money Fight was announced.

Also in June, Top Rank announced that it had a deal with ESPN to air fights with the first one being Manny Pacquiao fighting Jeff Horn in Australia on July 1st.  The debut earned big numbers as Pacquiao lost a controversial decision to Horn.

The Andre Ward-Sergey Kovalev II PPV in June drew between 130-135K PPV buys.

July saw a 4-city tour to promote the Mayweather-McGregor bouts.  It was an ambitious tour that fans clamored to be a part.  It was announced that the PPV price would be $99.95 HD.

The Money Fight drew huge numbers and was a big financial success.  We wrote about it here.  The event had streaming issues on both UFC Fight Pass and Showtime platforms.  As you might expect, there were lawsuits which are still matriculating through the court system.

Despite the big event, HBO ran an event featuring Miguel Cotto and it did well considering as it drew 730,000 viewers.

Capitalizing on the publicity of The Money Fight, announced an ESPN deal which will include airing its fight library on an OTT service that will launch in 2018.

Austin Trout sued the WBO which included claims under the Ali Act.  The case was moved to federal court in Puerto Rico where the WBO is seeking to dismiss the case and move it to arbitration.  The case will be an interesting look as to whether the court will allow a claim under the Ali Act will go to arbitration.

In September, Magomed Abdusalamov settled with the state of New York for $22 million for injuries sustained in a fight in 2013.  Abdusalamov was left with a brain injury and paralysis due to improper conduct and lack of training by the New York State Athletic Commission.

A huge ESPN fight between Vasiliy Lomachenko and Guillermo Rigondeux drew 1.73 million viewers.  The overall telecast drew 1.487 million viewers.

In December, Showtime announced Mayweather-McGregor drew 4.3 million domestic PPV buys.  This is off from the 6.7 million Dana White had stated.  After hearing of the announcement, White took issue with Showtime’s numbers.

One of the bigger stories to watch going into 2018 is the announcement by Dana White that he will be promoting boxing.  Zuffa Boxing, a t-shirt worn by White during The Money Fight press tour, was a hint that White was up to something.  White made it official late in the year.  He indicated that he was meeting with Floyd Mayweather.  Despite stating that he will never work with Showtime again, he said he would be willing work with other promoters with the exception of Bob Arum.

Trout case may have impact on future of Ali Act litigation

January 5, 2018

Maybe the most important case as it relates to the expansion of the Ali Act may involve boxer Austin Trout and his current lawsuit against the World Boxing Organization in Federal Court in Puerto Rico.

Last month, the WBO is moving to dismiss the case and invoke the arbitration clause which was a part of his promotional contract with the company.  Trout had filed the lawsuit which includes claims for violation of the Ali Act in boxing.  The WBO argues that Trout agreed to the contract and should be held to its arbitration clause and that he forfeited his right to a jury trial.  Trout states that the Ali Act is federal law and that it is not governed by the WBO Promotional contract.  His attorneys also claim that that the arbitration would be unreasonable or unjust.  The other overarching argument is that the WBO has waived its right to compel arbitration by litigating the case.

The case, originally filed in state court in New Mexico where Trout resides, has been around for 2 years but due to jurisdictional fights, nothing substantive has happened in the case.  Due to the hurricane that hit the island, there was an additional delay.

You can find the background of the lawsuit in our September 2017 post which includes copies of the Complaint and Amended Complaint.

Payout Perspective:

There’s no timeline as to when the Court might render a ruling on the WBO’s Motion to Dismiss.  But, the overarching issue for fans of the Ali Act Expansion is whether an organization can contract out of the lawsuit.  This means that even if there is a federal law which grants a plaintiff a right to sue, the fact that there is an arbitration clause in the contract may render the claim moot as to a trial and it may (or may not) go forward in arbitration.  There are several layers to consider here as to whether the Ali Act is something that was contemplated as part of a contractual dispute that would go to arbitration.  If it is a part of the contract and the arbitration clause is valid, it would make it easier for organizations to litigate claims.  On the other hand, I have been an advocate for arbitration and/or mediation to resolve Ali Act violations due to the fact that litigation is long and expensive.  You could also bifurcate the claims as to taking the Ali Act to trial while arbitrating any other claims.  The other issue is who would be the trier of fact (i.e., jury, judge or arbitrator).  Also, who would be the arbitrator (a panel or just one individual).  Thinking ahead, if an expansion to the Ali Act takes place, it would be interesting to see if the UFC amends its fighter contracts to institute clauses to limit them to binding arbitration similar to the UFC Anti-Doping Program.  MMA Payout will keep you apprised of this lawsuit.

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