Show Money Episode 11 talks about the UFC sale

July 17, 2016

I hopped on with Paul Gift and John Nash of Bloody Elbow to discuss the UFC sale and the future impact.  We also learned at the end of the episode that Brock Lesnar was flagged for a potential UFC anti-doping policy violation.

Lesnar flagged for potential UFC anti-doping violation

July 15, 2016

USADA has notified the UFC that Brock Lesnar has been flagged for a potential violation of the company’s anti-doping policy.

The UFC posted its statement on the notification on Friday night.

“The UFC organization was notified today that the U.S. Anti-Doping Agency (USADA) has informed Brock Lesnar of a potential Anti-Doping Policy violation stemming from an out-of-competition sample collection on June 28, 2016. USADA received the testing results from the June 28, 2016 sample collection from the WADA-accredited UCLA Olympic Analytical Laboratory on the evening of July 14, 2016.

“USADA, the independent administrator of the UFC Anti-Doping Policy, will handle the results management and appropriate adjudication of this case. It is important to note that, under the UFC Anti-Doping Policy, there is a full fair legal review process that is afforded to all athletes before any sanctions are imposed. The Nevada State Athletic Commission also retains jurisdiction over this matter as the sample collection was performed in close proximity to Lesnar’s bout at UFC 200 in Las Vegas.

“Consistent with all previous potential anti-doping violations, additional information will be provided at the appropriate time as the process moves forward.”

The flagged test calls into question the UFC waiving Lesnar’s notice to return to the UFC without the requisite 4-month written notice.  Under 5.7.1 of the UFC anti-doping policy, it’s within the UFC’s right to grant an exemption to a 4-month period in which USADA may test you.  The UFC clearly allowed an exemption  for Lesnar to make 200.

The WWE gave a short statement regarding Lesnar’s test.  As it has been throughout the Lesnar lead-up to UFC 200, it’s staying away from Lesnar’s participation in the UFC.  I’m sure they regret promoting his win last Monday.

Payout Perspective:

Just a little over one year into the UFC Anti-Doping Policy, we are discovering that the drug testing policy shows no favorites.  Not only did a flagged test take Jon Jones off of the biggest card of the year, Brock Lesnar was identified as possibly committing a violation as well.  The fact is that these drug tests could be expedited to ensure that all fighters are cleared of any out of competition violation prior to an event.  But, it has been decided that whatever testing process they go through was not rushed.

The failed test is a negative for the WWE as Lesnar is scheduled to be featured in next month’s WWE Summerslam.  Notably, two of the WWE’s big stars (Roman Reigns) have been flagged for a drug violation.

The violation likely forecloses Lesnar in the Octagon again unless he has an excuse for the flagged test.  For the UFC, it’s another blemish for the company.  However, Lesnar is not a mainstay for the company despite being the biggest draw on PPV.  Thus, the UFC and its new owners should withstand the bad PR in the coming days.

UFC 200: Payout Perspective – Part 2 of 2

July 13, 2016

Welcome to UFC 200’s Part 2 of Payout Perspective.  We are once again recapping the weekend that was in the UFC.

UFC Sold to WME | IMG

The news came out on Sunday that Zuffa, LLC had sold the UFC to an investment group spearheaded by William Morris Endeavor and International Management Group.  As we learned the sale price was approximately $4 billion.

While Jeremy Botter’s report was met with denials as well as a lawyer letter, the news was true.  The Fertitta Brothers, Dana White and Flash Entertainment sold its shares in the UFC.

Prior to Sunday’s news, Los Angeles Times and TMZ both ran articles refuting the stories of a sale which were backed by Zuffa executives.  The TMZ story did not cite names but quotes from Zuffa execs while the Times ran a piece which included sit downs with White and Lorenzo Fertitta

More Promotion

UFC 200 introduced its main event of Jones vs. Cormier (after McGregor-Diaz was scrapped) on ABC’s Good Morning America.  The event included Dana White, Jon Jones, Daniel Cormier, Miesha Tate, Chuck Liddell and Frankie Edgar.  It was the second time that a fight was announced on GMA.  This time around, the UFC was front and center on the show.  It was good exposure for the company.  Too bad the main event didn’t stick.

Forbes ran a piece on the marketing behind those crazy graffiti posters.  Apparently part of the idea was based on Conor McGregor’s tirade at the pre-fight press conference at UFC 197.  McGregor was promoting his fight against Rafael dos Anjos.  Imagine if RDA did not get injured.

Bud Light offered limited edition UFC bottles.  Guess who promoted them:

Payouts

The complete list of salaries from UFC 200 as disclosed by the Nevada State Athletic Commission is as follows (via MMA Junkie):

Amanda Nunes: $100,000 (no win bonus)
def. Miesha Tate: $500,000

Brock Lesnar: $2,500,000 (no win bonus)
def. Mark Hunt: $700,000

Daniel Cormier: $500,000 (no win bonus)
def. Anderson Silva: $600,000

Jose Aldo: $500,000 (includes $100,000 win bonus)
def. Frankie Edgar: $190,000

Cain Velasquez: $300,000 (no win bonus)
def. Travis Browne: $120,000

Julianna Pena: $64,000 (includes $32,000 win bonus)
def. Cat Zingano: $35,000

Kelvin Gastelum: $86,000 (includes $33,000 win bonus and $20,000 from Hendricks’ purse)
def. Johny Hendricks: $80,000(Hendricks forfeited 20 percent of his original $100,000 show money to Gastelum for missing weight)

T.J. Dillashaw: $50,000 (includes $25,000 win bonus)
def. Raphael Assuncao: $42,000

Sage Northcutt: $100,000 (includes $50,000 win bonus)
def. Enrique Marin: $13,000

Joe Lauzon: $108,000 (includes $54,000 win bonus)
def. Diego Sanchez: $80,000

Gegard Mousasi: $110,000 (includes $35,000 win bonus)
def. Thiago “Marreta” Santos: $28,000

Jim Miller: $118,000 (includes $59,000 win bonus)
def. Takanori Gomi: $55,000

The Reebok Clothing payouts are here via MMA Junkie.  Notably, Aldo and Edgar both made $30,000 each as “challengers” since they were vying for the interim(?) Featherweight title.

Odds and Ends

What has happened to Johny Hendricks?

Early weigh-ins did not help Johny Hendrick as he yet again had issues with weight cutting.  Notably, Kelvin Gastelum has had problems in the past and just made the limit.  Miesha Tate had to disrobe to make the championship weight.

UFC 200 Prelims scored the highest rated show ever on FS2 as the first 31 minutes was switched to the network due to MLB going extra innings on FS1.  Despite the delay due to baseball, FS1 was the highest-rated prelim ever in the adult 28-49 demo.  The prelims on FS1 peaked with over 2 million viewers in the last quarter hour.

The last hour of the prelims went head-to-head with the first hour of PBC on ESPN.  PBC scored 442,000 viewers for its 2-hour plus event on Saturday night.

UFC offered the event in 4K.  It was the first time that a PPV was offered in 4K by any sport organization.

I missed Jon Jones’ press conference but I cannot say I feel sorry for him.  Whether or not he took PEDs, he’s been given chance after chance to succeed, but continues to fail.

Think about how much Jon Jones cost the UFC for them to tear down his posters and take his likeness off of the T-Mobile Arena.  There’s also the unsold t-shirts and posters.  He also cost UFC employees a night’s sleep to re-do all of the promotion centered around the Jones-Cormier main event.  Now that’s selfish.

International Fight Week

If you’ve never been to International Fight Week, it’s sort of like the NFL Experience at the Super Bowl.  If you have never been to that, think big convention hall with tons of sponsor/vendor booths, interactive areas and talks from special guests.  It’s a great thing to go and see if you’re a big UFC fan.  I realize that over the years this event may have lost steam, but once again, it’s something for the true UFC fan.

While UFC 200 and International Fight Week may have been much bigger with Ronda Rousey and/or Conor McGregor on the card, the event and week is a good opportunity for the UFC and its partners to engage with its fan base.

UFC 200: Payout Perspective – Part 1 of 2

July 11, 2016

Welcome to a special edition of Payout Perspective.  This time we take a look at UFC 200 from the T-Mobile Arena in Las Vegas.

Nunes upsets Tate to win women’s title

If I were to tell you at the start of the year that the main event for July’s UFC 200 would be Amanda Nunes versus Miesha Tate, you probably would have thought that it was a joke.  However, due to Ronda Rousey’s movie career, Conor McGregor’s poorly played power move and a Jon Jones drug test, we received Nunes-Tate as the final fight on what was/is supposed to be the biggest card of the year for the UFC.

Amanda Nunes looked sharped and started off quick as she always does.  She peppered Tate and may have broken her nose.  Once it got to the ground, Nunes applied the rear-naked choke (or chin crank) for the victory.  You could see Tate being broken as the round went on.  She barely made weight for this fight despite seemingly calm throughout the rest of the camp.

Nunes was emotional and became the first openly gay UFC champion for the sport.  It was fitting as it was the same weekend that the UFC announced its line of apparel in support of the LGBTQ community.  Of course, the weekend was somewhat tarnished by comments made by Donald Cerrone on Sunday although The Cowboy did apologize immediately.

Nunes may have Holly Holm or a returning Ronda Rousey at year’s end.  If Rousey decides to return to the Octagon, I could envision a New York defense for Nunes against Rousey.

UFC 200

Lesnar dominates Hunt in return to Octagon

Brock Lesnar surprised most of the MMA fanbase as he defeated Mark Hunt in a 3-round heavyweight bout.  Although Lesnar’s last time in the Octagon looked very bad (a loss to Alistair Overeem at UFC 141), he looked quick and his wrestling helped squash Hunt.  In another surprise, Lesnar’s post-fight interview was far-less dynamic and much more humanitarian than beast-like in his UFC 100 tirade which even UFC Fight Pass censors due to his comments about sponsor Bud Light.

This was supposed to be a one-time thing for Lesnar as he was on “loan” (for $2.5M +) from the WWE.  We will see if he will fight again.  If he does, you have to think he’s close to being in line for a title shot.

Aldo wins interim belt as McGregor watches on

Jose Aldo looked like his old self in securing a unanimous decision win over Frankie Edgar.  Aldo’s ability to stuff takedowns and score on the outside helped him defeat a game Edgar.  Aldo should receive his much-anticipated rematch against Conor McGregor (after his one-off with Nate next month).

Not sure what Edgar will do next.  He had been on a great run up until Saturday.  However, he’ll have to hope for a Conor win to get another shot at the 145 title.

Attendance and Gate

The UFC set a gate record in Nevada with $10.7 million for the 18,202 in attendance at the T-Mobile Arena in Las Vegas.

Bonuses

The bonuses of $50,000 went to Amanda Nunes, Cain Vevlasquez, Joe Lauzon and Gegard Mousasi.  All were performance bonuses as there was no Fight of the Night.

Payouts

The biggest payout was Brock Lesnar and his $2.5 million.  Even with no win bonus, it’s the largest reported payout for a UFC fighter.  No complaints from anyone else as Lesnar likely brought in many PPV purchasers.  Lesnar likely will make more from his PPV cut.

Lesnar’s opponent, Mark Hunt, received $700,000 for stepping in with the WWE superstar.  According to Kevin Iole, the Nevada State Athletic Commission stated that Cormier was slated to make $1 million for his fight with Jon Jones.  But since that was cancelled, he made $500,000.

Promotion of the Fight

The UFC bought ad time on Adult Swim in an effort to expand its reach as well as touch upon the network’s African American demo.  At the time, the main event was Cormier-Jones.

In addition, the UFC had a “confrontation show” on FS1 with Jon Jones and Daniel Cormier talking about their fight.

Bud Light and Monster Energy held promotions months in advance holding trips to win a chance to go to UFC 200.

The UFC did their usual media stops although it did not seem as broad a reach as UFC 196.

Sponsors

The special gold mat included the usual sponsors as well as a couple new ones.  EA UFC2, Harley-Davidson, MetroPCS, Toyo Tires, Bud Light and Monster were all in the Octagon with the energy drink having the center of the Octagon.  Hudson Shipping Lines, a mainstay sponsor on many International UFC cards had signage in the Octagon.  DirecTV promoted its original show, Kingdom.  It showed clips of the show as well as showing stars in attendance.  Also, Speedway was also in the Octagon sharing a signage post with Monster.  The company is a gas and convenient store with most of its locations on the East Coast.  It ran a promotion in conjunction with Monster leading up to this event.

Bud Light had the prep point at the televised weigh-ins and at the event.

As we mention, Bud Light and Monster Energy had promotions far in advance of 200.

Odds and ends

Yes, we’ll address the sale in another post.

The mat probably was to be more a gold look but was yellow to commemorate UFC 200.

The UFC offered 200 in 4K.  It was the first time ever and event was offered in PPV.

This was the first reveal of the Reebok kits.  It had more colors.  Notably the yellow looked good for Anderson Silva as it was his usually color.  But, the yellow also was the same as the mat.

Interesting that DC was wearing his Nike Air Max shoes during fight week including during the Embedded where Dana White told Cormier that his fight with Jones was off.

The WWE did not actively promote UFC 200 although the PPV featured an ad for Summerslam.  It was not until Brock’s win did the WWE social media machine engage.

While there is so much love for Lesnar right now, an injury-free Cain Velasquez at sea-level is probably the best heavyweight out there.

It’s been slightly over 1 year with the UFC Anti-Doping Policy and the company’s biggest event is greatly affected by it.  At least we know that there are no favorites in the process.

The UFC and Snapchat announced a multi-year partnership for coverage of its live events which began at UFC 200.

The UFC Prelims on FS1 were sent to FS2 for the first half hour due to the MLB game that preceeded the event going to extra innings.  The FS1 audience missed out on the Sage Northcutt fight.  Despite an average (maybe below) average performance, Sage secured an individual Reebok sponsorship.

The Exclusive UFC Fight Pass Prelims had some of the more exciting fights of the night on it as it produced two bonus winners (Lauzon, Mousasi).

Speaking of Fight Pass, I was interviewed by The Verge about how the UFC became the ‘Netflix of Combat.”

Conclusion

We’ll have more on the event, the Expo, Jon Jones and more in part 2.  But, everyone probably wants to know what an estimated buy rate would be for this event.  While we pondered whether this event could draw 2 million PPV buys, that would be unlikely after the Jon Jones debacle.  Jones is not a big PPV draw but the promotion and marketing was centered around the feud with Cormier.  UFC 182 drew 800,000 PPV buys.  With Lesnar and two other title fights, one would think that it could draw near the 2 million mark.  Even without the feud, UFC 200 should do well with just the name Brock Lesnar attached.  UFC 200 should doing something between 1 million to 1.2 million PPV buys.  While it won’t eclipse UFC 100’s buy rate, it will be a good sendoff for Zuffa.

UFC sold, announcement Monday

July 10, 2016

Chris Maathuis of KLAS-TV News, a CBS Las Vegas affiliate is reporting that Zuffa has officially sold the UFC to WME-IMG Capital.  The official confirmation will come on Monday morning although Lorenzo Fertitta and Dana White sat down for interviews with the local station about the sale.

Despite internal and external denials about a rumored sale, it was clear that Zuffa was set to sell the company.  It will be sold to WME-IMG for approximately $4.2 billion.  The deal will be backed by private equity firms Silver Lake, Kohlberg Kravis Roberts and the investment firm of Michael S. Dell per the NY Times.

The sole response, as of this writing, coming from Dana White’s twitter account tonight:

White told ESPN’s Brett Okamoto that he is staying on with the company as President despite the sale.

Payout Perspective:

We now learn that the reports of the sale back in May were true and the UFC was just holding the story until after UFC 200.  Notably, the UFC’s lawyers sent Jeremy Botter of FloSports (according to Botter in an interview with Josh Nason of The Wrestling Observer) a letter warning him about his report that the UFC was being sold.

As for the sale, the price tag is amazing for a sport that you still must consider niche (fighting does not appeal to a broad base) but attractive to a young demo with disposable income.  We shall see what directions the new owners pursue and what level of input White will have with the ownership.

UFC 200 sets gate record in Nevada

July 9, 2016

UFC 200 set a record gate for the UFC in the state of Nevada with $10.7 million.  The event drew 18,202 at the T-Mobile Arena in Las Vegas.

The attendance and gate were announced at the UFC post-fight press conference.  The gate surpasses December’s UFC 194 which drew $10.1 million at the MGM Grand Garden Arena.  We should note that the estimated attendance for Conor-Aldo was 16,516.

Bonuses went to Amanda Nunes, Cain Velasquez, Joe Lauzon and Gegard Mousasi.  All were Performance Bonuses and there were no Fight of the Night Bonus.  Each won $50,000 bonuses.

Payout Perspective:

Although UFC 100 drew $100K bonuses and UFC 129 drew $129K bonuses there were no $200K bonuses.  As for the gate, the record is due in part to the high ticket prices to get in.  Certainly, it was another great three days of fight culminating with a big event that drew a record number of fans paying premium prices to break the gate record.

Anderson Silva steps in to face DC at UFC 200

July 8, 2016

The UFC announced Thursday night that Anderson Silva will face Daniel Cormier in a 3 round fight at UFC 200.  Silva steps in for Jon Jones who was removed due to a potential UFC Anti-Doping Policy Violation.

Silva was scheduled to do an autograph signing in town this week but that was cancelled prior to the news of Jones’ drug test.  Silva takes the fight with just 2 days notice.

Cormier was distraught about losing the Jones fight but now gets one of the greatest in the sport.  However, Silva comes off a February loss to Michael Bisping and was removed from UFC 198 and a fight with Uriah Hall due to injury.

Payout Perspective:

Silva’s addition after Jones’ removal will help bolster the card that may have seen some fans asking for refunds after the title fight fell.  But, Silva is still an attraction that will keep the momentum of Saturday’s card.

Jones off UFC 200 for potential UFC Anti-Doping violation

July 6, 2016

Jon Jones is out of the main event for UFC 200 and off of the card entirely after he was flagged for a potential UFC anti-doping policy.  The UFC was informed of the potential violation on Wednesday night.

Jones is said to address the potential USADA violation on Thursday morning.

The positive test is a result of an out-of-competition sample on June 16, 2016.  According to the UFC anti-doping policy

Via UFC.com:

The UFC organization was notified tonight that the U.S. Anti-Doping Agency (USADA) has informed Jon Jones of a potential Anti-Doping Policy violation stemming from an out-of-competition sample collection on June 16, 2016.

USADA, the independent administrator of the UFC Anti-Doping Policy, will handle the results management and appropriate adjudication of this case. It is important to note that, under the UFC Anti-Doping Policy, there is a full fair legal review process that is afforded to all athletes before any sanctions are imposed.

However, because Jones was scheduled to compete against Daniel Cormier this coming Saturday, July 9 in Las Vegas, there is insufficient time for a full review before the scheduled bout and therefore the fight has been removed from the fight card. As a result, the three-round heavyweight bout between Brock Lesnar and Mark Hunt will become the UFC 200 main event.

Consistent with all previous potential anti-doping violations, additional information or UFC statements will be provided at the appropriate time as the process moves forward.

Ticket refunds available upon request at primary point of purchase.

Brock Lesnar and Mark Hunt will be the main event of the PPV.

Payout Perspective:

It’s a huge kick in the stomach to the UFC that Jones is the center of controversy once again.  It comes on the biggest stage and on the biggest card for the UFC.  While we cannot conclude Jones is culpable for this drug test as there may be factors which may show no wrongdoing and he is entitled to due process per the terms of the policy, it is another sign that Jones is not clear of his demons.  He appeared past his problems and the UFC Embedded series showed a guy that seemed happy and ready to focus on his career.  It appears that this is not the case.

Not only is Jones out of UFC 200, there is now a possibility that he may have violated the terms of his probation.  The terms in which the state can withdraw its plea agreement is below.  While I don’t think he violated the terms, it is another trouble for a fighter that could have been the best ever in the sport.

Screenshot (27)

As for the card, it’s clear that the UFC is fortunate that Brock Lesnar is on it.  PPV, which has been boosted to $70 for HD, may take a small hit but where we may see the problem is with the gate for the T-Mobile Arena.  It will be interesting to see how many people request a refund.  The card is still packed but a Jones-Cormier feud is going to be put on hold yet again.

Can Lesnar push UFC to record PPV buy rate?

July 6, 2016

At UFC 100, Brock Lesnar’s defeat of Frank Mir helped the company set a record with 1.6 million PPV buys.  Can Lesnar’s fight on the UFC 200 main card help the company set a record yet again?

Things have changed since July 2009 when Lesnar manhandled Frank Mir in two rounds.  However, the UFC is banking on the Lesnar PPV success to continue 7 years and 100 PPVs later.

Before we discuss UFC 200 surpassing UFC 100 in PPV buys, one has to recall UFC 100 also included Georges St. Pierre defending his welterweight title.  In addition, a young Jon Jones fought on the preliminary card.  Arguably, UFC 200 has a better lineup with 3 title fights as well as Cain Velasquez and Travis Browne in the main card opener.

Lesnar is a PPV magnet and despite the fact he’ll likely be fourth on the card behind the three title fights, many people are buying the card to watch him.

Back in 2010, MMA Payout deduced that Lesnar was the biggest UFC PPV draw.  We note that the post occurred in August 2010, prior to Lesnar’s defeat at UFC 121 to Cain Velasquez.

With Lesnar in the main event, it’s clear that he’s been an overwhelming boon for business.

UFC 91, November 15, 2008: Lesnar v. Couture: 1,010,000 PPV buys

UFC 100, July 11, 2009: Lesnar v. Mir: 1,600,000

UFC 116, July 3, 2010:  Lesnar v. Carwin: 1,060,000

UFC 121, October 23, 2010: Lesnar v. Velasquez: 900,000

UFC 141, December 30, 2011: Lesnar v. Overeem: 535,000

You might recall that UFC 141 was on a Friday night due to New Year’s Eve which likely detracted from the buy rate.  Despite that, the rest of Lesnar’s fights averaged 1,142,500 PPV buys.

In October 2014, the Sports Business Journal compiled a list of the biggest UFC PPV draws.  Lesnar topped that list as well.  GSP, Rampage Jackson, and Chuck Liddell followed in that order.

If we were to factor the Conor McGregor cards, he would crack the list of top PPV draws but Lesnar is still the top draw for the company.  Ronda Rousey events average around 680,000 PPV buys (excluding the co-main event cards with Chris Weidman).

With UFC 200 so stacked with fights for the casual to the hardcore fan, Saturday night’s event should flirt with the company PPV record of 1.6 million PPV buys.  The company’s decision to include Lesnar on this card could help it propel it to near 2 million PPV buys.

Payout Perspective:

It’s been 5 years since Lesnar last fought but Saturday’s event is stacked.  Jones-Cormier, Edgar-Aldo and Tate-Nunes would have given this card nearly 1 million PPV buys but the addition of Lesnar should put this event over the top.  We shall see if Lesnar would like to step back into the octagon after his fight with Mark Hunt Saturday.  Certainly, based on the anticipated huge buy rate, the UFC wouldn’t mind Lesnar coming back to the heavyweight division.

Boxers spar in court over failed bout agreement

June 26, 2016

Although Deontay Wilder is scheduled to fight Chris Arreola on Fox next month, he’s embroiled in a court battle against Alexander Povetkin and his promoter, Andrey Ryabinskiy due to a purported failed drug test which scratched the fight between the two.

On June 13, 2016, Wilder filed a lawsuit against Povetkin, Ryabinskiy and World of Boxing, LLC (“WOB”) for breach of contract and seeking the court for a declaratory judgment.  In addition to the money that has been put up in escrow for the fight

10 days later, World of Boxing, Povetkin and Ryabinkiy (“WOB”) filed sued against Wilder, Lou DiBella and DiBella Entertainment, Wilder’s promoters.  WOB is filing claiming causes of action for breach of contract as well as defamation.

Both lawsuits were filed in the U.S. District for the Southern District of New York.

Wilder and DiBella Entertainment, Inc. v. World of Boxing, LLC and Alexander Povetkin

The lawsuit claims breach of contract against WOB and Povetkin.

The facts, as told by Wilder’s attorney are below.  Also added, are additional facts from the WOB lawsuit which we identify as well.

  • The World Boxing Council (“WBC”) ordered Wilder and Povetkin (as the mandatory challenger) to begin negotiations for Wilder’s mandatory title defense of his WBC World Heavyweight Championship.
  • No agreement could be made and a purse bid was ordered. WOB won the purse bid at a price of $7.15M.  Notably, the WOB lawsuit claims DiBella’s bid was for $5.1M.
  • The agreed payout would include 10% of the amount bid ($715K) to the winner as a bonus and then a 70-30 split thereafter. But, the parties still had to negotiate other parts of the fight including drug testing.  The amount would also cover a 3% WBC sanction fee.
  • According to the WOB lawsuit, Wilder would receive $4,504,500, Povetkin $1,930,500 and the winner would receive $715,000.
  • Wilder’s side wanted to institute a drug program conducted by the Voluntary Anti-Doping Association (“VADA”).
  • Negotiations continued but suspicions by Wilder’s camp about Povetkin’s use of performance enhancing drugs increased.
  • With the parties at an impasse, the WBC stepped in and instituted an agreement on April 6, 2016. In the agreement, the drug testing program included VADA testing under the “WBC Clean Boxing Program.”
  • Since WOB won the purse bid, the fight was to take place in Moscow, Russia on May 21, 2016.
  • An agreement was signed on April 11, 2016. A copy is attached to the Wilder Complaint and is below.
  • On April 19, 2016 an Escrow Agreement was entered into in which $4,369,365 was put into an Escrow (identified as Chicago Title in the WOB lawsuit). The Escrow Agreement contained a (confidential per Wilder’s attorneys) liquidated damages provision.
  • Povetkin tested positive for Meldonium in an April 27, 2016 test.
  • The WBC issued a ruling that the fight would not take place as scheduled.
  • Wilder’s side advised the Escrow Agent not to disburse any of the money in escrow until it received a “joint instruction from the parties or a non-appealable order from a court of competent jurisdiction.”

Word of Boxing, LLC, et al. v. Deontay Wilder, et al.

The WOB lawsuit mitigates the finding that Povetkin tested positive for Meldonium.  This substance was the same one that tennis star Maria Sharapova tested positive for and has received a two-year ban from the International Tennis Federation.  In the UFC, Islam Makhachev tested positive for Meldonium and was pulled from the UFC on Fox 19 card.  The ban on Meldonium was instituted by the World Anti-Doping Agency (“WADA”) on January 1, 2016.  It was added to the list of banned substances and notice was given to athletes three months earlier in September 2015.

However, earlier this year, WADA acknowledged that there was a lack of clear scientific information on excretion times.  Thus, this new revelation may actually overturn certain notices of infraction.  In fact, this was noted by WOB’s attorneys in its lawsuit.

It argues that Meldonium found in Povetkin’s sample were traces and could not impact an athlete’s performance.  It should be noted that both “A” and “B” samples found Meldonium.  Povetkin admits to using Meldonim in 2015, prior to its ban.  But, the facts reflect that he had a negative sample in April 7 and 8, 2016 but then tested positive in an April 27, 2016 sample.

WOB’s breach of contract claim cites that Wilder did not allow the WBC, the governing body for this fight, make a determination on the Povetkin drug test.  Rather, Wilder and his promotion decided not to participate which WOB claims as the breach.

It also cites a breach of the escrow agreement with respect to the monies lodged in an Escrow Account which was to pay for the purses.  WOB claims that since the bout did not occur, it should receive its money back from the trust but Wilder has “taken actions to prevent Chicago Trust from releasing such funds…including through a letter directing Chicago Trust to refrain from disbursing the Escrow Property to World of Boxing.

The defamation claim is rather unique as it claims Wilder and his promotion arm instituted a “Smear Campaign” against Povetkin.  The WOB Complaint lists multiple news reports where it claims Lou DiBella and his promotion provided the outlets with false statements.  WOB claims Povetkin did not cheat or lie and the “trace amounts” in Povetkin’s April 27, 2016 sample do not support the fact that he attempted to do so per the WOB lawsuit.  WOB claims the statements were made to avoid their contractual obligation of Wilder having to fight in Moscow, Russia.

WOB is seeking $34.5M in its lawsuit.  It is looking for the $4,369,365.000 in the Escrow Account and its defamation claim seeks $10 million.

Bout Agreement

Payout Perspective:

Leave it to boxing to provide us with some of the more unique contractual legal issues in the sport.  There is an issue of who breached the contract between the parties.  Should Wilder have a claim due to the positive drug test from Povetkin?  Or, does Povetkin side have an argument against Wilder for not following the WBC procedures?  One has to think that Povetkin has a right to appeal the VADA ruling especially with the uncertainty of Meldonium.  But, we see that the contentious negotiations between the parties have now spilled over into the courts.  Wilder has found another fight in lieu of Povetkin.  But, does Povetkin have a claim against Wilder for blocking funds to be returned to them in Escrow?  It’s clear there is a liquidated damages provision in the Escrow Agreement of $2.5 million as both sides seek that it damages.

MMA Payout will keep you posted.

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