NLRB dismisses Leslie Smith’s claims against Zuffa

September 26, 2018

MMA Junkie’s Steven Marrocco first reported that former UFC fighter Leslie Smith had her NLRB complaint against Zuffa dismissed last week per Smith’s attorney Lucas Middlebrook.

Per a report from ESPN’s Brett Okamoto, Middelbrook plans to appeal.

Smith filed the charging letter in May of this year based on unfair labor practices against the UFC.

Leslie Smith Charging Letter by on Scribd

In June, the NLRB Investigation on Zuffa determine that the charging letter had merit and would file a complaint against Zuffa in Federal District Court.  The NLRB could have filed an injunction against Zuffa which would have prohibited the company from designating its contracted athletes as independent contractors and make them statutory employees.

Post-decision, NLRB Region 4 where the charging letter was filed, was instructed to send the case to D.C. for review.  Smith’s attorney believed that this was politically motivated.

Payout Perspective:

This is a stunning turn of events for the NLRB to dismiss the matter after there appeared to be merit to Smith’s claims.  MMA Payout has made a FOIA request on the charging to determine if there is any explanation for the dismissal.  The case had been dormant since being sent to D.C. and one can only wonder what went on during this process.

Dana White says he is a genius in deposition testimony

September 24, 2018

On Friday, Plaintiffs in the Zuffa Antitrust Lawsuit filed their Opposition Brief to the company’s Motion for Summary Judgment.  Of the multitude of exhibits filed in support of the brief are three exhibits with excerpts from the deposition of Dana White.

White’s deposition took place in August 2017 in Las Vegas.

Deposition of Dana White – V 1 by on Scribd

Deposition of Dana White – V 2 by on Scribd

Deposition of Dana White – V 3 by on Scribd

Some of the deposition excerpts came highlighted which correlates with some of the points made in the brief.

As one might imagine, a lot of ground was covered during White’s deposition.  In the excerpts of the deposition that the public can view, the questions look at acquisitions of other organizations, his role as a fight promoter, contracts and other issues.  The fighter attorneys played videos during White’s videotaped deposition in which they played excerpts of interviews where is being interviewed.  The attorneys asked about the answers in the videos.

The deposition took place just a couple weeks prior to The Money Fight between Conor McGregor and Floyd Mayweather there was some discussion about him being a boxing promoter in light of the matchup.

Some interesting tidbits:

There was some interesting testimony for White where he agrees with a 2013 interview where he said that other promotions were AAA (i.e., minor leagues) to the UFC.  He affirmed this interview testimony as of 2017 (and likely today).

He gave a round-about answer to whether he was being truthful as a promoter.  The inference was that there is puffery when promoting fights although he did not want to make it sound that he was outright lying.  In this excerpt, he throws some shade at Bellator.

Dana White stated that he believed OneFC to be a grassroots promotion but has grown into a big-time organization.  He testified that he gets question when in Asia whether the UFC is like OneFC.  Perhaps with the news that Eddie Alvarez may be heading to OneFC, he might be correct.

 

Dana White is not a fan of Bloody Elbow.  When asked about the web site, he asked if it was the web site that doesn’t interview people.  He does not believe them to be credible.

When asked about distributions at the end of 2009, he did not really know the owners’ payout, of which he would receive a piece.  He thought it was $305,000 but he was corrected by the attorney as he was informed it was $305 million.  When he realized this, he stated, “Oh Awesome.”

When asked about how the company was paying for the contributions for which he was receiving millions, he stated he is the “fight genius” and the “promotion genius” but he did not know about the distributions.

Payout Perspective:

Certainly some of the more interesting subjects was likely redacted.  White was prepared for the deposition and did not waver when pushed on some questions.  In the testimony that we can see, he was careful on what he said and how he said it.  Perhaps the “genius” comments may have been over the top but also may have related to something earlier in testimony.

Plaintiffs file Opposition to UFC’s Motion for Summary Judgment in Antitrust lawsuit

September 21, 2018

Plaintiffs in the Zuffa Antitrust Lawsuit have filed their Opposition to UFC’s Motion for Summary Judgment.  The 47-page long opposition brief includes over 100 exhibits, many of which are redacted, or include deposition transcripts with redactions.

The main argument in the Plaintiffs’ Opposition is that the UFC is the “major league” of MMA and it has done so through predatory means.  The theory asserted is that it has become the top of the food chain in MMA through its retention of top-level fighters.  It argues that “a critical mass” of elite fighters is necessary to compete with the UFC.  But, the UFC’s scheme has foreclosed this opportunity.

Despite the fact Zuffa argued in its motion that there was ample competition within the industry as evidenced through testimony of rival MMA promoters and fighters that left the organization, Plaintiffs argue that the “supposed evidence of Fighter mobility merely reflects that the UFC is the “major league” of MMA and cuts Fighters who do not meet its standard.”

Plaintiffs argue in their brief that Zuffa’s anticompetive scheme was “designed to lock in current and potential top fighters to exclusive contracts for the most valuable parts of their careers.”

Oppos to MSJ – Plaintiffs by on Scribd

It noted that Zuffa used its market leverage to extend exclusivity over its fighters. This was done through coercion, intimidation and other means of forcible persuasion.  This included four ways outlined by Plaintiffs and evidenced through deposition transcripts.  This included:

  • Move Fighters to unfavorable placement on the fight card for an event
  • Control the timing of a bout (refuse to off Fighters bouts)
  • Delay a Fighter from competing for another promoter through the Right to Match and Exclusive Negotiation clauses in its contract.
  • Deprive fighters of title opportunities

Plaintiffs argue that Zuffa’s scheme impaired competition through locking up the majority of top fighters, deprived rival promoters of the key input of top fighters and relegated other promoters to feeder or minor leagues.  It calls out other promoters cited in Zuffa’s motion that indicated that they could compete “are not credible and are disputed.”  In fact, Plaintiffs show why Bellator, OneFC and PFL’s statements indicating that they are on par with the UFC are false.  Also, noted in a footnote to the motion, Absolute Championship Berkut, also recognized as a direct competitor, noted the cancellation of three events due to “organizational and financial problems.”

The Plaintiffs cite Dr. Singer’s expert report regarding the input and output markets and its showing how Zuffa has suppressed fighters’ wages, restricted the output of fighter services and excluded rivals.  Plaintiffs also argue that the acquisitions of other organizations by the UFC stifled competition and restricted fighter mobility.

Payout Perspective:

There is a lot to digest here and MMA Payout will take a deeper dive into the opposition including the evidence used by Plaintiffs.  The crux of their opposition is that the UFC’s anticompetitive scheme is based upon the retention of top tier fighters through exclusive contracts.  It locked in top fighters during their “most valuable parts of their careers” and was to leverage its market power to extend exclusivity.  As a result, it impaired competition despite the views of rival promoters that indicated it had no problem signing fighters it wanted.  As a result of the scheme, the anticompetitive effects included suppression of fighters’ compensation, reduction of “quality” MMA events and it suppressed marketwide output of MMA Events and inflated prices.  Furthermore, Zuffa cannot show that the contractual exclusivity provided procompetitive benefits which may outweigh the anticompetitive effects.

Zuffa has a chance to offer a Reply to this Opposition which will be submitted on November 2nd.

USADA arbitrator reduces Jon Jones suspension, will be back in UFC by October

September 19, 2018

USADA has handed Jon Jones a 15-month suspension for his failed drug test at UFC 214 in July 2017.  The arbitration decision means that Jones will be eligible to fight in the UFC this October.

Jones was represented at his hearing by experienced doping attorney Paul Greene.  He was also represented by Peter S. Christensen of Las Vegas.  Notably, Howard Jacobs was Jones’ attorney at his first arbitration hearing and at the California State Athletic Commission hearing regarding his second failed USADA test earlier this year.  The arbitrator was Richard McLaren.

Final Redacted Award Jones … by on Scribd

Unlike other arbitration hearings, the parties entered into a Joint Stipulated Factual Resolution and Arbitration Agreement.

Despite the fact that Jones was facing the potential of a four-year suspension for his second infraction under the UFC Anti-Doping Policy, the arbitrator reduced his suspension by 30 months based on Jones’ cooperation with USADA in attempting to determine the cause for his failed drug test.  McLaren could have reduced it down to 12 months but determined that Jones could have done other things to mitigate his risk.

The arbitrator determined that based on the UFC Anti-Doping Violations rules that it need not determine the source of the finding to determine fault.  Therefore, regardless of how the illicit substance ended up in Jones’ system, it is not necessary to how it was ingested for them to determine fault.  But here, the arbitrator determined that Jones’ liability to be minimal.  Although, the arbitrator does suggest that Jones could have done more to prevent the violation, he does not think the infraction aided him in his performance.  “There was absolutely no intention to use Prohibited Substances on the part of the Athlete [Jones],” wrote the arbitrator.

The arbitrator noted that Jones seemed contrite for his wrongdoing.

There is the possibility that the CSAC still may rule on a suspension for Jones.  It has revoked his license and fined him $205,000.  But, it would seem that any further suspension of time from eligibility

Payout Perspective:

A week ago USADA felt compelled to address rumors that it was being paid off to reinstate Jon Jones.  Perhaps now we know the reasons behind the statement.  The ruling seems to be made in a vacuum when looking at the UFC Anti-Doping Policy and Jones’ prior arbitration hearing.  The decision seemed to neglect his prior indiscretions, his mistakes admitted in the first arbitration and his California State Athletic Commission hearing where he readily admitted that his management team falsified documents on his behalf so that he would not have to do the educational component of the UFC Anti-Doping Policy.  All that being said, Jones had a viable case but the facts seemed to be against him knowing he had a prohibited substance in his system and this was his second drug test failure which would connote a four-year suspension.

Overall, I don’t think UFC fans mind that Jon Jones is coming back sooner than later to the octagon.  Its just the matter that the policy seemed to bend over backward and then look away from the way it adhered to its policy with other fighters.  Its true that Jones will be suspended 15 months before coming back to the UFC, but this was his second strike and with a history of reckless disregard for the rules this shows flexibility for athletes that can produce the company revenue.

UFC 228: Payout Perspective

September 12, 2018

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 228 which took place at the American Airlines Arena in Dallas, Texas.

Woodley submits Till

Tyron Woodley used a D’arce Choke to earn his BJJ Black Belt and retain his UFC welterweight belt.  Woodley submitted Darren Till and earned a performance bonus.  Despite the belief by many that Till was the contender to dethrone Woodley, the champion had little difficulty with him.

Next up for Woodley looks to be Colby Covington.

Mottano stripped of title

The second title of the evening was scrapped due to Nicco Montano being sent to the hospital presumably as a result of trying to cut weight.  As a result, her fight with Valentina Shevchenko was taken off the card and Dana White stripped the TUF winner of her flyweight title.  Shevchenko will have the opportunity to fight for the flyweight title at a yet to be determined date.

Stripping Mottano of the title hurts her pay scale since she now will receive only $3,500 from the Reebok Outfitting Policy.  As the champion, Mottano (who never defended the title) would have made $40,000.

Attendance and Gate

The event drew 14,073 for a gate of $1.7 million at the American Airlines Center in Dallas.  There have been 5 PPVs in Dallas and of that UFC 228 was the lowest gate of the 5 held there since UFC 103.

Bonuses

There were a variety of finishes and stoppage for UFC 228 that could have received the $50,000 bonus.  Woodley, Jessica Andrade and Irena Aldana and Lucie Pudilova earned the bonuses.

Ratings

The UFC 228 Prelims on FX were the lowest of the year drawing only 560,000 viewers and peaking with 683,000 viewers.

The prefight show on FX averaged 271,000 viewers according to Nielsen.

The post-fight show on FS1 drew 64,000 viewers.

Sponsors

Fight week saw the announcement of 3 new “Official” UFC sponsors.  Nemiroff became the “Official Vodka of the UFC,” P3 became the “Official Protein Bar of the UFC,” and Blackheart Premium Spiced Rum became the “Official Rum of the UFC” in the US.  Nemiroff and P3 were in the Octagon for UFC 228.  Also in the Octagon was Motel 6, MetroPCS, Modelo, Toyo Tires, Harley-Davidson the movie Predator was also featured and Monster Energy had the middle of the Octagon.

The movie, Predator also sponsored the Embedded episodes.

Toyo Tires sponsored the backstage interview which was seen on Facebook.

Odds and ends


The visual seems to tell the story that most BJJ practitioners know. It’s hard to be awarded black belt in jiu jitsu.

If you watched the Embedded episodes, you may have noticed Woodley wearing a CbdMD shirt which one might infer, he is a sponsor.  In fact, the company sent out a PR release congratulating him.  I’m sure this is something that Woodley and his camp have looked into and ensuring that he does not cross the UFC Anti-Doping Policy.

One of the judges in the Esparza-Suarez fight mistook Suarez for Esparza in the first round and gave Esparza, not Suarez a 10-8.

Xbox put out a tweet gaging interest in the event.

By the way, what was up with the poster? I realize that Till is taller but did they have to make him look like a giant?

This is an ominous tweet with a quote from Shevchenko’s manager.

One might infer that Shevchenko was not paid her fight purse or her win bonus for making weight despite her opponents’ trouble. Once again, this is an overarching issue that manager’s must handle in the contract. Until there is a union, association and/or collective bargaining unit that will address this situation, the athletes are at the mercy of the UFC.

There was a Fan Experience held in Dallas prior to UFC 228 with numerous sponsors and athletes:

There were over 200,000 google searches for Tyron Woodley Saturday.  On Friday, there were over 200,000 google searches for UFC 228.

Conclusion

UFC 228 was an entertaining event with a lot of finishes including Tyron Woodley making it known that he is one of the top UFC stars in the company.  But, going up against two other boxing events on the same night may have hurt PPV purchases.  Also, the big GGG-Canelo fight occurring the following week may have detracted the casual fan on a budget from purchasing this PPV.  It would appear that this event is likely to have drawn around 175,000 to 200,000 PPV buys.

Payout Exclusive: CM Punk talks new show, praises All In

September 10, 2018

CM Punk is back.

But it’s not in the octagon or the wrestling ring.  He is one of the hosts on Netflix’s Ultimate Beastmaster 3 which premiered August 31st.  Punk is co-host along with former NFL star Tiki Barber.

The show is an obstacle course reality series featuring teams from around the world vying to become champion.

Ultimate Beastmaster Season 3 (via Netflix)

Punk noted that they weren’t allowed to run the challenging obstacle course.  “I would have probably fallen and busted my head,” joked the former WWE star and UFC competitor.  At the end of shooting, they were given the opportunity but by that point, after watching the athletes from around the world struggle with one of the more demanding courses put together, no one wanted to do it.

Ultimate Beastmaster Season 3 (via Netflix)

There are localized hosts for each country participating including Australia, Brazil, France, Germany, South Korea, the UK, Mexico and Italy.  Reactions from all countries’ hosts are shown in localized versions.  Former UFC champ Anderson Silva served as Brazil’s commentator and Stu Bennett (aka WWE’s Wade Barrett) as the UK’s commentator.

The series executive producer Sylvester Stallone hosted the first season of the Ultimate Beastmaster which started on Netflix in February 2017.

Speaking frankly during the phone interview, Punk indicated that he got a call from his agent about the opportunity.  “I jumped at the chance,” Punk said when he heard that he would be working with the former New York Giants running back.  “I thought the entire concept and the different spin peaked my interest.”

Since we last saw Punk in the Octagon this past June, he has been branching out into new things. Although he says he will be back training at Roufusport in the future, he has taken on some acting projects.

Ultimate Beastmaster 3 was actually filmed almost a year ago but just released on Netflix late last month

“It was amazing,” Punk said of working on the set.  “There were so many neat and awesome people to work with.”  Notably, Punk worked with old WWE friend Stu Bennett, known in the WWE as Wade Barrett.  “It’s been nice to see how successful he’s been,” said Punk of Bennett who has carved out an acting career after leaving the WWE.  Also, on the set was fellow UFC athlete Anderson Silva.  Punk recalled Silva being a little late for filming each day due to training for an anticipated fight with Kelvin Gastelum.  “To do this show while training for the fight had to be tough on him.”  As we know now, that fight was called off as Silva was flagged for a potential UFC anti-doping violation.

In between contestants making their way through the obstacle course, the hosts openly root for their nations while (good-naturedly) rooting against others.  When nations are eliminated, the other hosts are not shy to make fun of the demise of their team.  “There’s a lot of ribbing that goes on,” said Punk.  Working odd hours, brought out a lot of personality with many of the hosts.  Punk observed rivalries between France and Mexico based on their soccer teams.  The hosts mocked each other and generally had a good time during filming.  “Imagine all the stuff they had to edit out,” said Punk.

Punk enjoyed the experience shooting Ultimate Beastmaster 3.  “I take every single opportunity afforded to me.”  He added, “[i]t was nice to learn their stories and get to know them a bit.”

While Punk may be taking a detour from combat sports, he made a rare fan meet and greet/photo appearance during “All In” Weekend in his hometown of Chicago.  “I’m really careful and choosy about where and when I do appearances.”  He talked a little about the event and his admiration for Matt and Nick Jackson.

“I love those guys.” Punk said of The Young Bucks. “For anybody to put 10,000 plus in a building and you don’t have the brand name WWE behind you its great.”

“They remind me when I was on the independents,” said Punk.  “I couldn’t be happier for those guys.”

Punk is currently working on a couple of movie projects including an upcoming film entitled “Girl on the Third Floor.”  After that, he will be back training in MMA.

Endeavor purchases Flash Entertainment’s stake in UFC

September 4, 2018

Flash Entertainment has sold its 10% UFC stake to Endeavor according to Arabian Business.

MMA Fighting has also reported and confirmed the sale by the Abu Dhabi-based company.  There are no reports on the amount it sold its stake in the company.  “After almost 10 years the time was right to exit that investment,” Lickrish is quoted by Arabian Business.

Flash kept its 10% stake in the company after the sale to WME-IMG (now ‘Endeavor’) for $4 billion.

Dana White recently boasted that the company is now valued at $7 billion although that has not been independently confirmed.

Flash Entertainment is wholly owned by the Abu Dhabi government.  It purchased a stake in the UFC in 2010 for a reported to an amount between $150 million and $175 million.  You might recall that the UFC put on a PPV in Abu Dhabi, UFC 112.  It was a mid-afternoon PPV on a Saturday in the United States to accommodate the show at the Concert Arena on Yas Island.  The event drew 500,000 PPV buys.  It also held a Fight Night in 2014.

Last year, Endeavor purchased the 5.8 percent of the company retained by the Fertittas in the initial sale for a price valuation of $5 billion.

Payout Perspective:

The transaction seems to close out all minor investors in the UFC pre-sale to Endeavor.  Based on estimates, Flash Entertainment may have made between $500-$700 million with its investment.  It might have been time to cash out as well as Endeavor seeking to retain full control over the company.

Plaintiffs in UFC Antitrust Lawsuit request Court to file response to MMA Manager Declaration

August 30, 2018

The plaintiffs in the UFC antitrust lawsuit have requested that the Court review its Surreply Brief in opposition to Zuffa’s Motion to Seal Zuffa’s Summary Judgment Motion and Portions of Plaintiffs’ Class Certification Reply.

Specifically, the Surreply Brief addresses the Declaration of MMA Manager Ali Abdelaziz which was included in Zuffa’s Reply Brief.

A Surreply Brief is not automatically considered by the Court, in fact, it is usually disliked since its additionally work for an already overworked court.  These types of briefs must bring up new evidence, facts important to the case not brought up or another exigent reason.  Reiterating arguments that would have been contained in an opposition will likely get poor treatment.

Here, plaintiffs believe the need to address Abdelaziz’s Declaration which Zuffa used to aid its Reply Brief.  The argument in which Zuffa uses Abdelaziz’s testimony is based on the need to seal payout information of fighters.

The manager of many top fighters submitted this declaration on behalf of Zuffa.  He claims that public disclosure raises “legitimate safety concerns” for fighters and their families.  He also believes that public disclosure of terms and compensation of fighters’ agreements.

Declaration of Ali Abdelaziz by JASONCRUZ206 on Scribd

It is worthy to note that no current UFC fighter signed a Declaration in support.  But, Abdelaziz, who represents a huge swath of UFC fighters supports the sealing of documents.  Although Abdelaziz’s declaration supports the last argument in Zuffa’s brief (and usually the weakest), plaintiffs felt compelled to address it.  The declaration was torn apart by the plaintiffs in its Surreply Brief.

Motion to FIle Surreply by on Scribd

Plaintiffs’ list four reasons why Ali’s Declaration fails: 1) The rationale that disclosure of fighter compensation hinders rather than helps in obtaining negotiating athlete purses rings false lin light of evidence of salaries of players in other major leagues.  2) The Declaration contradicts Zuffa’s own arguments in favor of sealing since it argued that disclosure would put Zuffa in a strategic disadvantage whereas Abdelaziz says non-disclosure is advantageous. 3) The allegation that fighters would be put at risk of kidnapping or extortion is not supported by credible evidence.; and 4) Plaintiffs calls Abdelaziz credibility a question since he’s an MMA manager and alleged principal in the WSOF as a promoter.

Payout Perspective:

While the brief is damaging, its still up to the Court to decide whether or not to take it into consideration.  Of course, we know that Zuffa will file an opposition to this Surreply which means more filings.  MMA Payout will keep you posted.

Zuffa requests court to review Hunt ruling in antitrust case

August 29, 2018

Zuffa has filed a Motion for Leave to File Supplemental Authority regarding its Motion to Seal related materials in its Summary Judgment motion of Plaintiffs’ lawsuit in their antitrust case.

The supplemental authority is the recent ruling in the Mark Hunt case on Zuffa’s “Renewed” Motion to Seal Documents in that case.  The court previously denied the Motion to Seal but changed course in granting the “Renewed” Motion.  It should be noted that Hunt’s attorneys did not oppose the “Renewed” motion for some reason.

This Motion hopes to include this ruling in deciding the pending motion before the court in the Antitrust matter. They persuasively argue that Plaintiffs had referred to the previous Hunt ruling where the Court denied the sealing of records.  As Zuffa points out in this motion, the original order was “without prejudice” whereas the renewed motion was “with prejudice.”  The difference with or without prejudice is that “without” prejudice means that the ruling could be amended on a party’s motion.  With prejudice is the final ruling of the Court.

Supplemental Authority After Hunt by JASONCRUZ206 on Scribd

Payout Perspective:

The Hunt ruling, although I disagree with the outcome, will likely be considered in the antitrust case as it relates to similar documents.  Thus, the motion will be granted, and the Court will consider it as persuasive authority when determining whether or not to unseal the redacted materials by Zuffa.

Egg whites and a UFC contract: Cung Le depo transcript reveals his signing with Zuffa

August 22, 2018

Cung Le met with Dana White and Lorenzo Fertitta in person to discuss signing with the UFC over egg whites at the UFC’s offices according to the released depo transcript attached to Zuffa’s Motion for Summary Judgment.  His testimony reveals that he was “stuck” in his UFC contract a year and a half after he retired.

The deposition took place in April 2017 in Las Vegas at the offices of the UFC’s lawyers, Boies, Schiller & Flexner.  Le testified that he negotiated his entrance into the UFC himself and was not represented by an agent or manager.  He indicated that he flew to the Bay Area to Vegas on his own and made his way to the UFC offices.  In the depo, he testified that he had an interest in the UFC and White and Fertitta were big fans of his from Strikeforce and when he competed on ESPN.

Exhibit 18 – Cung Le Depo by JASONCRUZ206 on Scribd

White and Fertitta had their chef cook Le egg whites and he was presented with a UFC contract.  Le stated that he wanted to look it over before signing.

It appears that they were discussion of his Identity Rights in the contract.  Since Le was doing movies, he was concerned about a conflict with his Zuffa contract.

Le testifies that he retired but was precluded from doing work with any other organization for a year and a half because he still had two fights left on his contract.  He stated he couldn’t do commentating and was not able to negotiate with Bellator.

For a look at our summary of the deposition of Ike Epstein, click here.

Payout Perspective:

There is a portion redacted where Le goes into who he contacted prior to filing the lawsuit.  It also may explain why he decided to file the lawsuit and become the named plaintiff in it.  Prior to this lawsuit, he had never been involved in any other legal proceeding.  The testimony on Identity Rights is interesting considering Le’s movie career and celebrity outside of the UFC.  What may be helpful for his cause his his testimony that he was “stuck” for a year and a half from doing anything because he was still under UFC contract.  This includes being foreclosed from doing commentary with another organization due to his contract with the UFC.  Le may be a perfect plaintiff for this case since he had an established MMA career prior to the UFC, negotiated his own deal and has a career outside of MMA.

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