Hunt’s attorneys file opposition to dismissing his First Amended Complaint against UFC, White and Lesnar

July 19, 2017

Attorneys for Mark Hunt have filed their opposition brief to Zuffa, Dana White and Brock Lesnar’s Motion to Dismiss his First Amended Complaint.  In the brief, they cite specific instances in which they addressed the court’s concerns regarding their allegations.

The brief specifically claims that it has provided adequate information on damages and a proximate cause to go forward with its Civil RICO claim.

Plaintiffs Opposition to MTD FAC by JASONCRUZ206 on Scribd

Hunt addresses the court’s concerns with respect to the Civil RICO claim alleged by Hunt.  They rely on a case, Mendoza vs. Zirkle Fruit, Co., in which the defendants in that case sought to manipulate the work force by hiring undocumented laborers to depress wages of documented workers.  In this case, Hunt’s lawyers argue that the UFC and White wrongfully manipulated the market to depress wages of clean fighters by hiring doping fighters.

They also cite the Mendoza case to dispel the Defendants’ argument that there could be other plausible proximate causation for Hunt’s alleged damages.  They claim Mendoza did not dismiss the plaintiffs’ civil RICO claims although there were alternative theories to the damages from the plaintiffs.  Thus, as Hunt relies on Mendoza, the Court cannot dismiss Hunt’s civil RICO claim solely because there are alternative or intervening causes for Hunt’s financial losses.

Also in his brief, regarding his Breach of Contract claim, Hunt argues the clause in the New Zealander’s contract which states that Zuffa shall be bound by the rules and regulations of the Athletic Commission was breached.  In the first hearing on dismissing the original complaint, the Court questioned what specific part of the contract Hunt alleged was breach as it was not clear to the Court from the original complaint.

 

Payout Perspective:

We detailed the Court hearing and how the Judge was skeptical about Hunt’s claims.  We shall see if the arguments supplied in this Opposition Brief persuades the Court that the First Amended Complaint has changed.  In this brief, Hunt argues that it should be entitled to a shot at discovery, which is being challenged in a different motion.  It also requests another shot at amending the complaint if the Court determines the allegations are not sufficient.  We shall see how that goes.  .

 

 

Taking a look at the Motion to Dismiss hearing in the Mark Hunt lawsuit

July 12, 2017

It’s not often that you get the transcript from a court hearing for free (relatively speaking).  But Brock Lesnar’s attorneys have attached the entire hearing from the parties’ Motion to Dismiss on May 22, 2017 as an exhibit to its current Motion to Dismiss the First Amended Complaint of Mark Hunt.  MMA Payout takes a deep dive into the hearing.

Transcript Exhibt a to Lesnar’s MTD by JASONCRUZ206 on Scribd

There were three parties present.  Howard Jacobs, representing Brock Lesnar, J. Colby Williams and Donald Jude Campbell on behalf of Zuffa, LLC and Dana White and Scott Ingold and Joseph Gonnella on behalf of Mark Hunt.  Jacobs, Williams and Ingold were the attorneys that argued the motion before the Honorable Jennifer A. Dorsey.

The Court complimented the parties on how well-briefed the parties were in arguing the Motion to Dismiss.  As such, he made the introductory note that he had read all of the cases cited by both parties and thus did not need a rehash of the cases.  In my experience, this is helpful and shows the court’s competence.  Also for judicial efficiency, he does not want a party to go too deep into the cases they cite by bringing up the underlying facts in that case unless its central to the point of the parties.

I will let everyone know, first of all, I have read every word of all of the very nicely prepared briefs. I want to thank all of you for the care and attention that went into those briefs. And, because I think everything was so well briefed, I definitely don’t need a reiteration of every argument and every point raised. I’ve spent a lot of time with these motions. I’ve read all of the cases that are cited in them. So I’m prepared to hear what else or what else you would like to stress.

The Court takes time asking questions of Hunt’s attorney about their tort-based claims as well as their theory for the RICO claim.  Defendants seem to have successfully pegged the RICO claim as one that circumvents the rationale behind the purpose of the claim and more of one where attorneys attempt to frame a RICO claim in order to triple their damage claim.  As such, there’s no standing for Hunt to assert his RICO claim.

Colby Williams:

Here, Mr. Hunt’s Complaint is a prime example of the overenthusiastic use of RICO and its specter of criminal wrongdoing to seek a financial windfall in the context of a routine commercial dispute. And, while RICO has unquestionably been stretched in scope and meaning beyond the organized crime context, certain guiding principles remain no matter what the subject matter is of the case.

The most fundamental of those requirements, Your Honor, we would submit, would be that a plaintiff has to have RICO standing under 18 U.S.C. 1964(c) and that’s a two-pronged inquiry. First prong, you’ve got to demonstrate a cognizable injury to a property or business interest. And, Your Honor, most respectfully to opposing counsel, that is not determined by trying to squeeze yourself into some other interest that has been found suitable for RICO injury in a prior case. The courts are unanimous when they tell us business and property interests are a categorical inquiry based on state law. The second inquiry that must be established for RICO standing is that there has to be proximate cause between the injurious conduct and the claimed injury. These are questions of law for the court; they are proper for determination at the 12(b)(6) stage; and, if a plaintiff fails to satisfy either prong, the RICO claim must be dismissed. We submit Mr. Hunt doesn’t satisfy either one.

Defendant’s stress the fact that personal injury and reputational harm are “simply not recoverable” under RICO.  Hunt’s alleged lost opportunities, according to the defendants, are future claims that are speculative and contingent which do not fall under a remedy under RICO.

Notably, the defendants wanted to make known that Hunt was still gamely contracted by the UFC and performing under the contract at issue.

Williams:

Mr. Hunt, on March 4th, fought Alistair Overeem. He references it in his opposition. He was paid $750,000 for that fight, Your Honor. More money than he made in the summer of 2016 at UFC 200 when he fought Mr. Lesnar. He hasn’t lost a single opportunity. He’s continuing to get fight opportunities. He’s making more money. There is no RICO injury here at all.

Jacobs, the attorney for Brock Lesnar, argued that the claims against Lesnar are baseless as they lack proximity.  The RICO claims, which are based on Hunt fighting Bigfoot Silva and Frank Mir do not apply to Lesnar argued Jacobs.  He claimed that Hunt cannot show that he relied on any omissions or misrepresentations from Lesnar which is a requisite for a fraud claim and the underlying actions for a RICO violation.  Jacobs argues the use of the ESPN interviews with Brock Lesnar and Dana White would defeat his own claim.

…I think, all of the causes of action. Certainly RICO, fraud, false pretenses — all of those claims require an allegation of reliance on the false representations. And so the plaintiff in his Complaint and then as supplemented by his opposition says that he relied on either Brock Lesnar’s alleged misrepresentation that he wasn’t doping or he relied on the material omission of the fact that he was doping. So those are the allegations. And there have to be damages pled which he has to show that he relied on these misrepresentations or omissions.

 … And what he [Hunt]wants to do here is have it both ways. He wants to use the interviews that Mr. Lesnar gave as part of his RICO claims and the predicate acts, but then he wants you to somehow find that his own statements, the very same types of interviews, where he said: I know that Brock Lesnar was doping and I don’t care. I’ll beat him anyway. He wants you to ignore those and you can’t because they show that the allegations here are false.

“He wants to use the interviews that Mr. Lesnar gave as part of his RICO claims and the predicate acts, but then he wants you to somehow find that his own statements, the very same types of interveies, where he [Hunt] said: I know that Brock Lesnar was doing and I don’t care.  I’ll beat him anyway.  He wants you [the Judge] to ignore those and you can’t because they show that the allegations here are false.”

Jacobs also attempts to extinguish Hunt’s purported theories for a RICO claim:

And the pattern of racketeering, it’s been alleged that it’s both an open-ended pattern and a closed-ended pattern. And I just wanted to address some of the statements that are made on both of them. On the closed-ended continuity, the claim seems to be that — at least in part because you have to go further back in time — that the prior retirements of Brock Lesnar somehow factor into this closed-ended continuity. There’s a couple problems with that. One, it has not been pled in the Complaint. Two, any allegation that Brock Lesnar’s prior retirements that predated 2015 is somehow being a pattern of activity because they were used to avoid drug testing under the UFC Anti-Doping Policy, they have one significant problem and that is there was no UFC Anti-Doping Policy before 2015 and there’s also no allegation that Mark Hunt ever was in line to fight Brock Lesnar prior to 2015. So it’s — those allegations to establish closed-ended continuity simply are factually impossible in this case.

 As to open-ended continuity, it seems to be thatlooking forward, well, Brock Lesnar could unretire and again avoid testing at any time. Again, if you look at the UFC Anti-Doping Policy, specifically at Article 5.7 which we asked that judicial notice be taken of, it specifically says that if he unretires he — basically he has to serve his suspension from that point going forward. So, if he has 11 months left on his suspension, he has to be in the pool for 11 months if he unretires for testing. So this notion and these arguments that he could somehow step out of retirement and straight into the ring is also factually impossible.

Hunt’s attorney first brings up the fact that it is the burden of the moving party thus setting the landscape for his argument that despite possible omissions, the non-moving party (Hunt) would have deference for any vague or ambiguous facts.  He stresses based upon case law that Hunt need only set forth “plausible” facts for their claims.  Further, he need not provide specifics on damages.

He notes that the RICO claim is based on “an ongoing course and conduct by the enterprise and the parties that make the enterprise,” including Brock Lesnar.  He notes that reliance on fraud need not be alleged to make his RICO claim.

He addresses the Defendants’ issues with Hunt’s standing (re question of damages) and proximate cause.  He notes that Lesnar was allowed by the UFC through a “fraudulent agreement by the enterprise.”  He goes on to state that Defendants “defrauded Mr. Hunt when they did that.  They defrauded the Pay-Per-View subscribers. They defrauded many people who were paying or relying on the fact that Mark Hunt was going to get fight a fair fight.”

But the Court asked whether the allegations were “patently speculative” including whether Hunt would have beaten Brock Lesnar if he had fought clean.  The Judge also questions how a fighter that uses PEDs would be able to increase the value of the company based on Hunt’s allegations in the Complaint.  In fact, the Court seems to question the theory of case and alleged damages posed by Hunt.  The attorney for Hunt does not go into the problems only that it needs discovery to determine more detailed matters.

Yet, he seems to have a hard time with the questioning and focusing on the rationale of the RICO claim.

THE COURT: How is it — how can you — I guess the question may be ultimately is what facts have you alleged currently to demonstrate and how — as opposed to just conclusory allegations that these damages, these lost opportunities, are from the RICO activity and the racketeering activity and not merely from the fact that he got beat?

INGOLD: Well, Your Honor, the defendants seem to say, well, we would have to prove that but for the cheating by Mr. Lesnar, Mark Hunt would have won the fight.

THE COURT: But for the racketeering activity

INGOLD: Well, if — if the defendants had not, in our view, committed wire fraud; if they had said, we’re going to make Mr. Lesnar go through the same testing protocols; we’re going to hold him to the same standards as every other fighter, as Mr. Hunt in fact, then it would have likely turned up that Mr. Lesnar was cheating; he would have not been able to compete; they would have substituted another fighter. Even if Mr. Hunt would have fared better against a clean Lesnar, that would have helped his brand.

 THE COURT: How is all of what you’ve just described not patently speculative?

 INGOLD: Well, Your Honor, Mendoza says that we’re allowed to allege damages generally at the pleading stage.

Ingold goes on to analogize the issue of damages:

Your Honor, I would submit that if Michael Jordan never won a basketball game kids wouldn’t be buying Air Jordan sneakers from Nike for hundreds of dollars; that if Mike Tyson never won a boxing fight, people wouldn’t have paid hundreds of dollars in Pay-Per-View fees to see him fight.

The fact of the matter — and we put this in our brief — is that losing fights is bad for business.

The Court also questions why his claims for false pretenses is based upon a criminal standard rather than a civil one.  The Judge read it more like a fraud-in-the inducement claim and Hunt’s attorney could not really address why the False Pretenses claim was based on a Nevada criminal statute.  The Judge also questioned Mr. Ingold as to whether they were challenging the enforceability of the contract.  It was clear that Mr. Ingold did not want to argue that the contract was unenforceable or voidable.

The Court noted that if there was not a false pretense, it would impact his claim for unjust enrichment and other claims made by Hunt.  Basically, under Nevada law, could not claim damages covered by a contract and then have an unjust enrichment claim against the contracting party.  Mr. Ingold cited a case in which there could be more damages claimed outside the contract under unjust enrichment.

It was curious to note that Hunt is not alleging that his fight contract is unenforceable despite the fact that he claims that portions of the contract were breached.

Notably, the Campbell & Williams attorney, Colby Williams, started by quoting a case in which it attempts to frame its argument that RICO does not apply in this case.

“…Mr. Hunt’s Complaint is a prime example of the overenthusiastic use of RICO and its specter of criminal wrongdoing to seek a financial windfall in the context of a routine commercial dispute.”  Williams goes on to state that Hunt has failed to satisfy the two-prong test set out to claim that they can sue (“standing”) under the federal RICO statute.  First, you have to “demonstrate a cognizable injury to a property or business interest.  Second, the UFC brings up a fact that had not been brought up which actually helps their case here.  Jon Jones failed a USADA test and was not allowed to fight at UFC 200.  This factual distinction serves as circumstantial evidence that the UFC would not have allowed Lesnar to participate at UFC 200 if it had known that he was taking a banned substance, he would not have allowed him to fight at the event.  Thus, the plausibility of a conspiracy claim falls flat here.”

The Judge does side with Mr. Williams here in citing that the claim was “overenthusiastic” use of the civil statute.  He dismissed the cause of action with the right to amend which Hunt did.  However, the Court did warn that the threshold for a plausible civil RICO claim was high.  Whether or not Hunt met this hurdle will be determined in the upcoming Motion to Dismiss of the First Amended Complaint.

The primary problem found by the Judge was “the lack of demonstrated RICO standing.”  The Court did not buy a “specialized business personal injury” as asserted by Hunt regarding his loss opportunities and damage to his Juggernaut brand.  Personal injuries are not recognized under this statute.   He also could not infer proximate cause.  Essentially, the Judge could not determine that the claim that the UFC concealed exemptions “to cause clean fighters to fight doping fighters” caused Hunt’s injury.

Once again, I am curious as to why Hunt’s attorney did not include USADA in its Complaint for damages.  Certainly, there could be a level of liability on USADA, a third party (and nonparty in this lawsuit) that administers and enforces the UFC Anti-Doping Policy.  With the claims that Lesnar was allowed clearance to fight without proper drug testing, USADA could have been an entity to point the fighter.  Secondly, based on the argument and Hunt’s briefing, Juggernaut brand could have its own claims here.  As pointed out by Defendants, the company owned by Hunt should bring its own claim if it had one.

We shall see how Hunt’s attorneys respond and what they will argue to the Judge has changed (specifically the RICO claim) from the original complaint to the First Amended Complaint.

UFC 213: Payout Perspective

July 10, 2017

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 213 from the T-Mobile Arena in Las Vegas, Nevada.

Whittaker wins interim middleweight title

Robert Whittaker won a unanimous decision over Yoel Romero to win the interim middleweight title. Originally, a co-main feature, it took over as the last fight of the show when Amanda Nunes was reportedly hospitalized and could not fight Saturday night.

Romero tired and Whittaker was able to take advantage. One of Whittaker’s cornermen almost suffocated him with the black Reebok champion shirt during his post-fight interview. Also, Michael Bisping entered the Octagon to do a WWE-style promo on Whittaker. The two may fight after Bisping-GSP in November at MSG (likely to happen) so their fight might not happen until International Fight Week 2018.

With the UFC announcing that it is returning to Australia in November could Whittaker return to defend his title at that point?

Nunes withdraws leaving void for main event

If you watched the Embedded episodes for this event, you saw Amanda Nunes in a self-sauna in her hotel room.  Everything seemed fine as she was on weight on Friday morning.  But news Saturday morning of an illness and the immediate thought was about weight-cutting issues.  However, it was chronic sinusitis that led to the main event being cancelled.  Valentina Shevchenko will have to wait until Nunes gets better but it put off the main event of International Fight Week which apparently didn’t sit well with Dana White.  As promoter, having a fighter bail on a main event due to an issue which seems minimal compared to other injuries, is infuriating considering this is the second year in a row that a last-minute change occurred.  But, for Nunes, her career and livelihood was on the line.  She is an independent contractor and if she were to have lost due to an illness, there’s no guarantee she receives a rematch.  Sure, she lost out on her fight purse but this is the long versus short term view.

While White says he will not trust Nunes again with a main event spot, he’s said the same about Jon Jones who is headlining later this month. If Nunes comes back and defeats Shevchenko like she did Tate and Rousey I assume all will be forgiven.

Attendance, Gate and Bonuses

Robert Whittaker and Yoel Romer drew Fight of the Night while Rob Font and Chad Laprise scored Performance Bonuses for their respective stoppages. Each earned $50K bonuses.

Despite the last minute scratch and lack of big fights on this card, UFC 213 drew the second-highest attendance and gate for 2017 with $2.4 million for 12,834. Only UFC 211 in Dallas this past May drew higher numbers with 17,834 for a gate of $2,662,645.

UPDATED:  Salaries

Alistair Overeem topped the salaries for the event with $800,000.  You can see more of the salaries here.

Promotion of the Fight

There were some sponsor activations for UFC 213 but it seemed that this event lacked buzz of the past July International Fight Weeks. The Embedded appeared to start later than usual in a fight week and there were only 5 episodes as opposed to the 6 that are usually put out there. This could be due to the Nunes news. Despite this, the episodes were sponsored by Budweiser.

There were some other sponsorship activation which we detail below.

Sponsorships

A couple new sponsors in the Octagon this month including Performance Inspired Nutrition and Gruntstyle.com.  Grunt Style is a Patriotic-Inspired Apparel company although the signage in the Octagon was rather bland.  The UFC sent out a press release the last week of June announcing that Performance-Inspired Nutrition would be the “Official Sports Supplement” of the UFC.  The partnership means that they will provide the supplements at the UFC Performance Institute in Vegas.

Performance-Inspired also sponsored the Performance of the Night Bonuses

Also, an ad for Dana White’s Tuesday Night Contender Series for Fight Pass.

Also, Budweiser, Harley Davidson, MetroPCS, Monster Energy, 7-Eleven, Toyo Tires and the movie, “Battle for the Planet of the Apes” were all in the Octagon with Monster Energy having the middle.

MetroPCS also did some live streaming with Forrest Griffin and Demetrious Johnson analyzing the UFC 213 card. There was also a contest for a chance to win UFC or Samsung gear.

UFC is offering a mobile video game capitalizing on the esports/mobile game space.

Toyo Tires aired a new commercial featuring UFC fighters which included Anthony Pettis and Paige VanZant. Toyo Tires also sponsored post-event backstage interviews including this one with Dana White.

Odds and ends

Michael Johnson-Justin Gaethje was the fight of the weekend. His fight style is not long for this sport but he should get a top 10 lightweight next.

UFC 213 Countdown drew 116,000 viewers on FS1 Sunday Night per Nielsen.

MetroPCS had new commercials with Sage Northcutt and Demetrious Johnson. Maybe the UFC is making good with Johnson.

Here’s the portable sauna that Nunes used in episode 5 of the Embedded series. It only goes for $179.

If all UFC contracted athletes can use the Performance Institute, why don’t they especially if they need treatment or would like to do non-specific training.

The get-in price of UFC 213 as of Saturday afternoon of the event was $80 with a lot of tickets left on Tickemaster. The going price on SeatGeek was an $86 get-in price.

At the TUF 25 Finale weigh-ins, it looked like Tom Gallicchio had sponsors on his shorts.

The UFC 214 official promo is great.

UFC 214: Cormier vs Jones 2

The official promo for #UFC214: Daniel Cormier vs Jon "Bones" Jones 2.Enjoy.

Posted by UFC on Sunday, July 9, 2017

It was announced during the broadcast that Nevada has yet to agree to the Unified Rules of MMA.

Reebok should go with a v-neck shirt to put over fighters after their bouts for the simple fact it’s hard to put them over your head.  Robert Whittaker was almost choked out by his own corner man by putting on his black Reebok champ shirt.

The internet always wins:

UFC 213 google searches drew over 200,000 on Saturday night. Google searches for “UFC” drew over 200,000 which likely may be attributed to the cancelled fight and Dana White’s subsequent comments. I don’t think we can extrapolate that all of these searches were related to people buying the PPV.

Conclusion

It’s hard to think that the removal of Amanda Nunes could impact PPV buy rates. But, a show that could have done 300,000 PPV buys is likely doing something around 250,000 if lucky. Whittaker-Romero are not main-eventers and the lack of an actual (not interim) title on the card likely hurt. With over 200,000 google searches on Saturday night, I would suggest this PPV draws between 200-250,000 PPV buys.

Nunes hospitalized, out of UFC 213 main event

July 8, 2017

Another year, another last minute issue with the main event of the International Fight Week PPV.  Amanda Nunes was hospitalized and Dana White confirmed that the title fight with Valentina Shevchenko is off.

The UFC issued a release which includes a sentence noting that customers may request a full refund for their tickets.

The new main event will be Robert Whittaker and Yoel Romero vying for the interim middleweight title.

Last year, UFC 200 was dealt a huge blow when Jon Jones was removed from the card after he tested positive for a banned substance.

You can expect a rough secondary market for this event even before the main event was cancelled.  The get-in price on the secondary market is $87 as of Saturday afternoon per SeatGeek.  There are a lot of tickets on Ticketmaster with the get-in at $80 as well as ample floor seats going for $600.

Payout Perspective:

The PPV buy rate will likely take a hit albeit a slight one as while Nunes is an up and coming star and defeated two of the more popular women fighters of recent memory (Miesha Tate, Ronda Rousey) I do not know how much of a draw she would have been.  Certainly, having her defending her title would have garnered buys, but I think this card was destined to be in the mid-300s.  Without Nunes, just a guess, but it’s likely 250,000 based on the card as it is now.

Povetkin-WOB bring up new information in Wilder Meldonium case

July 5, 2017

The attorneys in the Deontay Wilder-Alexander Povetkin/World of Boxing case are at it again with letters to the court sent late last month.  The parties await a pending Motion for New Trial and/or Motion for JNOV but the attorneys for Povetking and WOB are lobbying the Court to consider newfound information.

As you may recall, at trial in February, a jury took little time in siding with Wilder.  The jury decided that Povetkin had ingested Meldonium after January 1, 2016, the sole issue at trial, and Wilder won as a result.  Povetkin filed a Motion for New Trial, or in the alternative, Motion for Judgment Notwithstanding the Verdict.

In a letter to the Court dated, June 21, 2017, the attorneys for Povetkin and WOB note that a WADA Technical Document dated May 17, 2017 stated that WADA advised that “urinary concentrations of Meldonium below 100 ng/mL “should not be reported” “as an Adverse Analytical Finding.”  The attorneys argue that this was in direct contrast to the opinion of Wilder’s expert which noted that he follows the WADA technical documents.

Povetkin WOB letter to Court 06.21.17 by JASONCRUZ206 on Scribd

They also note that the WADA laboratory that examined Povetkin’s specimen has had its accreditation partial suspended.  The suspension was announced via WADA press release on June 20, 2017 and Povetkin and WOB argue that this “goes to the heart of this litigation.”  The argument is that the reliance on the accreditation by Wilder’s attorneys and his expert place the verdict into question since these issues have arisen after the verdict.

In response, Wilder’s attorney states that the two issues raised are irrelevant and are a ploy for another “bite at the apple.”  Wilder’s attorney notes that the WADA technical document does not go into effect until September 1, 2017.  Thus, the document does not go into effect until a year and a half after Povetkin’s positive test for Meldonium took place on April 27, 2016.

They also bring back the original question that was posed before the jury at trial earlier this year: “Did Alexander Povetkin ingest meldonium after January 1, 2016?”  This negates the argument of whether or not Povetkin would have tested positive for Meldonium under WADA guidelines.

WOB Letter 06.30.17 by JASONCRUZ206 on Scribd

With respect to the allegations that the UCLA Lab has had its accreditation partially suspended by WADA, Wilder’s attorney argues that the partial suspension does not mean that it cannot continue its regular anti-doping activities and is only for three months.  It stresses that the notice does not even apply to UCLA’s testing for Meldonium, which is central to the issue at trial.  It suggests that this fact would have likely been excluded at trial under Federal Rule of Evidence 403(b) due to the fact that its “probative value” is outweighed by its prejudicial effect.  It also suggests that this new information allows Povetkin/WOB to engage in wild speculation about the case based on assumptions.  For instance, it argues that Povetkin and WOB claim that Wilder’s expert at trial knew about the “impending suspension” which would imply that he was lying under oath.

Payout Perspective:

It has been several months since the attorneys for Povetkin and the World of Boxing have filed its motion for a new trial or trial notwithstanding the verdict without a ruling from the Court.  The latest wrangling are valid if you represent the defendants but the threshold for a motion for new trial would bet that there were significant legal errors.  The issues brought up by Povetkin and WOB seem to be more factual in nature.  Regardless, the bar to have such a motion granted (new trial or overturning a judgment) is high and somewhat difficult because you are asking the Court to overturn its own decision.  Rather, these arguments seem more appropriate for an appeal.  Moreover, the Court does not really have a time limit to decide on this motion whereas an appeal would have had more stringent guidelines.

MMA Payout will keep you posted.

UFC, White and Lesnar seek dismissal of Hunt’s First Amended Complaint

June 28, 2017

The UFC, Dana White and Brock Lesnar have filed a Motion to Dismiss to Mark Hunt’s First Amended Complaint.  According to Lesnar’s Motion to Dismiss, all but one of Hunt’s original causes of action in his Complaint were dismissed with the Court allowing Hunt leave to amend.  The Defendants (collectively the UFC, White and Lesnar) have filed a Motion to Dismiss Hunt’s amended lawsuit.

Both motions liberally cite the transcript of the May 22nd hearing on their original Motion to Dismiss.

Zuffa Mtd Fac by JASONCRUZ206 on Scribd

Bolstered by these comments Defendants continue to pick at Hunt’s RICO claim in the FAC which included more details about Hunt’s purported injuries:

Hunt has conjured up a veritable smorgasbord of alleged injuries in the hopes that one might qualify as the requisite concrete financial loss necessary to state a RICO claim. None do.

The argument is the old claim that a plaintiffs’ allegations do not match up with their claimed damages.  Here, Hunt’s claims that he lost out on sponsorship and appearance deals as well as lost profits from his own clothing brand are speculative at best and cannot be claimed here under a theory from his RICO allegations nor his tort-based (physical injury) causes of action.

Moreover, Zuffa claims that Hunt cannot show a logical correlation between what has happened in his case and the UFC. Zuffa states that Hunt cannot show the requisite proximate clause to state his RICO claim.

Zuffa cite a case which outlines the reason:

This means there must be “some direct relation between the injury asserted and the injurious conduct alleged. A link that is too remote, purely contingent, or indirect is insufficient.”

Defendants claim that Hunt’s claimed damages are too attenuated to be claimed to be a loss related to a civil RICO claim.

Finally, they also claim that Hunt cannot prove the underlying predicate offenses required of a civil RICO violation.

Lesnar’s Mtd Fac by JASONCRUZ206 on Scribd

Lesnar’s Motion meticulously goes through each claim of Hunt but in more detail as it pertains to the current WWE performer.  Notably, Lesnar’s motion argues that Hunt had signed on to the bout with Lesnar and assumed the risk in signing on to fight Lesnar and therefore cannot argue damages as a result from his UFC 200 fight.

At the Court hearing, Howard Jacobs, Lesnar’s lawyer, stressed the fact that Hunt cannot prove damages for a civil RICO claim.  The distinguishing factor is that Hunt claims business and reputational damages.  These are not recognized damages under RICO claims the Defendants.  Moreover, Jacobs states that Hunt’s claim is a “prime example of overenthusiastic use of RICO…”

Reading throught the Court transcript, Hunt’s lawyer flails at the Court’s questioning of their RICO claims as well as whether or not Hunt was claiming that the bout agreement Hunt signed was invalid.  Hunt’s lawyer didn’t seem to know or did not want to admit that it was some type of strategy.

Payout Perspective:

The first three pages of Lesnar’s motion are instructive in a step-by-step analysis of the differences between Hunt’s original complaint and his First Amended Complaint.  While there are more facts provided in Hunt’s First Amended Complaint, the Defendants argue that the information provided by Plaintiffs do not help his claims.

Lesnar’s Motion to Dismiss attached the Court transcript from the May 22nd as an exhibit.  The Court complemented the parties on their briefing and due to time restraints allowed 10 minutes for each party to argue before the Court.  The Court grilled Hunt for about 15 minutes during the hearing about their Complaint.  To be honest, this could be bad news for Hunt.  Then again, it might be dependent on how the Court looks at the First Amended Complaint and this new Motion to Dismiss.

MMA Payout will have more on this.  Stay tuned.

Payout Exclusive: Interview with Roy Englebrecht and Alliance MMA’s Robert Haydak

June 28, 2017

Alliance MMA continues its expansion of regional promotions.  This month, it announced the acquisition of Roy Englebrecht’s Southern California fight promotion.  MMA Payout had the opportunity to speak with Alliance MMA’s President Robert Haydak and Roy Englebrecht.

The acquisition is the largest promotion the publicly traded company has made thus far.  The New York Business Journal reported that the transaction was for the acquisition of the assets of Roy Englebrecht Promotions in a cash and stock deal.  It is the 11th promotion it has acquired in its bid for strategic expansion.  One of the company’s overall goals is to become a feeder league for bigger promotions such as the UFC and Bellator.  It has acquired other ancillary companies such as fighter management company Suckerpunch and ticket company Cage Tix.  Alliance MMA provides infrastructure support to the regional companies while allowing the existing promoters to continue to run the promotion.

“31 years as an independent promoter is enough,” stated Englebrecht of the change.  He will stay on serving in the same capacity for the promotion.  To date, it has 18 fight dates set for this year including boxing/MMA hybrid shows at Fight Club OC at the Hangar in Orange County, California.  He also has two new events, “Rumble on the Water,” at the Queen Mary in Long Beach, California and Gladiator MMA which will be held in the LA Coliseum.

Englebrecht will continue to serve as the promotion’s GM and his staff will remain.  This is similar to other acquisitions made by Alliance MMA where they allow the staff to remain in place for a certain amount of time and will make a future decision on the company staffing.

He noted that he is willing to ween off of the MMA/boxing hybrid shows which have been very popular but that decision will be based on Alliance MMA.  Haydak stated that it was his first experience with a hybrid show and was impressed with the event Roy had created.  A decision has yet been made on the fate of Fight Club OC at The Hangar.

Englebrecht was impressed with the professional nature of Alliance MMA which was one of the reasons he decided to sell his promotion.  Alliance MMA first approached Englebrecht at one of his events in December 2016 and then met CEO Paul Danner at another one of his events in 2017.  The two sides exchanged information and after review of documents by the necessary people a deal was made.  The fact that Alliance MMA included Haydak, a former promoter, it made Englebrecht more at ease since they spoke the same language.

“Certainly, their due diligence which made me very comfortable,” said Englebrecht.  Haydak emphasized that Alliance MMA is being meticulous about its mergers and acquisitions.  “Its a very tedious and long process,” explained Haydak of what the company does in looking into acquiring a promotion.  “There is back and forth regarding financial and operations review.”  Out of 60 companies it has reviewed, Englebrecht’s promotion was just the 11th promotion Alliance MMA has purchased.  “It’s just not just jumping on any opportunity,” said Haydak.

The acquisition according to Haydak was based on Roy’s reputation as a promoter and Alliance MMA’s desire to make inroads into Southern California.  “We identified California as a market to get into.”  Alliance MMA also is working with longtime Alliance MMA Gym’s Eric del Fierro to promote fights in the region as well.  However, Alliance MMA does not see any conflict with the two regional promotions in the Southland.  “We’re not concerned about that all.  We’re working on the same purpose,” explained Haydak.

Englebrecht enjoyed his time as an independent promoter but voiced the challenges of being out in the “wilderness.”  “I’m a fan of regional promotions.  In saying that, you still have to do a whole lot.  It’s not like you’re a Golden Boy, UFC or Bellator.”

Bleacher Report’s CEO opines UFC has tapped out from audience standpoint

June 23, 2017

Believe it or not, eSports and MMA are similar. They both are emerging sports compared to traditional sports, they have niche audiences, cater to younger male audiences and have issues with the burgeoning infrastructure.  At a sports tech conference held in Seattle on Thursday, Bleacher Report’s CEO Dave Finocchio saw parallels with the growth of eSports and MMA.  The comparison was not positive.

When posed with the question of the future of eSports, Finocchio stated that he had concerns with the mainstream breakthrough of eSports because of the lack of a star that is known to the mainstream.  “The shelf life of an average player is short and players burnout,” he noted.  He stated that a big part of the model for sports leagues is building the brand of the players and leveraging their celebrity.

He looked to the UFC in comparison citing the absence of Conor McGregor and Ronda Rousey leaving the company without any other known starts to build around. “[i]f you look at the UFC…it did kind of ‘tap out’ from an audience standpoint…they really built their brand on the backs of a few fighters.”  Although he recognized that the UFC is a successful business and one of the reasons it sold for so much is due to the celebrity of a few fighters.  His concern was that while the business can be monetized, it will be segmented to a small audience.

(You can see the comments around the 24:00 minute mark in the embedded video story on Geekwire)

Right now, eSports reporting on BR is limited to aggregation rather than original reporting.  Finocchio did indicate that BR is looking into doing more in that space.

The lack of mainstream stars is a concern since without these highlighted people, the casual fan does not have someone to look to in the sport.

Notably, Finocchio also stated that Fantasy Football peaked and is now out of date.  He noted that Fantasy is not catching on with the BR audience.  Daily Fantasy Sports is now the future.  He did note that “[i]deally, betting becomes legal.”

Payout Perspective:

There are many parallels between the sport of MMA and eSports that will look at in the future.  But, the statement from Finocchio is true.  This has happened in other sports.  The NBA had a problem with the lack of marketing of stars in the 1980s and the early 2000s pre-LeBron and Kevin Durant.  But, eSports and MMA are niche sports.  One might argue that it might take more of an effort to market and feature its players/fighters.  Demetrious Johnson complained of his lack of marketing to feature him and realistically only eSports followers know the names of the sport’s most popular gamers.  It will be interesting to see what/how each sport handles this issue and which sport will break through quicker.

Parties request further clarification over discovery in UFC Antitrust case

June 21, 2017

After a June 1, 2017 conference with the Judge Peggy Leen to discuss outstanding discovery issues, the attorneys for the fighters and the UFC are at it again over what was said at the hearing.

On June 20th, Plaintiffs’ attorneys sent a letter to the Court requesting clarification on “a number of issues arising out of the Court’s order.”  The Plaintiffs sought clarification from the following:

  1. “Do Third Parties that produced documents before or just after the hearing count against the 5 document subpoenas allowed to Plaintiffs?” Plaintiffs have informed the UFC that they were intending to pursue documents from Golden Boy Promotions, Haymon, DiBella Entertainment, Inc., Top Rank, Inc. and Gary Shaw.  Plaintiffs had served documents subpoenas on 17  third parties.  The reason for the clarification is because they were to receive documents from Leon Margueles and Jakks Pacific prior to the hearing.The UFC claims that the two count as part of the maximum 5 issued by the Court.  Obviously, the Plaintiffs contend that they do not.  The UFC notes in its memo to the Court that Plaintiffs did not bring up this production to the Court.
  1. “Has the Court Authorized Plaintiffs to Depose Matt Hume?” Hume is a part of OneFC as Vice President of Operations and Competiton for the company.  According to Plaintiffs, counsel for OneFC will not accept a subpoena and since the company is headquartered in Singapore, lack jurisdiction.  The UFC did not oppose this request and takes no position.  It should be noted that both Plaintiffs and the UFC have agreed to document production from OneFC which was not counted against the 5 allowed by the Court.
  2. “Can Plaintiffs Pursue Discovery from Mercer?” The fighter pay study commissioned by the UFC’s attorneys to be done by Mercer is at issue here. Plaintiffs would like to “resume the discovery initiated in mid-2016.”  The UFC wants this counted as a third-party request.  It notes that some of the documents requested by Plaintiffs were designated as work product by the UFC in spite of the previous court ruling requiring certain documents produced by Mercer to be produced.  In addition, it is requesting clarification regarding a deposition of Mercer.  The UFC had offered to stipulate to the authenticity of documents produced by Mercer in lieu of a CR 30(b)(6) deposition.  But, according to the UFC, Plaintiffs never responded.

Payout Perspective:

The parties were ordered to meet and confer over outstanding discovery issues after the court conference but there is still conflict between the parties.  Laid out by the parties, it’s clear there might be a legitimate gripe.  It usually not a good look to be seeking clarification just after a hearing to go over discovery issues again especially when the overarching theme of the process is for the parties to cooperate.  These types of outstanding issues (i.e., what counts as 5 third-parties, etc.) must be discussed by the parties in Court in front of the judge.  There are some issues that you might not be able to think of while standing in court, but that’s why there are usually more than one (likely three or four) attorneys at the hearing so they can pass along notes to lead counsel to come up with questions to clarify.  Likely, Judge Leen will hold a teleconference but will none too pleased that the parties are coming back.

Plaintiffs Memo Re Discovery by JASONCRUZ206 on Scribd

Defendants Memo Re Discovery by JASONCRUZ206 on Scribd

Nate Diaz, Leslie Smith sued by former agency

June 21, 2017

TMZ Sports first reported that Nate Diaz and Leslie Smith are being sued by their former management group for nonpayment of commissions and conspiring with an attorney to break management agreements.

The lawsuit claims that the defendants owe them more than $1 million in damages and that they were never paid for their work on the UFC 202 fight with Conor McGregor.

Sam Awad is also named as a defendant in the lawsuit.  Awad represented Diaz this past April at a NSAC Commission hearing which reduced his fine and suspension from his UFC 202 press conference.

The lawsuit, obtained by TMZ and MMA Junkie note that Ballengee signed Diaz as a client in the summer of 2014 on recommendation from his brother Nick who was an existing client.  The lawsuit alleges that Diaz would pay based upon the same terms as Nick’s contract with the company.

If the Ballengee Group name sounds familiar, Jeff Borris is a member, he is the individual heading up the Professional Fighters Association.  Smith had a falling out with Borris after initial support for the organization.

The Ballengee Group was launched in 2014 by oil company entrepreneur James Ballangee.  He hired baseball agents and attorneys away from CSE, Perennial Sports & Entertainment and MVP Sports Group.

Payout Perspective:

This will be an interesting lawsuit to follow as we may see the inner-workings of the commission structure for Diaz and maybe Smith.  It always amazes me that a lot of the fighter-agent relationships are dependent on the fighter paying the agent after-the-fact instead of the payment going into some sort of trust account from which the agent can take its payment and leave the rest to the fighter.  The inclusion of Awad likely means that the fighters will defer to him as the reasons for nonpayment.

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