Zuffa Reply Brief in support of dismissing antitrust lawsuit takes aim at Plaintiffs’ claims

November 5, 2018

On Friday, Zuffa filed its Reply in Support of its Motion for Summary Judgment in dismissing all claims against it by former fighters in the antitrust lawsuit.

In its Reply Brief, it argues that Plaintiffs have now changed its theory of liability since its original claims are no longer viable.  Zuffa argues that Plaintiffs have failed to define relevant markets and in turn have not proven its monopsony and monopoly claims.

In a more of a procedural argument, Zuffa argues that Plaintiffs failure to rebut certain Statement of Undisputed Facts in its Motion and are therefore admitted as true.  Alternatively, Zuffa states Plaintiffs have failed to raise any genuine factual disputes in its counterstatement of facts.

Zuffa argues that Plaintiffs’ Opposition to its Motion for Summary Judgment relies heavily on Dana White’s puffery.  But, as Zuffa argues, “strong statements praising your own business and demeaning your competitors are evidence of competition, not an antitrust case.”

This past September, Plaintiffs filed its Opposition Brief to Zuffa’s Motion for Summary Judgment.  The main argument by Plaintiffs is that the UFC is the “major league” of MMA and it has done so through anticompetitive behavior.  Plaintiffs claim that Zuffa used its market leverage to extend exclusivity over its fighters through coercion, intimidation and other means of forcible persuasion.  The claim is that the evidence supplied shows Zuffa abused its market power.

Zuffa claims that Plaintiffs have provided a new category for fighters: “marquee,” citing marquee fighters as the most important input for MMA promoters and that Zuffa violated the antitrust laws by preventing competitors from having a “critical mass” of the fighters.  Zuffa argues that this theory of the need to have a “critical mass” of “marquee” fighter does not appear in its Amended Complaint nor is there discussion of this theory in its discovery responses.  Moreover, Zuffa argues that Plaintiffs fail to define this term.

Moreover, Zuffa states that the relevant markets in which Plaintiffs allege Zuffa has power over have not been properly identified.  Zuffa notes that Plaintiffs failed to provide an evaluation of the “marquee” query and that their expert, Dr. Hal Singer, does not include the Significant Non-transitory Decrease in Price test.  Zuffa also takes issue with the lack of defining an output market for a monopoly claim.  This is due in part to its assertion that Dr. Singer failed to properly conduct a SSNIP test.  Zuffa cites to Singer’s admission that he did not test whether cable networks, broadcast networks and sponsors (the output market according to Dr. Singer) would switch to sports entertainment.

Zuffa also states that Plaintiffs cannot dispute that other promotions are viable competitors of the UFC.  They cannot dispute the testimony of the promoters which claim that the UFC has not been an obstacle to them signing fighters.  In this argument, they negate the testimony of Kurt Otto and Jeremy Lappen because they promoted MMA events before the class period and before Plaintiffs claim Zuffa had monopsony power which deems their testimony irrelevant for purposes of this lawsuit.

One of the other claims asserted by Zuffa in its Reply is that the Plaintiffs cannot show relevant direct evidence of lower compensation as a result of the claimed monopsony power.  Zuffa argues that Plaintiff cannot solely rely on their expert’s reports alleging the correlation.  Here, Zuffa argues that the practical market facts do not show that the company suppressed compensation due to its share of the market.  Zuffa also argues that Plaintiffs’ are making a “predatory hiring” claim as Plaintiffs describe a marketplace where the UFC retains fighters it does not need in order to keep them away from other promotions.  But, Zuffa argues it simply offered fighters more money.  This would seemingly fly in the face of Plaintiffs claim that wages were suppressed.

Furthermore, Zuffa states that Plaintiffs have failed to show its foreclosure theory based on the UFC’s use of exclusive contracts.  Basically, despite the inference, Plaintiffs cannot show intent that the contracts foreclosed competition.

These are the main arguments asserted in Zuffa’s Reply Brief which rebuts Plaintiffs’ Opposition and supports the promotion’s contention that the Plaintiffs’ lawsuit contains no general issues of material facts and as a result must be dismissed.  The strongest arguments in my opinion seem to be the argument that other promotions do not appear to be harmed by Zuffa’s business practices.  Plaintiffs point out how the purported scheme may still impact other MMA competitors.

It is clear that Plaintiffs do not respond to Zuffa’s Statement of Undisputed Facts (“SUF”) in its Opposition.  Rather, they introduce their Counterstatement.  Procedurally Plaintiffs should have responded to Zuffa’s SUF.  If you do not, the statements are admitted as true.  Plaintiffs will likely argue that their Counterstatements are equivalent to a denial or rebuttal.  It would be up to the Court to determine this.  I would think that Plaintiffs would have been extra cautious with this filing and would have ensured that they would not deem anything admitted if they did not respond.  Notwithstanding this argument, the Court will need to decide this Motion.

Both sides have made strong arguments for why this case should go forward or be dismissed.  The question is whether there are material facts still to be decided with the lawsuit as it is currently framed for it to go forward to trial.  Zuffa makes strong arguments stating why it should be dismissed and premise Plaintiffs theories based on unverified assertions and a moving target of theories.  Plaintiffs maintain its basic argument that Zuffa’s market power dictated the rest of the industry and through its strategies, was able to suppress fighter rights and wages.

MMA Payout will keep you posted.

Reply Brief by on Scribd

Floyd Mayweather to fight in Japan New Year’s Eve

November 4, 2018

Floyd Mayweather will return to fighting on December 31st in Japan for the Rizin promotion.  He is set to face Japanese kickboxer Tenshin Nasukawa.  The rules and duration of the bout is yet to be determined.We last saw Mayweather in August of 2017 as he defeated Conor McGregor in the biggest selling PPV of all time.  It also broke records in Nevada for attendance.

The fight announcement was made at a press conference Sunday night, Monday in Japan.  The fight is set to take place at the promotion’s annual New Year’s Eve show at the Saitama Super Arena in Japan.

Mayweather is 50-0 in boxing while his opponent is 27-0 in kickboxing.

Payout Perspective:

This is surprising news.  Not that Mayweather is returning to the ring, but he’s doing it in Japan.  It’s not clear what was the driving force for this appearance (aside from money) but this will definitely draw media to see if this is a stunt or something else.

Zuffa files Reply Brief supporting its right to seal docs in Antitrust case

October 29, 2018

In its latest filing, Zuffa has filed its reply in support of its motion to seal parts of the opposition brief filed by the plaintiffs in response to the company’s motion for summary judgment in the Antitrust lawsuit.

Zuffa filed a Motion to Seal certain documents that are being used in support of its Motion for Summary Judgment.  The promotion included justifications for sealing each of the documents it requests.

Zuffa Motion to Seal by on Scribd

Plaintiffs argue that the documents are not commercially sensitive information.  In its brief, Plaintiffs cite testimony from Zuffa’s attorney Michael Mersch about a hypothetical contract, testimony related to Lorenzo Fertitta’s deposition concerning financial information and wage share.  Plaintiffs argue that there is no confidential information contained in the testimony sought to be sealed. Zuffa also requests portions of expert reports to be redacted.  This includes plaintiffs’ expert report from Hal Singer and its own expert Robert Topel.

Plaintiffs Opposition by on Scribd

Perhaps one of the more salient arguments in Plaintiffs argument is that many of the passages that Zuffa seeks to redact are old.  Essentially, the information that Zuffa seeks to seal are remnants of the past and do not contain trade secrets because they no longer contain information that is subject to the current business landscape.

The Reply is its response to the Plaintiffs’ seeking to unseal certain documents filed in support of the brief filed by the fighters suing Zuffa. Plaintiffs’ opposed the motion for summary judgment filed by Zuffa seeking to dismiss the fighters’ claims against the promotion.  But, although Zuffa has unsealed and unredacted certain documents, there still remains a giant portion still unavailable for viewing.

Zuffa Reply ISO Motion to Seal by on Scribd

In its Reply Brief it reaffirms that it properly identified documents that it was sealing and met the legal burden for documents needed to preclude.

Additionally, they claim that the documents sought to seal are specific and would pose competitive harm to the company as they would divulge confidential business information and strategy.  Zuffa also rejects Plaintiffs argument that the information sought to seal is old and already public knowledge.

The Court will decide whether Zuffa carries its burden to show that the records it seeks to seal “articulate compelling reasons supported by specific factual findings,” providing ‘articulable facts’ that favor secrecy and that those interests outweigh the presumption of public access to judicial records.

While it has been underscored in this briefing, the right of access by the media is a viable argument for the Court to look at the sealing of documents critically.  The Reply includes several tweets from John Nash and articles for Paul Gift which discuss the Zuffa antitrust lawsuit.  Certainly, the attorneys have taken just a survey of the reporting going on here as media here is just an afterthought from both legal sides.

The recent reversal in ruling in the Hunt-Zuffa lawsuit which sealed Bout Agreements.  In the Order which granted the sealing of documents, the Court stated, “[D]efendants claim that the agreements contain proprietary information, and that competitive standing with MMA promoters.  The court finds that defendants have identified compelling reasons that warrant sealing the exhibits…”  This does not seem compelling at all.

How will this all shake out?  If you take the Hunt ruling into consideration, it would seem that despite the “compelling” standard for sealing documents, the Courts skew toward finding any excuse to seal a document.

Deontay Wilder files appeal brief in Povetkin Meldonium case

October 22, 2018

Deontay Wilder filed its appeal brief in requesting that the court overturn the trial court’s ruling in favor of World of Boxing and Alexander Povetkin.  The appeal highlights an incongruent ruling by the court which appeared to defer to the World Boxing Council in its determination of Povetkin’s drug test failure.

The match between the two heavyweights was set by the World Boxing Council to take place in May 2016 in Moscow, Russia.  Wilder was training in England when he learned that Povetkin and tested positive for a banned substance.  Wilder decided to return to the United States instead of going to Russia believing that the fight was cancelled due to the failed drug test.  Povetkin and his promotion, World of Boxing claims that Wilder breached the contract when he failed to go to Russia for the match which prompted the WBC to cancel the fight.

In limbo is a purse of $7.15 million still in escrow.  The trial court granted World of Boxing’s request for the escrow money to be return.  Of course, Wilder believed that he should be granted his share of the money since Povetkin failed the drug test.  A lawsuit filed by the heavyweight champion ensued in which WOB and Povetkin filed counterclaims against Wilder.

From our post this past April:

In February 2017, a jury just took 32 minutes to determine that Povetkin took the banned substance Meldonium post-January 1, 2016, however that did not mean much in the outcome of this Summary Judgment motion.

One of the overarching issues in the lawsuit as to who is to blame for the failed fight in Russian in May 2016.  You might infer from the news of a failed drug test from Povetkin that it was the Russian.  However, Povetkin claimed that Wilder’s failure to appear in Russia forced the hand of the regulating body, the WBC, to call off the fight.

The WBC Bout Agreement takes precedent here as the Court examines the contract in applying basic contract principles.  But in its application, there seem to be things that don’t make sense.

“We begin by noting that the Bout Agreement contains no language mandating that each fighter refrain from ingesting banned substances.”

The inference one might yield from this sentence of the Court opinion is that tis ok to used banned substances.  Based on this, the Court held that Povetkin did not breach the Bout Agreement because it cannot conclude when/if he ingested the banned substance Meldonium. Obviously, this is opposite the jury finding.

The good news for Wilder is that there was no finding of a breach of the Bout Agreement when Wilder did not go to Russia for the fight with Povetkin.  The Court notes, “[t]here is simply no evidence that the WBC’s postponement decision was a “normal or foreseeable consequence” of Wilder’s actions, or that Wilder’s acts otherwise caused the WBC’s decision.”  Povetkin and World of Boxing sought $2.5 million in liquidated damages that was part of the Escrow Agreement.  “While the WOB Parties argue that it was Wilder’s failure to appear in Moscow, rather than Povetkin’s positive test result, that caused the WBC to postpone the Bout…no reasonable jury could indulge in the speculation that would be required to conclude that this was so,” stated the Court opinion.  It went on to state, “[B]ecause a reasonable jury could not find that any breach by the Wilder Parties proximately caused the WOB Parties’ damages, the Wilder Parties’ motion for summary judgment dismissing the WOB Parties’ claim for breach of the Bout Agreement is granted.”

As for the escrow funds, World of Boxing is entitled to its release held in escrow but no interest because no judgment was entered against Wilder.

The claims for defamation filed by Povetkin remain although they may be dismissed pending further movement in this case.

The Court opinion seems to fly in the face of the original jury finding that Povetkin took Meldonium post-January 2016.  The opinion seems to lean entirely on the WBC Agreement for its determination on its procedure in determining the status of Povetkin based upon his drug tests.  The Court quotes WBC Rules and Regulations when it notes, “the WBC may in its discretion consider all factors in making a determination regarding responsibility, relative fault, and penalties, if any.”

The WBC did not issue a ruling on Povetkin’s positive drug test until August 17, 2016.  It noted that it called the bout off and reserved any further ruling.  It then determined that it was not “possible to ascertain that Mr. Povetkin ingested Meldonium after January 1, 2016.  After two additional rulings by the WBC which opposed the August 17, 2016 ruling, it overturned the decision and stuck with its August ruling.  It based this on a study showing Meldonium having the ability to stay in one’s system for more than five months.  It also noted Povetkin had negative drug tests six other times.

The WBC seemed to be dragging its feet in this case as it put off the ruling on Povetkin despite the litigation moving ahead.  There’s also the issue of Povetkin’s positive test for ostarine which happened after the lawsuit began.  Yet, the WBC did not penalize him for this and even stressed negative drug tests notwithstanding the two positive tests for Meldonium and ostarine.

The appeal brief, which was filed in August 31, 2018, brought up the glaring disparity in issues regarding the WBC ruling and that of the jury trial.

Wilder notes that the WBC confirmed in its August 2016 ruling that the bout was called off due to Povetkin’s positive test.  In December 2016, Povetkin tested positive for another banned substance.  It issued a March 2017 ruling which doled out an indefinite suspension and a $250,000 fine.  But, in November 2017, it issued another ruling which amended the indefinite suspension to a fixed one-year fine and reaffirmed its ruling that it could not be found whether Povetkin ingested meldonium post-January 1, 2017.

Wilder points out that WOB’s attorney argued to the Court that “only the WBC, and not a jury, was competent to decide the issue, and that a jury verdict would merely be an advisory opinion.” Despite the trial judge’s disagreement, WOB attorney believed that the contractual agreement of the WBC would be the controlling factor in determining whether Povetkin took Meldonium.

However, Wilder believes that the District Court’s interpretation of the Bout Agreement was wrong.  Wilder argues that the “WBC does not have the discretion to resolve private disputes between parties to a contract.”  The Bout Agreement includes a clause which states that the parties “irrevocably accept and consent to the jurisdiction of” the District Court to “resolve any disputes arising out of” the Bout Agreement.” Wilder claims that whether or not Povetkin ingested Meldonium constituting a breach of the Bout Agreement is clearly a dispute arising out of the agreement, over which the District Court has exclusive jurisdiction.  Essentially, while the Bout Agreement gives discretion to the WBC, it does not supersede the authority of the courts to interpret the contract.  And Wilder argues, “[b]y cedeing the decision regarding whether Povetkin breached the Bout Agreement to the WBC,” it committed reversible error.  Additionally, the counterclaims filed by WOB and Povetkin reflect the authority of the courts over the WBC Bout Agreement.

Wilder also argued that even if the appellate court holds that the trial court was correct in holding that the WBC and not the trial court could determine whether the Bout Agreement was breached, it caused error in its application of the facts of the case.

Wilder cites the following press release from the WBC:

They also argue that the date of the bout is a material term in the contract.  Thus, whether or not the date of the bout was postponed is not relevant.  WOB asserts that Wilder breached the agreement due to his failure to fly to Russia for the intended fight.  Wilder cites several cases in which the exact date of the events is deemed essential to the terms of the contracts.

Following along the line of logic that the WBC had some authority in its contract, Wilder argues that the WBC delegated its duty to the trial court:

As a result, Wilder argues that the WBC applied a “strict liability” standard wherein if a jury found that Povetkin ingested Meldonium after January 1, 2017, he would be stripped of his mandatory challenger status which meant that his fight with Wilder would be off the table.

Wilder also indicates something amiss with what may be infers as a “quid pro quo” with Povetkin and the WBC. Pointing out the press release by the WBC, it seems as though if Povetkin paid his fine, he would be reinstated.

In a footnote of its brief, Wilder states that the trial court denied a request to reopen discovery on this limited issue but Wilder request this court again.

Finally, Wilder argues that he is entitled to the escrow property in the amount of $4,369,365 as a result of WOB’s breach of the Bout Agreement.

Payout Perspective:

This is a fascinating legal case premised on the basic tenets of a contract. The trial court’s decision to side with Povetkin and WOB in determining that the WBC would be the only entity capable of deciding whether Povetkin ingested Meldonium seems out of line with the job of the court to interpret the contract when a dispute comes before it. We have seen with the Austin Trout case that the Court has deferred to the drafter of the private contract despite the aggrieved party bringing a lawsuit. MMA Payout will continue to follow once WOB files its appellate brief.

Boxer Austin Trout case moved to arbitration, casts concern on future of Ali Act

October 16, 2018

A Federal Court in Puerto Rico has dismissed boxer Austin Trout’s lawsuit against the World Boxing Organization for claims of violating the Muhammad Ali Boxing Reform Act.  The court determined that due to the signed contact, Trout must submit to arbitration.

Austin Trout Case Order on … by on Scribd

Trout claimed that the WBO had dropped him from the promotion’s ranking arbitrarily which affected his ability to receive a title shot.

The lawsuit landed in Federal Court in Puerto Rico after the boxing promotion moved the case to Puerto Rico where its offices are located.  Originally Trout filed the lawsuit in state court in New Mexico.  The WBO moved the case to Federal Court in New Mexico and then requested the venue change to Puerto Rico which the Court granted.

The WBO claimed that Trout was bound by the terms of his WBO contract which required that he arbitrate any disputes he had with the contract.  According to the contract, the WBO would handle the arbitration and any appeal would be heard by a grievance committee put together by the promotion.

Trout argued that the lawsuit should remain in court for two reasons.  First, Trout’s attorneys argued that the WBO waived its right to arbitration as it already appeared in the case and filed procedural motions for the case to be moved to federal court and then to Puerto Rico.  Secondly, Trout argued that his claims were based upon violations of the Ali Act which should be litigated instead of arbitrated.  Furthermore, it argued that the arbitration clause was invalid because the WBO would effectively “be both a party and a judge.”

The WBO moved to compel arbitration and dismiss the lawsuit.  In siding with the WBO, the Court indicated that the WBO’s contract which included the arbitration clause was valid and related to the dispute alleged by Trout and therefore it was a valid arbitration clause.  Trout unsuccessfully argued that there was ambiguity in the contract and with contracts of adhesion, they should be found in favor of the non-drafting party.  Here, Trout argued that the arbitration clause related to disputes with third parties whereas disputes directly with the promotion could be litigated.  Part of this argument was due to the WBO serving as the arbitrator in the matter.  However, the court found no ambiguity and that the contract availed the parties to arbitration on all matters.

As to the argument that the lawsuit was litigated by the WBO and as a result, it had waived its right to arbitration, the court argued that the sole responses made by the promotion in court were procedural and not substantive.  Hence, it had not participated in litigation of the case and did not waive its right to an arbitration.

There is no indication that Trout will appeal this decision at this point.

Payout Perspective:

The underlying issue in this decision is that claims under the Muhammad Ali Act could be arbitrated based on a contract signed by the parties.  This does not bode well for the possibility of the Ali Act Expansion to combat sports.  The reason being is that if the party drafting the contract (e.g., Zuffa) includes a provision that all disputes under the contract shall be resolved via arbitration, it might mute the effectiveness of the Ali Act.  While arbitration is a faster way to resolve disputes, in the Trout case, he was concerned with the ability for the WBO to be judge and a party.  One might foresee an MMA promotion including in its contract its ability to choose an arbitrator.  We have already seen that the UFC Anti-Doping Policy has chosen its own vendor and arbitrator.  It would likely do the same for any case claiming a violation of the Ali Act.  Unless there is an appeal, look for this decision to rear its head in the future.

Eddie Alvarez signs with ONE Championship

October 15, 2018

ONE Championship has signed Eddie Alvarez to a contract making the former UFC and Bellator lightweight to the Asia-based company.  According to the promotion’s press release, it’s a multiple bout contract.  Terms of the deal were not disclosed.

Payout Perspective:

The signing is a coup for ONE Championship who may seek to extend its reach to North America.  Thus far, the company has grown exponentially since its start in the early 2010s.  It has Ben Askren and former UFC star Brandon Vera on its roster as well as several top fighters in Asia.  Alvarez joining the promotion should bolster fans of Alvarez in the U.S. which may, in turn, mean a foray into North America.

At 34, its probably the best possible deal for Alvarez.  He’s nearing the end of his peak earning as an MMA fighter and ONE is likely paying him much more than the UFC or Bellator would offer.  This may serve as an option for other fighters that may be nearing the end of their deal in the UFC or Bellator that there are other options in the industry.

Tukhugov taken off UFC Fight Night 138 sparks Khabib to threaten to leave UFC

October 11, 2018

Khabib Nurmagomedov has given the UFC an ultimatum.  Keep his teammates in the UFC, or lose him.

The Eagle made this statement on Instagram after Saturday night’s post-fight brawl which included UFC featherweight Zubaira Tukhugov.  It was Tukhugov who threw a punch at Conor McGregor in the Octagon after Nurmagomedov left the cage to go after McGregor’s jiu jitsu coach Dilon Danis.

The Instagram statement was made once news that Tukhugov was removed from his fight against McGregor teammate Artem Lobov at UFC Fight Night 138 at the end of the month.  A replacement for Tukhugov is being sought although Lobov is lobbying Dana White to keep Tuhugov.

 

View this post on Instagram

 

I would like to address @ufc Why didn’t you fire anyone when their team attacked the bus and injured a couple of people? They could have killed someone there, why no one says anything about insulting my homeland, religion, nation, family? Why do you have to punish my team, when both teams fought. If you say that I started it, then I do not agree, I finished what he had started. In any case, punish me, @zubairatukhugov has nothing to do with that. If you think that I’ll keep silent then you are mistaken. You canceled Zubaira’s fight and you want to dismiss him just because he hit Conor. But don’t forget that it was Conor who had hit my another Brother FIRST, just check the video. if you decide to fire him, you should know that you’ll lose me too. We never give up on our brothers in Russia and I will go to the end for my Brother. If you still decide to fire him, don’t forget to send me my broken contract, otherwise I’ll break it myself. And one more thing, you can keep my money that you are withholding. You are pretty busy with that, I hope it won’t get stuck in your throat. We have defended our honor and this is the most important thing. We intend to go to the end. #Brothers

A post shared by Khabib Nurmagomedov (@khabib_nurmagomedov) on

A day after meeting Vladimir Putin, Khabib told the Nevada Athletic Commission that they could keep his $2 million purse.

Khabib’s cites the lack of punishment given to McGregor for his attack on the bus he was in at the Barclay’s Center back in April.

Payout Perspective:

This was bound to happen.  The UFC did nothing to discipline McGregor citing his arrest by New York Police was good enough has now come back to haunt them.  Now, Khabib is using the lack of discipline in that case to save his teammate from expulsion from the promotion.  If that does not happen, he has threatened to leave.  This is a bad situation from the promotion as it now must decide how to deal with this situation.  It’s apparent that Khabib has some leverage in this situation as he likely has opportunities in Europe and Russia outside of the company.  Coming off the best PPV buy rate ever, the UFC will now have a slippery slope it must navigate as if they do nothing, it is even more precedent for athletes to get away without discipline.

UFC 229: Payout Perspective

October 9, 2018

Welcome to another edition of Payout Perspective.  This time it was one of the biggest events in company history with UFC 229 at the T-Mobile Arena in Las Vegas.

Khabib submits Conor, brawl ensues

You’ve likely read all about the post-fight brawl.  Despite MMA fan that like to downplay the incident, this was not how you showcase your product to the millions of fans that watched the fight.  Rather than be professional, both sides were not.  Conor’s antics prior to the night, and Khabib’s during it were both wrong.  It was a disgrace to the sport and overshadowed the dominant performance by Khabib.

At this point, the Nevada Athletic Commission will have to suspend and fine Khabib for some time to make it look like an authority.  With that being said, it’s clear that the UFC will take no action despite its ability to do something about it.  The UFC has maintained its alibi of hiding behind the regulation of a commission to do its bidding when it comes to these types of disciplinary issues.  It is clear that if they wanted, they could terminate Khabib’s contract.  Dana White stated that any fighter from Khabib’s corner would no longer fight in the UFC.  But what about Khabib?

Conor is to blame as well.  His antics have helped put him in the stratosphere of earners in combat sports and brought millions of dollars to Zuffa.  As a result, he’s been allowed to do anything without repercussions.

The whole scenario points to a suspension for Khabib and being stripped of his lightweight title.  We should have Conor face Tony Ferguson for the title and/or Diaz/Poirier winner facing Ferguson with the loser facing Conor.

Ferguson returns to stop Showtime

Tony Ferguson stopped Anthony Pettis in a blood-splattering fight that showed El Cucuy is back.  Both fighters had their moments and the movements in the fight were out of the ordinary and extraordinary.  Ferguson used a somersault to get out of the way of Pettis and Showtime used capoeira moves in attacking and defending.  Pettis was sliced by one of Ferguson’s strikes and was bleeding like a pro wrestler.  He did damage Ferguson as well.  In the end it was the relentless Ferguson that earned the victory as Pettis could not continue due to a broken hand.

Attendance, Gate and Bonuses

The event set a record for an MMA event in Nevada with 20,034 for a gate of $17.2 million.  It eclipsed UFC 200 held at the same venue.  The gate for UFC 229 fell short of the company record of $17.7 million for the UFC’s debut at MSG at UFC 205.

According to SeatGeek, a standing room only seat for UFC 229 went for over $400, with the get-in price at $1,234.  Again, it was second to only UFC 205’s get in price.

The bonuses went to Ferguson and Pettis for Fight of the Night, Derrick Lewis and Aspen Ladd for Performances of the Night.  Each drew the standard $50,000 bonus.

Payouts

The payouts were highlighted by Conor McGregor’s $3 million purse followed by Khabib’s $2 million.  But, the NAC has held up Khabib’s payout pending an investigation in the post-fight brawl.  While it has issued the check to McGregor, it’s held Khabib’s pay pending an investigation

The rest of the payouts can be found here.

Promotion of the Fight

Conor McGregor did not do a “world tour” for this fight which would have probably brought even more interest to the event.  He did promote when needed such as their first press conference.

The press conference which was held between Conor-Khabib prior to fight week was done without an audience but was shown in Times Square.  It was also on ESPN which had to use its censor liberally due to all of the profanity.  Conor’s late arrivals at the presser and ceremonial weigh-ins really put stress on the networks to deal with stretching out the time.  With more losses, networks will get tired of this habit.

ESPN did air the UFC Countdown show on its network in addition to it airing on FS1.

Dana White appeared on Jimmy Kimmel’s show to promote the fight.  Conor McGregor made an appearance on Conan O’Brien’s show and shared Proper 12 with his Irish counterpart.

In addition, there were multiple radio ads in addition to the television commercials.  Most of which highlighted the infamous Brooklyn bus attack.

Sponsorships

There were some new sponsors for this event including Conor McGregor’s Proper 12 Irish Whiskey and San Manuel Casino.  The latter sponsor is based out of Highland, California and was shown during the ceremonial weigh-ins.

One of the newest UFC sponsors, Portable Protein Pack aka P3, appeared on the front paneling of the UFC/Reebok shorts.  We may see more of this with existing official sponsors having secondary opportunities on fight gear.

In addition, Air Asia made a significant splash in its sponsorship activation which included stewardesses on stage with UFC Octagon girls during the ceremonial weigh-ins and with signage in the red corner of the Octagon to match the company’s branded color.

It was reported by Ariel Helwani that Conor McGregor signed a lucrative deal with Monster Energy which was said to be in the millions.

EA announced a new edition of its UFC3 video game featuring Conor McGregor.  EA conducted a fight simulation in which Conor McGregor KO’d Khabib in the 3rd round.

In the octagon, Toyo Tires, Harley Davidson, Bud Light, Nemiroff, Motel6, MetroPCS, P3, CircleK, Modelo, Air Asia, UFC3’s Notorious Edition, Autozone and the return of the Walking Dead and Monster Energy held the center. It was clear that there were more sponsors than ever before within the Octano on its corners and canvas.  Harley Davidson had the fighter prep point.

Ratings

The UFC Prelims on FS1 drew 1.3M viewers on Saturday.  The prefight telecast on FS1 drew 373,000 viewers.  The prefight show matched the one from UFC 223.  The 222-prefight show was the highest-rated this year with 431,000.

Odds and Ends

I wrote about the UFC brawl in depth and how the promotion of the fight allowed for this to happen.  The UFC faces a lot of fallout (good and bad) from the event.  Khabib and Conor are facing NAC sanctions for their actions and at least two fighters from Khabib’s team will likely be expelled from the UFC and from fighting in Nevada.  For a promotion that is looking to grow the sport and find blue-chip sponsors, one has to ask whether UFC 229’s brawl was good or ad for business.

Conor went after Khabib’s manager, Ali Abdelaziz, a controversial MMA manager that has been linked to terrorist groups if you believe McGregor and some journalists writing on the subject.  Despite these alleged ties, it seems that a majority of MMA fighters trust Abdelaziz with their career.  During the fight, Abdelaziz and members from both camps stayed in the back as the UFC tried to prevent what happened Saturday from happening.

The internet searches for this event were huge.  On Friday, UFC 229 drew over 2M google searches.  McGregor-Khabib drew over 2M searches as well.

Conor McGregor drew over 5M google searches on Saturday.  Derrick Lewis drew over 200,000 and Michelle Waterson drew over 100,000 searches.  “McGregor Fight” drew over 1 million google searches on Sunday.

Derrick Lewis’ post-fight interview was an all-time classic and was one of the reasons he drew as many google searches.  He took off his pants, said Donald Trump called him and told him to be Alexander Volkov.

Khabib appeared at the post-fight press conference and indicated he received congratulations from Vladimir Putin.

Matt Damon turned down the opportunity to be on Saturday Night Live to go to UFC 229.  There were many other celebrities drawn to this event as well and the aftermath had everyone on social media talking about it.

Internal numbers for Internet purchases of the event were up over 60% from Mayweather-McGregor according to Dave Meltzer.  This would be an indicator (although maybe not the strongest) the buy rate surged past the record of 1.6M PPV buys.  White indicated that it did not reach 3 million but was over 2 million.

The UFC received a ton of mainstream coverage due to post-fight brawl.  But, does this tarnish their image or encourage the promotion to try more of this?

Conclusion

Dana White touted that based on the viewership of Embedded episodes and YouTubes views compared with McGregor-Mayweather, the PPV would break the UFC record and it appears he will be right.  Despite the lack of expanded promotion of the event, its clear that the UFC hit all of the trigger points to garner the casual fans to buy the event.  The controversy is whether it was right to include footage of the bus attack or allow McGregor to continue personal attacks on Khabib’s religion, family and friends.  But, the PPV buy rate will likely go over 2 million (say 2.2 million) buys and show that marketing the bus attack footage helped more than it hurt.  There will be a rematch and you can believe that they will show the post-fight melee.

Factual misstatements, omissions cited by Smith in dismissal letter as she appeals NLRB decision

October 8, 2018

MMA Junkie reports that Leslie Smith will file an appeal of her dismissal of her NLRB labor complaint.

In a two-page decision dated September 18, 2018, the NLRB cited that after an investigation Smith’s complaint lacks merit.  “[t]here is insufficient evidence to establish that the UFC’s failure to renew her contract in April 2018 was based on any protected activities.”

The letter from Region 4 regional director Dennis P. Walsh notes that the “UFC’s failure to renew a contract and continue to negotiate with Smith” was not clear as to if it was an adverse employment action.  Essentially, the decision did not see evidence that re-signing Smith to a new contract was an adverse employment action.  The UFC’s unwillingness to make a counteroffer to Smith’s contractual demands was not evidence of an adverse employment action.

The decision cites three times that the UFC’s conduct actually benefited Smith.  They cite the UFC allowing Smith to remain in the promotion in 2017 after refusing to accept two fights.  Despite her refusal, her contract was extended twice.  The UFC approved Smith’s request to wear a Project Spearhead mouth guard for her April 21st fight despite the ban on third-party logos due to the Reebok deal.  Finally, the NLRB cites the UFC granting Smith $500 for travel expenses related to her April 21st fight.

Lucas Middlebrook, the attorney for Smith, has filed an appeal to the decision and requested two NLRB officials to be recused from the appeal as well as requesting that the same investigator that originally found merit in Smith case review the appeal. He accuses the UFC of using political ties to have the complaint sent to D.C. for additional review.

Smith argues that there were several factual misstatements in the dismissal letter including the allegation that she would not fight unless the UFC gave her additional money and added two fights to her expiring contract.  She also argues that the Bout Agreement obliges the UFC to reschedule the bout or terminate the existing Bout Agreement.  Since the fight was not rescheduled and the bout agreement was terminated, Smith argues that she should have had one more fight left on her contract. Based on this interpretation, the dismissal letter claims that her contract had ended but that would not be the case.

She also noted omissions in the dismissal letter decision including her No. 9 ranking in the UFC and having won 3 of her past 4 fights with the only loss coming outside of her weight division.  She also indicated that the $500 provided to her for travel was related to per diems unpaid by the UFC which included costs for checked luggage.

Payout Perspective:

This will be an appeal to watch considering the allegations and the belief that politics are involved in this.  Dana White and the UFC are friendly with the current administration.  In fact, UFC Fight Pass will be airing a special about Trump and his ties to MMA.  But, will the NLRB listen to the merits of this appeal and overturn the dismissal?  The most compelling argument for Smith is the bout agreement which requires either a reschedule of the bout or cancellation of the bout.  With a cancellation Smith would have been allowed one more fight on the contract.  If not, there is a possible claim for breach.  MMA Payout will keep you posted.

Chickens came home to roost at UFC 229

October 6, 2018

Tonight’s UFC 229 was marred by a melee after Khabib Nurmogomedov defeated Conor McGregor in the main event.  Khabib went after Conor’s corner, namely Dilon Danis, and chaos ensued.

A member of Khabib’s corner climbed the cage and took a shot at Conor.  During the post-fight show on  FS1 Dana White stated that 3 of Khabib’s cornermen were arrested.  At the post-fight press conference, White indicated that Conor did not want to press charges.  So they are likely to go free.  In all likelihood, Khabib will be facing a suspension and fine for his actions.  White also said that Conor McGregor was paid for tonight’s fight but the commission was withholding Khabib Nurmogomedov (per Brett Okamoto at ESPN).  Khabib was supposed to earn $2 million for his fight tonight.

This was my initial reaction and still maintain this feeling:

The UFC used the footage of McGregor hurling a dolly at the bus Khabib Nurmogomedov was on to promote this fight.  McGregor was arrested for the attack.

MMA Fighting’s Marc Raimondi asked White about this during the press conference lead-up.  White unequivocally stated that the bus attack at Barclay’s was part of the story.  While it may have been a part of the feud, it seemed questionable to use a criminal act to promote the fight.  The two men and their respective camps hated each other.

Moreover, McGregor’s antics and his personal attacks at Khabib fueled the fire between the two.  After Khabib defeated Conor, he spat on him and went right after his corner.  It was a great event that may have surpassed over 1 million PPV buys but how many of those casual viewers will return to see this chaos.

MMA will survive this incident as NBA survived Malice at the Palace but the promotion of the event seemed to cross the line between the two men.

The promoter decides on how to promote the fight.  White did not have to showcase the bus attack in the hype videos.  There was enough bad blood between the two men and camps to put together something fans would want to buy.

White expressed disgust by the act of Khabib the same way he did the day McGregor threw that dolly.  But, one has to assume that his dismay will be relieved once he sees the buy rate for this event.  The fact is he had the control to steer the promotion of the fight and could have done something.  While White had ordered extra security, they did not come through at the critical moment.

And while White’s concern about the aftermath of this debacle will be a headache, the remedy will be the fact that this feud is far from over.  Despite the stating the correct things by saying he didn’t want this to happen, monetizing tonight’s event will be easy for 2019.

But for now, the chickens have come home to roost for the UFC.

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