Hearing on Expansion of Ali Act gets heated

November 9, 2017

Testimony was heard before a Congressional Subcommittee on the possibility of expanding the Muhammad Ali Boxing Reform Act to combat sports.  Randy Couture, Marc Ratner, Greg Sirb and Dr. Kristen Dams-O’Connor testified at Thursday morning’s hearing.

The testimony centered around the business of MMA and the possible expansion of the Ali Act and at times became contentious especially when the bill’s sponsor, Oklahoma congressman Markwayne Mullin asked questions of the UFC’s Marc Ratner.

There were three central issues related to today’s hearing.  First, the issue of fighter rankings came up as Congressman Mullin grilled Ratner about the rankings and questioned how Georges St Pierre, a fighter that has been retired for 4 years, receive an immediate title shot against UFC middleweight champion Michael Bisping.

h/t @jedigoodman

He also asked how Bisping’s first challenger to the title was an unranked Dan Henderson.

Another issue was that of coercive contracts which Randy Couture addressed the problem.  He noted that he was prevented to fight Fedor Emelianenko due to the fact he had an exclusive contract with the UFC and could not fight outside of the promotion.  Additionally, Pennsylvania Athletic Commissioner, a proponent of the proposed bill stated, “[i]f the fighter does not know how big the financial pie is then how is he to know how big of a piece of the pie he should bargain for?”  Although a proponent, he noted that there has been no legal case brought forward by the U.S. Attorney enforcing the current Ali Act.  While there have been lawsuits brought by fighters, the law allows for the government to enforce the act.  According to Sirb, this has not happened.

Also, the issue of head trauma was discussed as Dr. Kristen Dams-O’Connor testified about traumatic brain injury, or TBI.  Her research centers around understanding and improving long-term outcomes experienced by individuals who sustained TBI.  Her testimony concluded that despite the fact that not participating in sports such as MMA or football would greatly reduce the number of TBI cases, that is not the reality.  She seemed resigned to the conclusion that these sports provide a certain amount of reward despite the inherent risk.  She did distinguish the two sports, MMA and football, by noting that it is the goal in MMA to deliver TBI to your opponent as knocking out someone is a part of the sport whereas football players avoid sustaining a concussion during their athletic careers.

The hearing had members of congress ask questions.  The star of the hearing (in my opinion) was Illinois congresswoman Jan Schakowsky who stated that she attended last year’s hearing on MMA.  She did her researched and watched some fights.  Admittedly, it was too bloody for her but she was interested in the safety of the sport and supported the Ali Act’s passage.  Later in the hearing, she asked Dr. Dams-O’Connor informative questions about TBI and youth participation in MMA.

On the other spectrum of the “question asking” was New Jersey Congressman Frank Pallone.  Pallone is a proponent of sports betting and utilized his time to ask questions related to sports betting.  Essentially, Pallone did not really care about the answers but used this stage to push his stance on sports betting.

But the main event of the hearing was Mullin going after UFC representative Marc Ratner.  The congressman was short with Ratner and often cutting him off from filibustering his limited time.  He was pointed with Ratner about the rankings system to which Ratner attempted to talk about how the fights were made for the fan’s benefit.  He queried whether Conor McGregor was stripped of his Featherweight title for lack of defending it.  Ratner noted that he had no say in the rankings and did not know.  The attack by Mullin on Ratner seemed calculated.  Mullin proclaimed that the UFC was the “Don King of MMA.”  This was meant as a pejorative swipe at the organization.

Payout Perspective:

We’ll have more on this interesting hearing from Thursday.  The hearing seemed to flesh out some of the basic issues of why expand the Ali Act to combat sports and the reasons why it is not needed.  It essentially boils down to a state’s right to govern versus federal oversight.  At the outset, Mullin seemed to stress the “interstate commerce” nature of MMA which would imply that the business crosses states lines and due to this, a federal law would be appropriate.  MMA Payout will keep you posted.

Live Stream: Congressional Hearing on Perspectives on MMA

November 9, 2017

This morning, the Subcommittee on Digital Commerce and Consumer Protection will hear from Randy Couture, Marc Ratner, Greg Sirb and Dr. Kristen Dams-O’Connor on MMA and the proposed expansion of the Muhammad Ali Act.  You can watch below:

The witnesses have provided their statements that they will deliver to the committee. You can find them here.

MMA Payout will have reaction and analysis after the hearing.

Background Memo Produced for Congressional Hearing on MMA set for Thursday

November 8, 2017

On Thursday, Randy Couture, Marc Ratner, Dr. Kristen Dams-O’Connor and Greg Sirb will testify before a Congressional Subcommittee discussing MMA and the proposed bill which would expand the Muhammad Ali Boxing Reform Act to combat sports.

Currently, there are 7 co-sponsors to the bill introduced by Republican congressman Marwayne Mullin in May 2016.

“Perspectives on Mixed Martial Arts,” as the hearing is entitled will start on 10:00 a.m. ET on Thursday.  Couture, Ratner and Pennsylvania’s Athletic Commissioner Gregory Sirb will testify.  Also added is Dr. Kristen Dams-O’Connor, Director, Brain Injury Research Center, Icahn School of Medicine at Mount Sinai.

Since May 2016, the proponents of the bill have been actively lobbying Washington D.C. to garner support from legislators.  On the other side, the UFC has spent money to lobby against the passage of the bill.

With news that Dana White is interested in promoting boxing, the bill has a new twist depending on the structure of the anticipated UFC Boxing promotion.

The background statement for the hearing has been produced and is below.

HHRG-115-IF17-20171109-SD003 by JASONCRUZ206 on Scribd

Among the topics that may be explored at the hearing:

-How has MMA evolved and changed since its beginnings in the early 1990s? Do these changes suggest a need for new business or regulatory approaches?

-How does MMA compare to other combat sports? Do any similarities or differences offer insights into public policy options?

-How does current regulation of MMA protect the interests of fans, fighters, and sponsors? Are there areas for improvement?

Payout Perspective:

MMA Payout will have a breakdown of the testimony taken on Thursday.  While I don’t expect anything earth shattering, I anticipate that this is a sign of attempting to determine the level of support out there is for the bill.  The bill is far from a vote in the House, but the hearing is a step in the right direction.  It will be interesting to see the level of education on the subjects in MMA will take place and the advocacy by the parties.

UFC 217: Payout Perspective

November 6, 2017

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 217 taking place at Madison Square Garden in New York.

GSP Returns to win Middleweight Title

Georges St Pierre looked more muscular than ever before in his foray into the middleweight division against champion Michael Bisping.  GSP looked great in the first round but it appeared that he tired.  Bisping was able to open him up with elbows from guard despite being taken down.  But, Bisping was caught by GSP.

We’ll see what happen next for GSP.  He’s not done, but could be in the middleweight division.  Of course, that puts Robert Whittaker’s position in the division up in the air.  If GSP leaves to face Tyron Woodley in the welterweight division, we could see Whittaker-Bisping.

TJ Dillashaw regains Bantamweight Title from Cody Garbrandt

In a heated fight between two former teammates, TJ Dillashaw regained his bantamweight title from Cody Garbrandt.  Cody tagged TJ at the end of the first but it was Dillashaw that got off the shot in an exchange in the second which ended Cody’s night.  Dillashaw says there will not be a rematch for now and is setting his targets on Demetrious Johnson.

Thug Rose upsets Boogie Woman

The stare-down at the weigh-ins and Joanna Jedrzejczyk’s proclamation that she was the “Boogie Woman” made me want to see this fight all the more.  The contrasts between a stoic Namajunas and the bombastic Joanna Violence led many to wonder if Rose was ready or if she knew something.  She knew something as she was able to knock down the strawweight champ twice and with the second make her tap to the strikes.  The loss was surprising to most as Jedrzejcyk looked, on paper, to have the overwhelming advantage out of the 3 title fights of the night.  Yet, Namajunas was able to outstrike the Muay Thai specialist.

If a loss were to ever be beneficial, this one helps the UFC as they can now set up a rematch between the two which could sell much better as a standalone main event for a future UFC PPV.

Attendance and Gate

Madison Square Garden produced a $6.1 million gate drawing 18,201 fans according to the UFC.  The event was the second highest gate in the company’s short history since MMA was legalized in the state.  Last year’s UFC 205 drew astronomical numbers with over 20,000 fans and a $17 million gate.

The secondary market was not as robust as last year’s November event, but still did very well.  Although tickets dropped during the week, the average resale price was still $538 as of Thursday of fight week.

Bonuses

There were no Fight of the Night bonuses as Performance $50,000 bonuses were given to GSP, Rose Namajunas and  TJ DIllashaw.  Ovince St. Preux and Ricardo Ramos drew $25,000 bonuses for their performances.  St. Preux stopped Corey Anderson with a headkick on the UFC Prelims while Ramos’ spinning back fist gave him the win over Aiman Zahabbi.

(UPDATED) Athlete Outfitting Policy Payouts

With 3 title fights, the Reebok payouts was more than a typical card.

Michael Bisping: $40,000
Georges St-Pierre: $30,000

Cody Garbrandt: $40,000
T.J. Dillashaw: $30,000

Joanna Jedrzejczyk: $40,000
Rose Namajunas: $30,000

Stephen Thompson: $10,000
Jorge Masvidal: $15,000

Paulo Costa: $2,500
def. Johny Hendricks: $20,000

James Vick: $5,000
def. Joseph Duffy: $5,000

Ovince Saint Preux: $15,000
def. Corey Anderson: $5,000

Mark Godbeer: $2,500
def. Walt Harris: $5,000

Randy Brown: $5,000
def. Mickey Gall: $2,500

Curtis Blaydes: $2,500
def. Aleksei Oleinik: $5,000

Ricardo Ramos: $2,500
def. Aiemann Zahabi: $2,500

Promotion of the Fight

Sponsors came out in full force for what many believed to be the biggest event of the year thus far.

Bud Light Canada produced a video and sent it out via twitter with Georges St Pierre

Body Armor, a UFC sponsor, produced bottles of its sports drink with the UFC logo.  Kobe Bryant, a part-owner of Body Armor was in town to speak at a Body Armor press conference making the sponsorship official.  Cody Garbrandt, Cynthia Calvillo, Francis Ngannou and Michelle Waterson were announced as the UFC’s BodyArmor athletes and a new UFC-geared BodyArmor flavor – Knockout Punch.

Air Asia was announced as the company’s very first “Official Airline” of the UFC.  It covers Asia and Australia so the opportunity for a domestic airline is still there.

EA Sports released the official trailer of the UFC’s next game, UFC 3.  It will be released on February 3rd and unveiled some new things to the game.  Conor McGregor will make his second appearance on the cover of the UFC video game.

MetroPCS introduced a new commercial featuring Demetrious Johnson.

The UFC provided a video of Cody Garbrandt preparing for his fight and using TriFecta Nutrition.  The company, which delivers nutritional meals includes Urijah Faber as a part of the company.

Embedded is starting to tie in the UFC sponsors as the episodes featured more Reebok kits (the fighters looked over their kits which they helped design), Body Armor and mouthguard sponsor GuardLab.

Sponsorships

New official UFC sponsor, Air Asia, made its debut in the Octagon.  In addition, MetroPCS, Budweiser, Toyo Tires, Budweiser, Harley Davidson, Performance Inspired, Hospitals for Special Surgery, Wish, Monster Energy and Sheetz shared an Octagon post.  Monster also had the center of the Octagon.  AMC’s the Walking Dead and EA UFC 3 also were in the Octagon

Budweiser sponsored the Embedded episodes and the fighter prep point.

In addition, Toyo Tires sponsored the post-fight interviews which was on the UFC Facebook page.

Wish sponsored the post-fight interviews in the Octagon.  EA Sports UFC sponsored the GSP-Bisping fight.

Odds and Ends

UPDATED:  UFC 217 almost made it without a cancelled fight after all fighters made weight.  But heavyweight Ion Cutelaba was flagged for an out-of-competition test and his fight was nixed from the card.

The Walt Harris-Mark Godbeer fight was called off after a low-blow followed by a kick to the head.  This was the fight that was held over from last PPV after Harris took the Werdum fight.  The way it ended, Godbeer probably wishes that the fight did not happen.

James Vick tied Demetrious Johnson with the latest stoppage of a fight with 4:59 in the third round.  Vick stopped Joe Duffy as the featured fight on the UFC Prelims on FS1.

Notably, GSP is still sponsored by Under Armour as he wore the clothes while working out on Embedded.   Also, some may have noticed the branded mat at TriStar on one of the Embedded episodes.

There were over 1 million searches for “UFC 217” on Saturday which bodes well for the PPV buys.  Dana White noted that it was trending to do 1 million PPV buys but nothing has been confirmed.  Rose Namajunas had over 200,000 google searches.  Cody Garbrandt had 100,000 searches and boxer Deontay Wilder had 100,000.

Conclusion

With over 1 million Google Searches on Saturday for UFC 217 and Rose and Cody getting their own searches, it appears that the return to New York will be a PPV success.  I am not sure if the PPV gets to 1 million buys but it will have the best chance of the PPVs this year to hit the mark.  Look for this to do a strong 825,000-850,000 PPV buys.

Good files lawsuit against supplement maker, Vitamin Shoppe

October 24, 2017

Lyman Good has filed a lawsuit against Gaspari Nutrition, Richard Gaspari, Hi-Tech Pharmaceuticals, Jared Wheat and Vitamin Shoppe as a result of a failed UFC drug test.  Good alleges that a vitamin supplement he took was not properly labelled and contained a banned substance.

The target supplement is Anavite according to the lawsuit which was filed in New York by his attorney, David Fish.

Good was suspended for violating the UFC Anti-Doping Policy after he failed a random test.  As part of the process, he learned that the drug that may have caused the failed test was Anavite.

Good is requesting restitution, damages, injunctive and other equitable relief.  Good believes that Gaspari Nutrition misbranded the products as “dietary supplements” to defraud consumers into the believing it had superior “dietary supplements.”

Vitamin Shoppe was sued for (among other things) breach of warranty for selling the products “despite assurances of product quality and control.”  The store claims to have safety measures to ensure that the products its sells are of quality.  Good claims that it has failed to provide such safeguards based on the product he purchased from the store.

Upon learning of the flagged USADA test, Good had provided USADA with unopened packages of Anavite to examine at a lab regarding the contents.  The results confirmed Andro in the product.  Andro is a banned substance per the UFC Anti-Doping Policy and considered a steroid.  Thus, Good has sued the supplement maker, its owners and the store that sold the product.  The lawsuit indicates the harmful effects of steroids and the fact that Andro is such a substance

The lawsuit embeds a picture of the product and its contents which is listed as a “dietary supplement”.  Andro is considered “adulterated” and misbranded according to Good.

There are several causes of action in this lawsuit including products liability, fraud and intentional infliction of emotional distress.

Good was taken off the New York City card last November as a result of the failed test.

Payout Perspective:

This is a first of its kind lawsuit under the UFC Anti-Doping Policy and perhaps MMA.  Good can show he was damaged due to the fact that he relied on the representation of the label that Anavite did not contain Andro as it was not on its label as a content and was listed as a “Dietary Supplement.”  He is making a claim against Vitamin Shoppe since it claims to have superior knowledge of these products and should have investigated this product.  The defendants will likely claim a tainted product and that overall, its products do not contain the banned substance.  Moreover, it will claim that there are no damages incurred by Good despite serving a six month sentence.

In products liability cases (lawsuits where the claim is that a product is defective), there is a higher standard on the manufacturer or seller to ensure that the user is not harmed.  In this instance, one could argue Good was not harmed in the sense of physical injury.  He was harmed since he had to ensure he did not ingest a banned substance per the UFC Anti-Doping Policy.  This will make a very interesting case as it continues.  MMA Payout will continue to follow.

Sterling latest to question role of MMA manager

October 20, 2017

The role of an MMA manager may seem very simple as far as the job duties may entail.  But, there are many facets to it.

MMA Junkie recently posted an article which questioned whether a manager was necessary for fighters.

From reading the article you might infer that the negotiating process with the UFC does not seem like a negotiation at all.

It was an interesting read featuring Aljamain Sterling as he no longer is represented by management.  Previously, Sterling was represented by Malki Kawa.  As you may know, Kawa represents Jon Jones as well as several other top tier fighters.  He also has a couple NFL players.

The article talked about Sterling and his decision to manage himself deeming it a raise since he would no longer have to pay Kawa his 10 percent.

Sterling was a sought after free agent not too long ago and his free agency was chronicled in interviews.  In the end, he re-signed with the UFC.  He indicated that the UFC’s offer was “more lucrative” than the original 20K and 20K he received.  He noted that the then World Series of Fighting came in second and then Bellator.  Sterling’s deal doubled his last payday of $14K to show and $14K to win as he was given $30K and $30K by the UFC.

But since Sterling re-signed with the UFC in February 2016, he has gone 2-2.  The previously unbeaten and media darling Sterling lost some of the shine his undefeated record had provided him.

Sterling’s win over Renan Barao at UFC 214 this past July revealed he makes $33K and $33K which is just $3,000 more than where he originally started after the new UFC contract.

Sterling notes in the Junkie article that he does not receive any sponsorships (due in part to the Reebok deal) or any ancillary activities.  Kawa indicated that the phone was not ringing for Sterling and his matches were essentially decided by the UFC matchmakers.  Without much outside business, Sterling decided that it was time to part ways with his manager.

The issue of fighter management in the UFC is an intriguing question.  Obviously, Sterling’s perception of a manager is limited to just negotiating contracts, securing sponsorships and the handling of promotion which usually is via social media.  Previously, the landing of sponsors for fight nights was the main role of the manager.  But, with the Reebok deal, the Octagon patches of a few years ago are gone.  Only a small portion of UFC fighters are securing outside the Octagon sponsors or in-person appearances.  There are other duties of a manager based on the fighter relationship which may encompass everything from handling travel to logistics questions in training prior to a fight as well as media relations.

The article does talks about the need for a manager when negotiating a new deal with the UFC and/or the possibility of providing counsel to a fighter when dealing whether to take certain fights (e.g., taking fights on short notice).

Then there is the question of what to do if a drug test is flagged by USADA.  Recently, Lyman Good’s manager David Fish, also an attorney, filed a lawsuit against several supplement manufacturers after Good was flagged by USADA.  It appears that Good took a supplement that did not reveal all of its contents.  As a result, Good was flagged for testing positive for a banned substance and received a six-month suspension.  It is in these instances, where counsel is needed for the athlete to determine the facts in assessing what to do if a test is flagged.  There are cases like in Good’s scenario where a tainted vitamin supplement might have caused the failed test.  But, it would seem that a manager would help assess the situation and piece together a plan to address the issue with the regulators as well as the media.

Aside from the above scenario, the question that must arise for the dominant demo of UFC fighters not named McGregor is what value add does a manager have in their career.

Earlier this year, Demetrious Johnson was upset with how he was treated by the UFC as he lashed out at the company.  Soon thereafter, he hired Kawa as his manager.  Notably, he indicated in an interview that he did not know if he would be paid for UFC 215 after Ray Borg had to bow out due to illness.  Fortunately, the fight was easily rescheduled for UFC 216 but no word if Johnson was compensated for having to train for UFC 215 only for it to be cancelled.

The manager question is not just limited to Kawa but the examples reflect a question of worth to a fighter’s career.  The utility of a manager is questioned in other sports as athletes have just retained attorneys to look over contracts and paid less overall.

We will see if Sterling’s decision to represent himself is a trend or an anomaly.

UFC 216: Payout Perspective

October 10, 2017

Welcome to another edition of Payout Perspective.  In this edition we take a look at UFC 216 from the T-Mobile Arena in Las Vegas, Nevada.

Ferguson submits Lee

It was not a good week for Kevin Lee.  Not only did he have issues with cutting weight which kept everyone in suspense on Friday.  It appeared that he had a staph infection on Saturday night.  Joe Rogan noticed a mark on Lee’s left pec immediately.  Lee acknowledged the infection which makes one wonder how the commission allowed Lee to fight.

It was a good fight but it looked like Lee had tired in the third and was eventually submitted.  Ferguson should go on to face Conor McGregor if he decides to return to fight.  If not, could we see another setup with Khabib.

DJ makes history with title defense

Demetrious Johnson did it again with another successful title defense of his UFC Flyweight title and another 5th round stoppage.  Johnson had a sensational suplex into an armbar transition to tap out Ray Borg.  It was the 11th title defense which set a record.  DJ stands alone in the UFC Flyweight division.

Despite the remarkable accomplishment Johnson was the co-main event and not the main fight on the show.  This was a subtle sign that despite the remarkable accomplishment, Johnson is not a top of the card draw as he should be.

Attendance, gate and bonuses

This was the lowest attendance and gate for a UFC PPV held at the T-Mobile Arena.  The figures announced post-fight totaled just 10,638 for a gate of $677,999.50.  Of 7 events at the T-Mobile, it was 6th in terms of attendance and gate.  Only this summer’s TUF 25 Finale drew less and that’s due to the fact that there are events on back to back nights.

The bonuses went to Demetrious Johnson, John Moraga, , Bobby Green, Lando Vannatta.  Johnson and Moraga earned the Performances of the Night while Green and Vannatta earned Fight of the Night for their draw.

Payouts

Tony Ferguson was the highest paid fighter of the night earning $500,000 while Demetrious Johnson drew $340,000.  Both Kevin Lee and Ray Borg earned the most of their career with their pay on Saturday.

Via MMA Junkie:

 

Tony Ferguson: $500,000 (includes $250,000 win bonus)
def. Kevin Lee: $250,000

Demetrious Johnson: $370,000 (no win bonus)
def. Ray Borg: $100,000

Fabricio Werdum: $400,000 (includes $125,000 win bonus)
def. Walt Harris: $28,000

Mara Romero Borella: $24,000 (includes $12,000 win bonus)
def. Kalindra Faria: $12,000

Beneil Dariush: $48,000*
vs. Evan Dunham: $40,000*

Cody Stamann: $24,000 (includes $12,000 win bonus)
def. Tom Duquesnoy: $23,000

Bobby Green: $24,000*
vs. Lando Vannata: $25,000*

Poliana Botelho: $20,000 (includes $10,000 win bonus)
def. Pearl Gonzalez: $10,000

Matt Schnell: $20,000 (includes $10,000 win bonus)
def. Marco Beltran: $14,000

John Moraga: $68,000 (includes $34,000 win bonus)
def. Magomed Bibulatov: $17,000

Brad Tavares: $74,000 (includes $37,000 win bonus)
def. Thales Leites: $57,000

The official Nevada Commission’s pay sheet had Godbeer receiving his show money.  Notably, the Nik Lentz-Will Brooks fight was scrapped due to an illness which hospitalized Lentz.  Although the Nevada Commission may not have paid Brooks, a social media post infers that he was still compensated.

The commission did not have purse payments for Lentz, Brooks and Derrick Lewis.

Promotion of the Fight

With the horrible events that happened the Sunday before the fight the event hype was muted for obvious reasons.  Dana White did not have any fight hype on his twitter timeline until Wednesday.  The Embedded episodes that usually kick off the week were held until that Wednesday.  With this event being a hard sell even before the tragedy, the lack of last minute buzz certainly did not help the buys for this event.

Sponsorships

Although not exactly related to this event, it was announced this week that longtime sponsor Bud Light would be replaced in the U.S. by Modelo Especial staring in 2018.

We are starting to see a lot subtler sponsor promotion on the Embedded series as we see the fighters getting their Reebok gear and visiting the UFC Performance Institute.

Aside from Budweiser, Toyo Tires, Metro PCS, Performance Inspired, Harvey Davidson, 7 Eleven and Monster Energy had the center of the Octagon.  One may have noticed that 7 Eleven had its own signage post whereas in past events it shared one with Monster Energy.  It also had the prep point.  The twitter hashtag Vegas Strong was also in the Octagon.

Odds and ends

It was a different opening for the UFC 216 PPV as Dana White invited over 1,500 first responders to the event and brought some of the survivors of the devastating shooting to the octagon.  Everlast, from House of Pain fame, also sang “America the Beautiful.”  There were cold openings for both the Exclusive Fight Pass Prelims and the Prelims on FX.

The festivities were strained by Dana White’s public scorn for Jason Aldean.  He claimed that Aldean did not want to perform (Aldean was the performer on stage during the shooting).  But, he showed up on Saturday Night Live the same night.  Let it go Dana.  It’s petty to mess up a nice night by getting mad at this.

Derrick Lewis and Fabricio Werdum were taken off last minute with Walt Harris taking the fight against Werdum.  The good news is that Godbeer was paid despite being taken off the card.  Brooks was not although his social media account infers he may have been compensated by the UFC.

Prelims were on FX this time around to compensate for College Football on FS1.  It drew just 653,000 viewers Saturday night.

The commission had some explaining to do with the one hour allowance for Kevin Lee to cut the pound he was over.  Apparently, the rules allow it for championship fights.

There was also the issue of how the UFC Anti-Doping Policy allowed exemptions to Kalindra Faria and Mara Romero Borella.  Yet, it took Andrea Lee off the card due to her prior issues with drug testing.

It appeared as though the upper bowl of the T-Mobile Arena was cordoned off which reflects the attendance was low for the event.  Ticketmaster had seats available up until Friday (and likely Saturday) of the event with the get-in price going for $55.

The UFC sold Vegas Strong T-shirts with 100% of the proceeds going to victims of the shooting on October 1st.

The PPV ended before 10:00pm on the west coast and the broadcast crew was forced to stretch instead of trying to fill in a fight from earlier in the evening.  It did provide some comedy as Daniel Cormier had problems with his headset cords.

There were over 500,000 searches for UFC 216 on Saturday.

Conclusion

This will be one of the lower-purchased PPVs of 2017.  While Lee and Ferguson is a good fight, it is not one you’d pay $60 to see as the main event.  Johnson is one of the greatest fighters ever, but fans do not want to pay to watch him fight.  While it was a good night of fights, its hard seeing this event doing more than 170,000 PPV buys.

Modelo set to replace Bud Light as UFC U.S. beer sponsor in 2018

October 9, 2017

The Sports Business Journal reports that beer maker Modelo Especial will replace Bud Light as the UFC’s Official Beer for the United States starting in January 2018.  The deal is a benchmark move by the beermaker as it is attempting to make a splash in the U.S. market.

Bud Light signed a 10-year pact with the UFC in 20008.  At the time, the deal was huge for a still-growing company.  But, it appeared that despite renewal talks and being pleased with the sponsorship performance, Annheuser Busch did not want to come back at the same terms.

Financial terms were not disclosed but the report indicates it rivals the $10 million deal the UFC had with InBev for the global sponsorship.  The new deal with Modelo allows the UFC to negotiate sponsor deals with other beer companies outside of the United States.

The brand is new to sports sponsorships as it ran its first national English language TV campaign 18 months ago and signed its first sports sponsorship just a year ago.

According to the Sports Business Journal, Modelo is attempting to make a move into sports and this is the biggest deal thus far for the company.  Perhaps a surprise, Modelo is the number 1 beer of choice in the Los Angeles market.  It is the fastest-growing beer in the U.S. over the last 5 years according to SBJ.  Only sister brand Corona, is the best-selling import beer.

Payout Perspective:

The deal is a calculated risk for Modelo as it is seeking to grab more of an audience an attract the vaunted 21-34 male demo.  Unlike other sports sponsorships, this may come with some risk since UFC events are announced in a relative short timespan as compared to other sports.  Thus, market activation targeting a city (outside of Las Vegas) may be somewhat harder than baseball where it is known what cities will hold events.  For the UFC, it’s a good win for the company.  Not only does it grab a US beer sponsor, there is not global exclusive so the company can negotiate with local regions and countries to be the official beer in those respective areas.  Yet, the speculation is that the financial terms of the Modelo deal is on par with what Bud Light paid for the global sponsorship.  Also, the deal may open up what could be a lucrative liquor/spirits market as the Bud Light deal blocked this potential.

Young Bucks receive cease and desist over hand gesture

October 4, 2017

Pro wrestling tag team, the Young Bucks (real life brothers Matt and Nick Jackson) are big stars on the independent wrestling scene.  Recently, World Wrestling Entertainment sent the team a cease and desist letter for using hand gestures and phrases made popular by WWE characters during their performances.

The “Kliq” hand gesture was used in the mid-1999 by WWE performers Shawn Michaels, Kevin Nash, Scott Hall, Sean Waltman and Triple H.  It was later used in the 2000s by wrestling group the New World Order in World Championship Wrestling.

Too Sweet

Hook’em Horns

The Young Bucks have used the hand gesture on the independent scene and in Japan along with their stable of wrestlers.

The WWE sent a cease and desist letter to the wrestlers requesting that they stop using the hand gesture in addition to another gesture as well as catchphrases or else be sued by the company.

Notably, the WWE attempted to trademark the “Kliq” hand gesture with the United States Patent and Trademark Office in March 2015.  However, it received an Office Action that the hand gesture was likely to be confused with a trademark owned by The Board of Regents of the University of Texas System.  That trademark, registered in May 2014, is described as “the representation of a human hand with the index and small fingers extended upward and the thumb closed over the middle and ring fingers.”  It is commonly referred to as the “Hook’em Horns” symbol.  Gene Simmons of famed rock band Kiss attempted to trademark a similar hand gesture earlier this year as it is commonly known as a “rock on” symbol.  But, he later abandoned the application likely due to the fact that it would not survive a challenge from the University of Texas.

Instead of challenging the WWE, the Young Bucks decided to let the hand gesture go.  Instead, their new merchandise is based on the cease and desist.

IP protection of hand gestures in pro wrestling is not new.  Former pro-wrestler Diamond Dallas Page sued rapper Jay-Z over a copyrighted hand gesture which symbolized a diamond.  Jay-Z used the hand gesture to signify his record label.  Page noted he had copyrighted the symbol in 1995.  In fact, a records search reveals that he did.

Trademarks and copyrights differ as we previously discussed in this post.

In essence, the reason for the WWE’s cease and desist relates to the commercial use of the mark.  Protection of one’s intellectual property is important despite many who believe that the move was done to harass the Young Bucks.  Certainly, harassment is an incidental benefit for the WWE, and the Young Bucks, as well as some wrestlers associated with them recently mocked the company prior to a live show last week.  The old saying about messing with the bull and getting the horns finally came around to the bucks as the WWE flexed its legal muscle.

Not only did the WWE come down on the “Too Sweet” hand gesture but it also is preventing them from the “Suck It” callout and gesture as well.

For those wondering, its hard to argue the issue of “Fair Use” as the Bucks could claim parody.  For those that follow this, the 2 Live Crew case which used the Roy Orbison song, “Oh, Pretty Woman,” was retooled by the Miami-based rap group.  The U.S. Supreme Court deemed that the song was a commercial parody of the Orbison song and considered Fair Use.  We talk about “Fair Use” here.

But, the monetization of their use of the phrases and gestures would prove to be a hard factor to overcome.  Moreover, one of the factors, effect upon a work’s value, would be impacted.  The market is affected as the use of the material by the Bucks could be construed as a substitute for the original Kliq which may negatively impact the commercial use of the original Kliq.

 

 

Top Rank and Plaintiffs in Antitrust Lawsuit Resolve Discovery Dispute

October 2, 2017

Top Rank and the Plaintiffs in the UFC Antitrust Lawsuit have resolved their discovery dispute regarding a motion to compel production of documents and for the attendance of the deposition of Bob Arum.

A notice of resolution was filed late last week.  The agreement between the parties avoids a motion to compel brought by Plaintiffs in the Zuffa Antitrust lawsuit seeking financial information and the deposition of company head Bob Arum.

Resolution Re Top Rank Motion to Compel by JASONCRUZ206 on Scribd

Originally, the motion was to be heard in early September but was continued until later in the month, but the parties came to an agreement.

Top Rank argued that a subpoena for the production of documents from the company was not relevant to the Zuffa lawsuit.  It also argued that the Plaintiffs failed to show a “substantial need” for Top Rank’s information. It also stated that the Plaintiffs’ document request were overly burdensome.

Top Rank Oppo to Motion to Compel by JASONCRUZ206 on Scribd

Plaintiffs argued that they were entitled to the discovery as it is relevant to their lawsuit against Zuffa, there is a substantial need for the documents and believe the discovery is not overly burdensome.

Reply to Opposition to Top Rank MTC by JASONCRUZ206 on Scribd

Top Rank noted in its opposition that it “cannot have it both ways.”  It argued that in its lawsuit it claimed that the “relevant market” was limited to the sport of MMA and noted that it was different from boxing.  Yet, it was requesting “ten years’ worth of revenue, profit, loss and payment information.”  Yet, Top Rank claimed that However the Plaintiffs lawsuit against them, claimed that it had differentiated itself from pro boxing and thus its financial information was not relevant to the instant lawsuit.

Top Rank argues that the document requests are intrusive and it is a way for Plaintiffs’ experts to “compare financial data from Top Rank’s promotion of boxing events to Zuffa’s promotion of MMA events and create “benchmark percentages of revenues.”  Moreover, it claims that Plaintiffs do not explain why they are unable to obtain this information from other sources.  Top Rank’s opposition brief claims it has told Plaintiffs where it might obtain public data about the company.

Top Rank lists some of the requests in its brief:

REQUEST NO. 1: Your Company’s Income Statements, including event-level profit and loss statements for the Relevant Time Period [defined to be from January 1, 2005 to present], including without limitation All Documents, including depositions, declarations, affidavits, or other statements under oath, You produced in any lawsuits or arbitrations, or to any governing athletic commission or sanctioning body, relating to TOP RANK’s accounting of its revenues, expenses, and profits.

• REQUEST NO. 2: Data in as granular form as it is maintained (itemized ledger entries, if they exist) sufficient to show all bout-related revenues and expenses (including for championship bouts, bouts where victory leads to championship, and all other Professional Boxing Events), payments made to individual Professional Boxers (including purses, bonuses, pay-per view, and any other event and non-event related payments), and non-bout related revenues and expenses.

• REQUEST NO. 3: To the extent not included in Your response to Request Nos. 1 and 2 above, documents sufficient to substantiate Bob Arum’s statement that TOP RANK pays 80% of event revenue to the Professional Boxers who participate in bouts promoted by TOP RANK….

• REQUEST NO. 4: A Representative Sample of All Agreements between TOP RANK and any Boxers, relating to participation in a Professional Boxing Fight or Professional Boxing Event, and any Documents and Communications relating to the negotiation, termination, cancellation or transfer thereof. Responsive Documents include, without limitation, executed Agreements, draft Agreements, side letters, all negotiations between TOP RANK and any Boxer, including any Professional Boxer,
or their agents, managers, promoters, or other representatives (regardless of whether such negotiations resulted in an executed Agreement), copies of any form agreements; and all Documents relating to the effects any such actual or potential Agreements between TOP RANK and any Athlete, including any professional Boxer, had on TOP RANK’s revenues, valuation, or ability to operate profitably as a Boxing Promoter.

Zuffa Plaintiffs claim that the information is vital for their case and that the UFC denied the differences between boxing and MMA in its answer to the lawsuit with the inference that they were interchangeable.  Notably, in its Reply brief it claimed that the business of promoting fights is the same for all combat sports.

Payout Perspective:

Plaintiffs Reply Brief includes quotes from Lou DiBella and Dana White’s deposition but most of the citations are redacted.  The order which spells out what Top Rank and the Plaintiffs had agreed upon is heavily redacted so we specifically do not know what the parties agreed to provide and whether or if the deposition of Bob Arum will take place.  It could be that Top Rank agreed to provide a portion of documents so long as Arum is not deposed and/or someone else within the company is deposed.

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