Algieri situation presents problem with Ali Act

April 14, 2016

While there are many proponents that endorse expanding the Muhammad Ali Act to include the protection of MMA fighters, the federal law has its issues.  The case of Chris Algieri provides a good example.

Algieri, the New York fighter that is best known for his upset win over Ruslan Provodnikov which scored him his big money fight against Manny Pacquiao in Macau, China is fighting this weekend as part of a PBC on NBC TV card.  But despite his main event fight against rising star Errol Spence, Jr., Algieri is at odds with his promoter over pay.

Yahoo! Sports reported back in February that Algieri did not know how much of a percentage he was actually receiving from his promoter, Joe DeGuardia of Star Boxing, because the promoter has not revealed it to him.  Although a purse amount was agreed upon by the promoter and fighter, the fighter is afforded the right to know the amount a promoter receives from the event and thus the fighter should know the percentage he receives from a fight.  In his last fight, he made 30 percent of the promoter/fighter split in December 2015 – a win against Erick Bone.  Algieri believes at this point in his career his split should be more than 50 percent of the purse.

Under the Muhammad Ali Act, specifically section 13(b), promoters must inform boxers of: (1) the amounts of any compensation or consideration that a promoter has contracted to receive from such match; (2) all fees, charges, and expenses that will be assessed by or through the promoter on the boxer pertaining to the event, including any portion of the boxer’s purse that the promoter will receive…” and (3) any reduction in a boxer’s purse contrary to a previous agreement between the promoter and the boxer or a purse bid held for the event.

Algieri admits to having problems with obtaining this information from Star Boxing.  As the Yahoo report notes, the Act is silent as to when a promoter must disclose the information.  This, puts fighters like Algieri at a disadvantage.  While the promoter might be in compliance by giving his fighter the information at the last minute, it is not within the spirit of the law which was to protect fighters from these types of abuses.  A promoter might not reveal the information to his fighter for a variety of reasons.  Namely, they are just withholding the information to prevent a fighter from threatening not to fight as a way to demand more money.  DeGuardia indicated to Newsday that he is exercising his right not to reveal the information until Friday’s weigh-ins.  His attorney claims that Algieri’s public grievance is a ploy to renegotiate.

For those wondering, according to ESPN’s Dan Rafael, Algieri will make $325,000 this weekend.

Payout Perspective:

Algieri’s situation may not be uncommon in the world of boxing.  If you recall from the Pacquiao/Algieri 24/7 lead-up to the fight, the New York native drove an old car and lived with his parents.  Despite the Pacquiao payday (Algieri made over $1M), it’s clear that Algieri is still fighting for what he believes he deserves as a fighter.  This example shows why the Ali Act, for the good that it can and should provide, there are issues with the practical implementations of the law.  If the Ali Act is to expand to MMA, there should be amendments to the Act to ensure that the purpose of the law is followed.

Former WWE wrestler sues over royalties from WWE Network

April 8, 2016

Former WWE wrestler Rene Goguen (wrestling under the name Rene Dupree) sued the WWE Wednesday in a class action lawsuit filed in Connecticut federal court.   The former WWE superstar is claiming he is owed royalties from the WWE Network and Netflix due to a clause in his contract which pre-dated the over the top platforms but stated he was entitled to royalties of “technology not yet created.”

Goguen is claiming breach of contract for failing to pay royalties, breach of fiduciary duty, unjust enrichment and violation of Connecticut Unfair Trade Practices Act.

Goguen believes his Booking Contract, which was attached to his Complaint, entitled him to WWE Network and Netflix licensee sales of WWE Video Products due to a vague clause which left open for him to be entitled to royalties for “technology not yet created.”  He claims he was not paid these royalties.

The WWE told the Hollywood Reporter that Goguen signed a contract in 2011 that negates his ability to bring his claims.

Payout Perspective:

In all likelihood, the WWE will attempt to dismiss this case.  If the WWE is correct, we might assume that Goguen signed an agreement that precluded him from filing this type of lawsuit as the WWE probably contemplated the clause might open itself up to royalties.  The 2011 contract referred to by the WWE likely indicated he would not be entitled to any network royalties or any from WWE content on Netflix.  The bigger issue might be how the WWE splits royalties among its current roster for the network.  When C.M. Punk left, he claimed that many wrestlers did not know how the WWE would address royalties in light of the fact that some wrestlers made points off of PPV buys.  With the almost extinction of PPV, its clear that royalties from the WWE would be big for wrestlers.  We will see how Goguen’s case is handled and whether this raises any issues for WWE contracts moving forward.

Jones returns home after probation violation hearing

March 31, 2016

Judge Michael E. Martinez added new terms to Jon Jones’ probation as a result of a recent moving violations.  Jones was free to return home with the added stipulations which include attending an anger management and driver improvement courses.

In addition to the two added stipulations, he will need to complete a 60 more hours within three months.

The prosecutors argued for another additional term to his probation: a curfew which would require he be home from 10pm until 4am.  Jones’ attorney argued against a curfew due to the fact that he is training for his fight next month against Daniel Cormier.  Jones prefers training at night and he is often out late at night as a result.

Jones’ attorney added that the recent moving violations were “bogus” and that Jones was being profiled.

The judge did not require a curfew for Jones but added a requirement that Jones ask his probation officer each time he wants to drive.

The UFC issued a statement related to Jones’ court appearance:

UFC respects the decision made today by Judge Michael E. Martinez in New Mexico Second Judicial District Court regarding the probation terms of the case involving Jon Jones.

The organization was disappointed to learn that Jones was cited for several traffic offenses last week, as well as concerned by the nature and tone of portions of the conversation between Jones and the citing officer.

Still, UFC respects Jones’ right to contest those traffic citations in court and receive a fair hearing on the matter.

Jones’ scheduled bout on April 23 will proceed as planned, however, Jones understands that the UFC expects him to fully cooperate with the terms of his probation as set forth by Judge Martinez.

(H/t: MMA Fighting)

Payout Perspective:

The fight with Daniel Cormier should be clear to go provided Jones remains out of a courtroom between now and April 23rd.  Fortunately for Jones, the judge did not impose a curfew on him which may have disrupted his training schedule.  Certainly, it was well within the judge’s right to impose such a restriction given Jones’ sordid moving violation history.  Obviously, the UFC should be keeping tabs on Jones for the next couple weeks as well.

Jury awards Hogan additional $25.1 million in punitive damages

March 22, 2016

On Monday, Florida jury tacked on an additional $25.1 million punitive damages award for Hulk Hogan.  This amounts to a total of $140.1 million awarded to the former pro wrestler after the jury found in his favor and awarded him $115 million this past Friday.

Gawker Media was ordered to pay $15 million while Nick Denton was assessed $10 million and Gawker’s former editor in chief, Albert J. (“AJ”) Daulerio $100,000.  Punitive damages are awarded in addition to the actual damages at trial.  They are meant to reform or deter the defendant and others from engaging in similar conduct.  Not every state awards punitive damages.

According this report, the trial court judge told the jury that they could not award punitive damages that would bankrupt the defendants.

The net worth was determined by the court (via www.capitalnewyork.com):

The court determined that Gawker Media, a U.S. subsidiary of Cayman Islands-based Gawker Media Group Inc., had $48.7 million in gross revenues last year and a net worth of just $83 million. It determined Denton’s net worth to be $121 million — $117 million of which is tied up in stock in Gawker Media Group, Inc., which is valued at $276 million. The court determined that Daulerio’s net worth was negative $27,000, since he has no material assets but $27,000 in student loans.

Gawker, et al. indicated that it would appeal the jury findings and the damages awarded in hopes of either overturning the decision and/or reducing the monetary award.

Payout Perspective:

The moral of the story for AJ Daulerio is not to mess around at a deposition as it was his flippant answer to a question that seemed to have annoyed the jurors.  Even though the court advised that it was not to bankrupt the parties in awarding punitive damages, it seems like the award would do so for Daulerio.  One has to conclude that based on the monetary award, that Gawker will most certainly appeal.

Florida to amend law disclosing MMA promoter information

March 21, 2016

A Florida law set to go into effect this July will tighten an already broad exemption to exclude MMA promoter information from a public records requests.

The new law amends the Florida state public records exemption of 548.062 which indicates that all confidential business information required to be filed with the Florida State Boxing Commission after a match or obtained during an audit of the promoter’s books and records… and now expands the exemption to cover all confidential business information provided to the promoter to the Commission…

A portion of the law that will come into effect in July states:

“The disclosure of proprietary confidential business information could injure a promoter in the marketplace by giving the promoter’s competitors insights into the promoter’s financial status and business plan, thereby putting the promoter at a competitive disadvantage. The Legislature also finds that the harm to a promoter in disclosing proprietary confidential business information significantly outweighs any public benefit derived from the disclosure of such information.”

Within 72 hours after a match, the promoter must file a written report with the Commission.  This report includes the number of tickets sold, the amount of gross receipts, and any other facts that the Commission requires.

As with the previous bill one could extrapolate the amount of complimentary tickets given out by a promoter for the event based on a state requirement that a promoter my give comps to “up to five percent of the seats in the house without including the tickets in the gross receipts without paying corresponding taxes on them.”  The promoter may ask the Commission for authorization to issue tickets more than five percent in certain circumstances.

In addition, Florida’s UFC lobbyist Jeff Johnston has worked on the public records exemption which, according to this article, would close the loophole to disclose information prematurely.  Mentioned in the article was the taping of TUF featuring the Blackzilians versus ATT in Florida.  The new law would make sure that results would not be leaked early.

You may recall, that John Nash of Bloody Elbow was able to obtain a variety of documents from the state athletic commission which revealed how much it made on concessions, ticket revenue and rights fee.  As the article points out, the Muhammad Ali Boxing Reform Act requires promoters to disclose to a state athletic commission the amount it is spending and receiving for an event.  The law in Florida pertains to “pugilistic exhibitions” which includes boxing, kickboxing and MMA so the promoter’s disclosure is something to keep an eye on in the future.

Payout Perspective:

This bill amends the previous law which passed in 2014.  The subtle expansion tightens up the law to ensure that all confidential business information provided by the promoter to the Commission is covered by the law to prevent it from falling through the cracks of being subject to disclosure.  Essentially, the law ensures that all information a promoter provides to the Commission is confidential.   Pure semantics but it likely gives the UFC enhanced security that no information falls into the public domain.  With the UFC heading back to Florida in April, the law seems to be one of appeasement to entice the organization to keep coming back to the sunshine state.

Jury awards Hogan $115M in Gawker lawsuit

March 18, 2016

On Friday, a Florida jury awarded Hulk Hogan $115 million in damages against news entity Gawker after it posted a sex tape of Hogan without his knowledge.

It is too early to know whether Gawker will appeal but according to CNN Reporter Tom Kludt Florida law requires a party to post a bond for the full amount of damages although that is capped at $50 million.  The jury awarded $55 million in economic injuries and $60 million for emotional distress.  This does not include an unspecified amount of punitive damages.

The NY Times provides a concise synopsis of the trial.

A statement from Nick Denton, founder of Gawker, inferred that there will be an appeal.

Payout Perspective:

For those wondering whether Gawker could even afford to put up a supersedeas bond, Michael McCann indicates that Florida law allows judges discretion in determining how much a party must post especially if imposing such a bond would be a substantial injustice.  But, even before an appeal, one might expect Gawker’s attorneys file a Motion for Remittur which would request the court to reduce the amount of damages awarded by a jury.  In addition, or in the alternative, Gawker might seek a Motion for New Trial and/or Judgment Notwithstanding the Verdict.  Each of these alternatives would see Gawker requesting relief from the jury award due to some legal circumstance that was not followed and/or was done in clear erro.  Since the presiding judge would hear such a motion, the likelihood of success would be low since the trial court judge would be the one that would be overruling themselves.

We should see in the coming days the plan for Gawker.  Frankly, Hogan is not getting the money awarded by the 6-person jury any time soon.

Silva will likely fight outside NV in spite of ban

February 21, 2016

Jack Encarnacao of The Boston Herald writes that Wanderlei Silva may seek to fight in another jurisdiction outside of Nevada prior to the end of the three year ban issued by the commission this past week.

The Nevada State Athletic Commission issued a 3-year ban for evading a drug test leading up to UFC 175.  The penalty comes after much delay from a May 2015 court ruling from the initial NAC ruling which gave Silva a lifetime ban and a $70,000 fine.

Silva’s attorney, Ross Goodman, indicated to The Boston Herald that his client could fight in another jurisdiction.  “I would think if you go to Texas or any place else, and the commission there looked at it and saw that there was suspension of a license he doesn’t hold, I’m not so sure a commission would defer to Nevada,” Goodman told the Herald.  He also though there would not be a problem with Silva fighting outside of the United States.

Payout Perspective:

Goodman’s comments are based on his continued belief that his fighter should not have been disciplined by the NAC when Silva was not licensed by the state of Nevada when they attempted to drug test him.  Silva had appealed the May 2015 court ruling to the Nevada State Supreme Court based, in part, on this contention.  The appeal was dismissed due to the fact that a final disposition of the NAC penalty had not been determined.  Now, with the ruling this past week, Goodman may seek to re-file the appeal.  Regardless, it does seem like that Silva can still find work despite the NAC suspension.

Rousey files for “FTA” trademark

February 18, 2016

Ronda Rousey has filed five trademarks for “FTA” which stands for “F*** Them All” per ESPN’s Darren Rovell.  The FTA trademark would apply to a variety of materials for the proposed brand including apparel, stickers, removable tattoo transfers, cosmetics and MMA entertainment services

The trademarks were filed with the United States Patent and Trademark Office in early February.  Last year, Rousey filed trademarks for “DNB,” which stood for Do Nothing B***.  Those trademarks for DNB were filed in August 2015.

Payout Perspective:

The trademark applications are still in the infancy stage.  Her “DNB” marks are still under consideration with the USPTO as they have yet to receive a registration certificate by the USPTO.  Does the filing of the “FTA” marks mean that Rousey is nearing the end of her fighting career as she looks toward a career in movies?  Maybe.  It also could mean that she is capitalizing on the popularity of her brand expanding.

Nevada issues 3-year ban for Wanderlei Silva

February 17, 2016

The Nevada State Athletic Commission issued a 3-year suspension of former UFC fighter Wanderlei Silva on Wednesday.  Silva’s suspension is retroactive to May 24, 2014, the date that he evaded a drug test in lead up to his fight with Chael Sonnen at UFC 175.

In addition to the suspension Silva will have to submit a clean drug test upon applying for a new license.  There was no fine since a fight at UFC 175 never materialized.  Previously, Silva was fined $70,000 and banned him for life.  Silva filed a lawsuit seeking judicial review of the original NAC ruling.

Silva appealed the judicial review (despite the court reversing and remanding the NAC punishment) citing that the NAC did not have jurisdiction of Silva since he was an unlicensed fighter at the time that he evaded the drug test.

Payout Perspective:

The ruling could provide closure for Silva who will likely continue to fight.  But, with the ruling from the NAC, Silva’s attorney may reinstate his appeal with the Nevada Supreme Court.  A precursor to the legal court action was the NAC ruling.  Even if Silva accepts the 3-year ban, it does not mean the 39 year old will have to wait to fight.  He could fight overseas outside of the jurisdiction of the NAC.  We shall see if there will be an appeal.

DraftKings purchases Kountermove

February 11, 2016

MMA fantasy sports site Kountermove has been acquired by DraftKings according to the company in a press release issued on Thursday.  The Boston, Massachusetts company is one of the top Daily Fantasy Sports operators in the country.

Notably, the UFC has an existing sponsorship deal with DraftKings and appears in Octagon signage during UFC events.  In December 2014, it had a deal with Jon Jones to launch fantasy MMA on the DraftKings web site.

Via Draft Kings press release:

The transaction builds on DraftKings existing platform, further advancing the company’s leadership position in combat daily fantasy sports and accelerating the company’s overall growth in the combat sports space. With the transaction, DraftKings expects to further advance the level of competition currently provided by the company while accelerating its strategic objectives in growing the engagement with combat sports.

Payout Perspective:

It is an interesting move by DraftKings as it finds itself mired in legal issues across the country.  Not only does it have to deal with lawsuits and legal regulators, parts of its business are eroding due to the pressure of the present situation.  But, the strategy to acquire Kountermove may seem practical if you consider it is looking into niche parts of the fantasy sports spectrum which includes NASCAR, eSports and golf.  As noted by the Legal Sports Report, the acquisition occurs almost at the same time as DraftKings going live in the United Kingdom.  Should DraftKings be shut out of traditional sports, it may look to MMA and other niche sports to save its business model.

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