Canelo agrees to NAC suspension for drug test failure

April 18, 2018

At Wednesday’s Nevada Athletic Commission disciplinary hearing, Canelo Alvarez entered into an Adjudication Agreement agreeing to a six month suspension of his boxing license for failing two drug tests with the presence of the banned substance Clenbuterol.

MMA Payout has obtained a copy of the Adjudication Agreement from the NAC via public records request:

Saul Alvarez – Adjudication Agreement – Signed by JASONCRUZ206 on Scribd

Payout Perspective:

The six-month suspension seems fair considering Alvarez denies wrongdoing but decided not to defend his claims.  The suspension, convenient or not, allows Alvarez to return to the ring in September right around the time of Mexican Independence Day weekend – a traditional boxing PPV date.  The Agreement includes a paragraph citing that Alvarez denies intentionally taking Clenbuterol and another indicating he believes the cause was due to contaminated meat.  Regardless, this gives Alvarez the spring off to get ready for September.  Will there still be bad blood between Alvarez and the commission if/when he’s allowed to concern?  Or, will Golden Boy put it past them when their fighter comes back (and decides the venue of the event) considering the amount of money they’ll make when Canelo finally gets in the ring with GGG.

Zuffa files opposition to Plaintiffs’ Motion for Class Certification in Antitrust Lawsuit

April 16, 2018

Earlier this month Zuffa filed its opposition to the Plaintiffs’ motion for class certification in the Antitrust lawsuit filed in Nevada.  Back from Spring Break, MMA Payout takes a look at the motion.

Zuffa Oppo to Class Cert by JASONCRUZ206 on Scribd

Under Federal Rule of Civil Procedure 23 are four elements needed to show class action status is viable: Numerosity, Commonality, Typicality, and Adequacy.  Zuffa argues against each element for class action status.

The opposition brief goes in depth on the reasons why the 6 named Plaintiffs cannot represent the two broad classes contracted by Zuffa.  They argue that the claims are not the kind that should be decided as a class.  Rather, one of their main arguments is that the factual claims set forth by each plaintiff differ and there is no “typicality” of defenses or “commonality” of evidence.  Zuffa argues that the expert reports and opinions submitted by Plaintiffs are insufficient to buttress the argument that the claims are those that can be tried through class action certification.

The two classes that Plaintiffs seek to represent are the “Bout Class,” the class of athletes who competed in UFC bouts during the class period and the “Identity Class,” those athletes alleged to have their identities “expropriated” by Zuffa.  Nathan Quarry is the only named plaintiff to be a part of the Identity class according to Zuffa.

Zuffa outlines reasons why the Bout Class is defective:

  1. Plaintiffs cannot adequately represent the class because none of them currently compete in UFC promoted bouts, and their claims are not typical of others in the putative class, such as the current athletes they seek to represent.
  2. Plaintiffs cannot establish the requisite elements of an antitrust violation with common evidence. Essentially, Zuffa argues that the class of purported affected individuals is vast and a finding that the entire class was “coerced” into exclusive contracts is unlikely.  Zuffa also cites that the existent of local markets for live MMA entertainment means that individual issues predominate for all of those markets.
  3. Zuffa does not have a pay structure or follow a policy of “internal equity” according to the legal filing. They argue that the regression theory posited by Plaintiffs “cannot distinguish whether common or individual factors account for the variations in athlete compensation.”
  4. Zuffa also claims that the putative class is “unmanageable” due to the inability for Plaintiffs to identify which athletes would still be competing for Zuffa or any other MMA Promoter

Zuffa argues that the Plaintiffs’ cases are not typical of one another.  The “test of typicality” looks to “whether other class members have been injured by the same course of conduct.” The requirement evaluates whether defendant’s defenses would be similar for the Putative class representative.  Zuffa argues that the defenses vary based upon the athlete.  It identifies having varied defenses when dealing with Plaintiff Nathan Quarry, Brandon Vera, Cung Le, Javier Vazquez, Jon Fitch and Kyle Kingsbury.

The purpose of “adequacy” is to “uncover conflicts of interest between named parties and the classes they seek to represent.”  Here, Zuffa argues that the Plaintiffs are retired or compete elsewhere.  None of the Plaintiffs currently fight in the UFC.  Thus, they would not be representative of the current class of UFC fighters as Zuffa argues that they would be more interested in money damages rather than injunctive relief.

In its argument rebutting the commonality element for class action status which allows certification if questions of law or fact common to class member predominate, Zuffa argues that Plaintiffs’ alleged theory of liability is incapable of proving liability with common evidence.  Here, Zuffa argues that the factual issues for each case differs and the commonality requirement would not apply here.  Zuffa goes on to argue with respect to the allegation that athletes were “coerced” into UFC contracts, Plaintiffs’ claims require “mini-trials for each plaintiff and class member on the issue of whether they voluntarily entered into their contracts.” Additionally, they claim that individualized evidence will be required to determine injury and show an antitrust violation.

The opposition motion includes declarations from Stephan Bonnar, Kenny Florian and Jim Miller which reflect the tone that the fighters made a choice to fight in the UFC instead of being forced to do so because of the economic market conditions.

Here are some other observations:

-Zuffa cites the U.S. Supreme Court case of Comcast Corp., et al. v. Behrend, et al. which found that the plaintiffs in that case failed to establish a sufficient connection between their alleged theory of liability and their claimed damages.  Highlighted in the opinion was the need to conduct a “rigorous analysis” to determine whether the standard has been met.  Similarly, Zuffa argues that the Plaintiffs have a similar problem with their case.

-According to an excerpt from Michael Mersch’s deposition, in order to re-sign Zuffa athletes before their contracts expire, the company offers higher guaranteed compensation for their next bout as an incentive to sign a new agreement.  Zuffa argues that the individual athlete makes the decision as to whether to sign or not and their reasons differ on the decision.

-Zuffa notes that there is “no testimony that promoters could not obtain MMA athletes during the class period.”

-The opposition argues that Plaintiffs have switched course in the argument of a combination of monopoly and monopsony allegations but a “multi-faceted “Scheme” of only monopsony-related claims.”

-Zuffa argues that Plaintiffs’ attempt to merely offer proof of harm that is widespread across the class is not sufficient as they must need to prove class wide harm.  They also state that the antitrust claims asserted here are not routine for class action lawsuits.

-Zuffa notes, “[A]lthough Plaintiffs suggest class certification in antitrust cases is routine, no court has

granted class certification in a Sherman Act Section 2 monopsonization case involving allegations

based on unilateral conduct.”

-With respect to their motion to exclude the opinions of Plaintiffs’ experts Drs. Singer and Zimbalist under Daubert, Zuffa argues that regardless of the outcome from the Court, it may still conclude that class certification should be denied.

Payout Perspective:

 The obvious objective of the opposition is to show that Plaintiffs’ claims cannot be tried as a whole and must be tried individually.  If this were to occur, the Plaintiffs would be in a bind logistically and economically as they would be left to prosecute cases for each of the athletes involved in the lawsuit.  Additionally, this would lessen their leverage of settling the cases as well as foreclosing a potential for larger award if they prevail.  Zuffa also stresses the Comcast case in its argument that under a “rigorous analysis” that Plaintiffs liability theory and damages are not tied.

Exonerated after USADA arbitration, Barnett sues supplement maker

April 10, 2018

Josh Barnett has sued the supplement maker that he took which led to a finding of a banned substance by USADA. Barnett prevailed at arbitration with USADA which did not suspend the UFC Heavyweight any amount of time.

Barnett has sued BIOKOR, LLC, which does business as GENKOR, N101, Inc. and owners Mark Wilcox and Alex Lasbroas individually in the Superior Court of Los Angeles.

Despite proving that he did not knowingly take a banned substance, it took over a year for the process of investigation to take place.  The arbitration took place in early March.  Barnett was suspended for a December 9, 2016 infraction which was determined to be ostarine.

Fortunately for Barnett, he kept a detailed accounting of supplements which led to the finding that a supplement by the name of Tributestin purchased at a store in Los Angeles contained ostarine although it was not labeled on the product.

Barnett has sued for Negligence, Strict Products Liability, Breach of Implied Warranty and Breach of Express Warranty.

Payout Perspective:

Lyman Good, Yoel Romero and now Josh Barnett have sued supplement makers after they were flagged by USADA for findings of banned substances.  The claim is that the supplements were tainted and did not contained the banned substance on their label.  These lawsuits will be interesting to keep track of as this may be defense for a fighter flagged by USADA.

Iaquinta replaces Holloway in UFC 223 main event

April 6, 2018

Al Iaquinta has filled in for Max Holloway to take on Khabib Nurmogomedov after it was determined that Holloway could not make the required weight of 155 pounds.

Holloway, filling in on less than a week’s notice, was unable to make the weight according to officials.  One has to wonder whether having Holloway come to Brooklyn to fight made sense considering he was coming off an injury and the compressed time to make the weight.

Paul Felder offered to take the fight but the New York State Athletic Commission indicated that since he was not ranked, he could not take the championship fight.  The reasoning falls in line with what many have advocated with the Ali Act – Felder was not ranked high enough to take the fight for the Championship.

Iaquinta, Felder’s opponent steps in to the main event.  And, it appears there’s a discrepancy on whether this is a title fight or not.


Payout Perspective:

UFC 223 seemed like such a great event and the events of fight week have soured some good fights.  If Iaquinta were to pull an upset over Khabib, the heavy favorite, we could see a strained relationship with the New York State Athletic Commission.

NAC files official complaint against Alvarez

April 1, 2018

ESPN’s Dan Rafael has obtained a copy of the Nevada Athletic Commission Complaint against Canelo Alvarez.  The 8-page Complaint outlines the violations stemming from two failed drug tests for the banned substance Clenbuterol.

Alvarez claims that the findings in his drug tests are a result of tainted meat he likely consumed while training for his May 5th fight in Mexico.  In the past, fighters in boxing and the UFC have been cleared of anti-doping violations due to tainted meat.  Still, the issue is being taken seriously by the NAC which has scheduled a hearing on April 18th.  As a result of the proximity of the hearing to the May 5th rematch with Gennady Golovkin, the huge fight which promises to do as well business-wise and maybe better than last September’s event is in jeopardy.

According to the Complaint, Alvarez failed two urine tests administered by VADA on February 17 and 20th.  The urinalysis was examined by the Sports Medicine Research and Testing Laboratory finding Clenbuterol in the samples.

Whether or not Alvarez intended to ingest the banned substance is of no significance according to the Complaint as it is the standard rule.  As a result, his license in Nevada has been temporarily suspended until the April 18th hearing.

Canelo Alvarez by JASONCRUZ206 on Scribd

Payout Perspective:

It’s interesting that there seems to be no urgency in resolving this matter prior to the May 5th event.  With a lot financially at stake, one would think that the parties, including the Commission, would want to expedite the hearing process.  The hearing will be very important and one would think that Alvarez’s lawyers would need to prepare a strategy which would show that it was likely that tainted meat was the cause of the findings.  This might mean providing a daily nutritional regiment for Alvarez which might pinpoint the kind of things he ate which may have caused the findings.

The Interview: Ally Quinney and Sam Erhlich

March 30, 2018

The Interview talks with Florida State University doctrinal students Ally Quinney and Sam Erhlich as they recently presented an upcoming paper at the Sports and Recreation Law Association Conference regarding the privacy concerns with USADA and the UFC anti-doping policy.

In addition to their presentation, we discuss the recent Jon Jones hearing and the Josh Barnett opinion.

We discuss an exchange at the December 2016 Congressional Hearing on Mixed Martial Arts between the sponsor of the expansion to the Muhammad Ali Act, Markwayne Mullin and the UFC’s Jeff Novitsky regarding the reinstatement of Brock Lesnar.

Introductions: 1:04

Discussion about Presentation at SRLA:  2:31

Discussing UFC/USADA deal and the privacy concerns: 3:57

Survey re tracking of athletes provided to Fighters by USADA: 7:23

Discussion regarding leaving USADA testing pool:  11:36

Whether USADA is a state actor: 16:47

Does it matter that USADA is a third party:  20:14

Discussion on the Mark Hunt case: 21:21

Why won’t an Antitrust lawsuit work in this case: 31:24

Discussion about Jon Jones hearing: 33:30

Thoughts on Josh Barnett case:  34:30

Barnett receives only reprimand, no suspension, in USADA Arbitration hearing

March 23, 2018

Josh Barnett became the first UFC athlete to win an appeal through the UFC Anti-Doping Policy as a the opinion issued on Friday gave the heavyweight “no period of ineligibility.”  He only received a public reprimand but no suspension for the flagged drug test.

Josh Barnett wins USADA Arbitration by JASONCRUZ206 on Scribd


Barnett tested positive for a banned substance as a result of an out-of-competition sample on December 9, 2016.  The sample tested positive for Ostarine.

Barnett noted that he was routinely taking dietary supplements “to maintain his conditioning as an elite athlete.”  The opinion notes he took 17 supplements prior to providing the sample that came up positive for Ostarine.  Tributestin 750 was one of the supplements that was supposed to contain only Tribulus Terrestris.  Tribulus is not a Prohibited Substance.  “It is claimed to naturally support the production of testosterone among other positive health attributes.”

Through working with USADA, it was discovered through the process of supplement examination that Barnett’s Tributestin was contaminated with Ostarine.  After testimony at the hearing, USADA conceded that the source of the Ostarine found in Barnett’s out-of-competition samples were from Tributestin as the product was contaminated.  With this concession which USADA seemed to admit from the outset and confirmed with Barnett’s testimony, the case “became one of the Applicant being the victim of a Contaminated Product with a Prohibited Substance.”

Barnett’s prior history of failed drug tests was discussed and the matter of whether this was a second infraction of the UFC ADP.  However, the arbitrator determined that a drug sample taken by the California State Athletic Commission

Notably, Barnett, gave the UFC notice that he was taking a “leave of absence” on December 14, 2016.  Two weeks later, his A sample came up positive for Ostarine.

The arbitration hearing took place on March 6, 2018, 14 months after his sample was taken.  The Arbitrator seemed to be persuaded by Barnett’s testimony as he described his detail in trying to make sure that he was compliant with USADA rules.  Notably, after his dealings with the CSAC, he devised a practice of “keeping each original container of any supplement he used and ensuring that a small portion of its content remained and could be analyzed.”  This seemed to sway the trier of fact.

The Arbitrator noted:  “I find this Applicant to be a very meticulous and careful person.  In my experience as an arbitrator of hundreds of doping cases I have never heard testimony from an individual who has taken so much care to record his supplement regime in order to avoid the very problem he is now experiencing.

Payout Perspective:

Barnett’s prior fallout from drug issues was the reason that saved him here.  It was his cataloguing of what he takes plus the samples he had that persuaded USADA.  Could the system be fabricated?  Yes, but the presentation seemed to be compelling to the trier of fact.  So, it was not just cooperation plus providing all of the supplements to USADA, but the original bottles and samples taken which likely ensured that Barnett would not be suspended.  While it was curious that Barnett announced leaving the UFC for a time two weeks prior to his notice of his drug test results, it seemed to be of no consequence in the final conclusion.

Court denies World of Boxing’s request for Wilder emails re Meldonium in continuing legal drama

March 21, 2018

The United States District Court in Southern New York has denied a Motion to Compel in the World of Boxing/Alexander Povetkin lawsuit against Deontay Wilder.  Previously produced documents from Wilder’s attorney were determined to be work product by the Court.

The case has a long and winding history and while a jury determined that Povetkin had Meldonium in his system post-January 2016, the legal issues related to $7.15 million still held in escrow as well as allegations that Wilder breached his contract.  A breach of contract carries liquidated damages of $2 million.

Order on Motion to Compel by JASONCRUZ206 on Scribd

Central to the latest legal wrangling is a Motion to Compel documents originally filed last year by World of Boxing and Povetkin (“WOB”).  The motion was stayed (held off on a decision) until the end of last February’s trial.  The Court has now ruled on the issue and denied WOB from receiving emails from Wilder’s camp which discuss Meldonium.

The issue concerns 15 emails sent by Wilder’s attorney John Wirt after it was discovered that Povetkin tested positive for Meldonium.  Wirt has sent a letter to the escrow agent holding the purse money indicating that it not be released until resolution of the matter since it was Wilder’s position that Povetkin breached the Bout Agreement due to his positive drug test.  WOB objected to the letter which precluded the release of funds.

The emails were originally produced in written discovery but when WOB produced them at deposition, Wilder invoked a “claw back” provision which allows for the return of documents deemed attorney-client or work product.  On its privilege log, a list of documents withheld which lists the reason for not producing, it noted that the emails were attorney-client privilege.

Wirt’s emails were not sent to Wilder but his reps including Lou DiBella and Al Haymon.

According to the Court,  “The Wirt Email analyzes the WOB Parties’ mid-May [the fight was set to take place in late May 2016] explanation for the failed drug test that is at the heart of this dispute and discusses possible responses to it. Wirt recommends a course of action to the individuals receiving his email.”

Notably, there are subsequent emails from Shelly Finkel (Wilder’s co-manager) with his thoughts and the email is to employees of Wilder’s promoter, Lou DiBella.

WOB argued that the emails were discoverable because they were labeled as attorney client privileged and not work product.  Furthermore, they were not prepared in further anticipation of litigation which is a requisite in protecting a document via work product.  WOB argued that in deposition testimony by DiBella and Alex Dombroff, they were not thinking of a lawsuit.

The Court indicated that it could make the decision to deem the documents work product even if Wilder did not.  Secondly, it disagreed with WOB’s argument.  The Court writes that Wirt’s email was sent to protect the interests of Wilder in the prospect of litigation as Povetkin had failed a drug test and there was potential for the fight to be called off.  Moreover, Wirt had to protect his client’s interest with respect to the escrow money.

After an “in camera” [looking at the documents] review of documents, the Court determined that the emails were work product. Additionally, they stated that WOB did not show a “substantial need” for the documents and the Court determined that the emails were protected under work product.

Payout Perspective:

This case seems to be far from over as the fight over which side breached the Fight Contract and who should receive the $7.15 million in escrow.  Wilder was set to make over $4.5 million while Povetkin was going to make $1.9 million.  The winner would have earned an additional $715,000.  However, Povetkin’s promoter, who made the successful purse bid, would like the money back.  In addition, they claim Wilder breached his agreement to travel to Russia despite the news of Povetkin’s drug test.  The contract indicates a liquidated damages penalty of $2 million.  One has to wonder the importance of the emails as WOB has seen the contents.  It’s a matter of being able to utilize them in evidence.  Since the Court has determined them to be work product, they cannot be used at all.

MMA Payout will keep you posted.

As WBO seeks to move case to arbitration, Trout points out why it should not

March 19, 2018

The Austin Trout case continues in Puerto Rico and MMA Payout gives you an update on the case in which the former contender is suing his promotion including violations of the Ali Act.  The World Boxing Organization is trying to move this case into arbitration citing the fighter contractual agreement.

Trout originally filed this lawsuit in 2015 and due to jurisdictional issues, the case was moved to federal district court of Puerto Rico.

Once in Puerto Rico, the WBO moved the case to arbitration pursuant to the fighter agreement.  Trout argues that the WBO had waived their chance to move the case to Arbitration but failed to do so when the lawsuit commenced.  The lawyers for Trout argue that the WBO did not include this move to arbitration until its Answer to the Amended Complaint which included a Motion to Compel Arbitration.

Trout argues that the arbitration clause that the WBO is seeking to enforce is invalid and thus, not binding.   He also claims that the WBO cannot use arbitration in this case because it would effectively “be both a party and a judge.”

Trout points to the section of the WBO Championshp Regulations Section 34:

Any WBO Participant, including, but not limited to a Boxer, Manager, or Promoter who is or could be affected by a determination of the World Championship Committee who wishes to contest such a determination must, as his or her sole and exclusive remedy, file a Complaint pursuant to the WBO Appeal Regulations.

In all cases the complaint shall be referred to the WBO President, who may attempt for a reasonable period to resolve the complaint amicably. The WBO President may reject a complaint or he may refer it to the Complaints and Grievance Committee which shall determine the complaint or grievance in accordance with the WBO Appeals Regulations.

As Trout points out, this is inappropriate as it would go through two layers of the WBO (President and Grievance Committee) before determining the viability of the dispute.

The appeal process according to the WBO states: “Three persons designated by the President will constitute the WBO Grievance Committee.  They shall not be members of the Executive Committee.  The Members of the Grievance Committee shall be nominated by the President and confirmed by the Executive Committee.”

The committee would determine whether the fighter’s case would go to binding arbitration according to the WBO Agreement.

Trout points out the issue it has with the WBO attempting to move the case to Arbitration:

In a claim in which, apart from the obvious fact that it is a defendant, it is alleged that Defendant WBO engaged in a pattern of corruption by illegally manipulating its ranking system, allegations that could carry criminal charges under the Muhammad Ali Act, defendant WBO pretends to be party and judge.

There is simply no way the arbitration forum would provide a fair opportunity to plaintiff to pursue his claim. There can be no presumption of fairness, to the contrary. This is not a claim between to [sic] boxers or between a boxer and a manager. This is a claim between a boxer and the WBO.

Payout Perspective:

The case presents the issue of whether a violation under the Ali Act could simply be contracted out of through the use of the Arbitration clause.  In this instance, Trout’s lawyers argue that the WBO have waived their right to arbitration and that the clause is invalid.  As outlined by Trout, the process created by the WBO makes it appear unfair for the aggrieved party since they would have to first take up the issue with the President and then a WBO-appointed committee.  The committee would then decide whether the case would go to Arbitration.

Examining the differing clauses, it would seem that Trout should not have signed this agreement as presented.  If not else, he should have sought that the case be tried in court if the WBO Committee could not come to an agreed settlement/resolution of the matter.  This is a case to keep an eye on as the Court has yet to determine whether the case will be sent to arbitration.

In the future, this case may serve as a template if the Ali Act Expansion is ever passed to include combat sports.  One could foresee MMA promotions including contractual language which would allow for the promoter to seek to have any disputes with fighters go to binding arbitration.  One need only look to the UFC Anti-Doping Rules to see that if there is an appeal it goes to binding arbitration.

MMA Payout will keep you posted on the outcome of the Austin Trout case.

Alliance MMA settles in principle with plaintiffs in securities lawsuit

March 10, 2018

The parties in the Alliance MMA lawsuit have filed a Notice of Settlement filed in the class action lawsuit filed in federal court in New Jersey.

The lawsuit was premised upon an accounting irregularity in Alliance MMA’s 10-Q filings in 2016 could no longer be relied upon.  As a result, two lawsuits were filed against the company with one being dismissed in order for the other to be the lead case in the litigation.

Alliance MMA became the first publicly traded MMA organization on the NASDAQ.  Since it began trading publicly, the company’s stock has been down since.  As of Friday, March 9th the stock closed in trading at just $0.52.

Alliance MMA denied any financial impact as a result of the error and brought a motion to dismiss in the lawsuit.  The parties determined to settle the case prior to plaintiffs filing an opposition.

The notice allows for a stay on a deadlines in the case while the parties finalize a settlement.  A settlement and dismissal of the case must occur by April 9th according to the below filing.

Notice of Settlement by JASONCRUZ206 on Scribd

Payout Perspective:

The settlement is probably the best for both parties as the plaintiffs likely received compensation while Alliance MMA cut off the legal fee spigot.  We shall see what impact, if any, it has on the operations of Alliance MMA.  The company made changes in its C-suite and named a new president this past February.

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