MMAAA given “cease and desist” ultimatum by antitrust lawsuit plaintiffs

December 7, 2016

The MMAAA issued an “urgent news” statement as it appears that lawyers in the UFC antitrust lawsuit have issued a “cease and desist” letter from signing up fighters from joining the organization.

The statement was issued by Jim Quinn and Eric Hochstadt, outside counsel for the Mixed Martial Arts Association:

As Georges St-Pierre, Donald Cerrone, T.J. Dillashaw, Tim Kennedy, and Cain Velasquez made clear in the official public announcement last week, the Mixed Martial Arts Athlete Association (“MMAAA”) is all about looking out for the fighters and their well-being long-term.

Yesterday, the MMAAA received a “cease and desist” letter from a group of lawyers seeking to stop the MMAAA from signing up fighters and sticking up for their rights against the UFC and its owners WME-IMG.  The MMAAA will do no such thing.  Those lawyers – who represent only a few fighters – are focused on getting some money out of one case, of which they seek a significant portion for themselves.  Those lawyers do not speak for anyone else, and certainly not the MMAAA and all the fighters the organization represents now and will quickly grow to represent in the sport.

Over a year ago, those same lawyers reached out to the MMAAA to join forces with us.  We had a meeting and made clear that the MMAAA’s primary focus would be on achieving three core goals: 1) substantially increasing UFC fighter pay to 50%; 2) securing all-encompassing long term benefits for UFC fighters; and 3) a settlement to compensate past and current UFC fighters for all of the UFC’s wrongs.  To achieve these goals for the benefit of the fighters, we also made clear the MMAAA needed to receive a percentage of a monetary settlement to cover the costs to fund the MMAAA for staffing and attorneys both for past work getting to this point and the long fight ahead.  The lawyers made clear that they did not share the MMAAA’s vision.  They are focused on a short-term monetary recovery, of which they will seek 33%, and then they are gone from this sport.  We parted ways at that point.

The MMAAA is all about the fighters benefitting when the UFC is finally forced to take a powerful group of the fighters seriously.  The MMAAA will be executing on that plan and will not be stopped in this effort on behalf of fighters.

Although the lawyers identified in the statement were not named, but they represent the fighters in the antitrust lawsuit, Cung Le, et al. v. Zuffa, LLC, et al.

John Nash at Bloody Elbow obtained the letter from Eric Cramer, co-lead counsel for the plaintiffs’ attorneys representing the former UFC fighters suing the company sent a letter to Bjorn Rebney.

Letter to Rebney From Cramer by JASONCRUZ206 on Scribd

The letter issues that Rebney’s group cease and desist from operating which essentially means for it to stop pursuing fighters to join the organization.  It argues that the court has granted the attorneys to represent the class of fighters and MMAAA’s effort would be interfering.

Notably, the letter states that Rebney’s group wanted to be a part of the UFC Class Action and met with CAA in New York.  At the meeting, which took place in October 15, 2015, Rebney revealed MMAAA and stated that they would start another antitrust action if certain demands were not met.  The letter also reveals that Rebney and MMAAA might be contemplating an MMA promotion.

The letter gives Rebney and MMAAA December 9th to cease and desist from operations.

Payout Perspective:

The plot thickens.  It’s clear that when Rebney cited a “settlement” from the UFC, it would spark concern from the PFA and the plaintiffs in the antitrust lawsuit.  Clearly, the plaintiffs have invested a great deal thus far in litigating against Zuffa.  For MMAAA to come in at this point, and based on what Cramer reveals in his letter, this is unsettling to the plaintiffs and their attorneys.  Of course, MMAAA explains in their statement the reasons for seeking costs related to its own work on behalf of the fighters.  What is the truth?  Hard to say, but what we can gather is that there may be another lawsuit on the horizon if MMAAA and the plaintiffs in the antitrust case cannot find a way to settle the issue.

Ali Act sponsor claims UFC attempted to influence witness list of congressional hearing

December 6, 2016

Bloody Elbow reports that the UFC threatened not to participate at a Congressional subcommittee hearing on MMA and the possible expansion of the Ali Act set for Thursday.  The power play was due to Randy Couture’s participation as a witness at the hearing.

According to the bill’s sponsor, Republican congressman Markwayne Mullin, the UFC attempted to influence the hearing by refusing to participate at the hearing.  The hearing is before the subcommittee on Commerce, Manufacturing and Trade.

The witness list is now public and it appears that based on Congressman Mullin’s statement, the UFC threatened to withdraw the presence of Jeff Novitsky from the hearing.  Novitsky, who is the Vice President of Athlete Health and Performance will be speaking on behalf of the UFC.  The UFC denied Mullin’s statement that they attempted to rescind its participation via Novitsky.

Payout Perspective:

It will be an interesting hearing on Thursday as Couture, Novitsky, Lydia Robertson (Treasurer of the Association of Boxing Commissions and Combative Sports) and concussion researcher Dr. Ann McKee of Boston University will be testifying.  Mullin’s assertion that the UFC did not want Couture to testify could be true.  The UFC and Couture have had contentious past and the UFC likely does not want him to speak about his side of the story.  Whether or not the UFC attempted to get Couture off of the witness list is another issue.  Certainly, the company has lobbyists working on its behalf and they have talked to legislators including co-sponsors of the Ali Act Expansion Act.

Gawker turns on Daulerio in Hogan sex tape case

December 4, 2016

It appears that Gawker Media, LLC is turning on former Editor in Chief A.J. Daulerio per an article in the Wall Street Journal.  In legal papers filed in the Gawker’s Chapter 11 bankruptcy case, the company cites to the Florida jury verdict that awarded Hulk Hogan $140 million as violating employment terms while Daulerio was with the company.

The company is seeking to sever its ties with Daulerio as it is rejecting his request that Gawker continue to pay his legal fees over the fight over the video.

After the judgment, Gawker and its founder Nick Denton filed for Chapter 11 bankruptcy.  Most of Gawker websites were sold at auction to Univision for $135 million.  In legal filings, Gawker argued that Daulerio was to blame and cited the belief that Daulerio maintain that the Hogan video stay online despite the former pro wrestler’s contention it be removed.

Hogan and Gawker have reached a settlement of the jury verdict but the parties are now looking to how to fund Hogan’s $31 million settlement.

The WSJ article suggests that the move by Gawker is a strategy for the company to force Daulerio to accept a settlement of terms to pay the Hogan settlement.  Daulerio is said to owe $100,000 as part of the payment for the settlement with Hogan.  Apparently, Daulerio has not signed off on the deal due to “how he can discuss Mr. Bollea’s case.”  Daulerio, who was individually named in the original lawsuit, has considered appealing the decision on his own.

Gawker creditors have until Monday to vote on the settlement plan.

Payout Perspective:

It will be interesting to see what happens on Monday.  It was clear that this was a possible outcome when Gawker filed for bankruptcy.  Despite defending Daulerio in the civil trial, they now are turning to the interests of its creditors in the bankruptcy case.  As an individual, it would be hard to see how Daulerio could still fund his own appeal of the Hogan judgment.  Will keep you updated.

Congressional hearing on Ali Act Expansion set for December 8th

December 3, 2016

The Congressional subcommittee on energy and commerce will have a hearing this Tuesday on the Expansion of the Muhammad Ali Act.  According to the notice, the hearing is entitled, “Mixed Martial Arts: Issues and Perspectives.”

No witnesses have been announced and are by invitation only.  A webcast will be available for public viewing.

Republican Oklahoma congressional representative Markwayne Mullin was the primary sponsor of the bill introduced last May.  Democrats have signed on as co-sponsors to the bill which seeks to expand the current Muhammad Ali Boxing Reform Act to combat sports.  Specifically, the bill is addressed to help mixed martial artists.

Zuffa has employed lobbyists to combat the passage of this bill.  The bill will likely meet stiff opposition despite the bill coming from a Republican.  Current UFC exec, Ari Emmanuel, met with President-elect Donald Trump last month.  While no specifics of the meeting were revealed, Emmanuel and the President-elect have a past business relationship.  One might suspect that Emmanuel’s relationship may influence support to quash the expansion of the Ali Act.

Since the sale of the UFC to WME-IMG, more and more fighters have come forward to discuss their need for better pay and benefits.  Two organizations, the Professional Fighters Association and the Mixed Martial Arts Athletes Association have come forward seeking support to organize in hopes of negotiating with the UFC on behalf of the contracted fighters.  The two join the MMAFA as organizations that continue to seek better conditions for fighters.  The MMAFA is an active advocate for the expansion of the Ali Act.

Payout Perspective:

The hearing should be interesting as to who will testify and what will be said about the expansion of the Ali Act.  The sale of the UFC will likely come up as well as the current antitrust lawsuit.  The question is whether the expansion of the Ali Act would truly help MMA fighters.  What will interest me is how educated the legislators will be on the sport of MMA and how the application of the bill to MMA will have on the sport.

Upheaval within PFA as Smith, Middlebrook withdraw support

November 29, 2016

Leslie Smith has written an open letter in which she states she is no longer supporting the Professional Fighters Association.  Per MMA Fighting, labor lawyer Lucas Middlebrook is also severing ties with the organization he helped found with agent Jeff Borris.

The information of a possible board of fighters was leaked to the media which appears to be the reason for the parting of ways.  Eleven names of current UFC fighters were revealed.

Smith stated that she helped compile a list of potential fighters to target for the board.  The list, according to Smith, was to be confidential but the names as well as other information about the PFA appeared in an MMA Junkie article.  She was also upset at the fact that the PFA intended to set up an agent advisory board in addition to the fighter board.

Smith wrote a letter about the situation in which she proposes the next steps in organizing MMA fighters.

Middlebrook left for the same disclosures made.  Borris does not know how the leak of information happened.

Payout Perspective:

Altruism or naivete on the part of Smith?  Smith is passionate about organizing fighters but it appears that there was a misunderstanding regarding her role with PFA.  Whether or not there was an understanding about the confidentiality of the information passed on by Smith is a question that someone at the PFA could answer.  Obviously, the Junkie article revealed a lot about PFA’s goals as well as the potential for a board.  This might be seen as showing its hand too early.  It also might be a way to gain some PR for the organization at a time when it needed to gain traction with fighters.  The concern about disclosing names for a board is that it might cause discord between the fighters and the UFC. Middlebrook leaving PFA also reflects a lack of cohesion in the organization less than 3 months into its venture.  With the anticipated announcement of another attempt to organize fighters coming up on Wednesday, PFA may lose steam even before it begins.

President-elect meets with UFC owner

November 21, 2016

President-elect Donald Trump met with his former Hollywood agent, and current UFC owner Ari Emanuel on Sunday.

Emanuel met the President-elect at his New Jersey golf course.  Trump touted Emmanuel as “the king of Hollywood.”  The substance of the meeting was not revealed.

Despite being a longtime Democratic fund-raiser, Trump called Emanuel a “great friend.”  Dana White spoke on behalf of Trump at the Republican National Convention and was seen at an GOP party on election night.

Perhaps the meeting included some talk about Emmanuel’s new venture as head of the UFC.  He is one of the new faces of the organization since WME-IMG took over from the Fertitta brothers in July.

One of the relevant issues that the President-elect may deal with is the attempt to amend the existing Muhammad Ali Act to include combat sports.  The UFC has lobbied vehemently against it.  It has enlisted Farragut PR to monitor the Ali Act on behalf of the UFC.

The bill was introduced in late May by Oklahoma Republican Markwayne Mullin.  In late September, the bill was referred to the Subcommittee on Workforce Protection as set forth by the House Education and the Workforce Committee.

Payout Perspective:

With the new administration set to come in this January, the likelihood that the Muhammad Ali Expansion Act passes is low.  Certainly, having President-elect Trump as an ally will help Emmanuel and the UFC.  Moreover, one would think that a Republican dominated House and Senate would persuade Representative Mullin to shelve the bill or amend it to make it more friendly for promoters.

Update on Wilder-Povetkin lawsuit includes more discovery fights

November 17, 2016

Attorneys for Deontay Wilder and Alexander Povetkin continue to joust in letters in the lawsuit filed in the Southern District of New York.  A February 2017 trial date may be nixed due to issues related to finalization of a protective order to iron-out discovery issues.

After a discovery conference, last week, the parties continue to dispute the contents of the order with the court.

The discovery fight centers around a number of issues.  One is related to text and direct messages from the phones of Wilder and promoter Lou DiBella.  Notably, attorneys for DiBella state that his phone was destroyed in a hot tub over 4th of July weekend.  They indicate there are no responsive texts or direct messages from Wilder’s phone.

Letter From Judd Burstein 11.09.16 by JASONCRUZ206 on Scribd

Attorneys for Povetkin and his promoter, World of Boxing, requests information concerning an injury suffered by Wilder in July 2016.  The heavyweight champion’s attorney objected to the request citing it as not relevant and likely the believe that such production of information (if any) would not lead to discoverable information.

Wilder Letter Re Protective Order by JASONCRUZ206 on Scribd

WOB Letter Re Protective Order by JASONCRUZ206 on Scribd

From the court record, it appears that the parties are seeking to fast-track the case to trial with little, if any motions, in the case.  However, attorneys for Wilder filed a Motion to Disqualify the attorneys for Povetkin.  The Motion was then withdrawn by Wilder’s attorneys.  Despite the withdrawal, they cautioned attorneys for Povetkin that they would be violating professional responsibilities if they did not withdraw as trial counsel.  The crux of the issue relates to two of the attorneys of record involved in the contract negotiations for the Wilder-Povetkin fight.  The motion sought to disqualify the attorneys as well as bar them from potentially depose the attorney that they were involved in negotiations.

Motion to Disqualify by JASONCRUZ206 on Scribd

The lawsuit arises out of a cancelled fight and money sitting in an escrow account.  Wilder was set to face Povetkin in Russia in May 2016.  A contract was agreed to which included clauses that put over $4.3 million (a portion of payouts for fighters, as well as administrative fees, etc.) into an escrow account as well as a liquidated damages provision of $2.5 million for breach of contract.  It was discovered that Povetkin tested positive for the use of Meldonium which Wilder believe cancelled the fight.  As a result, he did not travel to Russia for a fight he did not believe would take place.  Povetkin’s camp claim breach of the fight agreement since the governing body had to cancel due to Wilder not showing up in Russia.  In addition, they claim that they should be entitled to their share of the purse in the Escrow account however, Wilder’s side has prevented the money from being disbursed without a court order.

Payout Perspective:

The discovery fight is not new to many litigation attorneys.  The trial judge will need to sort out the situation and allow time for the parties to obtain the information they believe they need to go to trial.  It does seem like this case will go to trial although litigation is a game of chicken to see who concedes first.

Dana White target for deposition in antitrust lawsuit

November 14, 2016

The Sports Business Journal reports that lawyers on behalf of former UFC fighters intend to depose Dana White as part of the antitrust lawsuit ongoing in federal court in Nevada.

The lawsuit is in its discovery phase with both lawyers for the plaintiffs and lawyers for the UFC exchanging documents.  Depositions involving key witnesses has commenced.  Notably, the article indicates that Nate Quarry has been deposed by the defendants.  Plaintiffs lawyers intend to depose Dana White in likely questioning about the UFC’s business practices which relate to their antitrust claim.

Discovery ends May 1, 2017 which means that we should see more UFC executives deposed by the plaintiffs’ attorneys as well as some of the former fighters which may include Cung Le, Jon Fitch and Brandon Vera.

The article indicates that plaintiffs’ attorneys may seek to depose executives from the new ownership group at WME-IMG as well.

Payout Perspective:

It will be interesting to see if and when they depose White.  His deposition is likely imminent since he’s had a major hand in the operations of the UFC when the alleged issues have occurred.  We will see if plaintiffs’ attorneys will be able to obtain his testimony from the FTC investigations as well as previous lawsuits involving the company.  One might expect a lengthy deposition (i.e., multiple days) for White.

McGregor may be late for “The Notorious,” other trademarks

November 10, 2016

UFC 205 is set to debut in New York and will likely set gate records and will flirt with the company’s PPV buy record.  Capitalizing on his brand, it’s headliner, Conor McGregor has filed for trademarks in Ireland.

According to the Irish Patents office, McGregor’s company, McGregor Sports and Entertainment Limited has filed for “The Notorious,” “Conor McGregor,” and “The Mac Life.”  Notably, as of this date, McGregor has not filed for similar trademarks with the USPTO

We may assume that McGregor is seeking to monetize his brand by filing for these trademarks.

McGregor might run into some legal issues with obtaining the marks as there are similar trademarks already on file with the Irish Patents Office.

Of course, the global popularity of McGregor means that his trademark is available all over the world.  Per a Law360.com article the U.K, an individual has applied for the marks, “The Notorious Conor McGregor,” “Conor The Notorious McGregor,” and “Conor McGregor The Notorious.”  The person has also obtained domain names with similar names with the champion.  At this point, the individual has yet to officially obtain the marks.

Payout Perspective:

You may recall Ronda Rousey applied for trademarks with the USPTO regarding potential business opportunities.  It appears that McGregor will do something similar.  McGregor may be a little late with filing for his marks and it seems as though he should have applied for international trademark protection earlier on in his career.  Obviously, it was up to him and his management team on a business strategy and obtaining trademarks is one of the details needed to monetize a brand.

PFA outlines goals including increasing fighter pay

November 8, 2016

MMA Junkie reports that the Professional Fighters Association (PFA) have set hard numbers and 10 goals to its vision of creating a union for the UFC contracted fighters.  Among the 10 goals is the step-up in pay with fighters making a minimum of $25,000 to show and $25,000 to win.

Lower-tier fighters in the UFC receive between $8,000 to $12,000 to show and the same for winning.  In Bellator, that amount is lower.

In addition, PFA would push for comprehensive health insurance for a fighter and his or her family.  The UFC does provide accident insurance that come with high deductibles.  However, these coverages do not cover basic health coverage and coverage that would extend to their immediate family.

Also, the PFA would push for an experience-based pension system which would start at $75,000 a year with 20 fights in the UFC and could up to $150,000 with 30 fights in the company.  The pension would start at age 65 and be paid for life.

Payout Perspective:

The association’s goals are outlined in the Junkie article but the biggest goal of increasing fighter pay has been something that fighters have wanted for years.  The increase would cut into the company revenues although it has been receiving much more in a revenue split as opposed to leagues that collectively bargain.  Other issues like health insurance and pensions would make provide general health and welfare benefits to the fighters; something that has not happened in this sport.  Outlining these objectives are of importance for fighters that are not sure about signing on for PFA to bargain on their behalf.  If the PFA can obtain the requisite number of fighter signatures to hold an election with the National Labor Relations Board (NLRB).  If they receive a majority vote in favor of a union, the PFA could collectively bargain with the UFC.  Are these objectives attainable or just aspirations?

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