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.

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.

2017: The year in boxing

January 6, 2018

2017 was a great year for boxing which saw some great fights and the spectacle that was Mayweather-McGregor.

The year started off with the talk about Mayweather-McGregor as the UFC’s lightweight champion stirred the pot by going on a rant on Instagram where he wrote “F*** the UFC.”  Dana White warned that if Conor went on without the UFC it would be an “epic fall.”

January also saw Al Haymon get a court victory with a dismissal of Golden Boy’s Antitrust lawsuit.  In a ruling which did not include oral argument, the Judge determined that Golden Boy did not come fort with genuine issues of fact to support its claims.  Most importantly, and a word of caution for the Plaintiffs in the UFC Antitrust lawsuit, the Judge reiterated that the antitrust laws protect competition, not competitors.

Although Golden Boy suffered the loss in court, it inked a deal with ESPN with 42 fights airing on ESPN starting in March 2017.  As the prevailing party, they requested legal costs in the amount nearing $35,0000.  Golden Boy appealed the dismissal but it appears that the sides resolved the case as the appeal was dismissed by agreement of the parties.

The Deontay Wilder-Alexander Povetkin/World of Boxing lawsuit went to trial in February and it did not take long for a jury to decide that Povetkin took Meldonium after January 1, 2016.  However, the case continues with the parties litigating the other claims as well as the issue who receives the millions of dollars that has been placed in escrow.

Wilder was also sued by rival Dominic Breazeale for a hotel melee.  The case was thrown out as the episode happened in Alabama but Breazeale sued in California.

Showtime Boxing had the highest rating of 2017 with Adrian Broner taking on Adrian Granados drawing 779,000 viewers.  The fight also aired on Twitter as the service continued to expand its offering of streamingClaressa Shields became the first female boxer to headline an event on premium network television. In March.

The GGG-Daniel Jacobs PPV drew between 130-150K PPV buys.  GGG’s next PPV appearance against Canelo would draw much higher as the draw drew 1.2 million buys.  The fight also had a higher price tag than usual:  $79.99 HD.  A rematch for May 2018 seems imminent.

March saw the second highest-rating for network viewership as Keith Thurman faced Danny Garcia in the battle of unbeatens on CBS.  The fight drew 5.1 million viewers while the overall telecast drew 2.7 million viewers.

After going through a lot of money, the viability of the PBC obtaining a media rights deal was brought into question.  Its deal with Spike TV ended but the organization found a home on FS1.

In 2017, it seemed as those everyone applied for a boxing license:  Conor, Nate Diaz, Cyborg…

Anthony Joshua faced Vladimir Klitschko in one of the biggest fights of the year.  The event aired live on Showtime and tape delay on HBO.

May’s Canelo Alvarez-Julio Cesar Chavez, Jr. PPV drew 1.3 million buys and its replay on HBO drew 769,000 viewers.

In May, we took a look at where was Boxing’s next PPV star.  Aside from Canelo Alvarez, there are several contenders to be the next star on PPV including Anthony Joshua.

In June, The Money Fight was announced.

Also in June, Top Rank announced that it had a deal with ESPN to air fights with the first one being Manny Pacquiao fighting Jeff Horn in Australia on July 1st.  The debut earned big numbers as Pacquiao lost a controversial decision to Horn.

The Andre Ward-Sergey Kovalev II PPV in June drew between 130-135K PPV buys.

July saw a 4-city tour to promote the Mayweather-McGregor bouts.  It was an ambitious tour that fans clamored to be a part.  It was announced that the PPV price would be $99.95 HD.

The Money Fight drew huge numbers and was a big financial success.  We wrote about it here.  The event had streaming issues on both UFC Fight Pass and Showtime platforms.  As you might expect, there were lawsuits which are still matriculating through the court system.

Despite the big event, HBO ran an event featuring Miguel Cotto and it did well considering as it drew 730,000 viewers.

Capitalizing on the publicity of The Money Fight, announced an ESPN deal which will include airing its fight library on an OTT service that will launch in 2018.

Austin Trout sued the WBO which included claims under the Ali Act.  The case was moved to federal court in Puerto Rico where the WBO is seeking to dismiss the case and move it to arbitration.  The case will be an interesting look as to whether the court will allow a claim under the Ali Act will go to arbitration.

In September, Magomed Abdusalamov settled with the state of New York for $22 million for injuries sustained in a fight in 2013.  Abdusalamov was left with a brain injury and paralysis due to improper conduct and lack of training by the New York State Athletic Commission.

A huge ESPN fight between Vasiliy Lomachenko and Guillermo Rigondeux drew 1.73 million viewers.  The overall telecast drew 1.487 million viewers.

In December, Showtime announced Mayweather-McGregor drew 4.3 million domestic PPV buys.  This is off from the 6.7 million Dana White had stated.  After hearing of the announcement, White took issue with Showtime’s numbers.

One of the bigger stories to watch going into 2018 is the announcement by Dana White that he will be promoting boxing.  Zuffa Boxing, a t-shirt worn by White during The Money Fight press tour, was a hint that White was up to something.  White made it official late in the year.  He indicated that he was meeting with Floyd Mayweather.  Despite stating that he will never work with Showtime again, he said he would be willing work with other promoters with the exception of Bob Arum.

Trout case may have impact on future of Ali Act litigation

January 5, 2018

Maybe the most important case as it relates to the expansion of the Ali Act may involve boxer Austin Trout and his current lawsuit against the World Boxing Organization in Federal Court in Puerto Rico.

Last month, the WBO is moving to dismiss the case and invoke the arbitration clause which was a part of his promotional contract with the company.  Trout had filed the lawsuit which includes claims for violation of the Ali Act in boxing.  The WBO argues that Trout agreed to the contract and should be held to its arbitration clause and that he forfeited his right to a jury trial.  Trout states that the Ali Act is federal law and that it is not governed by the WBO Promotional contract.  His attorneys also claim that that the arbitration would be unreasonable or unjust.  The other overarching argument is that the WBO has waived its right to compel arbitration by litigating the case.

The case, originally filed in state court in New Mexico where Trout resides, has been around for 2 years but due to jurisdictional fights, nothing substantive has happened in the case.  Due to the hurricane that hit the island, there was an additional delay.

You can find the background of the lawsuit in our September 2017 post which includes copies of the Complaint and Amended Complaint.

Payout Perspective:

There’s no timeline as to when the Court might render a ruling on the WBO’s Motion to Dismiss.  But, the overarching issue for fans of the Ali Act Expansion is whether an organization can contract out of the lawsuit.  This means that even if there is a federal law which grants a plaintiff a right to sue, the fact that there is an arbitration clause in the contract may render the claim moot as to a trial and it may (or may not) go forward in arbitration.  There are several layers to consider here as to whether the Ali Act is something that was contemplated as part of a contractual dispute that would go to arbitration.  If it is a part of the contract and the arbitration clause is valid, it would make it easier for organizations to litigate claims.  On the other hand, I have been an advocate for arbitration and/or mediation to resolve Ali Act violations due to the fact that litigation is long and expensive.  You could also bifurcate the claims as to taking the Ali Act to trial while arbitrating any other claims.  The other issue is who would be the trier of fact (i.e., jury, judge or arbitrator).  Also, who would be the arbitrator (a panel or just one individual).  Thinking ahead, if an expansion to the Ali Act takes place, it would be interesting to see if the UFC amends its fighter contracts to institute clauses to limit them to binding arbitration similar to the UFC Anti-Doping Program.  MMA Payout will keep you apprised of this lawsuit.

MPO Year in Review: No. 4 Ali Act Expansion moving forward?

December 31, 2017

Push for the expansion of the Muhammad Ali Boxing Reform Act to combat sports continued this year with another Congressional Subcommittee Hearing.  This time, the questions were pointed specifically about the impact the Ali Act might have on MMA.

In December, Randy Couture, Dr. Kristen Dams-O’Connor, Pennsylvania Athletic Director Greg Sirb and the UFC’s Marc Ratner testified at the hearing.  The most interesting exchange came from the bill’s sponsor Markwayne Mullin and Ratner.  Taking on the appearance of a contentious cross-examination, Ratner was grilled about the UFC and the rankings system.  He also questioned the matchups of certain events including why the UFC allowed Georges St Pierre to get a title shot against Michael Bisping despite coming back from a long absence.

In addition to the hearing, Bellator filed a Statement supporting the Ali Act.  Jon Fitch also filed a statement.  He also authored an op-ed in the Washington Examiner the same day as the hearing.  On the other end, Marc Ratner provided a statement opposing the Ali Act expansion.

Despite talk that Conor McGregor would be willing to testify before Congress, that rumor did not come to fruition.

We will see if there is enough congressional support for Mullin to bring it to a vote before the House or whether there will be a need for more education on the Act before it can move forward.  Thus far, there are 58 co-sponsors for the bill.

Arbitration could determine boxer Trout’s Ali Act claim

December 8, 2017

Although not given enough publicity, the lawsuit filed by Austin Trout against the World Boxing Organization which was moved to U.S. federal court in Puerto Rico continues with the WBO attempting to move the case to arbitration while Trout seeking to maintain it in federal court.

Notably, Trout claims damages for violations of the Muhammad Ali Act, Breach of Contract and Fraud.  The lawsuit was originally filed in November 2015 in New Mexico state court.  It was then removed to New Mexico federal court in February 2016 and then moved for dismissal for improper venue as it argued that the case should be in Puerto Rico where the WBO operates and pursuant to the “Contract Venue Provision” in the contract Trout had with the organization.  Although the Court denied this motion for dismissal, the WBO filed a Motion to Transfer venue to Puerto Rico in August 2016.  In July 2017, the federal court in New Mexico transferred the case to Puerto Rico.

After requesting that the lawsuit be moved to Puerto Rico, the WBO moved to compel arbitration of the matter citing the contract Trout signed with the promotion.  Trout’s attorney argued that the Ali Act claim is based on federal legislation and could not be decided by an arbitration.  It would not be a claim encompassing what was contemplated when resolving a dispute with arbitration.

Trout’s attorneys argue that the WBO never indicated that in its pleadings prior to the Motion to Compel Arbitration that it contemplated moving the case to arbitration.  Arbitration is a form of alternative dispute resolution outside of the court system.  It is decided by one or more arbitrators that renders an arbitration award that is usually binding and cannot be appealed.

The WBO cites Section 35(e) which states that Arbitrations pursuant to the laws of Puerto Rico and the U.S. Arbitration Act is the sole remedy for grievances.  This would be a binding Arbitration which means there would be no means for appeal.

Section 35(e) as cited by the WBO in its briefing:

All WBO participants acknowledge and agree that the mandatory resort to the WBO appeals regulations is the sole and exclusive remedy for any claim, appeal, grievance or contest that arises from any right or status that is or could be subject to these regulations or which result or could result from or relate to the interpretation of application of these regulations. These WBO Grievance Committee determinations are Arbitrations within the contemplation of the arbitration laws of Puerto Rico, 32 LPRA § 3201 et. seq. and the U.S. Arbitration Act, Title 9 of the United States Code and the Inter-American Convention on International Commercial Arbitration of July 30, 1975 and the convention on the recognition and enforcement of Foreign Arbitration Awards, June 10, 1958. All WBO participants stipulate and agree that the nature of the sport requires a prompt, final, and uniform resolution of all disputes concerning application of these regulations by a tribunal experienced with the application of these Regulations and with a special knowledge and experience in world championship professional boxing.

The WBO argues that Trout’s claims “come within the compass of an arbitration clause.”

On November 30th, Trout filed a sur-reply in opposition to the motion.  A sur-reply is an additional reply to a motion filed after the motion has already been fully briefed.  In general, courts frown up these types of briefs because they are not requested by the court and creates more work that many believe is unnecessary.

Nevertheless, the additional brief cites that the contract venue clause contained in the WBO contract governs the forum in the present case and thus should stay in the court system.

The pertinent contract language according to Trout is Section (d).

Section 35(d) of the WBO Championship Regulations states:

These Regulations are to be interpreted in conformity with the Laws of the Commonwealth of Puerto Rico. All WBO participants agree and consent that the exclusive venue for any or all action in which the WBO is made a party, whether it is to enforce, interpret or declare the application of these Regulations or to appeal from any determination of the WBO, including, but not limited to a determination of the Complaints and Grievance Committee, may be maintained only in the Superior Court of the Commonwealth of Puerto Rico, or, if applicable, in the U.S. District Court for the Commonwealth of Puerto Rico.

The WBO advocates that it’s the arbitration clause and not where the case should be litigated governs this issue:

The clauses here are not mutually exclusive. One clause—Section 35(d)—dictates applicable law and a chosen location for possible lawsuits involving WBO, and the other—Section 35(e)—dictates the selected procedure for disputes regarding WBO regulations.

The organization also claims that it has not waived its right to arbitrate.  It contends that there is no trial date and despite the fact that the lawsuit was filed in 2015, the delay in litigation of the case was due to securing proper venue and jurisdiction.  It also argues that the Ali Act violation claimed by Trout is subject to arbitration.

Of course, the argument by Trout’s side is that Section 35 (e) relates to “disputes regarding WBO regulations.”  The Ali Act, according to Trout, is outside the contemplated WBO regulations.  This would be a strong argument to keep it in federal court.

Payout Perspective:

This will be an interesting lawsuit to monitor due to the Ali Act claim.  Trout’s attorneys claim that the WBO had not brought up the issue of moving to compel when moving the jurisdiction and then venue.  But, this argument is not persuasive of whether or not the claims should be arbitrated per the contract.

If the court grants the motion, we could see an arbitration panel deal with an Ali Act claim (barring a motion to dismiss the claim prior to arbitration) and make a final determination on it which might be something of first impression.  The argument that the claims are from federal legislation (i.e., Ali Act) and not related to the WBO Rules is the strongest argument against arbitration.  MMA Payout will continue to follow.

Jon Fitch’s Statement before Congressional Subcommittee supports Ali Act Expansion

November 14, 2017

Former UFC Fighter Jon Fitch submitted a Statement at the Congressional Subcommittee Hearing on MMA as well as an op-ed piece in the Washington Examiner on the day of the hearing.  Each supports the proposed legislation expanding the Ali Act.

The Statement submitted and filed for the Congressional Subcommittee Hearing last week was on MMAFA letterhead.

Fitch’s primary argument is that he was passed over for fights despite being the ranked number 1 contender in the UFC.  He stated that he was criticized for “employing a tactical style” emphasizing his wrestling background rather than fighting in a more “exciting” fashion.

He cites being presented with a merchandising agreement by the promotion which required he give the UFC image rights “in perpetuity and for no compensation” for a video game.  He was released by the UFC for a time due to his refusal to sign the agreement.

Unlike Marc Ratner’s description of the MMA business model, Fitch describes it as a “structurally flawed model inconsistent with sport and designed to achieve a monopoly over an entire sport.”  Fitch gave the anecdote of winning the World Series of Fighting title and then being stripped of the title when “new investors” took over WSOF and it was changed into the Professional Fighters’ League.  He “regained” the title at PFL’s first official event in July.

Fitch goes on to advocate for the amendment to the Ali Act arguing that “sport’s natural growth is stunted” due to the coercive “contractual practices” in the sport.  He cites the lack of disclosure of fight purses by promoters which is required under the Ali Act.  He notes the Chris Algieri situation as a prime example.  We wrote about this in April 2016 and presented the problem with the Ali Act for boxers.

He also stressed that the Ali Act “requires rankings to be based on merit, not contractual subservience.”  Here, Fitch emphasizes the need for objective rankings giving the analogy with Major League Baseball changing the World Series simply based on popularity of team.

In conclusion to his statement, Fitch reiterated the stunting of growth in MMA due to anti-competitive restraints and that when the restraints are removed, “deep-pocketed investors will be made in MMA.”  He believes that the elimination of artificial restraints will cause organic growth benefiting all by increasing revenues for all in the sport.

Similarly, Fitch’s Washington Examiner op-ed was briefer than his Statement to Congress but touched on the same points including the rankings system and the fact that the titles do not matter.  The opinion piece called for sanctioning bodies that would provide the fighter with consistency and ensure that the top contender would have a shot at the title.

Jon Fitch Statement by JASONCRUZ206 on Scribd

Payout Perspective:

Fitch provides the fighters’ perspective of the MMA industry and it is vastly different from that of Ratner’s viewpoint of MMA.  Ratner believes that MMA is devoid of the corruption that plagued boxing which led to the Ali Act.  Fitch sees it differently.  He provides a first-hand account of the issues he knows of in MMA including the issue with the UFC related to the forfeiting of his image rights for the EA video game and giving up his WSOF title when new owners took over.  Certainly, you can point to the fact that neither addresses that he is a plaintiff in an antitrust lawsuit against the UFC which may sway the reader’s view when objectively looking at the opinion.

Ratner’s Statement before Congressional Subcommittee outlines Opposition to Ali Act Expansion

November 13, 2017

The UFC’s Marc Ratner submitted a Statement to the Congressional Subcommittee Hearing on MMA.  The statement opposes the expansion of the Ali Act to combat sports citing issues such as state’s rights and

Ratner, the company’s Senior Vice President of Government and Regulatory Affairs, highlighted his long-time work with boxing and assisting in the passage of the original Ali Act.  He testified about 20 years ago in which he expressed concerns about “conflicts, cronyism, and corruption” in boxing.  He stated that the problems he saw in boxing are “absolutely not present in MMA.”

He highlighted the UFC’s “rags to riches” story of a business that worked its way up from the bottom and did most of the lobbying from state to state by itself, without help from any other MMA organization or promotion.

Ratner emphasized that state regulation works and federal oversight were be an overreach by government.

In addition, he addressed the many mixed martial artists, including female fighters, that have worked themselves into positions where “[d]ozens upon dozens” are millionaires because of the opportunities provided by the UFC.  He also expressed the fact that only a “very small minority of fighters” are supporting this legislation.

Ratner also argued that the reason for the Ali Act was to address corruption in “so-called sanctioning organizations.”  He described these as “privately run businesses that rank fighters for a fee.”  Unlike these boxing sham organizations that either pushed or held back boxers, MMA does not rely on sanctioning organizations.  He cited the UFC rankings which are voted on by sports reporters.  He added, “[w]e put on the fights that fans want to see and they want to see competitive fights.”

He concluded that the proposed legislation would impose boxing’s sanctioning organization model onto MMA.  He claimed that MMA is predictable and transparent in its current state.  He also warned that the growing number of sanctioning organizations in boxing has created a lack of uniformity in the sports and its rankings.

Marc Ratner Statement by JASONCRUZ206 on Scribd

Payout Perspective:

Ratner’s argument against the proposed legislation is plausible based on his viewpoint of the reasons behind the enactment of the original Ali Act.  At this point, the proposed legislation mirrors the Ali Act without any specific differences between the original and the proposed expansion of the law.  The argument that there is nothing wrong with MMA is a bright line view and in comparison to boxing at the time that lawmakers sought to enact the Ali Act might be true.  But, it’s hard to say that just a minority of MMA fighters support the act.  Of course, there are some that do not want to publicly support the Ali Act expansion for concern of repercussions.

Ratner also suggests that the UFC rankings are independent because sports reporters provide the rankings.  Who is it that picks these sports reporters?

His point that numerous sanctioning bodies in boxing creates uncertainty in the rankings is a viable argument.  But does that mean that the expansion of the Ali Act would mean multiple fighter rankings?

The old argument of state’s rights versus federal rights is argued by Ratner as he suggests that state athletic commissions are able to oversee MMA rather than having a federal authority.  It is true that the current system is working, but take the Conor McGregor incident at Bellator 187 as an example.  Who has the authority to oversee McGregor’s actions.  The Association of Boxing Commissions?  Bellator?  The UFC?  The regulatory body overseeing the Bellator event in Dublin?  While state athletic commissions and tribal regulators can enforce actions in its jurisdictions what happens with interstate issues like that of McGregor.

While Ratner provides some arguments against the Ali Act expansion, there are indeed issues in MMA that a federal law can address.  The question is whether this proposed version can do it.

Bellator files Statement on Ali Act for Congressional Hearing

November 12, 2017

Bellator MMA submitted a statement to last week’s Subcommittee Hearing on MMA.  The Statement was written by Tracey Lesetar-Smith, Vice President of Business and Legal Affairs at Viacom Media Networks and supports the expansion of the Ali Act to combat sports.

The statement, which becomes part of the Congressional record on MMA, gives a brief history of the boxing and MMA ecosystems.  Lesetar-Smith states that boxing had a pre-existing, sanctioning-body architecture while MMA “organically developed” under a “league” system.  This is described as a different business model than that of boxing.  Unlike the UFC, Bellator states that it “co-promotes events with smaller domestic local promoters and international fight promoters to enhance [its] events and allow them [local promoters] opportunities to showcase their league talent.

Lesetar-Smith made it clear that boxing and MMA use “multi-year, multi-fight, exclusive promotional contracts” and it is not prohibited in the original Ali Act.  There was a distinction made between these contracts and those “coercive contracts” addressed in the Ali Act.

She explained why the organization uses exclusive contracts.  “Bellator invests a great deal of time, resources, and capital into promoting and marketing each long-term athlete and therefore the exclusivity and duration of each contract reflects a desire to seek a return on investment.”  The multi-fight contracts also allow for Bellator to plan and budget for events in advance.  There is also an “outlay” of money for fighters that they do not immediately recoup.

The Statement notes that the UFC “utilized tactics that made competition in the MMA industry very challenging.”  This has made it a challenge to compete with the UFC.

The “unimpaired movement of skilled athletes to organizations” is one of the primary things that can overturn UFC market share according to Bellator.

Bellator states that it relies upon State and Tribal Athletic Commissions to regulate its events.  However, lack of funding, staff and resources have made regulation a challenge.  Bellator requests that the federal government “advocate for and support the work of these Commissions.”  It also champions the health and safety of its fighters and expressed concerns regarding traumatic brain injury and Chronic Traumatic Encephalopathy (CTE) and pushed for further safeguards.

Bellator Statement in Support of Ali Act by JASONCRUZ206 on Scribd

Payout Perspective:

The issue of fighter safety as it relates to TBI or CTE is not addressed in the proposed legislation although Bellator advocates for it.  The requests that the federal government support further health and safety measures is admirable but it also would mean a budget and allocation of federal spending which may not be feasible in this present economic client.  Whether or not you believe that free agency over time will level the field for which Bellator may catch up to the UFC, it is plausible but may not be possible especially with the mainstream appeal of the brand and its new owners.  Yet, Bellator’s statement is the flip side of the UFC’s position on the Ali Act.  It’s an interesting position but remember, among other key differences between the organizations, Bellator does not rely on PPV revenue as much as the UFC nor does it pay its fighters as much.

Show Money Episode 20 takes a look at the Congressional Hearing on MMA and more

November 12, 2017

Its another episode with Paul Gift and John Nash discussing this past week on the Subcommittee Congressional Hearing on MMA.

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