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.

Hearing on Expansion of Ali Act gets heated

November 9, 2017

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

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

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

h/t @jedigoodman

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

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

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

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

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

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

Payout Perspective:

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

Live Stream: Congressional Hearing on Perspectives on MMA

November 9, 2017

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

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

MMA Payout will have reaction and analysis after the hearing.

Background Memo Produced for Congressional Hearing on MMA set for Thursday

November 8, 2017

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

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

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

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

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

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

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

Among the topics that may be explored at the hearing:

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

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

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

Payout Perspective:

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

Congressional Hearing on MMA set for next week

November 3, 2017

There will be a Congressional Hearing on Mixed Martial Arts on Thursday, November 9th.  The subcommittee on Digital Commerce and Consumer Protection will hear testimony from Randy Couture, the UFC’s Marc Ratner and the Executive Director of the Pennsylvania Athletic Commission Greg Sirb.

Entitled, “Perspectives on Mixed Martial Arts,” it appears the hearing will discuss the Expansion of the Muhammad Ali Boxing Reform Act.

You may recall last December, Couture and others testified at a similar subcommittee hearing which served as a general primer on the issues in mixed martial arts although it did not discuss in detail the legislation proposed by Markwayne Mullin.  Since then, the bill has secured more co-sponsors in support.

Payout Perspective:

Another hearing on MMA, and this time directed to the Ali Act Expansion.  It will be interesting to see the amount of education/information that the testimony will provide.  Moreover, how much will the subcommittees know about the sport and what the law will be applied.  Well, will the people testifying know what the expansion will do.  With the talk about the UFC expanding into boxing (which is a question I hope will come up), we will see the pros and cons of the expansion.

Report indicates McGregor willing to testify in support of Ali Act expansion

September 22, 2017

According to a report from Reuters, Conor McGregor may address the U.S. Congress in support of the expansion of the Muhammad Ali Boxing Reform (aka “Ali Act”) to combat sports.  Congressman Markwayne Mullin, the Oklahoma legislator that is sponsoring the bill told the news outlet.

The Republican congressman indicated that McGregor’s team wanted to come to Capitol Hill to talk about the Ali Act.  There is no date certain for McGregor to speak before Congress nor is there another date for the Ali Act Expansion.

However, supporters of the Ali Act has racked up supporters with 49 congressman, both Republican and Democrat, signing on in support of the bill.

Payout Perspective:

McGregor’s support and possible testimony would lend some positive public relations in support of the legislation.  McGregor, who has indicated that he would like to both box and compete in MMA, could testify about his experiences in both sports and would be able to convey the differences in each since he was in the ring against Floyd Mayweather in August.  McGregor’s experience is different from MMA fighters since he would have been subject to the current Ali Act when boxing but not covered by the Ali Act when competing in MMA.  Will it turn the tide for the bill?  It would provide some more momentum to move this along through the house.

Payout Perspective: The Money Fight

September 4, 2017

Welcome to a special edition of Payout Perspective.  Almost a week later, but we are still talking about The Money Fight that took place August 26th at the T-Mobile Arena.

Mayweather stops McGregor in 10

Floyd Mayweather waited it out.  As most believed, he tested out Conor McGregor for the first couple around before going on the offensive.  Out of the ordinary for the counterpuncher, but Mayweather pressed McGregor and it was clear that the UFC champ was tiring.  Despite not being brought to the canvas, the fight was stopped.  A good call despite McGregor’s post-interview protesting.

Mayweather gets his 50th win against McGregor who takes his first loss of his career.  Of course, it was just McGregor’s first fight.

We should see McGregor back in the Octagon but it’s clear that Mayweather may want to dabble in boxing again.  He wasn’t the worst in there but boxing in MMA is different than boxing.

Attendance and Gate

The fight was not a sellout which was not a surprise leading into the fight.  The astronomical price to see the event without much of an undercard likely was the primary reason for a non-sell out.  Due to the prior disappointment of Mayweather-Pacquiao, the event likely scared the big spenders away.

Payouts

The official payouts from the event had Mayweather earning $100 million not including PPV upside and McGregor getting $30 million.

Attendance and gate

The only thing that may have been a disappointment was the attendance for the event at the T-Mobile Arena. The event drew 14,623 although the gate was yet to be officially announced.  It was thought that due to the high prices the event would have drawn over the $72 million record for May-Pac.  With capacity at 20,000, the event fell way short of capacity but the big financial boon was the $99.95 price tag for the PPVs.

Promotion of the Fight

The 4-city world tour this past July introduced us to The Money Fight.  Maybe the Toronto tour stop was the best and the New York/Brooklyn stop was the worst.  Whatever you thought of it, it was the beginning of a monthlong run-up to the fight.

There were tons of promotion around the event including Showtime All Access and UFC’s Embedded Episodes.  At times, it appeared that each show favored its own boxer.  As always, this shoulder programming always interests me.

Saturday Night Live did a skit during its prime time Weekend Update the week before the fight.  The skit featured someone pretending to be Conor McGregor.  It was a bad impression.

Television Ratings

The Prelims to Mayweather-McGregor on Fox peaked at 3.1 million viewers and averaged 2,568,000 viewers.   It drew an outstanding 1,156,000 viewers in the A18-49 demo.

Other associated ratings:

  • Mayweather-McGregor Prefight Show 1,463,000
  • Mayweather-McGregor Postfight Show 368,000
  • Mayweather-McGregor Weigh-In 287,000
  • PBC on FS1 drew 269,000 viewers on Friday night.

PPV estimates

Dana White proclaimed that the event drew 6.5 million buys.  Showtime stated that the fight sold between 4 and 5 million buys.  Other reports stated that the initial estimates did not break the 4.6 million record of Mayweather-Pacquiao.  ESPN noted that an estimated 50 million people saw the event.

The PPV estimates will not come in until this week but Showtime’s Stephen Espinoza claims it was a “massive financial success.”  This seems like an understatement based on the numbers.

Espinoza noted in a New York Times article that 10 to 12 percent of the total buys were through a digital service.  We note the tech difficulties those users had below.

Technical Difficulties

Due to the high demand, people reported issues with their streaming of the event.  The Showtime App, UFC.tv and Fight Pass were the main culprits with issues although other ways to purchase the PPV had problems.

Showtime issued a “limited number” of refunds.  Espinoza seemed to minimize the affect the technical difficulties had claiming that they were “definitely exaggerated.”  However, the first lawsuit filed over not being able to watch the event was filed in Oregon over futile attempts to watch the vent on the Showtime App.

The fight was delayed 20 minutes to accommodate for the technical difficulties but those paying $99.95 shut out of the telecast.

The UFC did not immediately state they would issue refunds, but upon meeting with its vendor, noted that it would issue refunds for those that had issues on the UFC.tv/Fight Pass app.

The Las Vegas Review-Journal noted that the PPV issues “appeared to come from a surge of late purchase and connectivity issues.”

Related?  The UFC announced less than a week later that FITE.TV would become the UFC’s new online streaming partner.  No official word, if NeuLion is out altogether with the UFC.

Sponsors

Corona was the main sponsor for The Money Fight.  Notably, this was not rolled out until a week or so prior to the fight.  One would have thought that the sponsorship for the event would have been announced much sooner.  In addition, Body Armor was very visible during the event as “towels and stools in the fighters’ corners had the Body Armor logo on it.  Also, fighters took their hydration from Body Armor bottles.  Also, Wish Shopping made a big splash with signage on the mats and on the weigh-in scale.

McGregor wore irish flag-inspired Beats By Dre headphones for the weigh-ins.  The company also released an ad starring McGregor on August 23rd.  McGregor signed a sponsor deal with Online betting site, Betsafe.

Odds and Ends

There were tons of newsy items coming out of this event and we couldn’t get them all in.  I wrote a preview on many of the issues including the commission agreeing to the glove change and Zuffa signing on as a co-promoter here.

While the PPV estimates may break records, Showtime had to deal with pirates using Periscope.  While Showtime obtained an injunction to stop some sites, it could not stop private users.  A tech security company claimed that almost 3 million viewers watched pirated streams.

Conor McGregor’s flip up sunglasses during the promotion of this fight were reminiscent of Dwayne Wayne’s.

Conor McGregor announced the roll-out of his first foray into the whisky business:

Floyd Mayweather introduced TMT-themed apparel for this event including one with the Irish Flag colors on a TMT shirt. He also had an assortment of mouthguards.  Iceberg Guards is selling a replica guard of the one he wore during The Money Fight for $295.00.

Gervonta Davis drew 100,000 google searches on Fight Night mainly due to his headgear coming out during the walkout.  Davis won, but drew the ire of some fans since he didn’t make weight.

While the Mayweather/McGregor announcement overshadowed the rematch between Andre Ward and Sergey Kovalev this past June, Top Rank attempted to take advantage of the assembled media in Vegas by announcing a deal with ESPN that would include providing the company with the Top Rank fight library for an upcoming Disney-OTT platform.

ESPN showed old Mayweather fights where analysts talked about how he was such a pro and a likeable guy.  How times have changed.  The UFC also aired his fight with Maidana on UFC online to help promote the fight.

Although there was much publicity for this fight, the Miguel Cotto fight in Carson, California on the same night drew 730,000 viewers on HBO which is very good considering it was overshadowed by The Money Fight.

Mayweather and McGregor did the standard media appearances including on Jimmy Kimmel.

There were over 10 million google searches for the “Mayweather vs. McGregor Fight,” and 10 million google searches for “Mayweather.”

Conclusion

Usually we predict a buy rate, but with the news that it’s likely between 4 and 5 million PPV buys, we don’t have to conclude that this fight was a success.  The only question will be whether the buys passed the 4.6 million PPV record.  Whether or not it did, this fight was impressive in how it was marketed and promoted.  The UFC helped its brand with its involvement in the event and Mayweather made money as he always seems to do.  Will we see more crossover fights in the future?  Only if it is big names and promises to bring in big numbers.

Boxer Austin Trout files lawsuit against WBO citing Ali Act violations

September 1, 2017

Boxer Austin Trout has filed a lawsuit against the World Boxing Organization citing violations of the Muhammad Ali Boxing Reform Act.  It is the first lawsuit citing the Ali Act in several years.

The case originally was filed in the federal district court of New Mexico as that is where Trout resides.  The original complaint, filed in February 2016, did not include a claim under the Ali Act, instead includes allegations of Unfair Trade Practices pursuant to the local rules in the state of New Mexico, Fraud and request for Injunctive Relief.  Trout’s essential claim was that he was a highly ranked boxer that should have received a title shot but he was dropped in the rankings for what appears to be no apparent reason.  A boxer that was previously ranked below him was given a title shot.  According to Trout, it was because the promoter gave financial incentive to the WBO.  He also claims that the WBO “solicited and accepted financial remuneration from promoters and/or managers to fix ratings.”  Upon request of the reason why Trout fell in the rankings, he was not provided a response.

Attached to their original complaint was a “Show Cause” letter from the WBO to then Junior Middleweight Champion Demetrius Andrade, why the title should not be vacated due to lack of activity.  Andrade vacated the title and Trout believed that he was due a shot at the vacant belt since he was highly ranked.  However, he was not given the shot and, in fact, dropped from the rankings.  Attached in the documents is correspondence inquiring the reasons for his disappearance in the rankings.

Original Complaint by JASONCRUZ206 on Scribd

The WBO moved the case to Puerto Rico and attempted to dismiss the lawsuit. The lawsuit was moved to the federal district of Puerto Rico where Trout’s lawyers amended the case to include the Ali Act violation, breach of contract and fraud. They claim the requisite statutory damages and attorney fees and costs which would total $40 million.

Amended Complaint by JASONCRUZ206 on Scribd

Payout Perspective:

This will be an interesting test of the Ali Act as there has not been a lawsuit in some time where this has been claimed.  I took a look at this a couple years ago.  For those that want to see MMA expand to the Ali Act, we shall see how this plays out.  The claim relates to the lack of a rankings system to justify championship fights.  Certainly, the UFC has not followed its own rankings and current fighters could make such a grievance against the company.  It is likely that a Motion to Dismiss the Amended Complaint which was filed earlier this will transpire prior to the litigation of the lawsuit on the merits. MMA Payout will keep you posted

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