New UFC Antitrust Lawsuit filings include Plaintiffs’ Objection to Use of Zuffa “Summary of Exhibits”

June 15, 2019

The parties in the UFC Antitrust Lawsuit have exchanged objections to exhibits previously submitted to each side.  The objections are part of the trial schedule and are lodged with the court to argue prior to the use at August’s hearing with the experts.

For context on the request, Plaintiffs included the email to Zuffa attorneys in which they inquire about the exhibits that they seek to now exclude.  Plaintiffs claim that the exhibits are “creating new metrics for analyzing the data (e.g., “Fighter Share Deviations,” Foreclosure Share Deviations,” etc.) or breaking down data in ways that neither Zuffa nor its experts has/have ever before done in this case.”

Exhibit to Plaintiffs’ … by on Scribd

Plaintiffs have objected to exhibits submitted by Zuffa which are “Summary of Exhibits.”  The argument relates to expert materials which they claim are “outside the scope of the record created by Zuffa’s economists during expert discovery.”  As explained by Plaintiffs, they are “undisclosed consultants” with new analyses and cannot form the basis of Zuffa’s expert presentation.

Plaintiffs argue that the exhibits that Zuffa would like to use include new information that they did not have possession of for their experts to render an analysis and opinion.  This would be untimely and not according to the evidentiary rules per Plaintiffs.  The reasoning behind this rule is to give each side a fair opportunity to evaluate the opposing expert’s position and prepare accordingly.  Plaintiffs contend that the information should have been provided in a “timely written report” but they did not provide the report to them per the rules of the Court. Plaintiff points to the expert discovery deadline on January 24, 2018.

Payout Perspective:

Zuffa also objected to certain exhibits provided by Plaintiffs for use and we will look at that in another post.  In this submission by Plaintiffs, they claim that Zuffa has attempted to submit new information to utilize at the hearing of the experts in late August.  Plaintiffs object because of the overarching belief that it is an unfair surprise in that they do not have an opportunity to rebut the new information.  Plaintiffs point to the expert deadline to submit reports as a reason why they are seeking to have these exhibits excluded.  If excluded by the Court, this could cause significant impact to Plaintiffs case.  Of course, its anticipated that Zuffa will argue that the information is not new expert testimony and just a summary of findings already provided to Plaintiffs.

Endeavor files paperwork for IPO

May 23, 2019

Endeavor, the company that currently owns the UFC, has filed paperwork with the Securities and Exchange Commission to become a publicly traded company on the New York Stock Exchange.

Endeavor states that it plans to raise $100 million in the offering which is a standard figure for companies until it provides an actual figure at a later date.  Proceeds from the company receives from this offering will go towards working capital and general corporate purposes.

According to the S-1 filed today, it reported revenue of $3.6 billion.  The company posted a net income of $231.3 million in the year ended December 31, 2018.

Endeavor is the combination of Ari Emmanuel’s company with Patrick Whitesell’s IMG sports and modeling agency in 2013.

According to the filing, Goldman Sachs will be the IPO’s lead banker.  KKR Capital Markets, J.P. Morgan, Morgan Stanley and Deutsche Bank are also underwriters on the IPO.

Zuffa is included in the voluminous S-1 statement.  It includes information on its finances, debt as well as information on the UFC antitrust lawsuit as a potential liability.

MMA Payout will take a look and provide a further in-depth analysis of the S-1.  But, as for now, it looks like the UFC may be a part of a publicly-traded company in the near future.  How does it affect its business?  We will see.

Proposed dates for further UFC Antitrust hearings won’t happen until August or September

January 21, 2019

If you were hoping for a resolution to the UFC Antitrust Lawsuit in 2019, we have some bad news for you.  It’s unlikely to happen.

A letter filed by the plaintiffs on Friday indicates that both sides won’t make an appearance in the courtroom until this fall.

Letter Re Scheduling by on Scribd

In December, Zuffa filed its Motion for Summary Judgment but prior to any decision, the Judge wanted to understand more of the information offered by the experts, specificially plaintiffs’ expert, Hal Singer.  The parties were to meet and confer on available dates.

As one might expect, lawyer calendars (as well as the Court’s) are packed.  Thus, the first available scheduling option proposed is for August 26-30, 2019 with Dr. Singer and UFC’s expert, Dr. Topel.  In the alternative, they proposed an evidentiary hearing which would start September 9th or 16th.

Payout Perspective:

Clearly, the Court moves at a glacial (without global warming) pace.  Clearing schedules for attorneys, the Court and the experts is quite hard and if you thought this was going to end this year, you (and I) were wrong.  Even with these hearings, there are the prospects of renewed motion for summary judgments and the class certification hearing (to determine if the case deserves class action status).  MMA Payout will keep you posted.

MMA Payout Year in Review: No. 10 – The UFC Antitrust Lawsuit rolls on

December 26, 2018

MMA Payout is doing its annual review of top business stories for the year.  The first story we take a look at is the ongoing Antitrust lawsuit which had several key developments this year.

First, Judge Boulware denied Zuffa’s Motion for Summary Judgment on Friday, December 14th.  It did not decide on class certification on the day as the Court made it clear it wanted to hear from the experts in the case for him to determine if there was a viable case on the part of the Plaintiffs.

Earlier this year, experts for Plaintiffs and Zuffa issued the experts reports in this case.  The reports assessed things such as the liability of Zuffa and potential damages.  Zuffa, of course, shot down these arguments asserted by Plaintiffs’ experts.  They, then filed a motion to exclude Plaintiffs’ expert citing (in general) that the opinions did not follow traditional scientific opinions.  A bulk of the reports were sealed as the experts reviewed confidential information.

Plaintiffs also filed for Class Certification, a requisite of Class Action status.  Zuffa opposed the motion.  At this time, this motion is on hold pending Judge Boulware hearing more on the subject from the experts.

As discussed about on Show Money in December, it appears that the lawsuit will come down to Plaintiffs’ expert’s assertion that the way to determine antitrust injury is based on “wage share” versus “wage level.” Wage share, adopted by Plaintiffs’ is looking at the wages of athletes in comparison with the revenues of the company.  Wage level, adopted by Zuffa, is looking at the wages over a period of time and not in comparison with company revenues.  Clearly, a wage share outlook would favor Plaintiffs if they are asserting that their salaries have been artificially depressed due to anticompetitive measures by Zuffa.  Wage level would favor Zuffa since its clear that salaries have increased over time.

Payout Perspective:

Do not look for the resolution of this case in 2019.  Even if Judge Boulware were to dismiss this case, Plaintiffs would seek to appeal the decision.  Zuffa would do the same if there would be an unfavorable ruling for its case.  The only way this case would end in 2019 is if the parties decided to settle the issue short of trial.  While this would be out of the question, if the Judge were to impose his will on the parties to settle, I would foresee this happening.

Show Money Episode 25: The Vegas Field Trip and Uncle Dana reveals some numbers

December 21, 2018

I joined John Nash and Paul Gift to talk about their coverage of the UFC Antitrust Hearing on December 14th and discuss the Kevin Iole piece in which Dana White revealed salaries and PPV buys.  Enjoy.

You can find the audio here.

 

One last motion before the Class Cert-Summary Judgment hearing in the UFC Antitrust Lawsuit

December 13, 2018

In light of Friday’s big hearing in the Zuffa Antitrust lawsuit in Federal court in Nevada, the parties have filed a joint motion to stipulate how they will deal with references to trade secret or confidential information.

The joint motion was filed on Thursday and is agreed to by the parties.  It’s unlikely that the Court will disturb the agreement.  The parties believed the agreement was necessary as the Protective Order which dictates how to deal with confidential information does not address hearings.

Parties for the Plaintiffs that have filed an Antitrust lawsuit against Zuffa will argue for Class Action status while Zuffa has a Motion for Summary Judgment which may dismiss the case in full on Friday in Federal District Court in Nevada.

It does appear that Plaintiffs reluctantly joined in on the motion as the overarching issue deals with the mention of documents Zuffa believes are confidential and/or trade secret.  A motion to seal is pending before the court.

Joint Motion by on Scribd

 

Payout Perspective:

Both parties had a chance to provide statements to the Court in this Joint Motion.  The Plaintiffs cited Kevin Iole’s Yahoo story from Wednesday in which Dana White gave him the payouts of Chuck Liddell since 2011.  This would seem to run contrary to the claim that Zuffa salaries should be confidential.

The Court could rule on the Motion to Seal documents that were fought over during the pleading process but it has yet to do so.  Tomorrow will be a big day because not since the Motion to Dismiss will this case hinge upon being dismissed.

Court in UFC Antitrust Lawsuit decline legal “hot-tub”

December 2, 2018

The Court in the UFC Antitrust lawsuit has ruled that there not be an evidentiary hearing on the admissibility of expert reports and testimony prior to the December 14th Motion for Summary Judgment and Class Certification hearing.

The Court issued a Minute Order late last week:

The Court has considered the Request [ECF No. [617]] for an evidentiary hearing. The Court DENIES this request at this time. The Court will the hear arguments of counsel and make a determination at the hearing on December 14, 2018 whether an evidentiary hearing is necessary to decide the Motion To Certify [ECF No. [518]].

As we explained in this post, the hearing requested by Zuffa was to determine expert testimony and the admissibility of the same.  The Plaintiffs argued that Zuffa was asking for a reconsideration of a evidentiary hearing to determine the expert testimony.  As Plaintiffs point out, the Motion to Certify the Class occurs on December 14th and would require a delay in that decision if they were to entertain such a hearing.

Payout Perspective:

A minor victory for the Plaintiffs here as it does not have to prepare for another hearing in this lawsuit.  It also prevents a determination on the evidence prior to the class certification hearing.  While the Court may still request an evidentiary hearing at some point, it saw no reason to do it prior to next Friday’s big day.  One might take this as good news for Plaintiffs if you think that the Court was concerned about the information that it needed another day to decide the evidence in this case.  Of course, the court’s calendar could be so full, there was just not enough time to slot it in before the 14th.  MMA Payout will keep you posted.

Plaintiffs in UFC Antitrust Lawsuit try to avoid “hot tubbing”

November 16, 2018

Plaintiffs in the UFC Antitrust lawsuit have filed a letter to the Court arguing that there should not be an evidentiary hearing on expert testimony.  The legal slang of “hot tubbing” where “concurrent expert evidence” is being offered and heard by the court at the same time.

Letter November 16 by on Scribd

Plaintiffs see a request by Zuffa to hold an evidentiary hearing regarding the expert testimony as an end-around to exclude expert testimony.  The Court denied Zuffa’s Daubert motions without prejudice in late September per Plaintiffs. It’s the position of Plaintiffs that this is a way to ask for the Court to reconsider at this late date.  Plaintiffs also argues that the format of each side presenting its experts on direct and then cross examines the other side would take multiple days.  Notably, this would run into the rescheduled date for the Motion for Summary Judgment of Friday, December 14, 2018.  It would most certainly delay the hearing date once again if the Court were to entertain the hearings.

There is also the argument that evidentiary hearings on class certification are not required.  Plaintiffs cite cases where the Court suggests that evidentiary hearings for these types of complex cases are unnecessary.  Finally, Plaintiffs also argue that evidentiary hearings for summary judgment almost never happen and there’s no extraordinary reason brought up by Zuffa why one should take place now.

Notably, “hot tubbing” is not prohibited, but its not specifically addressed.  There are various opinions on its use and affect.  Judges have wide latitude when it comes to admitting expert witness testimony.  Of the factors a court may consider, the most important tends to be whether or not the testimony is a waste of the court’s time.

Payout Perspective:

And we are now introduced to the term of “hot tubbing” which is a term that originates from Australia according to some research.  It’s the “battle of the experts” and the purpose seems to be a way to flesh out some of the theories asserted by the parties in hopes of scaling down the arguments for the court at trial.  Plaintiffs believe that Zuffa is asking for this type of hearing as either a second bite at attempting to exclude their experts or stall.  I would think that it’s the former rather than the latter.  Zuffa likely believes that if they can knock out some of Plaintiffs experts, there will be little left of Plaintiffs claims.  MMA Payout will keep you posted.

ShowMoney talks UFC Antitrust Lawsuit and ONE business

November 14, 2018

Show Money is back once again as I discuss the business of MMA with Bloody Elbow’s John Nash and Paul Gift (also of Forbes).

This show’s topics includes the upcoming Motion for Summary Judgment in the UFC Antitrust Lawsuit and the business moves made by ONE Championship.

Zuffa files Reply Brief supporting its right to seal docs in Antitrust case

October 29, 2018

In its latest filing, Zuffa has filed its reply in support of its motion to seal parts of the opposition brief filed by the plaintiffs in response to the company’s motion for summary judgment in the Antitrust lawsuit.

Zuffa filed a Motion to Seal certain documents that are being used in support of its Motion for Summary Judgment.  The promotion included justifications for sealing each of the documents it requests.

Zuffa Motion to Seal by on Scribd

Plaintiffs argue that the documents are not commercially sensitive information.  In its brief, Plaintiffs cite testimony from Zuffa’s attorney Michael Mersch about a hypothetical contract, testimony related to Lorenzo Fertitta’s deposition concerning financial information and wage share.  Plaintiffs argue that there is no confidential information contained in the testimony sought to be sealed. Zuffa also requests portions of expert reports to be redacted.  This includes plaintiffs’ expert report from Hal Singer and its own expert Robert Topel.

Plaintiffs Opposition by on Scribd

Perhaps one of the more salient arguments in Plaintiffs argument is that many of the passages that Zuffa seeks to redact are old.  Essentially, the information that Zuffa seeks to seal are remnants of the past and do not contain trade secrets because they no longer contain information that is subject to the current business landscape.

The Reply is its response to the Plaintiffs’ seeking to unseal certain documents filed in support of the brief filed by the fighters suing Zuffa. Plaintiffs’ opposed the motion for summary judgment filed by Zuffa seeking to dismiss the fighters’ claims against the promotion.  But, although Zuffa has unsealed and unredacted certain documents, there still remains a giant portion still unavailable for viewing.

Zuffa Reply ISO Motion to Seal by on Scribd

In its Reply Brief it reaffirms that it properly identified documents that it was sealing and met the legal burden for documents needed to preclude.

Additionally, they claim that the documents sought to seal are specific and would pose competitive harm to the company as they would divulge confidential business information and strategy.  Zuffa also rejects Plaintiffs argument that the information sought to seal is old and already public knowledge.

The Court will decide whether Zuffa carries its burden to show that the records it seeks to seal “articulate compelling reasons supported by specific factual findings,” providing ‘articulable facts’ that favor secrecy and that those interests outweigh the presumption of public access to judicial records.

While it has been underscored in this briefing, the right of access by the media is a viable argument for the Court to look at the sealing of documents critically.  The Reply includes several tweets from John Nash and articles for Paul Gift which discuss the Zuffa antitrust lawsuit.  Certainly, the attorneys have taken just a survey of the reporting going on here as media here is just an afterthought from both legal sides.

The recent reversal in ruling in the Hunt-Zuffa lawsuit which sealed Bout Agreements.  In the Order which granted the sealing of documents, the Court stated, “[D]efendants claim that the agreements contain proprietary information, and that competitive standing with MMA promoters.  The court finds that defendants have identified compelling reasons that warrant sealing the exhibits…”  This does not seem compelling at all.

How will this all shake out?  If you take the Hunt ruling into consideration, it would seem that despite the “compelling” standard for sealing documents, the Courts skew toward finding any excuse to seal a document.

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