Zuffa files its Motion for Summary Judgment against former fighters in the UFC Antitrust Lawsuit

July 31, 2018

On Monday, Zuffa filed its Motion for Summary Judgment against the Plaintiffs in the UFC Antitrust lawsuit.  The filing argues that despite the lengthy and voluminous amount of discovery taken place, the former fighters have not provided factual evidence to support their antitrust claims.  It also argues that the expert opinion of the Plaintiffs should be excluded, and if not, they do not set forth evidence to establish a market, examine the correct wage comparison exhibiting losses and show causal injury.

Zuffa notes that it has filed Daubert motions which seek to exclude the testimony from Plaintiffs’ two economic experts.  If the court grants those motions, Plaintiffs will not have evidence of market definition, causation or damages.  Even without the court granting those motions, Zuffa argues that Plaintiffs’ allegations for monopolization and monopsonization must fail.  Zuffa argues that based on the testimony from rival organizations such as Bellator, PFL, OneFC and ACB that none had issues securing fighters and thus had the necessary inputs to compete.  The company argues that Plaintiffs changed its alleged “scheme” and omitted any monopoly claims.  The new theory is comprised of a “free floating” monopoly “broth” which comprises different allegations and Zuffa argues that the claims fail due to the lack of a sufficient input or output market.

Zuffa cites to the ruling in the Golden Boy-Al Haymon lawsuit in which Haymon won on summary judgment.  Essentially, Zuffa contends “Plaintiffs have not met their burden of proving an input market of buyers (where Zuffa competes with other promoters to acquire athletes’ service) or an output market of sellers (where Zuffa competes to offer sports entertainment to viewers).”

The motion attempts to poke holes at Dr. Hal Singer’s findings in its expert report supporting the former fighters’ argument for an “Elite MMA Fighter” market.  Zuffa argues, “Dr. Singer has not even attempted to define a market using the accept SSNIP [Significant Non-transitory Increase in Prices] test because he has not defined buying promoters to whom a price decrease by a monopsonist would cause a shift in business.”  It once again cites to the Golden Boy-Haymon opinion for the example where a product market for “Championship-Caliber Boxers” is not sustainable where expert fails “to analyze the qualifications or backgrounds of the current managers in the market.”  Zuffa states, “Dr. Singer merely uses the ranking data combined with his own subjective analysis to include or exclude athletes rather than promoters.”

Zuffa goes on to argue Dr. Singer’s definition of the output markets stating that the proper market definition is broader than just MMA and his expert opinion does not consider the reasonable substitutes.

In arguing that the court dismiss its Monopsonization Claim, Zuffa argues that the testimony from competing MMA promoters have access to the inputs needed to compete refutes the monopsony claim that the promotion is a “monopsony purchaser of athletes’ services.”

Zuffa brings across multiple examples of its promoters thriving despite it being a competitor in the same market.  Bellator’s recent “nine-figure deal” with DAZN to produce 22 annual events is used as evidence to argue that other promotions do not have barriers to entry.  They also cite to PFL’s recent deal with NBC Sports and One Championship’s boast that it broadcasts to “1.7 billion potential viewers across 138 countries.”

Scott Coker’s deposition testimony is quoted in the motion stating, “there’s not going to be a free agent fighter that Bellator can’t affor or have access to” to support the claim that other promotions are comparable to the UFC.

In addition, Zuffa claims that Plaintiffs have failed to evaluate the effect of the challenged conduct on actual compensation levels.  It claims that actual compensation for fighters rose during the Class Period in question.  This goes back to the overarching theme of “wage share” versus “wage level.”  Wage share is the total compensation as a percentage of relevant revenues whereas wage level are the actual wages. Here, Zuffa argues that wage share is an unacceptable measure of anticompetitive conduct because it would have the “practical effect of stifling companies’ innovation and investments for fear of incurring treble damages liability based on a lower than average wage share.”

One of the interesting arguments made by Zuffa is that it did not engage in exclusionary anticompetive conduct.  It claims it did not engage in “predatory hiring,” which is the hiring of talent for purposes of keeping them away form a competitor.  The motion denies that the UFC signed Gilbert Melendez and Antonio Rogerio Nogueira to prevent them from leaving for another organization as claimed by Plaintiffs.  It also mentions the “benching” (i.e., “forced periods of inactivity”) of three UFC athletes: Andrei Arlovski, Roger Huerta and another fighter which is redacted.

The motion also argues that Plaintiffs did not prove that Zuffa’s Exclusive Contracts Foreclose a “Substantial Share of Competition.”  Zuffa claims that Plaintiffs contention that the company’s 30-month exclusive fighter contract (including the right to match period) is illegal is wrong.  “Contrary to Dr. Singer’s assertion that 30-month exclusive contracts are unlawful, courts have routinely held that exclusive contracts even up to six years are not anticompetitive so long as there is sufficient opportunity to compete for each contract at the time it is signed.”

Motion for Summary Judgment by JASONCRUZ206 on Scribd

Payout Perspective:

MMA Payout will continue to examine this motion as we have yet to talk about the plethora of exhibits which were attached to support it.  The arguments are similar to the ones made at the outset with its motion to dismiss. Zuffa’s introductory section which explains its success based on taking risks on the industry, its investment and its business acumen to get where it is today.

Zuffa stresses the competition in its motion utilizing evidence from testimony of its competitors to show that they are competing with the UFC and in certain instances have had no issues in attaining athletes similarly sought by the promotion.  This would seem to contradict the Plaintiffs argument that it had a monopsony over the market for “Elite Professional MMA Fighter services.”  As for its monopoly claim, Zuffa states the plaintiffs have conceded this claim based on inferences from prior pleadings.

Although it notes it is moving to exclude Plaintiffs’ expert, Hal Singer, it takes direct aim in rebutting his analysis which supports the claims made by the former UFC athletes.  It argues that they have wrongly identified the input or output market by attempting to define the market by the athletes and not by the MMA promoter.

Plaintiffs will have an opportunity to respond in the coming weeks and MMA Payout will keep you posted.

Plaintiffs in UFC Antitrust lawsuit file opposition in light of U.S. Supreme Court ruling

July 12, 2018

Earlier this week, the plaintiffs in the UFC Antitrust Lawsuit have filed a response in opposition to Zuffa’s motion seeking to file supplemental authority to support its Motion to Exclude Plaintiffs’ expert Dr. Hal Singer.

Zuffa is seeking to include the recent U.S. Supreme Court Decision in Ohio v. American Express in support of its Motion to Exclude which was filed at the beginning of May.  The U.S. Supreme Court issued its opinion on June 25, 2018.

Zuffa filed a motion requesting the opportunity to file supplemental authority on July 5th.  It explains the reason why it would like the Court to consider the case:

The Supreme Court decided Ohio v. American Express Co., — S. Ct. –, 2018 WL 3096305 on June 25, 2018. As explained in Zuffa’s proposed Notice of Supplemental Authority, this decision clarified that in light of the procompetitive benefits of certain vertical restraints, a plaintiff must define a relevant market to evaluate the anticompetitive effect of an alleged vertical restraint even when using direct evidence. Id. *8 n.7. Plaintiffs argue in their Opposition to the Singer Daubert motion that defining a relevant market is unnecessary when evidence of direct effects on compensation is presented. Accordingly, Amex will inform this Court’s decision on whether to grant Zuffa’s Motion to Exclude the testimony of Dr. Singer in light of this new development in the law that affects the currently pending motion. Plaintiffs are not prejudiced by this filing, as this additional legal authority was unavailable prior to the Daubert briefing, Plaintiffs will receive timely notice through this filing, and Zuffa has not delayed in presenting this authority to the Court or Plaintiffs.

Plaintiffs argue in their opposition brief that Dr. Singer has defined the relevant markets and applies them to his opinion.

Plaintiffs Response in Opposition to Zuffa’s Motion to File Supplemental Authority by JASONCRUZ206 on Scribd

Dr. Singer was retained by the Plaintiffs as an expert economist to opine, in part, that the compensation of all proposed class members is adversely affected by the UFC’s anticompetitive practices.  He also to identify the relevant markets in which this occurs.

The Supreme Court case is detailed here. In a 5-4 decision in favor of American Express, the Court determined that Amex’s anti-steering policies did not violate antitrust law.  The case specifically involves policies set by some credit card banks that prevented merchants from steering customers to use cards from other issuers with lower transaction fees, forcing merchants to pay higher transaction fees to the banks.  The case was based on the relationship between antitrust law and two-sided markets.  Thus, you might infer the parallels with the UFC case where the issue of the defining markets are being challenged.

The court in the UFC lawsuit may or may not take the AmEx case into consideration but Zuffa had a right to file the motion and the Plaintiffs had an opportunity to advise why it did not apply in this case.  MMA Payout will keep you posted.

Parties file joint motion on Michael Mersch depo testimony in Zuffa Antitrust Lawsuit

July 1, 2018

This past Friday, Plaintiffs a joint motion in the UFC Antitrust lawsuit filed a Motion to Seal Reply In Support of Its Motion to Seal Plaintiffs’ Class Certification Reply.  The motion, which includes both plaintiffs and defendants’ position seeks to seal certain deposition testimony from Michael Mersch as well as certain confidential information from his deposition.

Zuffa points out that the motion to seal is based on what’s included in its Reply Brief and unrelated to the merits of the case.  Zuffa is requesting to seal information in Mersch’s deposition testimony regarding the purse information of a UFC athlete based on privacy concerns expressed to Mersch.  It claims that evidentiary objections made by Plaintiffs are improper.

Plaintiff asserts that Zuffa has failed to meet its burden to seal portions of the Mersch deposition.  They believe that the earnings that fighters receive and Zuffa’s strategy of preventing its fighters from learning what others maker are not compelling reasons or good cause to seal the information.  The overarching argument is that there is no legal argument for the sealing of the information and the information (i.e., purse information) has been disclosed publicly by other sources.  Moreover, Plaintiffs argue that the information sought to seal is four years old and would have no trade secret value in present day.

Joint Motion Re Motion to Seal by JASONCRUZ206 on Scribd

Payout Perspective:

It would seem that the parties are making more of a battle over sealed information.  The payouts appear to be over two fighters if you infer from the exhibits attached to this joint motion.  Wikipedia pages are attached regarding payouts for UFC heavyweights Ben Rothwell and Alistair Overeem. The declaration of the Plaintiff’s attorney states as much.  Clearly, Zuffa wants to seal the testimony because they believe there is something there that might influence the Court or is previously not publicly disclosed.  Plaintiffs would like this information unsealed because they believe it would be useful.

Plaintiffs in UFC Antitrust Lawsuit oppose sealing of documents

June 19, 2018

Plaintiffs in the UFC Antitrust Lawsuit are opposing a Motion to Seal brought by Zuffa to seal documents in Plaintiffs’ Motion to Seal Plaintiffs’ Reply in Support of Motion to Certify Class and Related Materials.  The opposition is the first in this litigation which has gone without any challenges to the redaction and/or sealing of documents.

Plaintiffs’ Opposition to Motion to Seal by JASONCRUZ206 on Scribd


Plaintiffs cite 4 points why the Court should deny Zuffa’s Motion to Seal:

  • The materials Zuffa seeks to seal are not trade secrets, but rather largely, outdated aggregate data, and Zuffa would suffer no competitive harm if they were disclosed;
  • Zuffa’s justifications for sealing do not satisfy the applicable “compelling reasons” standard;
  • The right of the public, the press, the named Plaintiffs, and Class members to access judicial materials is especially robust….; and
  • Zuffa is attempting to gain an advantage by overdesignating materials that support Plaintiffs’ claims and their motion for class certification, when Zuffa has selectively revealed similar information that served Zuffa’s purposes.

Plaintiffs argue that Zuffa’s claim that redacting certain section of its documents “could permit..competitors to gain unfair insights into Zuffa’s strategic business practices and gain an unearned advantage in competition” is a red herring.  It contends that it is sealing information to control the flow of information to the public, the press, the named Plaintiffs’ and the class members, and prevent Plaintiffs from telling their side of the story to the public.  It’s not that its protecting its trade secrets argues plaintiffs it is concerned about the public learning about its misconduct.

Focusing on the issue of unsealing documents for the media, John Nash of Bloody Elbow sent correspondence to the Judge Richard Boulware requesting access to certain documents including portions of the expert reports that were redacted. Nash pointed out inconsistencies with what was being redacted, withheld for public consumption with what was allegedly trade secrets.  Zuffa’s counsel responded to the letter indicating that the likes of Nash, Paul Gift and yours truly had ample information to pontificate on the subject.  It claimed that the information sealed was trade secrets and precluded from public consumption.  Zuffa argued that the right to access of pleadings was not absolute.  Nash responded with a detailed letter outlining the reasons why certain sections should not be redacted.  The letter also cites a federal court judge order from last month in which it sanctioned attorneys for frivolous motions to seal.  The pertinent section that is applicable is as follows with emphasis being ours:

At the hearing on the order to show cause, there was discussion of the fact that attorneys – particularly attorneys for corporate clients – are under great pressure to file motions to seal information that their clients would prefer to keep secret, even if there is no legitimate basis to keep the information secret. This is no doubt a significant issue for corporate lawyers, but the answer is not to file frivolous sealing requests. The answer is to firmly explain to their clients that litigation is a public process, and that the public has the right to know what the litigation is about, subject only to very limited exceptions. Mere embarrassment to a corporation is not one of those exceptions

In that case, the Judge fined the law firm filing frivolous sealing requests $500 per lawyer involved (which was 5) for a total of $2,500.

2018-06-10 S Grigsby Ltr to Judge Boulware Re J Nash Email by JASONCRUZ206 on Scribd

Response to Ms Grisby Jun 10 2018 Letter by JASONCRUZ206 on Scribd

Payout Perspective:

According the plaintiffs’ motion, a party seeking to seal a judicial record bears the burden of overcoming “a strong presumption in favor of access” by meeting the “compelling reasons” standard.  While the disclosure of information might prove embarrassing, incriminating or put the party in a false light, it is not a reason to seal information from a public court filing.  From a media perspective, it is hard to be accurate if the information is not provided.  One need only look to Zuffa’s attorney proclaiming an industry insider report that UFC 225’s buy rate was less than 150,000 was a “material misrepresentation” and off by six figures.  But, the attorney did not correct the information with accurate data.  A later report, noted that the buy rate including streaming and traditional PPV buys was 250,000.

The federal court order from last month is persuasive considering the overarching theory is that sealing documents has “very limited exceptions.”  The burden is on Zuffa to show why they are allowed to redact certain sections.  Previously in this lawsuit, these types of motions were not opposed and therefore the court did not really examine the information sealed.  Now, it appears that the Court might review the redacted sections.

The motion creates more work for Zuffa and plaintiffs with another motion to handle.  However, this is not a frivolous motion from the perspective of the media.  There are a lot of instances where things like this go by without being questioned.  Here, at least there will be some examination as to the veracity of what can and cannot be sealed.

Plaintiffs file Reply Brief supporting class certification in Antitrust lawsuit

May 31, 2018

The Plaintiffs in the UFC Antitrust lawsuit have filed its Reply Brief in support of its motion for class certification.

Plaintiffs Reply ISO of Class Certification by JASONCRUZ206 on Scribd

Zuffa Oppo to Class Cert by JASONCRUZ206 on Scribd

The four factors for class action certification are the number of potential members of a class, the commonality of questions of law or fact, the typicality of the claims or defenses of the class and the adequacy of the representative classes.  In its, opposition brief, Zuffa took aim at the four factors in concluding that Plaintiffs have not served

Plaintiffs stress “four fundamental errors” in its reply brief.

First, Zuffa errs that there can be no legal challenge to its business practices.  Plaintiffs cite illegal conduct that allowed Zuffa an advantage in its industry.  The Plaintiffs rebut Zuffa’s assertion that wage level is the only way to evaluate compensation citing that its use is a way to masks Zuffa’s abuse of monopsony power.  Again, this is the overarching argument between wage level which measures compensation in dollars versus wage share which measures compensation as a percentage of revenues.

Second, Plaintiffs argue that Zuffa misunderstands the antitrust violation which is a scheme to acquire and maintain monopsony power.

Third, plaintiffs claim that Zuffa failed to respond to the ways in which they show common impact.  Plaintiffs claim that common evidence was capable of proving widespread harm across a class, courts usually certify classes in antitrust cases.

Finally, Plaintiffs’ claims are typical of the class as it refutes Zuffa’s claim that challenges the typical damages may have left some proposed class members uninjured.  In refuting this argument, Plaintiffs argues that there is no law which must show all class members were harmed to satisfy the typicality requirement.

Zuffa also argues that since Plaintiffs are ex-fighters, they will not protect the interests of the current Fighters.  However, Plaintiffs cite case law stating that former employees may represent present employees.  Plaintiffs also cite the “transitory” nature of a fighters’ career.  Since they are independent contractors, it would be easy for Zuffa to insulate itself from a class action lawsuit as the promotion could release a fighter it believed would be part of a lawsuit.  Moreover, Plaintiffs argue that former fighters have less of a concern with retribution from the organization versus a current fighter bringing a lawsuit.

Payout Perspective:

As in most Reply Briefs, Plaintiffs support its initial motion while rebutting opposition from Zuffa’s response to the motion.  As will be one of the bigger issues in the “battle of the experts” is the calculation of damages through wage share or wage level.  Plaintiffs endorse the wage share model to determine whether fighter wages were suppressed through illegal conduct versus Zuffa’s claim that wage level should be used to evaluate whether there were any factors to show such illegal conduct on the part of Zuffa.  Of course, each version supported by the party helps their respective viewpoint.  The Reply addresses Dr. Singer’s expert report and his theory of Zuffa’s Foreclosure Share – the proportion of fighters subject to its exclusive contracts – affects its Wage Share.  Dr. Singer’s theory of liability model suggests that Zuffa’s Exclusive Contracts are part of an unlawful scheme which correlates with underpayment of fighters due to illegal foreclosure (i.e., the measure of damages).  MMA Payout will keep you updated.

Catching up with Zuffa’s Reply Briefing in Antitrust Lawsuit

May 30, 2018

As we prepare for another filing in the UFC Antitrust lawsuit this week, MMA Payout takes a look at the briefing in supporting the motion to exclude plaintiffs’ experts.

Earlier this month, Zuffa filed briefs in support of its Motion to Exclude the testimony of Dr. Andrew Zimbalist.  They seek to exclude the testimony pursuant to Federal Rule of Evidence 702 and the Daubert case which allows the Court to determine whether certain expert testimony may be used at trial prior to trial.  The standard for admissibility is based on 5 factors which look to the scientific means of the method and whether they are generally accepted within the industry.  Zuffa argues that Dr. Zimbalist’s expert testimony as indicated in his submitted report conducted “no analysis and used no standards in his yardstick method.”

Zuffa Reply ISO Motion to Exclude Zimbalist by JASONCRUZ206 on Scribd

Zuffa argues that there are standards for the ‘yardstick method’ which Dr. Zimbalist uses, but he chose not to do so.   Specifically, Zuffa argues that Dr. Zimbalist did not conduct an empirical analysis of product markets, business models, revenue sources, or inputs.  According to Zuffa, Dr. Zimbalist did not consider any of the other factors that must be assessed using the yardstick method including “demand conditions or whether the comparators stand in the same relative position in their markets.”

In its analysis, the Dr. Zimbalist is measuring damages by wage share.  However, Zuffa argues that this measure is not accurate since it neglects to use individual salaries.  Zuffa argues, “[i]t is highly speculative for Dr. Zimbalist to assume without foundation that these hundreds of negotiations would add up to a similar wage share as the contractually define wage shares collectively bargained by the unions in the comparator sports.”

Zuffa goes on in its brief to argue that Dr. Zimbalist’s comparison to boxing is premised on faulty data as he uses Golden Boy to measure the entire boxing industry.  Zuffa argues that Dr. Zimbalist utilized data from another’s expert report in Golden Boy’s lawsuit against Al Haymon without independently verifying the data.

Finally, it argues that Dr. Zimbalist’s expert reports do not support Dr. Hal Singer’s expert reports and analysis and vice versa.

In supporting its motion to exclude Dr. Singer, Zuffa argues once again that wage share is not an acceptable practice for measuring damages.  Specifically, Zuffa takes issue with a regression analysis performed by Dr. Singer in his model.  Zuffa argues that the expert report finds anticompetitive effect which “directly contradicts” the fact that actual compensation has increased.  Second, the regression analysis performed by Dr. Singer shows that there is no anticompetitive effect and there is no relationship between the conduct and actual wages.

Zuffa Reply ISO Motion to Exclude Dr. Singer by JASONCRUZ206 on Scribd

The reply briefing to plaintiffs’ opposition to exclude their retained experts’ reports are based on the difference regarding wage share and actual wages.  The assertion by Zuffa is that “an analysis of wage share does not provide a reliable means of inferring anticompetitive effect, antitrust injury or damages because it cannot distinguish between a decrease in wage share as a result of the challenged conduct and a decrease as a result of legal and procompetitive business developments that increase overall revenues.”  Zuffa argues that there is no case law or economic literature supporting a regression analysis with wage share as a dependent variable inferring anticompetitive conduct.  Defendant also points out that the method would assume that a mandatory share of revenue is allocated for compensation. Yet, Zuffa compensates athletes based on “its perception of the athlete’s value and market forces, leading to a wide range of athlete compensation.”

Zuffa also argues that Dr. Singer’s reports do not show causality between his findings an the alleged anticompetitive conduct.  Zuffa claims that Dr. Singer’s regression analysis does not answer the key question of what proportion of increased revenues are attributable to athletes.  Rather, Dr. Singer relies upon economic theory which cannot replace Daubert standards according to Zuffa.

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

April 16, 2018

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

Zuffa Oppo to Class Cert by JASONCRUZ206 on Scribd

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

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

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

Zuffa outlines reasons why the Bout Class is defective:

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

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

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

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

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

Here are some other observations:

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

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

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

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

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

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

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

based on unilateral conduct.”

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

Payout Perspective:

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

Show Money Episode 21 talks antitrust lawsuit, Project Spearhead and more

March 8, 2018

In this episode of Show Money we talk antitrust lawsuit, project spearhead and more with Paul Gift and John Nash of Bloody Elbow.

MPO Year in Review: No. 8 Bellator among the parties pulled into UFC Antitrust Lawsuit

December 28, 2017

Bellator MMA found itself a part of the UFC Antitrust lawsuit as the two companies were opposing sides in a discovery dispute.  Bellator sued the UFC in Los Angeles, but the Court determined that the dispute should occur in the Vegas court handling the case between former fighters and the UFC.

Prior to the filing of the lawsuit in February, Bellator claimed that it had “produced in excess of two thousand pages of responsive documents.”  Yet, the UFC argued that it needed more which included payouts for Bellator fighters, contracts and financial information.

Bellator Motion to Quash Subpoena by JASONCRUZ206 on Scribd

Zuffa Opposition to Bellator Motion to Quash by JASONCRUZ206 on Scribd

The Vegas court issued a ruling in June.  Some of the findings are below:

Bellator was ordered to produce:

  1. A random sample of at least 20 percent of fighters under contract with Bellator between January 1, 2010 and the present. This will include any “amendments, modifications, side letters, or extensions that may exist with respect to any contract that is produced…”
  2. Bellator will produced “Anonymized contracts” with a unique identifier although identifying information “may be redacted.”
  3. The contracts “shall include the fighter’s gender, weight class, number of fights during term of agreements and any compensation to be paid.
  4. The Court limited and modified Bellator’s request for production to the following
    1. A list of all MMA events it promoted or co-promoted from January 1, 2010 through the present.
    2. An unaudited profit and loss statement through the quarter ending March 31, 2017 which will include Revenue, Expenses, Operating Income and Net Income.

In addition, Matt Hume, had a similar discovery issue in which the Plaintiffs sought information from OneFC (Hume is an executive for the company).  A lawsuit in Washington state ensued in which a motion to compel the documents of Hume in July included a request for attorney fees in the amount of $21,000.  Similar to the Bellator lawsuit, the federal magistrate dealing with the dispute decided to kick the case to Vegas for the trial court to handle.  The Plaintiffs demanded certain documents from Hume’s involvement with OneFC as well as to take his deposition.

Motion to Compel Depo of Matt Hume by JASONCRUZ206 on Scribd

Plaintiffs’ Opposition to Motion to Quash Hume Subpoena by JASONCRUZ206 on Scribd

The Washington state court decided that it did not want to intervene in the lawsuit and kicked the case to Vegas.

These were not the only two discovery issues in this case.  Zinkin Entertainment was ordered to produce documents related to the representation of its fighters.  Top Rank also came to terms with the UFC in the lawsuit over discovery.

Zuffa was ordered to hand over a study on fighter pay.

In addition, Zuffa filed a lawsuit to dismiss the claims of plaintiff Nathan Quarry due to statute of limitations.  The Court has yet to issue an order on the motion.

The UFC Antitrust lawsuit was a “discovery year” for the case as depositions were taken and fact discovery took over most of the year.  As expected, there were fights over the discovery of documents which seemed to have resolved.  In 2018, we will see the expert discovery phase start as the wheels of justice move slow on the civil side.

Top Rank and Plaintiffs in Antitrust Lawsuit Resolve Discovery Dispute

October 2, 2017

Top Rank and the Plaintiffs in the UFC Antitrust Lawsuit have resolved their discovery dispute regarding a motion to compel production of documents and for the attendance of the deposition of Bob Arum.

A notice of resolution was filed late last week.  The agreement between the parties avoids a motion to compel brought by Plaintiffs in the Zuffa Antitrust lawsuit seeking financial information and the deposition of company head Bob Arum.

Resolution Re Top Rank Motion to Compel by JASONCRUZ206 on Scribd

Originally, the motion was to be heard in early September but was continued until later in the month, but the parties came to an agreement.

Top Rank argued that a subpoena for the production of documents from the company was not relevant to the Zuffa lawsuit.  It also argued that the Plaintiffs failed to show a “substantial need” for Top Rank’s information. It also stated that the Plaintiffs’ document request were overly burdensome.

Top Rank Oppo to Motion to Compel by JASONCRUZ206 on Scribd

Plaintiffs argued that they were entitled to the discovery as it is relevant to their lawsuit against Zuffa, there is a substantial need for the documents and believe the discovery is not overly burdensome.

Reply to Opposition to Top Rank MTC by JASONCRUZ206 on Scribd

Top Rank noted in its opposition that it “cannot have it both ways.”  It argued that in its lawsuit it claimed that the “relevant market” was limited to the sport of MMA and noted that it was different from boxing.  Yet, it was requesting “ten years’ worth of revenue, profit, loss and payment information.”  Yet, Top Rank claimed that However the Plaintiffs lawsuit against them, claimed that it had differentiated itself from pro boxing and thus its financial information was not relevant to the instant lawsuit.

Top Rank argues that the document requests are intrusive and it is a way for Plaintiffs’ experts to “compare financial data from Top Rank’s promotion of boxing events to Zuffa’s promotion of MMA events and create “benchmark percentages of revenues.”  Moreover, it claims that Plaintiffs do not explain why they are unable to obtain this information from other sources.  Top Rank’s opposition brief claims it has told Plaintiffs where it might obtain public data about the company.

Top Rank lists some of the requests in its brief:

REQUEST NO. 1: Your Company’s Income Statements, including event-level profit and loss statements for the Relevant Time Period [defined to be from January 1, 2005 to present], including without limitation All Documents, including depositions, declarations, affidavits, or other statements under oath, You produced in any lawsuits or arbitrations, or to any governing athletic commission or sanctioning body, relating to TOP RANK’s accounting of its revenues, expenses, and profits.

• REQUEST NO. 2: Data in as granular form as it is maintained (itemized ledger entries, if they exist) sufficient to show all bout-related revenues and expenses (including for championship bouts, bouts where victory leads to championship, and all other Professional Boxing Events), payments made to individual Professional Boxers (including purses, bonuses, pay-per view, and any other event and non-event related payments), and non-bout related revenues and expenses.

• REQUEST NO. 3: To the extent not included in Your response to Request Nos. 1 and 2 above, documents sufficient to substantiate Bob Arum’s statement that TOP RANK pays 80% of event revenue to the Professional Boxers who participate in bouts promoted by TOP RANK….

• REQUEST NO. 4: A Representative Sample of All Agreements between TOP RANK and any Boxers, relating to participation in a Professional Boxing Fight or Professional Boxing Event, and any Documents and Communications relating to the negotiation, termination, cancellation or transfer thereof. Responsive Documents include, without limitation, executed Agreements, draft Agreements, side letters, all negotiations between TOP RANK and any Boxer, including any Professional Boxer,
or their agents, managers, promoters, or other representatives (regardless of whether such negotiations resulted in an executed Agreement), copies of any form agreements; and all Documents relating to the effects any such actual or potential Agreements between TOP RANK and any Athlete, including any professional Boxer, had on TOP RANK’s revenues, valuation, or ability to operate profitably as a Boxing Promoter.

Zuffa Plaintiffs claim that the information is vital for their case and that the UFC denied the differences between boxing and MMA in its answer to the lawsuit with the inference that they were interchangeable.  Notably, in its Reply brief it claimed that the business of promoting fights is the same for all combat sports.

Payout Perspective:

Plaintiffs Reply Brief includes quotes from Lou DiBella and Dana White’s deposition but most of the citations are redacted.  The order which spells out what Top Rank and the Plaintiffs had agreed upon is heavily redacted so we specifically do not know what the parties agreed to provide and whether or if the deposition of Bob Arum will take place.  It could be that Top Rank agreed to provide a portion of documents so long as Arum is not deposed and/or someone else within the company is deposed.

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