Judge orders UFC hand over fighter pay documents

June 12, 2017

U.S. Magistrate Judge Peggy Leen issued a 26-page ruling on Friday in the UFC Antitrust lawsuit which requires the UFC to hand over a study related to fighter pay.  There were three document requests demanded by Plaintiffs which included information related to a fighter pay study.

Order on Motion to Seal by JASONCRUZ206 on Scribd


Mercer is a third party human resources consultant.  The primary dispute is over a study commissioned by Mercer to produce a “fighter pay assessment” to guide “future compensation and benefits program design, including fighter pay (base and incentives) and benefit levels.”

The UFC produced 6 documents to requests by Plaintiffs and there are 3 documents in dispute.  Two were created by Mercer and the third was an email chain between the UFC’s in-house counsel and its outside lawyers Campbell & Williams regarding setting up a phone call with “outside consultants.”

After the documents were received by Plaintiffs, a subpoena and deposition notice to Mercer regarding the fighter pay study.  At that time, the UFC notified Plaintiffs are “clawing back” the three documents in dispute citing work product.  Clawing back is a request made of the inadvertent waiver of alleged privileged documents.  The claw back is usually dictated by the protected order the parties agree to at the start of litigation.

Of the three documents in dispute, the first is a memo from a Mercer employee regarding statement of work for the fighter pay study, the second is the aforementioned email chain between the UFC’s lawyer and Campbell & Williams and the third is a draft presentation entitled, “Fighter Pay/Project Update and Methodology Discussion dated March 18, 2014.

As the judge’s order notes:

“The presentation discusses a comparator group of other sports organizations including NASCAR, MLB, the NBA, and the NHL whose compensation practices Mercer proposed to study to “provide an external basis for understanding how UFC’s fighter pay structure and practices compares to similar companies.”

All three documents claimed that the information was work product.

The key term to understand when determining work product is whether the documents were created in “anticipation of litigation.”  The Court determined that they were not.

Notably, the UFC argued that a previous “quite contentious” interaction with Bellator as reasons why the current information was work product.  They cited the Eddie Alvarez lawsuit which produced a contract that has been used time and again.

The Court did not buy the UFC’s argument that the documents were work product.

Under the Court Order, the UFC must produce the documents.  The Court did not intervene on another issue regarding privilege log designations from UFC – a list of documents that a party must produce to show the opposing side what it is withholding and what privilege it is claiming to withhold.  The Court wants the parties to conduct a meaningful “meet and confer” prior to judicial intervention.

Payout Perspective:

This is a loss for the UFC as it wanted the documents to be privileged.  With the documents in Plaintiffs hands, they will likely conduct a deposition of the Mercer employee(s) that produced the study as well as use the information in deposing UFC officials.  Will this facilitate any settlement?  Probably not, but the information may reveal information for the overall theme of the case for the Plaintiffs.

UFC 178: Payout Perspective

September 29, 2014

Welcome to another edition of Payout Perspective.   In this edition, we review UFC 178 which took place at the MGM Grand Garden Arena where Demetrious Johnson took on Chris Cariaso in the main event.

Johnson outclasses Cariaso

Despite the lack of fan support (i.e., PPV buys), Demetrious Johnson can legitimately stake a claim to being the best pound for pound fighter in the UFC.  It was clear in the first minute that Johnson was the better fighter and ended Cariaso in the second round with a submission.

Johnson is getting prime placement on UFC shows and it’s the second PPV he’s headlined this year.  One should also stress the fact that Johnson has not been hurt during his title reign and is not an outside-the-Octagon problem.  So, why don’t people buy his PPVs?

UFC_178_event_poster

Cowboy welcomes Eddie to UFC

The skeet shooting and wakeboarding training regimen pre-fight aside, Donald Cerrone is an extremely good fighter.  In what was one of the more entertaining fights on the card, Cerrone defeated Eddie Alvarez.  It was the long-awaited debut for the former Bellator champ and the first round he showed why the UFC wanted to acquire his services.  Yet, Cerrone moves on looking for another fight before 2014 closes.

McGregor makes quick work of Poirier

You would have thought that this was the main event based on the crowd reactions.  The hype, trash talk and vitriol between the two (especially during any face off promoting the fight) was classic in what to do to have people interested in purchasing your fights. The Conor McGregor experience continues and likely his most impressive fight on the biggest platform so far.  McGregor easily handled Dustin Poirier in the first round.  It’s clear that McGregor is ready for a title shot after Saturday night.

Attendance and Gate

The attendance and gate announced at the post-fight press conference was 10,544 for a gate of $2.2 million.  Out of 9 PPVs this year, it ranked 7th in attendance.

Bonuses

The bonuses of $50K each were awarded to Yoel Romero-Tim Kennedy for Fight of the Night and Dominick Cruz and Conor McGregor for Performances of the Night.

Promotion of the Fight

The Embedded episodes continue to be popular as the UFC has found a formula to promote the fights digitally.  For the most part, viewers got to see Cowboy Cerrone wakeboarding and skeet shooting prior to his fight with Eddie Alvarez, Conor McGregor get a haircut, Demetrious Johnson getting a shave and Dustin Poirier at the Whole Foods at Vegas.  The one thing really missing from the embedded episode was a profile on Chris Cariaso.  The Countdown show did have a profile on Cariaso but it seemed incomplete.  Even if it was a foregone conclusion that he would likely lose (which happened), it would have been nice for them to have elevated his profile for this fight.  It seems to get better reviews than the UFC Prime Time episodes because they are short and can be viewed whenever people want to see them.

Conor McGregor did a good amount of pre-fight press.

Mighty Mouse appeared on the local Fox affiliate in Seattle last week hyping UFC 178.

Salaries

Salaries have been disclosed via MMA Junkie:

Demetrious Johnson: $183,000 (includes $54,000 win bonus)
def. Chris Cariaso: $24,000

Donald Cerrone: $126,000 (includes $63,000 win bonus)
def. Eddie Alvarez: $100,000

Conor McGregor: $150,000 (includes $75,000 win bonus)
def. Dustin Poirier: $34,000

Yoel Romero: $58,000 (includes $29,000 win bonus)
def. Tim Kennedy: $70,000

Cat Zingano: $18,000 (includes $9,000 win bonus)
def. Amanda Nunes: $15,000

Dominick Cruz: $100,000 (includes $50,000 win bonus)
def. Takeya Mizugaki: $32,000

Jorge Masvidal: $90,000 (includes $45,000 win bonus)
def. James Krause: $15,000

Stephen Thompson: $32,000 (includes $16,000 win bonus)
def. Patrick Cote: $33,000

Brian Ebersole: $42,000 (includes $21,000 win bonus)
def. John Howard: $21,000

Kevin Lee: $20,000 (includes $10,000 win bonus)
def. Jon Tuck: $10,000

Manny Gamburyan: $50,000 (includes $25,000 win bonus)
def. Cody Gibson: $10,000

Some notes:

Some interesting figures including Demetrious Johnson being paid like a champ (base of $129K).  The last official report of his purse was at UFC on Fox 9 where he made a base of $125K (notice a bigger bonus for that Fox event).  You might assume that June’s UFC 174 he made a base of $127K although those salaries were never officially reported.  Eddie Alvarez was paid $100K (show) for his first UFC fight.  You might recall when he was originally offered a UFC contract which precipitated the Bellator lawsuit, he was offered $70K for his first match in the UFC.  Conor McGregor is already up to $75K base.  Cat Zingano only made $9K/$9K which is only a $2K bump from her last fight in April 2013 against Miesha Tate.

Sponsors

The octagon sponsors included MusclePharm, MetroPCS, Alienware, Harley Davidson, Toyo Tires, Fram, UltimatePoker.net, Assassin’s Creed’s latest game, Matefit.me and Bud Light in the center.

Missing from the octagon was long-time sponsor, Xyience, which was purchased by another company that quickly pulled the sponsorship with the UFC.

Yoel Romero was sponsored by likeaboss.com.  I’m not sure what they do.

Cain Velasquez appeared in a promo for Harley Davidson Motorcycle’s “Hometown Throwdown.”

Mighty Mouse had his traditional sponsor of Xbox 360.  The only sponsor for Johnson, his fight banner told folks to pre-order an Xbox One.  I thought those were already available?  If you were wondering, on his recent Wrestling Observer podcast, Dave Meltzer did not know how much Johnson is receiving from Microsoft.

Cariaso was sponsored by Mountek.  Really.

Dominick Cruz was sponsored by the Phoenix International Raceway which stuck with him despite Cruz being on the shelf for a long time.  It paid off as PIR had a prominent logo on Cruz as he was demolishing Takeya Mizugaki.  He also wore the shirt in his post-fight interview.

Odds and ends

-Didn’t mention this earlier, but Cat Zingano-Amanda Nunes fight was the way to start a PPV.  Zingano has been through a lot and it appears that she will be the next for Ronda Rousey.

-MMA Fighting has backstage footage of Tim Kennedy confronting Yoel Romero about the extra time he took to get up from his stool in between rounds.

-Interesting that the UFC are rolling out different types of Bruce Lee t-shirts.  Hopefully some of the money that I suppose the estate is receiving from licensing his likeness is going toward this.

-Dominick Cruz won me over in just the 61 seconds of work.  First, his Jay Z/Cypress Hill remix entrance, Then, the plain black CRUZ sweatshirt.  Easily the best thing anyone has worn to the octagon in the history of this sport.  Finally, his “Alpha-Fails” drop is probably one of the best post-fight lines in a while.

-UFC on Fox YouTube channel has the whole 61 second Cruz return fight.

-Some argument as to whether Cruz fight should have been on PPV.  You can see it as perhaps a concession to boost FS1 ratings.  In hindsight, all of the fights on the PPV were great and hard to see replacing one.

-The good news is that the clay pigeons that Cerrone shot during that Embedded episode were not real as they were made at the same place that Floyd Mayweather got his fake weed from All Access.

-Not surprising, but according to Google Trends, Dublin and Ireland were the most interested city and country for search term “UFC 178”.

Conclusion

This was to be Jones-Gus II.  But after that was scrapped, it was Jones-Cormier.  After the Jones-Cormier media day brawl in August, one could have made the argument that UFC 178 would be the second-biggest PPV event of the year after UFC 175.  But with Jones getting injured, the need to adjust the lineup probably hurt the buy rate.  Overall, this card was very solid with every PPV fight being an entertaining one.  However, selling the Johnson-Cariaso was tough and you might infer that most of the pre-fight hype was for McGregor-Poirier. Although McGregor could be a breakout PPV star, he is not one yet.

While Google Trends saw an uptick in searches for UFC 178 from Ireland, it’s worth to note that the US was the 4th interested country for the event.  In the end, a buy rate of 300,000-325,000 seems reasonable.

13 for 13: No. 5 Eddie Alvarez-Bellator settle lawsuit

December 29, 2013

The Eddie Alvarez-Bellator legal saga came to an end this year with Alvarez settling with Bellator and making a triumphant appearance at Bellator 106.  The legal case which Alvarez vowed would go to trial settled in time for Alvarez to face Michael Chandler on November 2nd.

As we know the story, Alvarez completed his fight contract with Bellator although the company had “matching rights” which would allow it to keep Alvarez so long as it matched any competing offers.  Alvarez and Bellator had agreed that Bellator would get a chance to match the offer made by the UFC.  In fact, court documents show that it had cut and paste the UFC contract almost verbatim.  Still, Alvarez’s camp argued that the Bellator “match” did not match the UFC contract.  Bellator sued Alvarez, Alvarez sued Bellator and Alvarez attempted to file a Preliminary Injunction to allow Alvarez the opportunity to bolt for the UFC.  The court denied the PI.  The court also denied a motion by Bellator to dismiss Alvarez’s lawsuit against it.

Alvarez proclaimed that he would go to trial to settle this dispute.  Other fighters supported Alvarez and Alvarez talked about how Bellator mismanaged some of its fighters.  For this, Bellator head, Bjorn Rebney had to go into damage control to explain some of the issues Alvarez had highlighted.

The case would not have gone to trial until late 2014 at the earliest.

Alvarez went on a PR march claiming the Bellator had attempted to alter a document regarding the matching terms of his contract.  In fact, Alvarez produced the document (and the attempted “blacking out” of his address which you could still see) but it did not lend much to his theory.

Fortunately, Alvarez agreed to terms with Bellator which, in the end, likely saved Bellator 106.  Alvarez did not speak about the terms of his return to Bellator and his return was marked by this odd interview with Alvarez by Glenn Robinson’s daughter.

The lawsuit likely served as a guide for contractual dealings with Ben Askren.  The Welterweight champ was let go by Bellator even though the organization had matching rights in its contract with Askren.  Despite the fact Bellator let its champ go, it was less of a public relations issue than if it became mired in another lawsuit.

The court documents revealed the UFC contract and its PPV buy structure.  While these terms may have been released in the past, it was still interesting to look at the UFC’s structure in how fighters are paid based on PPV buys.  It also showed some of the added benefits Bellator was willing to give Alvarez if he stayed which included guests spots on Spike TV programming.  But, the key issue was the PPV upside that Alvarez would receive if he joined the UFC.  Earlier this year, Bellator had not put on a PPV although there were vague notions that it would put on a show.  As we know, it eventually announced a PPV to be headlined by Rampage Jackson versus Tito Ortiz.  We all know how that turned out.

There was also Dave Meltzer’s Declaration in support of Eddie Alvarez’s Preliminary Injunction.  Meltzer indicated PPV buy rates in his declaration to support Alvarez’s initial argument that Bellator did not match the UFC’s contract.  If the case would have proceeded and came closer to trial, Meltzer would have been deposed and/or testified at trial.  Attorneys would be able to inquire about how he substantiated PPV buy rates including such information as where he gets his information and if there is a formula for his PPV analysis.  Certainly, Meltzer could have claimed that he does not need to reveal his sources based upon his journalistic ethics.  Yet, it would have created an interesting scenario.  But, once again, the settlement saved this issue.

And, in the end, Meltzer was right about the “matching” thing.

The fact that Bellator cancelled its PPV after Ortiz’s injury shows that it did not believe Alvarez could headline a PPV (or it did not have enough time to market Alvarez as its top star).  Regardless of the reasons for turning the PPV into a card on Spike TV, the cancellation of the PPV may have confirmed what Alvarez may have known throughout:  that Bellator was not the same as the UFC.

Bellator passes on Ben Askren

August 21, 2013

ESPN’s Josh Gross reports that Bellator will let Ben Askren leave for the UFC if Dana White wants the welterweight standout. Bellator head Bjorn Rebney told ESPN that it would not make an offer to Askren.

Askren’s last contracted fight was this past July. Similar to Alvarez, its believed that Bellator has the right to match any contract offered to Askren. However, it appears that it is passing. The news was surprising considering Askren’s record and perhaps not surprising considering Askren’s wrestling-heavy, grinding style which is not exciting. After a bitter legal battle with Eddie Alvarez,which ended in a settlement and Alvarez coming back to Bellator, the company has made a decision on Askren.

When asked about whether Askren would be on Bellator’s first PPV in November he indicated that there would be “no chance.” Thus, it was likely that the parting was mutual.

Askren has already been in contact with Dana White via twitter:

Payout Perspective:

Askren is a dominant wrestler and a personality but his style may have been a reason Bellator has decided to give up on re-signing him. However, Bellator needs top level talent for the company and the PPV. Askren is dominating and Bellator could have utilized this. Perhaps Bellator saw another Alvarez situation on the horizon and thought best to let him go rather than get embroiled in another costly lawsuit. We will see if Askren does end up in the UFC and how his talent does in the UFC’s welterweight division.

Alvarez-Bellator settle paving way for Chandler rematch on PPV

August 13, 2013

MMA Fighting reports that Eddie Alvarez and Bellator have come to an agreement to settle their lawsuit.  As a result, Alvarez will fight Michael Chandler on Bellator’s first PPV November 2nd.

The settlement between party ends a contentious lawsuit which had both sides arguing over the contractual terms of Alvarez’s Bellator contract and whether or not Bellator had matched the terms of a contract offered by the UFC.  It also highlighted the potential contract Alvarez would have received if he had been allowed to leave for the UFC.  No terms of the settlement have been announced although it is being rumored that Alvarez will be able to leave Bellator if he loses to Chandler but if he wins he must do the trilogy with Chandler.

Alavarez-Chandler II will co-main event the card with Tito Ortiz facing Rampage Jackson in the main event.

Guess who's back? (via Wikipedia)

Guess who’s back? (via Wikipedia)

Payout Perspective:

All’s well that ends well.  As we had opined previously, it was likely that the two sides would come to an agreement before the November PPV.  The fact of the matter is that litigation is a slow process and factual discovery can be a money draining exercise.  Also, the fact that Bjorn Rebney or Eddie Alvarez did not have to be deposed was a good result for both sides.  No one had to be grilled by attorneys about Bellator business practices regarding matching terms or about Alvarez’s interviews regarding Bellator alleging lying to him.

Both sides needed each other and with the foreshadowing of Alvarez’s manager publicly stating that he hoped the two sides would settle, it became a foregone conclusion that it would happen.  With Alvarez-Chandler as a co-main event, Bellator needs to re-sign Ben Askren and have him on the card as well.  At this point, Bellator should re-introduce MMA fans to the first Alvarez-Chandler fight. It is widely popular on YouTube and would give these two some much needed (in-ring) publicity leading into their rematch.  The settlement, while it may be just a short-term gain, could provide a necessary lift for the organization.

 

Could Alvarez-Bellator settle before PPV?

August 6, 2013

MMA Fighting reports that Eddie Alvarez’s manager is hoping that a deal with Bellator can be reached.  Glenn Robinson, Alvarez’s manager, extended the olive branch with the statement.

Alvarez and Bellator are engaged in a lawsuit over the ending, or lack thereof, of Alvarez’s employment with the organization.  While Alvarez had proclaimed that he would not settle and take his case to trial and went on a twitter campaign suggesting that Bellator misrepresented a document he relied upon, it appears that Alvarez may have rethought his situation.  Certainly, the sobering fact that a trial would not happen until late next year at the soonest motivated this possible turn of events.

In the last settlement discussions as reported to the court, Bellator had offered Alvarez two PPV level fights with the first being a shot at the lightweight title currently held by Michael Chandler.  Alvarez declined the offer and countered with just one fight for Bellator.  This stalled the negotiations.

Payout Perspective:

The question is whether a settlement could occur before Bellator’s November 2nd PPV.  It appears that both sides need each other.  Bellator needs an opponent for Michael Chandler and a strong undercard for its Tito-Rampage main event.  Alvarez needs employment.  Both have been spending money on legal fees and both probably don’t want to do that anymore.  It makes sense that Robinson has sent out this message in hopes of engaging in talks.  The interesting point here is whether or not Alvarez will get the “same deal” that has been litigated.  Meaning, would Bellator give Alvarez the same terms as it offered before the lawsuit.  Or, will Bellator factor in the time, legal expense and public relations hit it took during the time of the lawsuit.

Bellator-Alvarez case will not go to trial until late 2014 at earliest

June 26, 2013

The “Joint Proposed Discovery Plan” filed with the Court in the Eddie Alvarez-Bellator case reveals the sobering reality of the judicial system.  Among the dates set by the Court, a pretrial conference will occur sometime after  September 15, 2014 which would mean an actual trial in the case would not occur until late fall 2014 or even early 2015.

The Court held an initial status conference this week which included the rendering of a “Joint Proposed Discovery Plan” which essentially lays out the plan on litigating the case.  This includes the written discovery and a plan on how many people will be deposed by each party (each side will have a maximum of 10 depositions).  It also includes a time for expert reports and expert depositions.

A pretrial conference may take place “any time after September 15, 2014 and after resolution of any dispositive motions (motions to dismiss claims)” according to the Order.

At that pretrial conference, the Court will likely appoint a Court date.  Thus, it’s most likely a trial would not commence until late 2014 or even 2015.

Another interesting note that has come out of the case is that the parties have agreed to a Discovery Confidentiality Order which may prevent the public from seeing documents deemed confidential by the parties.

Another interesting point was the status of the settlement talks which occurred prior to the filing of the discovery plan.  Bellator had offered Alvarez two PPV level fights with the first being a shot at the lightweight title currently held by Michael Chandler.  Alvarez declined the offer and countered with just one fight for Bellator.  This stalled the negotiations.

Payout Perspective:

And this is why Alvarez should not have stated that he was not going to settle with Bellator.  A trial date at best would not happen until the fall of 2014 (Alvarez will be out of action for 2 full years if this happens) but this does not even include any scheduling delays or motions to continue a trial date which are norms in litigation.  The parties have already noted that there may be scheduling issues with third parties (UFC?) and “disputes regarding designation of documents as confidential.”  Thus, there are already logistical obstacles and it’s still June 2013.  We shall see how this progresses and if the parties will look to settlement discussions.  But, in my opinion, the parties will want to conduct some discovery and depositions before any further discussions on settling occur.