Showtime sues Top Rank for Pacquiao lawsuits

May 29, 2016

Showtime Networks, Inc. has filed a lawsuit in the U.S. District Court of New York against Top Rank, Inc. citing indemnification and breach of contract related to lawsuits filed by third parties against Showtime and Top Rank stemming from Manny Pacquiao’s claim that he fought with an injury against Floyd Mayweather, Jr.

The lawsuits, filed by individuals who purchased the PPV claimed that Pacquiao was not ready to participate in the fight because of an injury in early April 2015 and it was not disclosed.  Most of the lawsuits point to the Pre-Fight Medical Questionnaire provided by Pacquiao which seemingly misrepresented the injury by not disclosing it.

Under the terms of an agreement between Showtime and Top Rank, Top Rank was to defend and indemnify Showtime from any liability (i.e., lawsuits) and supply Showtime with its own legal counsel.  Showtime’s attorneys point out that a potential conflict occurred when Pacquiao did not notify officials of a shoulder injury prior to the Mayweather fight.  According to the lawsuit, Showtime demanded that Top Rank pay for Showtime’s legal representations once these lawsuits were filed due to the potential conflict.  Top Rank claimed that the terms of the agreement which would trigger Top Rank to defend and indemnify Showtime would be an instance of actual conflict between the parties.  Per the lawsuit, Showtime claims that Top Rank did not believe that there was a conflict.

The relevant indemnification language of the Showtime/Top Rank contract is below:

Showtime also claims that Top Rank threatened to assert its own indemnity claims against Showtime.  Top Rank claimed that Showtime promotional materials for the fight were relevant in relation to claims of breach of contract filed by plaintiffs.  Thus, Top Rank requested the same defend and indemnification that Showtime had been of Top Rank.

Despite the refusal to pay for its attorneys, Showtime defended the lawsuits it was named in.  The legal fees through May 12, per the lawsuit is $682,754.06 plus interest.  Showtime seeks to recoup this plus fees and costs of the lawsuit in this action.

Payout Perspective:

It’s clear that this was bound to happen.  Once Pacquiao claimed the injury post-fight, the lawsuits started to pour in from plaintiffs’ attorneys and they were going to name any and all entities in its complaints.  The lawsuit presents the question of what is a conflict and what is not and when the right to indemnify and defend took place.  Showtime claims that the unreported injury should have triggered the indemnification in the contract while Top Rank will likely deny this citing no conflict at the time.

We will keep you updated.

Bellator MMA sued for wrongful termination

May 25, 2016

Zachery Light has filed a lawsuit in Los Angeles Superior Court against Bellator MMA and Viacom citing wrongful termination based on public policy.  Light, a former MMA fighter and employee of Bellator, claims various wrongdoings while working under Scott Coker.

The lawsuit was filed on Tuesday by Light’s attorney, William Crosby.

Light, a former amateur wrestler and MMA fighter, was hired by Bellator and worked under Bjorn Rebney.  He became Bellator’s Talent Development Manager.  The lawsuit states he was soon promoted to Talent Development Director.  He was praised for his work and “received the highest ranking on his annual reviews.”

The Complaint notes a shift of business culture when Viacom acquired Bellator and Scott Coker took over.

Light alleges that in September 2015, he became aware of a number of instances in which Bellator “failed to observe and knowingly disobeyed laws enacted to protect the health and safety” of MMA fighters.  Notably, the California law requiring a medical clearance examination by a licensed physician for participants in a MMA fight.  Light claimed that “a reliable source” at Bellator 126 noted that Ryan Martinez’ blood and eye medicals that were submitted to the state of Arizona “were admittedly forged.”  Martinez lost his fight to Nick Rossborough.

Screenshot (19)

At Bellator 131 in San Diego, Light learned from “reliable sources” that “a number of fighters on the card had submitted California state-required medicals” by Adam Rendon.  Rendon, the lawsuit claims, was not a licensed physician and this was in violation of California law.  Bellator 131 was the first “tentpole” event of the Coker-era which featured Stephan Bonnar fighting Tito Ortiz.

The lawsuit claims that Light talked to Rich Chou, Bellator’s Vice President of Talent, prior to Bellator 126.  Chou indicated to Light that he would follow up but when he did not here from Chou he approached Scott Coker.  According to the Complaint, “Coker told plaintiff (Light) “to do what Chou told you to do,” without addressing these issues.”  Light went back to Chou who, according to the lawsuit, stated he would be terminated if he (Light) “kept pushing the issue.”

Light went back to Coker to question about Rendon.  According to the Complaint, Coker told plaintiff, “a lot of people at Bellator are going to lose their jobs next week.  Do you want to keep yours?”

In addition, the Complaint claims that Coker pressured Light into promoting collusive fights in violation of the Sarbanes-Oxley Act.  The lawsuit alleges that Coker disliked manager Anthony McGann.  Rampage Jackson and Cheick Kongo were managed by McGann at the time and the Complaint claims that Light was instructed to “convince Kongo to fire McGann as his manager.”  Light was influenced by Coker to have Kongo fire McGann and have him sign a new promotion agreement or he (Light) would be fired.

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Light was instructed to arrange fights for McGann-managed fighters under contract in Bellator with opponents “who would convincingly defeat them.”  This would apparently allow Coker the pretext to cut ties with McGann and his fighters.  The lawsuit makes a point of indicating that “[s]uch collusive matches were tantamount to fight fixing…”

Under the Sarbanes-Oxley Act whistleblower provisions, employees in privately held subsidiaries of publicly traded companies who assist in an investigation into an employer’s violation are protected from employer retaliation.  Under the California Business and Professions Code, there is a similar provision claimed by Light.

Light also indicates that in “late 2014 and early 2015,” Mike Kogan was hired by Bellator in an executive capacity.  Kogan, who Light alleges is a “close friend” of Coker claims that Kogan was “paid management commissions for fighters he represented in bouts that occurred with defendant Bellator.”  This would be a “serious conflict of interest” and violation of California law.

The lawsuit states that due to stress-related to Coker and Chou refusing to follow laws and regulations and “requiring plaintiff to engage in illegal practices as a condition of keeping his job,” Light suffered an anxiety attack.  The health scare occurred on April 10, 2015 after Bellator 136 on the campus of UC Irvine.  He was taken to the emergency room and diagnosed with severe depression and anxiety.  Light had to take an extended medical leave.  He was cleared to return to work without restrictions on March 10, 2016 but was terminated on March 17, 2017 via a letter.  He was advised that “his job was no longer available.”

Payout Perspective:

This will be an interesting case as it goes forward.  Since it was filed just yesterday, there’s still a lot to digest about the claims.  As with many wrongful termination lawsuits, the allegations are salacious and may or may not be true.  One would expect Bellator to deny the claims and file a motion to dismiss – none of which is earth-shattering.  Obviously, the claims present a public relations issue as the company in support of amending the Ali Act to include MMA fighters are accused of doing things that oppose the protections claimed in the Ali Act.  Also, the conflict between promoter and manager rears its head in another MMA promotion.  We shall see about the veracity of the claims and how will Bellator address them.

MMA Payout will continue to follow.

Top Rank survives Haymon’s Motion to Dismiss

January 12, 2016

Top Rank Boxing withstood another motion to dismiss from Al Haymon in the ongoing lawsuit filed in federal court in Los Angeles.  The Honorable John Walter ruled, without oral argument, that Top Rank’s Second Amended Complaint was sufficient enough to survive a motion to dismiss.

A hearing on the motion to dismiss was to be heard on Monday but the court nixed this hearing ruling without the need for oral argument.  Previously, the court had dismissed Top Rank’s lawsuit but allowed it to re-file and amend, which it did.  But, Haymon had filed another motion to dismiss citing that nothing had changed in its amended filing.

Perhaps an ominous sign from Judge Walter for Top Rank was the notion that the arguments set forth in Haymon’s motion to dismiss might be best addressed in a motion for summary judgment.  A summary judgment is a motion brought by a party would dismiss a lawsuit prior to trial due to the fact that one side’s claim(s) that there is no general dispute as to any material fact and the case should be dismissed as a matter of law.  Of course, Judge Walter indicated in his order that he expects both parties to file motions for summary judgment.  The brief order inferred that it while it sided with Haymon’s arguments, the rule of law dictated that Top Rank’s Second Amended Complaint had sufficient information to go forward.

Top Rank sued Al Haymon for alleged violations of antitrust and state laws with respect to Haymon’s PBC promotion which includes its alleged managing and promoting of fighters.

The court opinion indicates that while it was not persuaded that Top Rank had cured all of its deficiencies in its state law claims, it will not entertain any more motions to dismiss.

Order on Motion to Dismiss by JASONCRUZ206

Payout Perspective:

And now we enter the discovery phase of the lawsuit as the court essentially tells the parties they have exhausted all of the motion to dismiss.  Haymon will now have to answer the 105 page Second Amended Complaint.  From there, it will be written discovery and depositions.  We shall see if the elusive Al Haymon will be summoned for deposition.  MMA Payout will keep you posted.

FTC closes second investigation of Zuffa

November 24, 2015

The Las Vegas Review Journal reports that the Federal Trade Commission has ended its second investigation of Zuffa without any findings of wrongdoing of the company’s business practices.  Although the investigation has ended, the FTC indicated that it reserved the right to investigate the company again if it saw a need. 

In a letter to Zuffa from the FTC, it indicated that the closing of the investigation should not be construed that a violation may not have occurred, just as the opening of the investigation should not be construed that a violation had occurred. 

UFC’s Chief Legal Officer Kirk Hendrick issued a statement on the FTC’s decision:

“Earlier this year the FTC informed us that it was conducting a non-public investigation, which we believe was instigated by former fighters or their attorneys to bolster a civil action against UFC,” Hendrick added, “After meeting with the FTC, we are pleased that they have sent us a letter stating that no further action is warranted and the investigation is now closed. We maintain full confidence in our business practices and continue to believe that the plaintiffs’ allegations are meritless.”

The letter from the FTC, obtained by the Las Vegas Review Journal is below:

UFC FCC by LVReviewJournal

The FTC investigated Zuffa after it had acquired Strikeforce in 2011.  The investigation came to close with no findings in early 2012.  A Freedom of Information Act request for documents from that first investigation revealed little as to their investigation.

Although the reason for the second investigation was not made public one might conclude it was due in part to the antitrust lawsuit filed by former UFC fighters.

Payout Perspective:

Good news for the UFC as it is clear of the investigation.  Moreover, it need not dedicate legal resources for this.  The FTC indicated that it may revisit the issue but one would think it is unlikely to occur unless something comes out of the antitrust case.

Al Haymon wins round against Top Rank in antitrust lawsuit

October 18, 2015

Al Haymon won a round in federal court in Los Angeles on Friday as he was successful in dismissing an antitrust lawsuit filed by Top Rank Boxing.  The court gave Top Rank the ability to amend their complaint by October 30, 2015.

The motion to dismiss Top Rank’s First Amended Complaint by Al Haymon, et al. was heard without oral argument by the court.

The court dismissed all of three antitrust claims brought by Top Rank against Al Haymon citing that it failed to allege “antitrust injury.”  The order states that it specifically failed to allege injury “to itself or to competition.”

Top Rank accused Al Haymon of 3 primary issues in its antitrust claim:

-Tie Out Contracts and “Sham Promoters”

-Predatory “Payola” Practices

-Venue Blocking

Per the Court order:

…as the Haymon Defendants point out, Top Rank has failed to allege how it has been injured by the alleged conduct.  Indeed, it has not identified a single bout that it has attempted to promote but was precluded from promoting by the Haymon Defendants, a single venue from which it has been blocked, or a single network that has refused to broadcast a fight promoted by Top Rank.  Top Rank correctly argues that competitors who are “frozen out” of a market by an antitrust violation have suffered antitrust injury and possess antitrust standing. However, Top Rank has failed to allege any facts demonstrating that it has actually been “frozen out” by any of the Haymon Defendants’ conduct.

Notably, the court dismissed defendant Waddell & Reed Financial, Inc., Waddell & Reed Investment Management Company, Ivy Investment Management Company and Media Group Holdings (“Waddell Defendants”) without the ability for Top Rank to amend their complaint as the Court deemed it would be “futile.”  Waddell was the alleged financial investor and adviser for Haymon et al. as they provided the money for PBC.  Despite its liberal policy favoring amendments, the Court noted that Top Rank has had the opportunity to amend its pleading and finds no amendment would persuade the Court that it has a claim against Waddell.

To survive a motion to dismiss, Top Rank had to allege market power or economic power in the relevant markets by Haymon, et al.  Top Rank identified the relevant markets as 1) the market for managing Championship-Caliber Boxers in the U.S. and 2) the market for the promotion of Championship-Caliber Boxers in the U.S.  Although the Court noted that these market definitions may not defeat a summary judgment motion, it may surpass a motion to dismiss.

The Court indicated that while Top Rank may define the relevant markets, it failed to adequately allege market power or economic power within those markets.  Specifically, the court notes that Top Rank does not provide “facts or figures” concerning Championship-Caliber Boxers (i.e, how many there are, how many promoters, promote them, how many managers manage them, etc.).  The court also takes issue with Top Rank’s allegation that Haymon’s market share is greater than 50%.  Here, the court finds no factual evidence of how Top Rank arrived at the figure and whether it is limited to the management of “Championship-Caliber Boxers.”

As a result of its inability to show that Haymon, et al. possessed market or economic power in the management market, it could not show that it tied together the sale of two distinct services of managing and promoting Championship-Caliber boxers.  Although Top Rank argued that the illegal tying arrangements may be in “consent” clauses in the Haymon contracts, Top Rank did not provide any factual allegations showing such clauses in fighter contracts which purported that a fighter was bound by the same manager and promoter.

In addition to the antitrust claims under the Sherman Act, the court dismissed a claim under the Clayton Act for injunctive relief due to the fact there was no showing of claims under the Sherman Act.  In addition, state law claims under the California law were deferred if and when Top Rank amends its complaint.  If it does not, the court will not rule on the state law claims.

Payout Perspective:

It’s interesting to note that Top Rank had sought the deposition of an officer from the Waddell Defendants prior to the ruling.  A deposition was noted for October 7th according to the court record but we assume that did not happen pending the ruling.  It was likely the hope that Top Rank could establish a link between the Waddell Defendants and its case.  However, with the court ruling, Top Rank would have to appeal the order for them to bring back Waddell into the case.  Look for Top Rank to file an Amended Complaint with specific allegations.  Despite the court dismissal, it invites Top Rank another shot at filing a complaint.  This might be interesting foreshadowing for some of the issues in the Golden Boy-Al Haymon antitrust case ongoing in Los Angeles.  Essentially, the court did not find Top Rank established sufficient facts that Al Haymon, et al. had market power/control over the relevant markets.  One of the arguments here is that this information might be obtained through discovery (i.e., contracts, venue contracts, etc.).  The court seemed definite that there must be some concrete factual allegations for Top Rank antitrust claims to go forward.  MMA Payout will keep you posted.

Parties in UFC lawsuit fight over confidential documents

August 29, 2015

Plaintiffs on behalf of the fighters in the UFC Antitrust lawsuit have filed a Motion for Protective Order as a result of what it claims to be an exclusion from discovery of one of its main attorneys.

As is the case in litigation where there are sensitive materials that will be shared by opposing sides via discovery, the court required the parties to work together to come up with a protective order which would serve as the guidelines for the exchange of information.  A concern by plaintiffs is that Zuffa lawyers seek to exclude Rob Maysey, an attorney for Plaintiffs, from “highly confidential” information.

Via Plaintiffs’ Protective Order:

Zuffa has proposed an unusual special “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” designation in the Protective Order that would apply to “extremely sensitive, highly confidential, non-public information, consisting either of trade secrets or other highly confidential information directly concerning business plans, strategies, revenues or costs, disclosure of which to another Party or Non Party would create a substantial risk of significant competitive or business injury to the Designating Party that could not be avoided by less restrictive means.” Zuffa [Proposed] Order ¶ 2.7.

The attached exhibits to the Motion for Protective Order include a back and forth exchange on discovery between the parties which cover such issues as retention of data and other pertinent eDiscovery information as to when Zuffa would provide its data and in what form.  Most, if not all of this information will be provided electronically and uploaded in reviewable databases for attorneys to review.

As for the interesting stuff, Zuffa is proposing two tiers of confidential information.  Essentially, Zuffa wants Maysey “firewalled” from the discovery deemed HIGHLY CONFIDENTIAL.  Plaintiffs argue that the definition proposed by Zuffa would preclude him from a broad swath of material.  Plaintiffs claim that Maysey is central to the litigation and would impair his ability to assist his clients and prepare for trial.  On the other end, Zuffa argues that Maysey is a “competitor” of the UFC according to its attorneys as he founded the Mixed Martial Arts Fighters Association.  The claim is that Maysey should not be allowed to view contracts and sensitive business materials which Zuffa claims he might use for future prospective gain.

The argument is that Maysey and a partner at one of the other plaintiffs’ firms, Neal Tabachnik (who has represented MMA fighters in the past) should be precluded from HIGHLY CONFIDENTIAL Information. Plaintiffs seek an order from the court which would preclude Zuffa’s argument that Maysey is precluded from seeing the HIGHLY CONFIDENTIAL information.

Exhibit 1 (attached to Plaintiffs’ Motion) is a letter from Plaintiffs’ lawyers to Zuffa lawyers. Specifically, the argument points out the reasons why the confidential designations are overbroad and why Maysey should be allowed to view documents.

The full letter is below:

Exhibit 1.PDF

Exhibit 2 is a response from Zuffa lawyers to the above letter:

Exhibit 2.PDF

I could not highlight the pertinent sections in the letter from Zuffa’s attorneys but it essentially spells out its position by pointing to case law that dual tiers of confidentiality is not unusual and that Maysey’s involvement in MMAFA warrants that he is blocked from viewing HIGHLY CONFIDENTIAL documents. It cites to the MMAFA web site and his own law firm bio as to reasons why he should be firewalled for viewing documents.  Notably, Zuffa points to a 2009 MMA Payout article in which Maysey was interviewed by Robert Joyner.

Payout Perspective:

Notably, Maysey filed a declaration with the Motion for Protective Order which mentions that he is the “principal client liaison” with the fighters in this litigation.  However, what it does not say is that he is trial counsel for the lawsuit (i.e., he will be in court trying the case if it gets to that point).  This could be a major distinction when arguing whether or not an attorney assisting in preparing the case is essential in the discovery process.  Moreover, Maysey states in the declaration that he founded MMAFA but does not own or “head” the MMAFA.  Also, he does not profit from it.  But, the issue that Zuffa will press is that he founded the organization and the web site maintains he is still a part of the organization.

This is a case of the internet coming back to bite back.  Zuffa’s attorneys have done its due diligence in scouring the web for information on Maysey and MMAFA.  One might see this as picking on someone that had attempted to help fighters seek out benefits.  Its clear Maysey was emotional during the initial press conference announcing the lawsuit.  We now see a strategy employed by Zuffa to block him out of the litigation.  Coincidence or not, this is litigation and this is what happens.

Two tiers of confidentiality is not unusual in litigation especially when highly sensitive material such as trade secrets are involved.  Zuffa’s arguments are valid but it will be how broad the definition of HIGHLY CONFIDENTIAL is that the court will look at when deciding whether or not it would be valid to preclude Maysey from looking at documents.  Certainly, one would think the court would have to balance its decision on the right for the plaintiffs’ attorney to communicate with his clients and prepare for trial.  MMA Payout will keep you posted.

Haymon-Golden Boy file Arbitration Briefs which may decide lawsuit

July 27, 2015

Arbitration briefs have been filed in the Al Haymon-Golden Boy case in which Haymon’s attorneys are seeking to stay the court case claiming that an arbitrator should decide the promotion’s grievances against Haymon and his business entities.  Arbitrator Daniel Weinstein is set to hear the parties’ arguments on July 29th.

Golden Boy argues in its brief to the Arbitrator that it does not have jurisdiction over the federal claims it filed against Haymon and his business entities this past May.  It states that the parties’ agreement was not “clearly and unmistakably” granting authority to arbitrate its particular dispute outlined in the May 5 lawsuit.  In addition, it states that Bernard Hopkins, a party to the lawsuit, is not a party to the Settlement Agreement signed by Golden Boy last December which Haymon’s attorneys claim negate GB and Hopkins’ federal claims which include Antitrust and Ali Act violations.  Hopkins is a plaintiff in the Golden Boy lawsuit.  Even if the Arbtirator claims that he has jurisdiction over the parties, Golden Boy argues that the federal claims are not within the arbitration clause and that the arbitration provision does not cover the term’s end.

The overall suggestion here is that the federal claims cannot be decided by an Arbitrator because the claims were never waived in the Settlement Agreement and/or the release of claims were not arbitrable.

In its opening arbitration brief which includes several sections that are redacted, Haymon’s attorneys argue that the Arbitrator has the exclusive jurisdiction to determine whether the federal claims are subject to the December 2014 Settlement Agreement executed between Haymon and Golden Boy.  It argues that Golden Boy has come up with the date of January 1, 2015 to “plead around” the Settlement Agreement signed by the parties.  Essentially, Haymon argues that the alleged monopoly and claimed violations of the Muhammad Ali Act existed on December 19, 2014.  Thus, the Haymon camp claims that the claims relate to the Settlement Agreement entered into by Haymon and Golden Boy. As for Hopkins, it argues that he is a shareholder in GB and the argument that it was not a party to the Settlement Agreement falls flat.

Haymon’s attorneys stress that “there is no explanation for Golden Boy starting its federal claims on January 1, 2015.”  This contention is in response to Golden Boy’s lawsuit which claims injuries sustained beginning on January 1, 2015.  In its briefing, Haymon attorneys stress that it had signed a bulk of the 100 fighters prior to the December 19th Settlement Agreement.  Thus, any sort of claim violating Antitrust laws or the Ali Act would have occurred prior to the parties entering into the Settlement Agreement.

Haymon’s attorneys also point to the broad release language in the Settlement Agreement in arguing that the release covers the present claims in the Golden Boy lawsuit.  They argue that Golden Boy could have negotiated for terms within the Settlement Agreement that would have addressed the issues currently before them.

Golden Boy's Arb Brief Re Preliminary Issues

Haymons’ Arb Brief by JASONCRUZ206

Payout Perspective:

We could know this week whether one of the two Antitrust lawsuits filed against Al Haymon will be put on hold.  One would think even with an Arbitrator ruling on jurisdiction, we will see an appeal by one of the sides.  It’s clear that the ruling will hinge on the language within the Settlement Agreement regarding the arbitration of the agreement.  We will keep you updated.

Plaintiffs file opposition to Zuffa’s Motion to Stay Discovery

July 4, 2015

Attorneys on behalf of the plaintiffs in the UFC Antitrust Lawsuit have filed an opposition to UFC’s Motion to Stay Discovery in the lawsuit that is now in the U.S. District Court of Nevada.

You might recall that Zuffa filed a Motion to Stay Discovery pending the court decision in its Motion to Dismiss.  The Motion to Stay Discovery was to be heard September 10, 2015 when the lawsuits were in San Jose.  Since the filing, the court determined that based on the forum selection clause found in fight contracts signed by many of the plaintiffs, the venue should be transferred to the federal district court in Las Vegas, Nevada.  Zuffa argued that since there was a likelihood that the curt would grant its Motion to Dismiss and would resolve all issues, discovery would be a moot point.  It also stressed the fact that the discovery process is “extensive, burdensome and costly.”  Zuffa cited the discovery requests which seek a voluminous amount of financial information from Zuffa.   In addition, Zuffa suggested that federal courts in California evaluated a request for stay during the pendency of a dispositive motion based on whether: 1) the pending motion must dismiss the entire case (or the issue in which discovery is aimed), and; 2) whether the court may determine the motion without the discovery.  Zuffa argues that the court can dismiss the case without the need for conducting discovery.

In its opposition, plaintiffs claim that the UFC’s motion to dismiss is “highly unlikely to succeed” and due to the fact that there are factual issues to resolve, discovery is required.  It also argues that a stay of discovery would hurt the plaintiffs’ case.

Plaintiffs state that the UFC’s Motion to Dismiss raises “at least four contentions” requiring discovery.

  1. Discovery related to UFC’s assertions that its exclusive contracts with fighters, sponsors, venues and others do not substantially foreclose competition or impair rival promoters.
  2. Discovery seeking to determine whether “minor league” promoters do not compete with the UFC.
  3. Discovery related to the argument that “Plaintiffs do not show how excluding would-be rivals from access to some venues, sponsors and TV networks amounts to substantial foreclosure.”
  4. Discovery regarding the UFC challenge of the term “elite MMA fighter” used in the industry creates a factual dispute.

Perhaps a dig at the UFC, the plaintiffs’ brief (on page 4) cites Bob Arum (a noted Dana White foe) stating that the boxing promoter “pays his boxers approximately 80% of the proceeds of events.”  The brief quotes Arum: “[b]ecause of the monopoly that the UFC has, [the UFC] pay]s][its] fighters maybe 20% of the proceeds that come in on a UFC fight.”

Response to Motion to Stay Discovery


Payout Perspective:

Its the standard litigation story that one side is stalling discovery, while the other side wants to facilitate discovery.

The opposition sets forth certain discovery requests it believes necessary for its case.  Essentially, it is laying the groundwork to broker a compromise with Zuffa to allow limited discovery.  The strategy here is for the court to determine what is fair and the fact that the plaintiffs outline a proposed plan may have the court allow the discovery to “see how it goes.”  Probably not what Zuffa wants, but one could see this happening.

If Zuffa wins its motion to stay discovery, it will save a lot of time and money and the litigation will hinge on the Motion to Dismiss.  If the court sides with plaintiffs and/or grants limited discovery, the plaintiffs may have a greater opportunity to withstand a dismissal.

We will see what the court decides.

Top Rank files suit against Al Haymon

July 1, 2015

Top Rank Boxing has sued Al Haymon and Waddell & Reed Financial in the U.S. District Court for the Central District of California in Los Angeles.  Similar to the lawsuit filed by Golden Boy in May of this year, it claims that Haymon and his business holdings violate antitrust law, the Muhammad Ali Act and California state Unfair Competition law.

The lawsuit, provided by the Los Angeles Times, filed on July 1st claims that Haymon attempts to circumvent the above-mentioned laws through his Premier Boxing Champions promotion.  Top Rank claims that Haymon and Waddell & Reed are seeking to “buy up and monopolize the entire vertical channel” of top fighters, “tying out” promoters, excluding promoters from major venues and using its “time buy” strategy as a “predatory ‘payola’ scheme.”

As stated in the Golden Boy lawsuit two months prior, the lawsuit identifies the scheme in which it claims that Haymon is using his market power in one business to take over a different business.  Haymon has a deep stable of boxers that fight exclusively on PBC/Haymon promoted cards thus foreclosing out the fighter market as well as the promotion for these fighters.

In an update from the Golden Boy lawsuit, Top Rank identifies a June 2015 issue in which California state regulators identified Haymon reserving venues such as Staples Center and The Forum so that other promotions would not be able to hold events there.  Per the LA Times, this was a reason why a fight between Lucas Matthysse and Ruslan Provodnikov was sent to a New York casino rather than a more attractive venue in Los Angeles.

Seeking to twist the dagger a little more, Top Rank picks up on Haymon’s music promoter background to accuse him of “payola.”  This is based on brokering “time buys” with a host of networks to air PBC exclusively.  Thus, the argument would be that other promoters are excluded from negotiating with those networks.

The lawsuit states that losses could exceed $200 million in PBC’s first two years in existence.  And while PBC may operate in the red, its “loss leader” strategy allows Haymon to gain an unfair advantage in the promoter market.

The Complaint seeks $100 million in damages against Haymon, et al.

Payout Perspective:

“The enemy of my enemy is my friend,” is an ancient proverb that might prove true in federal court in Los Angeles as both Golden Boy and Top Rank are digging in its heels against Al Haymon.  While it’s still too early to tell whether the two longtime adversaries will work together in its fight against Haymon, it will be an intriguing sidebar to this legal heavyweight battle.  The allegations mirror one another and offer some interesting legal issues.  One of interest to the boxing industry is Haymon’s alleged conflict of interest in serving as a “de facto” manager (although he’s labeled as an advisor) and promoter.  This is something specifically addressed in the Ali Act as prohibited.  MMA Payout will keep you updated.

Show Money Episode 5 discusses UFC and PBC lawsuits

June 7, 2015

Show Money Episode 5 is back with Bloody Elbow’s John Nash and Paul Gift. In this episode we discuss the status of the UFC antitrust lawsuit and the PBC lawsuit filed by Golden Boy.

If you would like to know a little more about the PBC lawsuit, you can find some more information here.

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