Plaintiffs file Opposition to UFC’s Motion for Summary Judgment in Antitrust lawsuit

September 21, 2018

Plaintiffs in the Zuffa Antitrust Lawsuit have filed their Opposition to UFC’s Motion for Summary Judgment.  The 47-page long opposition brief includes over 100 exhibits, many of which are redacted, or include deposition transcripts with redactions.

The main argument in the Plaintiffs’ Opposition is that the UFC is the “major league” of MMA and it has done so through predatory means.  The theory asserted is that it has become the top of the food chain in MMA through its retention of top-level fighters.  It argues that “a critical mass” of elite fighters is necessary to compete with the UFC.  But, the UFC’s scheme has foreclosed this opportunity.

Despite the fact Zuffa argued in its motion that there was ample competition within the industry as evidenced through testimony of rival MMA promoters and fighters that left the organization, Plaintiffs argue that the “supposed evidence of Fighter mobility merely reflects that the UFC is the “major league” of MMA and cuts Fighters who do not meet its standard.”

Plaintiffs argue in their brief that Zuffa’s anticompetive scheme was “designed to lock in current and potential top fighters to exclusive contracts for the most valuable parts of their careers.”

Oppos to MSJ – Plaintiffs by on Scribd

It noted that Zuffa used its market leverage to extend exclusivity over its fighters. This was done through coercion, intimidation and other means of forcible persuasion.  This included four ways outlined by Plaintiffs and evidenced through deposition transcripts.  This included:

  • Move Fighters to unfavorable placement on the fight card for an event
  • Control the timing of a bout (refuse to off Fighters bouts)
  • Delay a Fighter from competing for another promoter through the Right to Match and Exclusive Negotiation clauses in its contract.
  • Deprive fighters of title opportunities

Plaintiffs argue that Zuffa’s scheme impaired competition through locking up the majority of top fighters, deprived rival promoters of the key input of top fighters and relegated other promoters to feeder or minor leagues.  It calls out other promoters cited in Zuffa’s motion that indicated that they could compete “are not credible and are disputed.”  In fact, Plaintiffs show why Bellator, OneFC and PFL’s statements indicating that they are on par with the UFC are false.  Also, noted in a footnote to the motion, Absolute Championship Berkut, also recognized as a direct competitor, noted the cancellation of three events due to “organizational and financial problems.”

The Plaintiffs cite Dr. Singer’s expert report regarding the input and output markets and its showing how Zuffa has suppressed fighters’ wages, restricted the output of fighter services and excluded rivals.  Plaintiffs also argue that the acquisitions of other organizations by the UFC stifled competition and restricted fighter mobility.

Payout Perspective:

There is a lot to digest here and MMA Payout will take a deeper dive into the opposition including the evidence used by Plaintiffs.  The crux of their opposition is that the UFC’s anticompetitive scheme is based upon the retention of top tier fighters through exclusive contracts.  It locked in top fighters during their “most valuable parts of their careers” and was to leverage its market power to extend exclusivity.  As a result, it impaired competition despite the views of rival promoters that indicated it had no problem signing fighters it wanted.  As a result of the scheme, the anticompetitive effects included suppression of fighters’ compensation, reduction of “quality” MMA events and it suppressed marketwide output of MMA Events and inflated prices.  Furthermore, Zuffa cannot show that the contractual exclusivity provided procompetitive benefits which may outweigh the anticompetitive effects.

Zuffa has a chance to offer a Reply to this Opposition which will be submitted on November 2nd.

Joe Silva explains UFC matchmaking in deposition excerpts

September 20, 2018

After a little bit away, MMA Payout takes a look at some of the depositions taken place in light of the Zuffa Antitrust lawsuit.  The depositions were attached to the motion papers in support of Zuffa’s Motion for Summary Judgment.

Joe Silva, former matchmaker for the UFC, was deposed regarding his role with the company.  The deposition took place in June 2017.

Exhibit 52 – Depo of Joe Silva by on Scribd

Silva was asked about the acquisition of Pride and whether after the acquisition did Zuffa have the vast majority of the world’s top fighters.  Silva stated, “I would say we had the most, but not all.”  He added, “As you see that even after the acquisition, we continued to bring in other fighters from other places in the world.  If we’d already acquired all the best fighters, then no more acquisitions would be necessary.”

Silva was asked about when a fighter may be ready for the UFC and the talented 155 division.

There is a back and forth regarding an email from Stipe Miocic’s ex-manager Greg Kalikas.  The email indicates Silva telling Kalikas: “Too many 170s under contract right now.  Keep Stipe winning and we’ll get him in.”

 

Silva explained, “…it was very important for us to not have too many people on the roster.  We wanted to be able to manage it.  We wanted to be able to fulfill all our contractual obligations, so you have to limit the amount of people that you sign at any one time.  So at this time, 170 was particularly full….To maintain a fight for a fighter who didn’t get injured, I will now go to other people on the roster, and go, hey, I’ve got a dropout, fight’s only two weeks away from now, can you do it.  And if they go, no, I can’t make weight in two weeks, I haven’t been training, I’ve got an injury, I go to everybody who is on the roster.  If nobody can do it, I still want to get a fight that other guys, so now that’s an opening…”

Silva testified about a “policy” he had in which he would not release a fighter if they had lost 2 in a row and then lost a third but the last match was taken on late notice.  He also stated that he “never put pressure on anybody to fight late notice…”

He also stated that he left contracts up to the legal department although he knew that they were revised through the years.

He was aware of the fact that there is a provision in Zuffa contracts that extend the terms of the contract if fighters turn down fights.

There is some criticism about former UFC fighter Melvin Guillard.  It was based on an email to Dana White which states, “In the press conference the day before he said he is an A level fighter fighting in a B level show.  Never was the smartest guy.”  Originally, plaintiffs’ attorney thought he was talking about Justin Gaethje.  But, it appears that there is some mistaken interpretation as Silva explains that Guillard was talking about World Series of Fighting.


There is a text where he makes fun of Bellator’s main event of Tito Ortiz versus Rampage Jackson.  He explains about a comment regarding Jackson criticizing Silva for putting him up against fighters with wrestling backgrounds.

He also points to the hypocrisy of Bellator which was tournament based but turned to Ortiz- Jackson to headline their show.

There is also an email show to Silva in which Monte Cox emails Silva about the potential to have one of his fighters on a UFC Winnipeg show.  Silva responds that he could not because “I have to cut a hundred guys.”  Obviously, Silva was exaggerating but he explained about the roster and at the time – March 2013 – he had “too many fighters under contract.”

Payout Perspective:

The deposition testimony reveals a little bit behind the thought making process of Silva as he made the bulk of the matches for the company until he left shortly after the sale of the UFC.  He came off as a reasonable individual and there was not much in testimony that presented red flags.  Plaintiffs’ counsel did discuss some controversial emails which Silva easily explained away.

Plaintiffs in UFC Antitrust Lawsuit request Court to file response to MMA Manager Declaration

August 30, 2018

The plaintiffs in the UFC antitrust lawsuit have requested that the Court review its Surreply Brief in opposition to Zuffa’s Motion to Seal Zuffa’s Summary Judgment Motion and Portions of Plaintiffs’ Class Certification Reply.

Specifically, the Surreply Brief addresses the Declaration of MMA Manager Ali Abdelaziz which was included in Zuffa’s Reply Brief.

A Surreply Brief is not automatically considered by the Court, in fact, it is usually disliked since its additionally work for an already overworked court.  These types of briefs must bring up new evidence, facts important to the case not brought up or another exigent reason.  Reiterating arguments that would have been contained in an opposition will likely get poor treatment.

Here, plaintiffs believe the need to address Abdelaziz’s Declaration which Zuffa used to aid its Reply Brief.  The argument in which Zuffa uses Abdelaziz’s testimony is based on the need to seal payout information of fighters.

The manager of many top fighters submitted this declaration on behalf of Zuffa.  He claims that public disclosure raises “legitimate safety concerns” for fighters and their families.  He also believes that public disclosure of terms and compensation of fighters’ agreements.

Declaration of Ali Abdelaziz by JASONCRUZ206 on Scribd

It is worthy to note that no current UFC fighter signed a Declaration in support.  But, Abdelaziz, who represents a huge swath of UFC fighters supports the sealing of documents.  Although Abdelaziz’s declaration supports the last argument in Zuffa’s brief (and usually the weakest), plaintiffs felt compelled to address it.  The declaration was torn apart by the plaintiffs in its Surreply Brief.

Motion to FIle Surreply by on Scribd

Plaintiffs’ list four reasons why Ali’s Declaration fails: 1) The rationale that disclosure of fighter compensation hinders rather than helps in obtaining negotiating athlete purses rings false lin light of evidence of salaries of players in other major leagues.  2) The Declaration contradicts Zuffa’s own arguments in favor of sealing since it argued that disclosure would put Zuffa in a strategic disadvantage whereas Abdelaziz says non-disclosure is advantageous. 3) The allegation that fighters would be put at risk of kidnapping or extortion is not supported by credible evidence.; and 4) Plaintiffs calls Abdelaziz credibility a question since he’s an MMA manager and alleged principal in the WSOF as a promoter.

Payout Perspective:

While the brief is damaging, its still up to the Court to decide whether or not to take it into consideration.  Of course, we know that Zuffa will file an opposition to this Surreply which means more filings.  MMA Payout will keep you posted.

Zuffa requests court to review Hunt ruling in antitrust case

August 29, 2018

Zuffa has filed a Motion for Leave to File Supplemental Authority regarding its Motion to Seal related materials in its Summary Judgment motion of Plaintiffs’ lawsuit in their antitrust case.

The supplemental authority is the recent ruling in the Mark Hunt case on Zuffa’s “Renewed” Motion to Seal Documents in that case.  The court previously denied the Motion to Seal but changed course in granting the “Renewed” Motion.  It should be noted that Hunt’s attorneys did not oppose the “Renewed” motion for some reason.

This Motion hopes to include this ruling in deciding the pending motion before the court in the Antitrust matter. They persuasively argue that Plaintiffs had referred to the previous Hunt ruling where the Court denied the sealing of records.  As Zuffa points out in this motion, the original order was “without prejudice” whereas the renewed motion was “with prejudice.”  The difference with or without prejudice is that “without” prejudice means that the ruling could be amended on a party’s motion.  With prejudice is the final ruling of the Court.

Supplemental Authority After Hunt by JASONCRUZ206 on Scribd

Payout Perspective:

The Hunt ruling, although I disagree with the outcome, will likely be considered in the antitrust case as it relates to similar documents.  Thus, the motion will be granted, and the Court will consider it as persuasive authority when determining whether or not to unseal the redacted materials by Zuffa.

Egg whites and a UFC contract: Cung Le depo transcript reveals his signing with Zuffa

August 22, 2018

Cung Le met with Dana White and Lorenzo Fertitta in person to discuss signing with the UFC over egg whites at the UFC’s offices according to the released depo transcript attached to Zuffa’s Motion for Summary Judgment.  His testimony reveals that he was “stuck” in his UFC contract a year and a half after he retired.

The deposition took place in April 2017 in Las Vegas at the offices of the UFC’s lawyers, Boies, Schiller & Flexner.  Le testified that he negotiated his entrance into the UFC himself and was not represented by an agent or manager.  He indicated that he flew to the Bay Area to Vegas on his own and made his way to the UFC offices.  In the depo, he testified that he had an interest in the UFC and White and Fertitta were big fans of his from Strikeforce and when he competed on ESPN.

Exhibit 18 – Cung Le Depo by JASONCRUZ206 on Scribd

White and Fertitta had their chef cook Le egg whites and he was presented with a UFC contract.  Le stated that he wanted to look it over before signing.

It appears that they were discussion of his Identity Rights in the contract.  Since Le was doing movies, he was concerned about a conflict with his Zuffa contract.

Le testifies that he retired but was precluded from doing work with any other organization for a year and a half because he still had two fights left on his contract.  He stated he couldn’t do commentating and was not able to negotiate with Bellator.

For a look at our summary of the deposition of Ike Epstein, click here.

Payout Perspective:

There is a portion redacted where Le goes into who he contacted prior to filing the lawsuit.  It also may explain why he decided to file the lawsuit and become the named plaintiff in it.  Prior to this lawsuit, he had never been involved in any other legal proceeding.  The testimony on Identity Rights is interesting considering Le’s movie career and celebrity outside of the UFC.  What may be helpful for his cause his his testimony that he was “stuck” for a year and a half from doing anything because he was still under UFC contract.  This includes being foreclosed from doing commentary with another organization due to his contract with the UFC.  Le may be a perfect plaintiff for this case since he had an established MMA career prior to the UFC, negotiated his own deal and has a career outside of MMA.

Details of Zuffa exec deposition reveals questions on exclusivity provisions, right to match and toy deals

August 20, 2018

Zuffa filed its Motion for Summary Judgment in which it wishes to dismisses the antitrust lawsuit filed by ex-fighters.  MMA Payout takes a look at some of the deposition testimony attached as exhibits to the motion.  This is the first of a series.

In order to prove its case, Zuffa attaches portions of the deposition testimony it cites in its motion.  The depositions are not the full transcript but small snippets of pages from the depositions.  There are a portions that are redacted for the public so we cannot see the full transcript.

For instance, Sean Shelby’s deposition attached to the motion reveals nothing. The first question is visible, but the rest of the deposition is redacted.  The question posed to Shelby was an Exhibit which is a text completion between “multiple parties.”   One could only assume that the texts may be between Shelby and/or Dana White, Joe Silva or another UFC employee.

Depo of Sean Shelby by JASONCRUZ206 on Scribd

But, not all transcripts are like Shelby’s.  For instance, UFC Executive, Ike Epstein includes some interesting testimony.

Exhibit 8 – Depo of Ike Epstein by JASONCRUZ206 on Scribd

Reason for Exclusivity

The snippets that were provided in the exhibit provide Epstein’s testimony with respect to the purpose of exclusivity provisions in athlete contracts.  He testified that the UFC were “putting on 40 fights per year, and in order to put on 40 plus fights per year, you have to know that fighters are available to put on those events.”  He added, “[i]f the fighters were not exclusive to us, we could never put on 40 plus events per year, and our output would significantly decrease.”

He stated that the provision was a benefit for all UFC fighters and that no one would be affected negatively by the clause.  He did qualify this statement by testifying “all fighters are different.”  Although lured into the trap that exclusivity prohibits fighters from finding other opportunities elsewhere, Epstein stated that the sole purpose of the provision was to ensure that the company could do 30-40 events per year.  He qualified his answer to the UFC lawyer’s “narrow question” by stating that he disagreed with the “underlying assumption” in the question that assumed there were more opportunities for an athlete but for the exclusivity provision in UFC contracts.

At this point in the testimony it seems to get contentious, as the parties fight over the semantics of the questions.  Here, the plaintiffs’ attorney would like Epstein to agree to the question that based on the UFC’s exclusivity provision, the fighters cannot seek opportunities to fight elsewhere.  However, Epstein is wary of the trap and will not cede to this admission.  He does note that the viewpoint of the question infers something that the UFC does not want to admit, but plaintiffs cannot provide.  And that is that if fighters were given an opportunity to freely contract with others, they would earn more money, find more fights and/or both.

When asked by plaintiffs’ attorney Joseph Saveri whether boxing has the “same sort of exclusivity problems,” Epstein said yes.

He also agrees that most fight contracts are for 4 fights or 20 months, whichever comes first.  However, some fighters have longer terms.

He also testifies about the negotiations surrounding the Gilbert Melendez contract and how they thought the matching offer given to the lightweight was unreasonable.

There is an interesting exchange where Epstein discusses the willingness to match the offer made to Cheick Kongo.  However, the company decided to let the heavyweight go and he signed with Bellator.

Jakks and Round 5

Epstein is questioned about a toy deal with toy makers  Jakks Pacific and Round 5.

The limited testimony addresses Round 5’s ability to sign exclusive agreements with certain fighters.  Epstein notes that Round 5 was able to secure exclusive contracts to do toy deals with UFC fighters and were paid directly.   Jakks Pacific had the official license to replicate UFC fighters but, for a time, were foreclosed from making certain UFC fighters due to an exclusive contract with Round 5.

In 2009, Jakks, the master toy licensee for the UFC sub-licensed with Round 5 Corp to share UFC and MMA talent in the selling and distribution of action figures.  This brought all of the UFC athletes under the same umbrella and all were paid the same.

The example underscored the limited freedom that athletes had to resource other forms of revenue.  Ultimately, this was consolidated within Zuffa.  This testimony also related to Identity Rights for fighters.

Who is this?

There is a snippet where they discuss an individual that is hard to decipher without more information.  All that can be gathered is that “he regularly reports on ratings of UFC events,” and Epstein viewed reports as “business intelligence.”

Payout Perspective:

We’ll take a look at other depo transcripts as we await the plaintiffs response to this motion.  Epstein, a lawyer, understands the depo process so its no surprise that his testimony did not illicit anything of substance aside from the fact he liked Cheick Kongo.

Plaintiffs in UFC Antitrust Lawsuit Oppose Sealing of Documents by Zuffa in latest legal filing

August 14, 2018

Plaintiffs in the UFC Antitrust lawsuit have filed an opposition to Zuffa’s request for a Motion to Seal documents in its Motion for Summary Judgment.

Plaintiffs argue that the documents requested by Zuffa to seal from public view do not contain trade secrets, commercially sensitive information, are of public knowledge and are too old to contain trade secrets.  As a result, it has failed to carry its burden that it will be harmed if it is disclosed by the public

Plaintiffs have filed its own Motion to Seal here premised upon Zuffa’s request to seal.  This is based upon the Protective Order previously agreed to and signed by the parties, the documents that they seek to seal have been designated as “Confidential or Highly Confidential – Attorneys’ Eyes Only.”

According to Zuffa’s Motion to Seal, it places its requests in five categories: Financial Information, Business Communication and Strategy, Third Party Information and Expert Reports and Testimony.  Notably, Plaintiffs point out the vague notion of why Zuffa believes certain business communication and strategy should be sealed citing “public disclosure of this information would be likely to provide competitors with unfair and damaging insights into Zuffa’s business practices, including providing those competitors with unearned competitive advantages.”

The Motion notes that Zuffa would like to seal portions of deposition testimony from former Zuffa vice  president and assistant general counsel Michael Mersch about a hypothetical contract.  There is also a request to seal testimony from Lorenzo Fertitta but that portion of the motion has been sealed at this point pending a Court determination.

The Motion cites to certain MMA articles which are about the UFC contracts which display the fact that the information that the UFC seeks to seal is already of public information.

Oppo to Motion to Seal by JASONCRUZ206 on Scribd

Payout Perspective:

Plaintiffs have just started to oppose the sealing of documents at this point.  They note that previously they have allowed Zuffa to seal info with the motion going unopposed.  Either Plaintiffs are recognizing a new strategy or someone was asleep at the wheel and didn’t realize that they should have opposed these motions all along.  It will be up to a Court to decide if a legal burden to seal the documents has been proven by Zuffa.  A Court could take a look at what is being sought to disclose and render that certain things may be disclosed while others may remain to be sealed.  But, the inference is that all filings should be for public view and its up to a party to prove legal harm from disclosure.  MMA Payout will keep you posted.

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.

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