July 22, 2016
Former Bellator middleweight champion Alexander Shlemenko had his three-year suspension and $10,000 fine from the California State Athletic Commission (CSAC) reduced per a judicial court ruling in Los Angeles Superior Court this past Wednesday. The fine was reduced by the court and he should be able to return to fight in the state upon paying the reduced fine of $5,000.00. His suspension was deemed to have ended on February 28, 2016 per court order.
Schlemenko was represented by Howard Jacobs. Notably, Jacobs is representing Jon Jones with his recent drug suspension which caused him to miss UFC 200.
Per the CSAC, Shlemenko tested positive for steroids after Bellator 133 on February 13, 2015.
In a court ruling filed on July 18, 2016, the court sided with Shlemenko’s argument that the CSAC violated his due process rights by increasing his suspension from 1 to 3 years following his appeal. It also sided with Shlemenko that the CSAC was wrong in assessing two $2,500 fines for providing a false statement on an alleged application for license.
Shlemenko argued that the CSAC violated his due process rights because it increased his penalty following his appeal of the initial suspension. The court sided with Shlemenko as it stated: “Petitioner [Shlemenko] could not have known that by appealing the suspension of his license he was reopening the issue of the length of the suspension.”
CSAC increased Shlemenko’s suspension from 1 to 3 years after his appeal of the original punishment. The court notes that a 3 year penalty “was not even discussed until the closing briefs on the penalty issue, and by that time Petitioner was unable to respond.”
As for the fines, the court agreed with Shlemenko’s argument that the CSAC wrongly imposed two fines on Petitioner for false statement in his pre-bout questionnaire and lab intake form relating to his non-use of drugs. The court agreed that the statements were not made in connection with an application for a license.
In addition, Shlemenko claimed that the CSAC’s decision should be overturned because it “denied his right to have a second “B” sample of his urine taken to be opened and tested in his presence if the “A” sample tested positive for a banned substance. The court denied Schlemenko’s argument stating that it was not required for the CSAC to take a “B” sample to validate the test of an “A” sample.
The court also denied Shlemenko’s claim that he was denied a fair hearing because “the Commission improperly conducted its own research and exhibited bias against Petitioner and his counsel.” The court stated that there must be “concrete evidence” of bias and prejudice which they did not find in this instance.
The court ruling means that Shlemenko has served a suspension of over a year. But the legal process saved him an additional two year suspension and CSAC fine. The due process ruling clarifies some of the administrative issues with the process of fines and suspensions.
July 22, 2016
USADA has flagged George Sullivan for a “potential compliance issue” with the UFC’s anti-doping policy stemming from “voluntarily disclosed information” Sullivan provided to USADA. Due to this issue, Sullivan has been removed from his fight with Hector Urbina from the UFC on Fox 20 card this Saturday.
Sullivan denies the issue on his Facebook page.
As anyone that knows me or follows me on social media is aware, I am an outspoken advocate for keeping MMA clean of PEDs. I was shocked when I was told that I could not fight this weekend. I did not fail a test. I was pulled from the card due to a natural supplement being on my list of supplements that I voluntarily disclosed to USADA. This supplement has been on my list that I have disclosed to both the UFC and USADA prior to my previous fights. I have been tested for PEDs countless times in my career by different testing authorities, including USADA. I have never tested positive for any banned substances. I want to thank everyone that supports me. I plan to do whatever it takes to clear my name. I am confident that my name will be cleared.
The UFC has issued a statement on Sullivan:
UFC competitor George Sullivan voluntarily disclosed information to the U.S. Anti-Doping Agency (USADA) that could pose a potential compliance issue with the UFC Anti-Doping Policy. Out of an abundance of caution, Sullivan has been removed from his scheduled bout on Saturday night against Hector Urbina while USADA conducts an investigation into the matter.
Urbina will still weigh in as a potential backup opponent should there be a need for him to compete in another bout on Saturday. Otherwise, he will be re-booked for another card in the near future.
Unlike most UFC anti-doping infractions, it appears that Sullivan did not fail a test but a supplement he listed on his pre-fight questionnaire is at question. Should Sullivan have been pulled from his fight if it was a “potential compliance issue” and not related to a test USADA flagged. This is disappointing for Sullivan and his opponent Urbina who most likely will go without a fight Saturday and may, at best, receive his show money.
July 21, 2016
The Sports Business Journal took a deep dive into the UFC’s sale to WME-IMG. The article looks into the revenue drivers that had the acquisition price of $4 billion.
The purchase price of $4 billion represents a 22 multiple of the UFC’s earnings before interest, taxes, depreciation and amortization. On $600 million in gross revenue from 2015, UFC’s EBITDA is $180 million. $180m x 22 =$3.96 billion. The hope is that with a new media rights deal, the multiple will lower to 13-14 range which would make it a much better purchase.
Media rights, according to the UFC, could grow to $115 million per year to an average annual payout of more than $400 million starting in 2019.
The media rights do not contemplate PPV or UFC Fight Pass revenue. The UFC is set to start renegotiating in 2018 and believes it will have some leverage as other sports media rights deals run into 2020s.
The other revelation from the SBJ article is that ESPN, Fox and Time Warner all considered purchasing the UFC. The other potential purchasers included China Media Capital and Dalian Wanda Group.
But the concern from the potential buyers was that pay-TV distributors would not feel compelled to increase their affiliate fees which would generate the profit for media companies.
Yet, the UFC was an attractive acquisition here because of its media rights, it owns all of its content and the belief that they can build out the company’s “sponsorship sales and other content opportunities.” So while there is speculation as to whether distributors would facilitate an increase in fees, the opportunity to utilize the UFC’s assets were too good to pass up.
In order to make the acquisition, there is a plan in place to borrow a big portion of the money as part of the acquisition.
Sources: Goldman Sachs is launching a $1.3B 7yr loan (covenant-lite) to back UFC’s $4 billion LBO
Bank meeting tomorrow
— James Passeri (@JamesPasseri) July 21, 2016
According to the Sports Business Journal. Currently, the UFC has approximately $500 million of debt that will be retired as part of the $4 billion acquisition.
The article is a very thorough, detailed analysis of the deal. There is speculation that the deal might sour fall through due to the recent bad press concerning Brock Lesnar and Jon Jones. But, I would think that it might be posturing to obtain favorable concessions rather than actually backing out of the deal. The financing involves higher risk, higher interest bonds which is likely due to a number of factors involving the company’s current finances as well as the way WME-IMG would like to structure the deal.
July 20, 2016
USADA has handed UFC Featherweight Chad Mendes a 2 year suspension for violation of the UFC Anti-Doping Policy. It is the longest penalty issued by USADA since the policy was introduced last July.
Mendes admitted to his positive test but this did nothing to mitigate circumstances. He was flagged in June for a May out-of-competition test.
Via UFC-USADA web site:
Mendes, 31, tested positive for GHRP-6 (Growth Hormone-Releasing Hexapeptide) following an out-of-competition urine test conducted on May 17, 2016. GHRP-6 is a prohibited substance in the class of Peptide Hormones, Growth Factors, Related Substances and Mimetics under the UFC Anti-Doping Policy, which has adopted the World Anti-Doping Agency (WADA) Prohibited List.
While USADA has suspended other fighters for violations of the UFC Anti-Doping Policy, this is the first official suspension pursuant to its standard sanctions. A little over a year ago Mendes was in the company’s biggest event of the year against Conor McGregor. He has no career for the next two years. The penalty reflects the harshness of the new drug testing policy and should serve as notice for others.
July 20, 2016
The Zachary Light-Bellator lawsuit in California is getting personal. Bellator has filed a Cross-Complaint against Light stating that he stole money from the company and did not pay back a loan given to him due to the fact he was in financial trouble.
Light filed the lawsuit claiming wrongful termination back in May in Los Angeles Superior Court. Bellator was granted an extension to respond to the Complaint and it’s also filed its own Complaint against Light filed July 12th.
The cross-claim digs right into Light stating that Light told Bellator, that, “despite his sizable income, he had difficulty managing his family budget and was experiencing financial distress.” Bellator loaned Light $9,403.00 and entered into a written agreement to pay back the loan. Bellator attached a copy of the alleged agreement as an Exhibit to its Cross-Complaint. The company also claims that Light stole $4,600 in cash from VIP ticket sales from Bellator 136. Bellator claims Light now owes $5,050.00 plus interest.
Conversion, the civil claim alleged by Bellator, is essentially stealing. It also claims theft under California law and a breach of written contract which alludes to the purported failure of Light to repay the loan.
Bellator claims that as part of his job, Light “would collect the money he received from the sale of consignment and VIP tickets in connection with Bellator events, and remit the money to Bellator personnel shortly after he received it from purchasers.” He would then give the money to Bellator’s Chief Financial Officer, Michael O’Roark or Jane Estioko, Manager of Talent Relations. However, Bellator claims that Bellator remitted to Bellator “at least some of the money” he failed to give “thousands of dollars he collected.” The Monday after the event, Bellator 136, Light did not report for work citing medical reasons.
With respect to his financial issues, Light and Bellator entered into an “Authorization for Deduction” on December 18, 2014 for $6,974.57 in which he would repay the loan in monthly installments of $240.50 from his paychecks. It also appears that Bellator was charging him interest on this loan. The exhibit to the Cross-Complaint is below.
Light will have an opportunity to respond to these allegations. Obviously, these claims were filed as a result of Light’s lawsuit. The lawsuit is turning personal as Bellator infers the fact Light has had financial difficulties throughout. The loan was from December 2014 and the alleged theft occurred in April 2016. Were there any other issues in between this time that Bellator is holding back for the lawsuit or are these two issues the only claims against Light? Certainly Light will deny both claims.
The one question is why would Bellator give Light the responsibility of handling money on the company’s behalf if it believed he had an issue with finances. MMA Payout will keep you posted.
July 19, 2016
The UFC was notified on Tuesday by USADA that Brock Lesnar failed an in-competition drug test at UFC 200. The news comes on last Friday’s news that Lesnar had failed an out-of-competition test.
Lesnar has been tested 8 times by USADA since the announcement in early June that he would be returning to the Octagon at UFC 200.
The UFC Statement on Brock Lesnar on its web site reads:
“The UFC organization was notified today that the U.S. Anti-Doping Agency (USADA) has informed Brock Lesnar that his in-competition sample collection from July 9, 2016, at UFC 200, has tested positive for the same substance as his previously announced out-of-competition collection on June 28, 2016.
“USADA, the independent administrator of the UFC Anti-Doping Policy, will handle the results management and appropriate adjudication of this case. It is important to note that, under the UFC Anti-Doping Policy, there is a full fair legal review process that is afforded to all athletes before any sanctions are imposed. The Nevada State Athletic Commission also retains jurisdiction over this matter as the sample collection was performed at UFC 200 in Las Vegas.
“Consistent with all previous potential anti-doping violations, additional information will be provided at the appropriate time as the process moves forward.”
Per the UFC Anti-Doping Policy, below is the definition of In-Competition:
In-Competition: “In-Competition” means the period commencing six hours prior to the commencement of the scheduled weigh-in and ending six hours after the conclusion of the Bout.
The news of his in-competition drug test failure almost confirms that Lesnar was taking a banned substance and/or was cycling off of it in lead-up to his fight with Mark Hunt. The news is bad PR for the UFC and the WWE. While both organizations will move on, Lesnar’s drug test failure will foreclose his MMA career and will call into question its own drug testing policy.
July 18, 2016
ESPN reports that the Nevada State Athletic Commission extended the temporary suspension of Jon Jones per a commission hearing on Monday. The hearing revealed Jones’ A and B sample contained banned substances.
Prior to Monday’s revelation, Rashad Evans and Chael Sonnen inferred that Jones had tested positive for estrogen blockers which appears to be the case.
Jones has retained the services of Howard L. Jacobs. He is a noted anti-doping attorney that has represented cyclist Floyd Landis and Marion Jones. He’s also represented former Bellator fighter Alexander Shlemenko and Chael Sonnen.
The temporary suspension will be in effect until the commission can have a full hearing which will likely happen in September or October. Jones could face a 2 year suspension under the UFC Anti-Doping Policy as well as additional penalties from the Nevada State Athletic Commission.
The banned substances infer that Jones was doing something untoward. If Jones cannot broker a deal with USADA and the NSAC he will likely face a lengthy suspension and fine. Certainly, it’s a disappointment for the UFC as Jones is considered one of the best in the sport. Now, that has to be put into question considering this new discovery.
July 18, 2016
On Friday, Brock Lesnar was flagged by the United States Anti-Doping Association (USADA) of a potential violation of the UFC anti-doping policy due to an out of competition test from June 28, 2016. Although testing results of Lesnar’s “B” sample are yet to be revealed, the fallout from Lesnar’s appearance hurts the UFC and possibly the WWE.
On June 5, 2016, it was announced that Lesnar would fight at UFC 200 on July 9, 2016. The signing was unprecedented because he was under contract with the WWE. Yet, the WWE granted Lesnar the chance to fight in the Octagon once again. Despite the fact that the WWE has its own drug testing policy (known as the Wellness Policy – Lesnar has never been flagged for a violation), Lesnar was tested by USADA eight times in just the month lead-up to his fight against Mark Hunt. He took 5 tests in the first two weeks after it was announced he was returning. Multiple tests came up clean.
Despite the tests, the UFC policy handled by USADA dictated that a returning athlete to the UFC most give the company four months written notice so that USADA can put the athlete in the pool of those it may selectively test. But, the UFC anti-doping policy allows an exemption for a returning athlete that may be subject to drug testing. Per 5.7.1 of the UFC anti-doping policy:
An Athlete who gives notice of retirement to UFC, or has otherwise ceased to have a contractual relationship with UFC, may not resume competing in UFC Bouts until he/she has given UFC written notice of his/her intent to resume competing and has made him/herself available for Testing for a period of four months before returning to competition. UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.
The key sentence here is the last sentence: “UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.”
Since the UFC Anti-Doping Policy did not begin until July 1, 2015 and Lesnar’s last fight in the UFC prior to UFC 200 was December 2011, he was considered a new athlete. There has not been an official statement as to whether the UFC granted the 4-month exemption due to an “exceptional circumstance” or if it was “manifestly unfair to an Athlete.” Of course, either waiver could be easily explained.
But, one has to think that Lesnar and the UFC had contemplated his return as he had been training prior to the June announcement of his return to the Octagon. One might suggest that Lesnar could have notified the UFC of his return in the requisite 4 months to allow for the proper testing to occur.
However, it would seem that the parties wanted the Lesnar announcement to be a surprise. Recall, that Ariel Helwani and others from MMA Fighting were thrown out of a UFC event and Helwani was banned for life due to his report of Lesnar’s return prior to the UFC’s opportunity to make it themselves. Helwani along with his colleagues were reinstated a couple days later.
Notwithstanding the notice issue, let’s take a look at what Lesnar could face as a result of testing positive for a banned substance. First, Lesnar’s “B” sample, a second sample taken to determine the validity of the finding in the first sample, must confirm the initial finding of a banned substance. If this happens, Lesnar will face discipline from Nevada and the UFC per the anti-doping policy.
Since the infraction took place in Nevada, Lesnar will have to appear before the Nevada State Athletic Commission to address the drug test failure. At that time, we should know what drug(s) Lesnar tested positive for in his out-of-competition sample. In 2015, Nevada adopted guidelines for combat sports which included a 36-month suspension and 50-75% of the purse for a first-time offender for someone taking anabolic steroids.
In addition, the UFC anti-doping policy would discipline Lesnar.
Under Section 10 for Sanctions on Individuals, Section 10.1 specifically states:
An Anti-Doping Policy Violation occurring during, or in connection with, a Bout may, upon the decision of UFC, lead to Disqualification of all of the Athlete’s results obtained in that Bout with all Consequences, including, without limitation, forfeiture of title, ranking, purse or other compensation, except as provided in Article 10.1.1.
Read broadly, under the UFC-USADA Anti-Doping Guidelines, Lesnar could have his purse for the bout and “other compensation” taken from him. It would hurt enough that Lesnar would lose out on his $2.5 million reported purse but “other compensation” could mean money he makes from his PPV “upside.”
Not only could that happen, but the section further states that UFC could fine Lesnar up to $500,000 per Section 10.10 of the UFC-USADA Anti-Doping Guidelines. In addition, he could have his win against Mark Hunt overturned to a no decision per discretion of the Nevada State Athletic Commission according to section 467.850. This would not sting as much since Lesnar did not have a win bonus to forfeit. Regardless, he still could have a substantial amount of money taken away.
The monetary fine would be the hardest penalty for Lesnar. The $2.5 million is the largest reported payout for a UFC fighter in its history. But, Lesnar was going to make more from his PPV guarantee. It is being reported that the UFC 200 PPV drew 1.1 to 1.2 million PPV buys. In most markets, the PPV for UFC 200 was $59.99 HD and $49.99 SD. Lesnar was projected to make $3-5 million in addition to his $2.5 million.
Mark Hunt, Lesnar’s opponent has demanded that he receive half of Lesnar’s $2.5 million or else he is requesting his release from his UFC contract. Hunt, who made $700,000 for taking on Lesnar, will be disappointed to learn that under the UFC-USADA guidelines, any money forfeited by an athlete would be under the UFC’s discretion “to be applied to offset the costs of the Program or given to anti-doping research.”
The UFC could also fine Lesnar pursuant to its Code of Conduct which imposes discipline based on misconduct. Under its Code, “misconduct” may include, “Conduct that undermines or puts at risk the integrity and reputation of the UFC.” A violation of its drug program could fall under this.
There is precedent for a fine as Jon Jones was docked $25,000 for failing a drug test in December 2014. Of course, Jones’ drug test failure was for cocaine use. We note that the detection of this drug was done out of competition and should have not been tested for according to the rules.
Lesnar’s only statement related to Friday’s news of his potential violation was a vague “we’ll get to the bottom of this.”
The WWE does not seem to be concerned with the potential violation and has indicated his next appearance will be at its big event Summerslam, August 21st. They have not addressed the potential violation. From its perspective, its an MMA matter, that a WWE matter.
However, the question looms as to whether a Nevada State Athletic Commission suspension would affect his wrestling career. Some state athletic commissions oversee professional wrestling. Most commissions honor suspensions of an athlete in other states. Would a suspension in combat sports carry over to professional wrestling? We will see.
July 17, 2016
I hopped on with Paul Gift and John Nash of Bloody Elbow to discuss the UFC sale and the future impact. We also learned at the end of the episode that Brock Lesnar was flagged for a potential UFC anti-doping policy violation.
July 17, 2016
Bellator and PBC will have an end of summer card on back-to-back nights at the Honda Center in Anaheim, California August 26th and 27th.
Benson Henderson will headline the Bellator card on Friday night while Robert Guerrero will fight in the main event on the PBC card Saturday. Henderson faces Patricio “Pitbull” Freire and Robert Guerrero faces David Peralta.
For Henderson, it’s a return to lightweight after an inauspicious Bellator debut against Andrewy Koreshkov at 170 pounds.
Perhaps this is another type of synergy for the two organizations that are on Spike TV. You could also see it as a sort of mini-weekend for hardcore combat sports fans similar to the UFC with back-to-back live events. Henderson’s fight against Freire is pivotal for the company as the former UFC lightweight champion was a big signing for the company. Another loss could mean that the Viacom-owned company picked up another UFC fighter that is past his prime.