Update on Zuffa Antitrust Lawsuit

April 25, 2015

In a brief litigation update, the parties in the Zuffa Antitrust lawsuit recently agreed to mediation to occur no later than September 30, 2015.  The decision was determined as part of a pre-trial case management conference.

The parties met and conferred as to whether dispute resolution was appropriate for the case.  The parties have stipulated that mediation is premature at this point due to the upcoming motions related to transferring the venue to Nevada and Zuffa’s Motion to Dismiss which will be determined in July.  But, the parties agreed to mediation, and choosing a mediator, by the end of September.

Le, et al. and Zuffa ADR Stipulation

ADR Certification by the Parties

Payout Perspective:

Means nothing at this point since the decision is a perfunctory matter under the local court rules (see CR 16) as litigation in this matter progresses.  Based on the decisions in the Motion to Transfer and Motion to Dismiss, one party may be more willing than the other to mediate the case.  It would have also been likely that the Judge may facilitate (i.e., force) the parties into ADR (“alternative dispute resolution”) at some point.  Even if the parties mediate the case, there is no guarantee that the case would be resolved at that stage and it may continue to trial.

MMA Payout will keep you updated.

UFC on Fox 15 Prelims and final overnight ratings for main card

April 24, 2015

Before we enter the weekend, via a Nielsen source we report that the Prelims from this past Saturday’s UFC on Fox 15 airing prior to the Fox network drew 1.4 million viewers.  In addition, the UFC on Fox main card rating came up to 2.7 million from 2.43 million.

The only other time that the UFC on Fox Prelims aired on Fox was in July 2014 when UFC on Fox 12 drew 1.3 million viewers.

This past Saturday’s Prelims event featured Beneil Dariush defeating Jim Miller by unanimous decision.  The 2 hour Prelim event aired from 6:00pm to 8:00pm ET.

Payout Perspective:

Prelims improved from its last airing on the network and we shall if it has another opportunity to do the same in July with what looks to be a stacked card.  The Prelims went up against the NBA and NHL Playoffs.  The final numbers for the main card fell short of the last two UFC on Fox cards but did better than last April’s UFC on Fox 11 event which drew 2.5 million viewers.

The Ultimate Fighter 21 Ep 1: 490,000 viewers

April 23, 2015

Wednesday’s debut of The Ultimate Fighter 21: ATT vs. Blackzilians on FS1 drew an overnight rating of 490,000 viewers with a 0.3 rating in the 18-49 demo.  The 90 minute debut was the second most-watched show on the network Wednesday.

In comparison, the debut to TUF 20 did 536,000 viewers, TUF 19 did 476,000 and TUF 18 drew 595,000 viewers.

Soccer came first in terms of viewership on FS1 on Wednesday.

Topping the cable ratings on Wednesday was NBA Playoff basketball featuring the San Antonio Spurs and LA Clippers which aired during a part of the TUF debut.  The NBA on TNT drew 3.848 million viewers during the Spurs-Clippers game.

(H/t: Sports TV Ratings)

Payout Perspective:

The NBA and NHL Playoffs likely hurt the debut of TUF.  But this season of TUF seems to have less buzz than many other seasons.  This, despite the wrinkle this season with fight teams going at each other.  We’ll see how the season plays out and whether there will be an audience.

Zuffa retains former Solicitor General for NY appeal

April 23, 2015

The legal fight in New York is not over yet. This week, the UFC announced that it has retained former U.S. Solicitor General, Paul Clement to appeal Judge Kimba Wood’s dismissal of Zuffa’s lawsuit in New York.

Via the UFC release:

The judge’s dismissal of the UFC’s case against the State of New York in March was based on a technicality, and the decision confirms the state is misapplying the law. UFC was advised by the judge to “consider filing new vagueness claims.” Wood also stated the New York Attorney General’s “recent statements that the Ban prohibits sanctioned MMA” were made “despite [the law’s] plain language to the contrary.” UFC also believes that Judge Wood erred in failing to recognize the serious First Amendment problems with the New York law.

Clement’s job as Solicitor General required him to be the representative of the federal government before the U.S. Supreme Court. He has argued over 75 cases before the U.S. Supreme Court according to his law firm bio.

If Zuffa were to appeal the judge ruling (which we should know soon), it will go to the U.S. Court of Appeals for the Second Circuit.

UPDATE:  Zuffa has filed its official Notice of Appeal to the Second Circuit.  It not only will appeal the Court’s dismissal of the vagueness claim, but the other causes of action previously dismissed.

Payout Perspective:

The retention of Clement certainly means we shall see an appeal of Judge Wood’s dismissal. It appears that the appeal will encompass not only the recent dispositive motion dismissing Zuffa’s claim that the New York law is unconstitutionally vague but also the causes of action dismissed previously by Judge Wood which includes the UFC’s argument that the New York law violates the First Amendment.

Clement has had his share of sports law cases in his past including representing the NBA during labor negotiations in 2011, NFL v. Brady (which was filed during the NFL lockout in 2011) and NCAA v. Governor of New Jersey II (regarding the fight to legalize sports gambling in New Jersey).

Dish Network ditches UFC 186

April 23, 2015

MMA Junkie reports that satellite provider Dish Network will not be offering UFC 186 this Saturday and thus prohibiting its approximately 14 million subscribers from ordering the pay per view.

The UFC issued a statement regarding the situation.  The statement in part reads:

Due to contractual issues, DISH Network will not be offering UFC 186: Johnson vs. Horiguchi on Pay-Per-View this Saturday.  While all other providers in the U.S. have come to an agreement on renewal terms, DISH Network has elected not to renew its distribution agreement with UFC.

Via MMA Junkie:

The industry leader signed a multi-year deal with Dish that ended on Jan. 31, though an extension was inked for March’s UFC 185, according to a person familiar with the UFC’s agreement. The person requested anonymity because he was not authorized to speak publicly on the matter.

A Dish Network rep confirmed the impasse with the UFC and that it would not offer the pay per view to its subscribers.  It did indicate that the two sides were in negotiations for further events.

Payout Perspective:

According to this Broadcasting & Cable article in which Dish inked a deal to carry the Weather Channel, Dish Network is a notoriously difficult negotiator.  Of course, the UFC probably is seeking a bigger percentage of the PPV revenue.  At this point, it has some leverage in a new deal since it had a big first quarter of 2015 with its PPVs and Dish has lost PPV revenue due to the WWE Network.  You may also argue that due to the bigger cut HBO/Showtime is taking from PPV revenues from distributors, Dish is not seeing returns via PPVs.   Thus, the UFC is seeking a better contract.  Of course, UFC 186 is one of the weakest cards (on paper) despite the return of Rampage Jackson to the card.  We will see if the two sides will be able to come to an agreement by UFC 187 which looks to be a big show.

Court to determine Wanderlei Silva fate in Nevada by May 11th

April 22, 2015

After extensive oral argument on Wednesday, a Clark County District Court will issue a ruling on or before May 11th as to whether it will uphold a lifetime ban issued by the Nevada State Athletic Commission on Wanderlei Silva.

Judge Kerry Earley heard oral arguments from Silva’s attorney Ross Goodman and Nevada Deputy Attorney General Chris Eccles arguing on behalf of the NSAC.  The petition for review was filed by Goodman on behalf of Silva who was not in attendance at Wednesday’s hearing.  It essentially appeals the NSAC ban and fine of Silva stemming from his evading a drug test in lead-up to UFC 175.

MMA Junkie’s John Morgan, who attended and tweeted the proceedings, reported that the primary question was whether the NSAC was correct to order Silva to submit to a drug test “out of competition” although he was not licensed by the state at the time.

As maintained by Goodman in his pleadings and oral argument, the NSAC does not have jurisdiction over a fighter not licensed in the state.  Therefore, it had no power to suspend or punish.

Eccles argued that Silva took part in a news conference promoting the event and was thus “an unarmed combatant and contestant who was contracted to appear in the state as such.”

While the question of the severity of the suspension was discussed, it appears that the primary issue is that of jurisdiction.

Judge Earley indicated that she wanted more time to review the relevant statutes and regulations prior to issuance of a ruling.

Payout Perspective:

As always, the issue of jurisdiction must be determined first prior to discussing the substantive merits.  This could be a case where the Court knows a wrong has occurred and wants to make sure that the right result is made.  But, how do you do it when the law is not in your favor.  The relevant statutes appear to favor Silva’s argument but the NSAC makes an artful (and maybe persuasive) argument that the law should be interpreted broadly to include Silva within the jurisdiction of Nevada.  We shall see what the Court does on May 11th.

More on Appellate Court decision to allow Rampage to fight Saturday

April 22, 2015

A New Jersey Appellate Court has overturned the portion of the Preliminary Injunction preventing Rampage Jackson from fighting this Saturday at UFC 186.  According to the Court opinion issued Tuesday, the Preliminary Injunction, aside from his fight remains.

The rest of the issues will be determined by the trial court where Bellator sued Jackson for allegedly breaching his contract.  Jackson claims it was Bellator that breached the agreement.

The trial court granted Bellator MMA’s preliminary injunction which precluded Jackson from fighting April 25th.  However, Jackson filed an emergency appeal to reverse the trial court’s decision.  The appeal went under the radar until the announcement of the opinion on Tuesday.

The Appellate Court determined that any irreparable harm that may be suffered by Bellator due to Jackson fighting on Saturday was just “vague speculation” which overturns the trial court’s determination that Jackson’s involvement at UFC 186 would have caused reputational harm as well as the opinion of the trial court that Bellator’s investment in Jackson was more than just monetary.

Brett Okamoto tweeted a pic of the 3 page order and MMA Junkie has obtained it as well.

Payout Perspective:

The Appellate Court’s opinion makes the ongoing lawsuit between Jackson and Bellator clear as mud.  It also presents the issue that Bellator may either amend its legal Complaint to include the UFC or sue them separately.  A footnote to the opinion indicates that there may be a time where the preliminary injunction would need to be further amended or eliminated altogether and that the parties return to the Appellate Court.  The message does not put a lot of faith in the trial court.  Sure, each party knew that they could seek relief from the appeals court but to have the court actually announce this in a footnote seems like an overseer of the trial court.

With that said, the Appellate Court opinion negates the trial court opinion on the issue of irreparable harm when it came to the issuance of the preliminary injunction.  In essence, it believed that the trial court may have over-analyzed the issue with respect to Bellator’s investment in Rampage, the contractual landscape of MMA fighters and the unique value of Rampage.  It also seemingly dismissed any argument or value in Bellator’s argument regarding reputation harm.

MMA Payout will continue to monitor.

UFC manager comments on Reebok deal, fight management

April 22, 2015

In light of Zuffa’s announcement that it has changed the policy through which it will compensate fighters under the Reebok sponsorship deal, a manager of UFC fighters has spoken out about the deal and the sponsorship landscape.  Oren Hodak of KO Reps who represents Johny Hendricks, Ovince St. Pierre and Joe Lauzon among others has expressed his opinion on the problems with the current state of MMA sponsorship.

“The current problem in the MMA landscape is the managers/agents that are in the business.  They aren’t working hard enough or smart enough going after non endemic brands.  They are simply seeing a logo on another fighter and then contacting that company. Or even more pathetic is agents calling another agent to help them out with a deal,”  Hodak told MMA Payout.  Hodak holds a Master’s degree in Sports Marketing and worked in the sports industry for several years before opening up his MMA management company.

“KOreps has had great success giving companies such as Reebok, Bass Pro, Smart Stop Self Storage, Instaloans and most recently Parts-express.com their first real taste of Octagon exposure in addition to partnering with fighters outside of the cage,” stated Hodak.  “Sure, the sponsor tax takes money out of budgets from your core MMA clothing and supplement companies but there are plenty more companies out there with a sports marketing budget.  Over the years the UFC has slowly raised the sponsor tax and added numerous categories to the non-approved list, giving fighters less and less opportunity. In turn, managers have an excuse as to why they aren’t producing and UFC has fighters openly complaining about sponsorship money.”

On Monday, the Sports Business Journal reported that the UFC had changed the way it would pay its fighters through the Reebok sponsorship deal which goes into effect in July.  Instead of relying on media rankings, it would base the sponsorship pay on the number of fights an individual has had under Zuffa.  This would include fights in Strikeforce and WEC after both were acquired by Zuffa.  The change in the policy was said to be based on speaking with a number of fighters and managers.

“Some fighters may come out ahead with this new deal but I believe the fighters with professionally qualified sports management behind them will not,” Hodak added, “We have already heard from numerous fighters losing deals because they can’t utilize the valuable fight night impressions surrounding tv viewership.”

Payout Perspective:

It’s clear that despite the change in payment structure, the UFC-Reebok deal will still affect the bottom line of many fighters.  Hodak points out an issue he sees as a manager of fighters.  It’s an interesting viewpoint and a constructive critique on the nature of the business.  It also calls into question the management practice of some in the industry.  Not only will the sponsorship landscape change in the UFC, but the management of fighters may change too.  We shall see how this plays out in the UFC after the Reebok deal is put into place this summer.

Injunction overturned, Rampage back on UFC 186 card

April 21, 2015

In a surprising turn of events, the New Jersey court that issued the preliminary injunction preventing Rampage Jackson from fighting on Saturday’s UFC 186 card has reversed its decision. At this point, no court records have surfaced but Bellator has issued a statement indicating that it is “disappointed (the court) reversed the injunction as to the April 25 fight.

Jackson released his own announcement via social media:

Payout Perspective:

One can only guess the reasons for the Court to reverse its decision at this point. In its opinion issued on April 7th, it appeared that the Court seemed dead set that Rampage had breached his contract. Unless there was a procedural defect, the Court must have been persuaded by another issue it overlooked to reverse its opinion.  MMA Payout will have more as the information becomes available.

UPDATED: Not surprising, the UFC is pleased with Tuesday’s ruling overturning the preliminary injunction.  “We are happy with the decision from the New Jersey Court allowing Rampage to fight in Montreal this Saturday night,” UFC President Dana White said, “I am looking forward to seeing Rampage back in the Octagon.”

Show Money Episode 3 talks Rampage, Antitrust and Phil Davis

April 21, 2015

The third episode of Show Money talks Rampage injunction, an update on the UFC Antitrust lawsuit, Phil Davis to Bellator and the dismissal of Zuffa’s lawsuit in New York. I join Bloody Elbow’s Paul Gift and John Nash to talk, debate and discuss these issues.

« Previous PageNext Page »