UFC to change Reebok pay structure to tiered system

April 20, 2015

Sports Business Journal reports (subscription recommended) that the UFC is making a change to the way it will compensate its fighters through the Reebok deal.  Instead of paying fighters based on media rankings, it will pay fighters based on a “tiered system” based on tenure or number of UFC bouts fought.

There will be 5 tiers based on the number of fights an individual has had with the UFC.  The article indicates that the UFC will count fights with the WEC and Strikeforce into the number of fights an individual has fought with the organization. There will be tiers of 1-5 fights, 6-10 fights, 11-15 fights, 16-20 fights and more than 21 fights according to the article.

Title fights will be an exception to this rule as the fighters will receive greater compensation.  The UFC declined comment on sharing the amount of money each tier would receive.

The change is based on speaking with fighters and managers about the new Reebok deal according to UFC senior vice president of global consumer products, Tracey Bleczinksi.

The article includes quotes from Glenn Robinson of Authentic Sports Management and Ronda Rousey’s manager Brad Slater.  Robinson indicated that the sponsorship money has dried up over the years and that the Reebok deal is “more sustainable.”  Slater acknowledged that despite the number of sponsors a fighter may have, the total money earned was not “a really significant number.”

Payout Perspective:

The new “tiered” system appears to be a much more fair system than the media rankings which were widely criticized.  The system which rewards a fighter based on time served in the UFC (or WEC or Strikeforce) is a much more stable way of determining how a fighter will be compensated through the Reebok deal.  It also gives a fighter incentive to do their best to stay in the UFC.  Still, the unknown is how much a fighter will be paid through the deal.  The UFC does leave itself an out as the policy allows it to pay fighters more in championship bouts (e.g. McGregor at UFC 189).

The article points out that the change was based on discussions with fighters and their managers about the deal.  It’s interesting that these discussions happened now and not during the time prior to the Reebok announcement.  The new change should give a fighter more certainty as to what tier they are in and an expectancy as to how much they should receive from Reebok.

UFC on Fox 15 draws 2.43 million viewers in overnight ratings

April 19, 2015

Televison By Numbers reports that the UFC on Fox 15 event on Fox Saturday night drew an average of 2.43 million viewers which narrowly edged out the New York Rangers-Pittsburgh Penguins NHL game on NBC.

UFC on Fox 15 scored 2.43 million viewers, a 0.9 rating among the 18-49 demo and a 4 share.  The event ran from 8:00pm-10:00pm.  There was little, if any overrun as Luke Rockhold stopped Lyoto Machida in the main event.  The NHL on NBC (8:00pm-11:00pm) drew similar ratings with 2.41 million viewers, a similar 0.9 rating in the 18-49 category and a 3 share.

The UFC event was also up against the NBA Playoffs which aired on cable.

UFC on Fox 11 event which aired about the same time last year drew an initial overnight rating of 1.99 million viewers and was adjusted up to 2.5 million viewers.

In terms of overall viewership for the night, TV By Numbers is reporting that 48 Hours on CBS drew 6.25 million viewers in the 10pm slot Saturday

UFC on Fox 15 ratings

Payout Perspective:

This is a very good rating for the UFC considering it went up against the NHL Playoffs.  While it’s only the first round, one would think that the New York-Pittsburgh matchup would draw considerable interest from the two of the biggest television markets.  MMA Payout will have more on the ratings as they come in.

 UFC on Fox Ratings
UFC on Fox 1 5,700,000
UFC on Fox 2 4,570,000
UFC on Fox 3 2,250,000
UFC on Fox 4 2,360,000
UFC on Fox 5 3,410,000
UFC on Fox 6 4,220,000
UFC on Fox 7 3,300,000
UFC on Fox 8 2,380,000
UFC on Fox 9 2,800,000
UFC on Fox 10 3,220,000
UFC on Fox 11 1,980,000
UFC on Fox 12 2,500,000
UFC on Fox 13 2,800,000
UFC on Fox 14 2,820,000
UFC on Fox 15 2,430,000

Herrig claims Mortal Kombat character is based on her

April 16, 2015

Does UFC Fighter Felice Herrig have a legitimate claim against the new Mortal Kombat video game?  Video game web site Kotaku reported the similarities between the UFC strawweight and Cassie Cage, a character on the Mortal Kombat video game.

Although Herrig has not indicated that she may take action, does she have a claim?  Maybe.  In fact, she questioned this 3 months ago in Instagram and with more promos coming out featuring Cage, Herrig is becoming more suspicious.  The other question one might ask is whether the UFC also has a claim against Warner Brothers Interactive, the publishers of the video game.  Although we have not looked at Herrig’s contract, we assume that it is a standard UFC fighter agreement which would include a right of publicity clause which would grant the UFC the exclusive right to use her likeness.  If an entity, like the makers of Mortal Kombat, were to do this without the permission of the UFC, you might conclude that they would have a viable legal claim.

Based on the compilation produced by Herrig, one can make a valid argument that the character, Cassie Cage, looks similar to Herrig.  If Herrig and/or the UFC were to sue, it would have several causes of actions from which it could choose.

First, there are state laws of right of publicity which would be applicable here.  Most of these laws protect a person’s right in his or her name and likeness.  Likeness is the most difficult to define as there are multiple definitions of the term but in general Courts have used the “readily identifiable” test to conclude that drawings, if sufficiently detailed, can constitute a “likeness.”  In a famous case, the Court ruled a robot, if sufficiently detailed, could be a likeness.  That case involved TV letter-turner Vanna White as White sued Samsung for a television ad that depicted a robot doing a similar act of turning letters like the game show hostess.

One of the threshold issues to constitute a violation of one’s right of publicity is whether the offending party “knowingly” used another’s likeness without prior consent.  If there was no consent, the party violating the right of publicity shall be liable for damages.

In Herrig’s case, one might conclude that damages might include a portion of the sales of the new Mortal Kombat video game.

There are four steps under common law which courts seek out in determining whether there is a violation of one’s Right of Publicity:

  • The use of the identity;
  • Appropriating the use to its advantage, commercially;
  • Lack of consent; and
  • The use results in injury (e.g., here Herrig was not paid for the use of her likeness for the character).

Under Federal law, there is the Lanham Act in which Herrig or the UFC could argue that there was a “likelihood of confusion as to whether Herrig was endorsing Mortal Kombat.” Since Mortal Kombat did not ask Herrig if they could use her likeness, gamers may think that Herrig took part in the video game.

Obviously the makers of Mortal Kombat would claim that the character is not based on Herrig, or it is a compilation of various female characters and not necessarily Herrig.

Payout Perspective:

Whether or not Herrig or the UFC files a lawsuit is solely speculation.  A hurdle not mentioned above is the strength of Herrig’s mark.  Basically, how well-known is Herrig?  This is debatable although Herrig might cite to her many followers on social media as evidence of her notoriety.  We haven’t heard from Warner Bros. yet but expect a denial that the character was based on Herrig without her consent.  A lawsuit would be a long process which would be costly.  So, it would be up to Herrig or the UFC whether they think its worth it.

This publicity may help Herrig’s upcoming fight this Saturday as well as the debut of the new Mortal Kombat video game.

Of course, if you want more hype for the video game, you should watch this pre-Super Bowl 49 video of Marshawn Lynch and Rob Gronkowski playing the game.

Brooks tops Bellator 136 salaries

April 15, 2015

MMA Fighting reports the Bellator 136 salaries which were disclosed by the California State Athletic Comission.  Lightweight champion Will Brooks was the top paid fighter earning $72,000.

Brooks, who earned $36,000 for show and $36,000 for the win, successfully defended his title against Dave Jansen who made $12,000.  The event took place Friday at the Bren Events Center in Irvine, California.

Via MMA Fighting:

Will Brooks: ($36,000 + $36,000 = $72,000) def. Dave Jansen ($12,000)
Rafael Carvalho ($4,000 + $4,000 = $8,000) def. Joe Schilling ($27,000)
Marcin Held ($13,000 + $13,000 = $26,000) def. Alexander Sarnavskiy($11,000)
Tony Johnson ($8,000 + $8,000 = $16,000) def. Alexander Volkov($10,000)

John Teixeira ($4,000 + $4,000 = $8,000) def. Fabricio Guerreiro($8,000)
Saad Awad ($10,000 + $10,000 = $20,000) def. Rob Sinclair ($8,000)
Joey Beltran ($10,000 + $10,000 = $20,000) def. Brian Rogers ($10,000)
AJ McKee ($1,500 + $1,5000 = $3,000) def. Marcos Bonilla ($1,000)
Chad George ($1,500 + $1,500 = $3,000) def. Mark Vorgeas ($2,000)
Justin Goverale ($1,000 + $1,000 = $2,000) def. Jay Bogan ($1,500)
Steve Ramirez ($1,000 + $1,000 = $2,000) def. Jonathan Santa Maria($2,500)
Chris Herrera ($1,500) vs. Luc Bondole ($1,500) (DRAW)
Cleber Luciano ($3,000 + $3,000 = $6,000) def. Aaron Miller ($2,000)

Payout Perspective:

Clearly Bellator pay is much less than UFC pay.  Brooks’ base of $36,000 is on par with recent payouts of lightweights Joe Lauzon’s at UFC 183 and Danny Castillo at UFC 182.  Of course, there are other fighters on the UFC roster that make a higher base than Brooks.   Schilling made $27,000 in his loss which was the second highest show purse on the card.

Zuffa establishes online petition for New Yorkers

April 14, 2015

The UFC has launched an online petition to push for legalizing and regulating MMA in the state of New York. It is offering a one month free subscription to UFC Fight Pass for signing the petition.

The catch is that the one-month free subscription is only for New York residents. The launch comes with hope that this year in Albany will be different for the UFC and MMA fans. With the removal of Sheldon Silver as speaker of the Assembly, hopes look good for a potential vote on legalizing MMA in the state. As we all know, New York is the only state in the U.S. prohibiting professional MMA.

Lorenzo Fertitta spoke about the new initiative in the announcement on UFC.com:

“We wanted to create a new vehicle for these passionate New York fans to demonstrate their support for legalizing MMA in New York and use their grassroots strength to convince Members of the Assembly that they can’t wait any longer to bring the world’s fastest growing sport to the Empire State,” Fertitta said. “I’ve travelled across the state and was in Albany just last month. I constantly hear from fans eager to help and now we’ve provided a way for them to do just that.”

With Zuffa losing out on its legal battle in New York last month, it’s clear that there is much more pressure for Zuffa to score a win in the legislature.

Payout Perspective:

This is a good way for Zuffa to mobilize its support and offering Fight Pass also serves as motivation to fill out the petition. While there is no way of knowing if this type of campaign will eventually help, it’s another way for Zuffa to rally support.  We shall see if this helps drum up support.

UFC Fight Night 64 attendance

April 12, 2015

MMA Junkie reports the attendance from Saturday’s UFC Fight Night 64 from Krakow, Poland.  The announced attendance was of 10,000 for a live gate of $720,000.

The seating capacity of Tauron Arena in Krakow is 15,328 for sporting events.  It was the first event in Poland for the UFC.

Payout Perspective:

Good debut for the UFC in Poland?  Even though it may have not been a sell-out, 10,000 fans for the fight card is a respectable turnout.  One might think that Joanna Jedrzejcyk will headline an event when the UFC returns.

More on Plaintiffs Opposition to Zuffa’s Motion to Transfer Venue in antitrust lawsuit

April 11, 2015

MMA Payout reported earlier in the day of Plaintiffs’ Opposition to Zuffa’s Motion to Transfer Venue in its antitrust lawsuit filed in the U.S. District Court of Northern California in the San Jose Division.  We provide a little more insight into the filing by Plaintiffs on Friday.

In its opposition briefing arguing that the lawsuit should remain venued in San Jose, the Plaintiffs (i.e., Cung Le, Nate Quarry, Jon Fitch and the other fighters that filed in San Jose) argue that the forum selection clause in the UFC fighter contracts and/or bout agreements are inapplicable when it comes to this antitrust claim. Essentially, the Plaintiffs argue that the clause in the fighter contracts which Zuffa pointed to in its motion as binding the Plaintiffs to bring any legal action in Nevada does not apply when it comes to a claim violating antitrust laws. Essentially, the Court need not interpret the terms or enforce the contracts, but the contracts are evidence of Zuffa’s anticompetitive means.

Plaintiffs also argue that Zuffa fails to show that the present Court is an “inconvenient forum.” Plaintiffs argue that there are “significant ties” to the District in which they filed the lawsuit. They cite the fact that three fighters reside in the San Jose area and others train (notably, Jon Fitch) in the area. They also cite to the fact that Plaintiffs Le and Hallman fought for Strikeforce based in San Jose. Also, five of the Plaintiffs fought in San Jose while with the UFC. The Plaintiffs also cite to events that occurred in the area that are relevant to the lawsuit. The Plaintiffs bring up that EA Sports UFC, an issue raised in the lawsuit, was developed in Northern California.

In rebuttal to the Zuffa argument that the UFC’s documents and witnesses are located in Vegas and thus convenience would dictate that a transfer is warranted, Plaintiffs argue that UFC document production would not be inhibited. Essentially, with the technological advances of document discovery, the fact that Zuffa is in Vegas and the Plaintiffs are in Northern California is of no significance. The Plaintiffs argue that the depositions of UFC employees can be taken in Vegas without the need to transfer the whole case and if a trial were to take place, the relevant employees to testify at trial could be compelled to the forum at time of trial.

An interesting argument pointed out by Plaintiffs is that they cite the fact that the Court is experienced in antitrust law. The Northern District of California had 96 cases involving federal antitrust claims in 2014 whereas the District of Nevada only had 4. Plaintiffs state that from 2010-2014, the Court had “25 times the number of antitrust actions” than the District of Nevada.

Plaintiffs also point to “strong local interest in the underlying litigation” arguing that it should provide a forum to the Plaintiffs that reside and train in San Jose and the issue that UFC allegedly enforced its illegal monopoly and monopsony with Northern California-based Strikeforce is of interest to keeping the case in San Jose.

Finally, Plaintiffs argue that San Jose is relatively faster in terms of the time taken to file a lawsuit to the time a case goes to trial.  Cung Le and Jon Fitch also signed declarations to support this opposition although each did not have any significant information.

Payout Perspective:

After reviewing the opposition brief of the Plaintiffs, it is clear that the key argument here is whether the forum selection clause will be enforced by the San Jose court. Zuffa argues that the Plaintiffs signed the contract and thus it should be enforced and binds them to a venue in Las Vegas. However, Plaintiffs contend that the actual terms and/or interpretation of the contract are not an issue and thus the forum selection clause is not relevant. The other arguments are of lesser strength. Notably, the “significant ties” argument posed by Plaintiffs is hard to accept.

MMA Payout will keep you posted once Zuffa files its

UFC Fight Night 64 bonuses

April 11, 2015

MMA Junkie reports on the bonuses from Saturday’s UFC Fight Night 64 from Krakow, Poland. The main event came through as it was awarded the Fight of the Night.

Mirko “Cro Cop” Filipovic and Gabriel Gonzaga earned “Fight of the Night” honors. Cro Cop won the fight with a 3rd round TKO. In addition, Leon Edwards and Maryna Moroz earned Performance of the Night bonuses. Edwards scored one of the fastest KOs in UFC welterweight history. Moroz upset Joanne Calderwood with an armbar submission.

Each of the fighters earned $50,000 for their performances.

Stevie Ray’s TKO win over Marcin Bandel and Alexandra Albu’s submission over Izabela Badurek were the only other stoppages on the card that were not awarded a bonus.

Plaintiffs in Zuffa antitrust case file opposition to motion to transfer venue

April 11, 2015

The Plaintiffs in the Le v. Zuffa, LLC (and related) antitrust case(s) have filed its opposition to Zuffa’s Motion to Transfer Venue to Las Vegas.  Its main argument is that the forum selection clauses in the plaintiffs fight contracts are inapplicable in this antitrust action.

Earlier this year, Zuffa filed a motion to transfer venue from the federal court in San Jose to the federal court in Las Vegas citing, among the issues, the contractual agreements signed by the fighters.  Also, it argued that many of the witnesses are residing in Vegas thus it would be more convenient for this litigation to occur in Las Vegas.

On Friday, Plaintiffs filed opposition to the motion which states that the forum selection clauses (the contractual language in the fight contracts binding fighters to bring legal action in Vegas) are not applicable in this antitrust matter.  It argues that the contractual language only related to issues “to interpret or enforce” the contracts and Plaintiffs argue that the contracts are only relevant to the effect that the UFC used them as part of its anticompetitive scheme.  The Plaintiffs go on to state in its pleadings that the UFC “torture the text of the Agreements and ignore the weight of authority that defeats its Motion.”  Essentially, the UFC misinterprets its own contracts in this matter.

UFC has issued its own statement in relation to the opposition filed Friday:

“As expected, the plaintiffs have filed their opposition to our motion to dismiss. Nothing in their opposition changes our view that their complaints are filled with conclusory allegations that are not adequate to support their antitrust claim. As we laid out in our motion to dismiss, UFC has competed in a lawful manner that has benefited fighters and built UFC into a premier organization in the sport of Mixed Martial Arts.

Indeed, UFC properly competes with other MMA promoters, fairly compensates its athletes and has created a product that is enjoyed by millions of fans around the world. Our legal position is solid and we intend to prevail in this lawsuit.”

The hearing date on the motion to transfer venue is set for May 7th.

In addition to this motion, Zuffa has filed a motion to dismiss with the opposition brief pending.

Payout Perspective:

MMA Payout will keep you posted on this motion.  Plaintiffs argue several other points in its opposition which will cover in the coming days.  Essentially, the Plaintiffs argue that despite the fighters signing their fight contracts which subject them to jurisdiction in Las Vegas, the headquarters of the UFC, the claims that they bring do not relate to the enforcement of the contract.  The contract is only evidence of the anticompetitive nature of the organization.  In addition, Plaintiffs argue that key individuals do reside in San Jose and thus it should stay in the district.  Also, they claim that based on median time of filing to trial, it is faster (25%) to trial in San Jose than Las Vegas.

Court opinion in Bellator-Rampage lawsuit made available

April 9, 2015

A copy of the court opinion by Judge Karen Suter which granted Bellator MMA’s injunction in its lawsuit against Rampage Jackson was made public.

After oral argument on April 2nd, the Court issued its opinion on April 7th.  MMA Fighting provides a copy of the lawsuit here.

The court made it abundantly clear that it was not deciding the merits of the case and specifically that it was not deciding whether the contract between Bellator and Rampage was breached.  However, it made clear that Bellator had proved its case

Although the Court referred to several cases involving boxers that sign promotional agreements and then seek additional help from other promoters, the Court distinguished this case based on the exclusivity of Bellator’s agreement with Rampage.  It sided with Bellator in its argument that it was likely that Rampage breached its contract despite the arguments raised.

As previously stated, the Court found “clear and convincing” of the following on behalf of Bellator.  The four factors in determining a preliminary injunction are as follows:

  1. A substantial likelihood of success on the merits of the case;
  2. There is a substantial threat of irreparable damage or injury if the injunction is not granted;
  3. The “balance of harms” (threatened injury) weighs in favor of the party seeking the preliminary injunction;
  4. Granting an injunction would serve the public interest.

Some interesting points from the 25 page ruling.

  • The Court emphasized the exclusivity of the contract between Bellator and Jackson. It also stressed the fame and notoriety of Jackson as evidence that Bellator would suffer injury if Jackson were allowed to participate at UFC 186.
  • The Court did not buy the argument that Bellator breached its contract since it did not provide Rampage or his management with PPV summary report. The Court indicated Bellator had substantially complied with the information and that not providing the PPV summary was not a material breach of the contract.
  • Rampage’s claim that his fights were not adequately promoted by Bellator and the need to obtain the PPV summary was necessary fell flat. The Court ruled that there was no marketing provision setting a certain amount of money that was required to promote his fights.  Even without producing the summary report for PPV, there would be no breach since the actual compensation Rampage received was not in dispute.  Furthermore, the Court opined that Rampage offered no rationale for why Bellator would not want to market and promote one of the company’s top stars.
  • The Court sided with Bellator with its argument that if Rampage were allowed to fight at UFC 186, it would harm Bellator more than just monetarily, but from a reputation and brand standpoint. Bellator argued that the “MMA community” would denigrate Bellator if Rampage were allowed to leave for the UFC.  Moreover, Bellator argued that denying the injunction would be a sign to other fighters and their managers that they could just “ignore their contracts” and leave for perceived better opportunities.  Bellator also argued that if Rampage were to leave, Bellator would have lost out on the time and money it had invested in promoting him.
  • The opinion also notes that on December 4, 2014 Scott Coker claims to have notified the UFC that Rampage was still under contract while negotiations by Rampage to the UFC were ongoing. This seems to call into question how much the UFC knew about the Bellator-Rampage contract dispute.  It also calls into question the UFC’s decision to sign him and then put him on a card prior to a legal determination.

Payout Perspective:

In the end, Rampage and his legal team may win this court battle, but the first big decision out of this case falls in Bellator’s favor.  The Court opinion preventing him to fight at UFC 186 is not a good indicator of things to come.  Certainly, the Court made it clear it was not ruling on whether a breach occurred, but the threshold for proving a preliminary injunction is warranted is high (“clear and convincing” as opposed to “more likely than not”).  We will see what Rampage’s legal team decides on whether it will appeal the decision.

Another issue that was raised in passing was the knowledge that the UFC may have known about the contract issues with Bellator.  There could have been potential legal action between Bellator and UFC regarding interference with a contract but it seems as though Bellator did not want to pick that fight just yet.

MMA Payout will keep you posted on this.

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