Harvey responds to Rousey ruling

April 5, 2014

Darin Harvey issued a statement on the California State Athletic Commission (CSAC) ruling which released his former client, Ronda Rousey from her fight contract.   MMA Payout has obtained the decision siding in favor of the UFC women’s bantamweight champion and we take a look at what went wrong.

Via Inside MMA on AXS TV:

“When I first met Ronda Rousey four years ago, she was destitute and UFC President Dana White was quoted as saying a woman would never fight in the UFC. I set out to make Ronda a star and prove Dana wrong. The results speak for themselves. Ronda is now a highly sought-after model, spokesperson and actress, not to mention the first and still reigning female UFC champion. She deserves all the credit in the world for her accomplishments, but she never would have achieved such unprecedented success without the unwavering financial investment, career guidance and professional support Fight Tribe Management and I provided her.

I am not a litigious person, but I never thought for a moment that once she made it to the top, Ronda would turn her back on us and refuse to honor her legal and moral obligations. After months of radio silence and without even giving me the courtesy of an explanation I was forced to go to court to compel Ronda to private arbitration per the terms of our agreement. Before that could be sorted out, Ronda’s legal team ran to the State Athletic Commission, demanded an expedited hearing and tried to get our entire agreement thrown out on a technicality. During our four-hour hearing last week, I finally heard Ronda’s side of the story. Frankly, it’s pathetic and I’m not surprised the Commission chose not to include any of that in their written decision. The Commission did properly reject Ronda’s attempt to invalidate the entirety of our agreement, and I am very pleased with that aspect of their decision. Our case against Ronda will now proceed. I am confident that when all the facts are presented to an impartial private arbitrator, Fight Tribe Management’s contributions to Ronda’s career will be fully recognized and fairly rewarded.”

Harvey also tweeted the following:

 

Roy Englebrecht, a fight promoter in California, empathized with Harvey’s plight but also advised the following:

I have seen this happen a number of times over the years, where well intentioned people want to get involved in the fight business, but never take the time to learn about the business and some of the rules that govern it. This situation with Rhonda and Darin could have been avoided if Darin knew the CSAC rules and followed them. This manager/fighter agreement or promoter/fighter agreement in California is unique to the sport, and if not followed you will lose, as this ruling showed.

The comments are based on the ruling issued by Andy Foster of the CSAC in which it determined that the evidence and testimony at the March 28th Arbitration showed that the “Service Agreement” (as identified in the CSAC Arbitration Decision) was void as to the professional fighting services only.

The ruling, in favor of Rousey, is premised on Harvey not properly executing the fight contract on “printed forms approved by the commission.”  The Commission ruled that, “[t]he controlling contract was the subject “Representation Agreement”, which was entered into in California and specifically binds the parties to be governed by California law.” Hence, the rationale by the Commission would lead it to conclude that since the contract was not on its printed forms, the contract was void as to the fighting portion of the contract.  In addition, the Commission ruled that “a fighter-contract” is not valid unless both parties appear at the same time before the Commission, and the contract receives the Commission’s written approval.”  This did not happen as the contract, which was originally drafted in May 2012, was not executed until January 2013.  Regardless, it was not done before the Commission.

Even though Harvey’s “Representation Agreement” did not comply with the Commission rules, he still argued that he was entitled to “quantum meruit” (latin for “what one has earned”).  This is a theory in contract law allowing a party to be compensated for actual work/services performed.

Under this theory, Harvey was seeking to recoup losses incurred from representing Rousey.  Harvey indicated in an exhibit at arbitration that from January 1, 2010 to January 31, 2014, he collected $25,608 in income from Rousey fights, $23,180 from PPV fights and $20,830 from income of sponsorships.  This is offset by Harvey’s claim that he paid $170,376 in expenses related to Rousey’s fighting career which makes Harvey at a loss of $85,818 from representing Rousey.  The paid expenses included paying for training including strength and conditioning, sparring partners and living expenses.

However, the Commission ruled that Harvey was not entitled to quantum meruit since “such a finding would be inconsistent with the provisions of California law requiring proper fighter-manager contracts…”   The Commission reasoned in its decition, “[i]f Harvey, or other managers, were allowed to recover by means of quantum meruiti, it would undermine the statutory authority purposes of the Boxing Act.”  Thus, the Commission ruled against Harvey based on the overarching policy that it must protect the fighters from manager graft.  As stated in the decision, “[t]he Boxing Act is a regulatory statute, and recovery on a quantum meruit theory in the absence of compliance with the act would be inconsistent with its regulatory purposes.”

Payout Perspective:

As we indicated in a previous post, expect this case to heat up in the anticipated lawsuit and/or private arbitration.  However, this situation may have been avoided if Harvey and Rousey entered into a fight agreement as dictated by the rules of the CSAC.  If there would be further representation in other matters outside of fighting, it would seem that a second representation agreement would be necessary.  Based upon the facts, it looks as though the fighter-manager relationship was informal at the beginning with no need for things such as a signed contract.  This may explain the long lag between the date of the Representation Agreement (May 15, 2012) and the date Rousey actually signed it (January 29, 2013).  The harshness here is that for not following the rules of the CSAC, Harvey lost over $85,000 spent on her client that he will not be able to recoup.  The moral here is to follow the rules.

CSAC rules Rousey released from fight contract

April 4, 2014

Sherdog’s Mike Whitman first reported that the California State Athletic Commission issued its ruling in the arbitration of Ronda Rousey and Fight Tribe Management.  The commission ruled that Rousey is released from her fight contract but left the commercial aspect of the contract to the court.

Executive Director of the CSAC, Andy Foster heard the arbitration between the parties last week over the dispute between the UFC women’s bantamweight champion and her manager Darin Harvey.  Originally, Harvey had petitioned the Los Angeles Superior Court for the issue regarding the representation agreement between the parties to be decided via arbitration.  However Rousey’s legal representatives claimed that the contract should be determined by the CSAC.  The arbitration was held on March 28 with Foster serving as the arbitrator with the assistance of two attorneys from the AGs office.

Harvey claimed that the representation agreement was drafted as a talent contract and not a fighter-manager contract.  Regardless, Rousey’s attorneys argued that the representation agreement was void under California law.

The facts stated that Rousey and Harvey entered into a 3 year agreement starting on May 15, 2012 and signed on January 29, 2013.  Harvey would receive 10% of Rousey’s income generated from professional fighting, modeling, acting and other commercial activities.  However, the CSAC determined that the agreement “was not prepared on the required, pre-approved forms, nor did both parties appear before the commission at the same time in order to receive the commission’s approval, thereby invalidating the agreement as a fighter-manager contract in California.” (quote via Sherdog)  The CSAC ruled that Harvey was not a “manager” as defined under Business and Professions Code section 18628

The CSAC left open the issue as to the “commercial activities” that were incidental to “fighting activities” to the court.  So, it’s likely that we have not heard the last of this dispute.

Payout Perspective:

MMA Payout will have more on this decision as it becomes available.  The initial read from Sherdog’s report reflects the fact that this contract dispute is not over.  It’s interesting to note  that based on the information available, Harvey sought his manager fee from “commercial activities” which may have been a conflict with Rousey’s agents at William Morris. We note that Rousey signed Fight Tribe’s agreement on January 29, 2013 and then signed on with William Morris in late February 2013.  Whether this was coordinated by Harvey and/or the relationship between Fight Tribe and William Morris became strained over time is an issue that may play out in court proceedings.

Bones and Bendo included in documentary about fighting/religion

April 2, 2014

Benson Henderson and Jon Jones talk about their commitment to Christianity in an upcoming documentary entitled, “Fight Church,” as reported by Deadline.com.  The documentary follows pastors that moonlight as mixed martial artists.

Henderson and Jones are interviewed for this feature-length documentary which appears to grapple with the idea that men that teach the Bible also fight.  Both fighters are devout Christians.  The film is directed by Daniel Junge who won an Academy Award for his film, Saving Face.  The trailer is via Deadline.

Payout Perspective:

After watching the trailer there are a lot of hot buttons that can be discussed including what looks to be children participating in fights and shooting guns.  Henderson and Jones have made it known inside and outside of the Octagon that their religion is an important part of their lives.  Thus, their participation is not controversial.  Of course, we do not know the content of the documentary and what each says in their interviews.  Until we go out and see the documentary we cannot we make a judgment on them.

Debate sparks over Fund a Fighter alternative to sponsorships

April 1, 2014

The state of sponsorships was brought up once again by dueling MMA Junkie articles which looked at the ways fighters can find additional revenue in what appears to be a dwindling sponsorship market.

The first article took a look at the MMA “crowd funding” in the form of Fund a Fighter.  Essentially, the purpose of the company is for fans to contribute to fighters’ fundraising campaigns as they prepare during a training camp in lead-up to their fight.  In exchange, the fighters provide the fans that contribute to their campaign with various “rewards” which varies based on the amount contributed.  The “rewards” can include a simple recognition on social media, to a t-shirt, to fight shorts worn on fight night.

It sounds like a great alternative to seeking out sponsors and dealing with concerns over payment, or lack thereof.  The obvious drawback is the uncertainty as to whether fans would be willing to fund a training camp for a fighter.

According to the Junkie article, the average campaign garners $2,100 which is far from the amount of money that a UFC fighter could have made in sponsorships a couple years ago.

Brian Ebersole and Dan Miller are the most notable fighters to use the web site which charges a 15% commission of the total amount each fighter receives. According to the Fund a Fighter web site he raised $3,250.00 for his fight against Rick Story at UFC 167.

On the other end, World Series of Fighter Rick Glenn received $275 for his fight at WSOF 5 in September 2013.  There are other fighters on smaller circuits that utilize this web site as well with varying degrees of success.

A couple days later, MMA Manager John Fosco talked to MMA Junkie and lashed out about the “crowd funding” strategy and described the Fund a Fighter web site as “welfare.” Fosco had strong words for the perceived problems with the UFC sponsor tax and tightening of funds by sponsors.  Essentially, he believes that there is still money out there for fighters citing (in the Junkie article) that he can get his fighter $8,000 for a Fight Pass fight and has done “way over $10,000” in sponsorships for a Facebook fight in the past.  Fosco lays blame with “lazy managers.”

The article goes on about how Fosco’s company, VFD Marketing, has looked for opportunities for its fighters outside of the Octagon as well as traditional sponsors on their gear.

Payout Perspective:

MMA Payout interviewed Fosco back in 2010 when he originally had secured Safe Auto as a sponsor for some of his fighters.  It became an official UFC sponsor.  Fosco indicated that Safe Auto sponsorship was based on a cold call to the company.

The articles give differing views of the current state of sponsorships.  It appears that Fosco has adapted with the sponsorship market and rails on those that complain about it.  Then, there is a site like Fund a Fighter which is an “out of the box” way for fighters to fund their training through donations.  Fund a Fighter appears to be a great strategy for fighters on the smaller circuits with regional popularity attempting to make it to the next step.  Basically, this allows someone with a full-time job some money to spend on food; gear and the ability to take time off work without having it hurt them economically.  From this standpoint, a site like this would be smart.  Similar to a small-time filmmaker seeking a way to put the final editing touches on their film, “crowd funding” appears to be a good way to seek out the help they need.

On the other hand, based on the information from its web site, it appears that UFC-type fighters could (and should) make more in sponsorships than what is being collected on a Fund a Fighter campaign.  There are many impediments of this happening:  the UFC sponsor tax, “lazy managers” as perceived by Fosco or just the inability to land sponsors.

Even if sponsors are landed, there may be issues with how they are obtained.  There are the Dynamic Fasteners and Auto Shopper.com’s which appear to have purchased sponsorships in bulk.  In a recent article, Dynamic Fastener described this as “bundle pricing” when DF negotiates sponsorships with an agent for the agent’s entire stable of fighters appearing on a card.  The problem here is whether the individual fighter is getting the best deal for themselves or are they being lumped in at a discount.  Cole Miller spoke out about the obstacles of the lower-to-middle card fighters getting sponsorships (and sponsor money).  Chris Camozzi and Mac Danzig have also spoken out about sponsors and both have refused to take on sponsors for their fights even though they are willing to pay.  You may recall Danzig even went as far as to accept no sponsors for a fight on Fox.

With the possible advent of UFC uniforms, will the sponsorship market in the UFC change yet again?  We shall see.

TUF Nations Episode 11: 267,000 viewers

March 31, 2014

MMA Payout has learned from Fox sources that the 11th episode of TUF Nations: Canada vs. Australia scored an average viewership of 267,000 viewers.  The overnight rating from this past Wednesday was the best overall rating on either FS1 or FS2 for that day.

TUF Nations was the most watched show on FS1 last Wednesday.

The 11th episode shows an increase from its 195,000 average viewership of the week prior.  It is the best episode rating since Episode 4 which registered 384,000 viewers.

TUF Nations: Australia vs. Canada

Episode 1:  371,000 viewers

Episode 2:  253,000 viewers

Episode 3:  107,000 viewers

Episode 4:  384,000 viewers

Episode 5: 187,000 viewers

Episode 6: 78,000 viewers

Episode 7: 161,000 viewers

Episode 8:  202,000 viewers

Episode 9:  220,00 viewers

Episode 10: 195,000 viewers

Episode 11:  267,000 viewers

Payout Perspective:

Wednesday’s episode featured the exit of Tyler Manawaroa as he lost a decision to Elias Thodorou.  Thodorou now moves on to the Middleweight Final.  Manawaroa was the fighter that would have been precluded from competing in the UFC due to his racially insensitive Instagram posting.  So, it would have been odd if he would have made it to the Finale.

Recent Court ruling may impact Zuffa anti-piracy litigation

March 30, 2014

A recent federal court ruling could pose a problem for Zuffa in its legal strategy to go after end users that steal its pay per views.  A federal judge in a Florida court has thrown out a lawsuit by adult film company Malibu Media due to lack of jurisdiction.

Malibu Media sues hundreds of people claiming that they have illegally downloaded its product. It employs a strategy of finding the alleged illegal users through tracking of individuals’ IP addresses.  Essentially, it files lawsuits all over the country in venues where it has tracked down where the alleged infringer is living.  But, the basis for the filing of the lawsuit is premised upon its location of the plaintiff via IP address.  Malibu argued that the reliability that the plaintiff is located in the venue where the lawsuit is filed is reliable due to the time of the use and the location of the address.  The IP addresses were obtained from Comcast Cable.  However, the Court, on its own accord, determined that Malibu Media must show good cause why the Court should rely on its geolocation of the defendants (alleged infringers). Notably, Malibu Media had sued the individuals as “John Doe” with only an IP address to identify the individual.

Based on the IP address would Malibu Media then request that it obtain the name of the individual with the account that is linked with the IP address.   The Court ruled that Malibu Media could not provide sufficient evidence for the Court to rely on to show that the actual infringer of the company’s copyright.  Thus, without the alleged infringer providing a response, the Court threw out the lawsuit.

Zuffa has taken down web sites illegally streaming UFC PPVs and has obtained user information such as usernames and IP addresses in order to track down the individuals for possible lawsuits.

Payout Perspective:

Even before evaluating the merits of the lawsuit, the party filing suit must establish that it is in the correct jurisdiction.  The Malibu Media ruling in Florida may be either an isolated or persuasive ruling for other venues to follow suit.  In general, in order for Zuffa to sue in a particular court, the person it must sue must reside in that district.  The viewership of the illegal stream must occur in the place where it happened.  But, the ruling states that despite the location of the IP address, Malibu Media could not establish the actual person that is purportedly watching the illegal stream.

Zuffa indicated that more than 50% of the individuals targeted for allegedly illegal streaming UFC events settle out of court according to MMA Junkie. And while the issue that it loses millions of dollars from illegal streaming is a reality, the legal procedure that it seeks to recoup its losses may be taken into question.  While Zuffa has been able to shut down illegal streaming sites and have gone after end users which has resulted in either out of court settlements or default judgments, the Malibu Media ruling in Florida may be an impediment to suing claimed infringers.  If a Court does not rely on an IP address to establish the jurisdiction of the claim, then it becomes harder to sue.

New study suggests brain injury more prevalent in MMA than boxing

March 29, 2014

ESPN.com reports on a new study released in the American Journal of Sports Medicine which cites UFC records in concluding that MMA brain injury is more susceptible than that in boxing and other martial arts.

The new information is being released in time for the legislative session in Albany, New York where the UFC will once again try to legalize the sport of MMA in the state of New York.  The UFC has unsurprisingly indicated that the new research is “somewhat flawed,” according to chief operating officer, of the UFC, Lawrence Epstein.

The study, conducted by University of Toronto researchers looked at 844 UFC bouts from 2006 to 2012.  The conclusion showed that 13 percent of the fights ended in KOs and another 21 percent ended in TKOs (ref stoppage).  These TKOs occur “usually after a combatant was hit in the head five to 10 times in the last 10 seconds before the fight was stopped” according to the Brett Okamoto article.

Payout Perspective:

The UFC’s response cites the Cleveland Clinic study as its commitment to the safety of athletes.  Boxing and MMA organizations are joining together in that study in contributing to the ongoing medical study of early stage signs of brain injury.  The latest study from these Toronto researchers, based on how it’s described, appears to make a conclusion only on one source of research (records and video evidence).  There appears to be no other source for the study (e.g., interviews with fighters, evaluating medical literature, comparisons with boxing, etc.).  What it does is give opponents of MMA in New York evidence to point to in its arguments for the preventing the sport from legalization in the state.

Rousey-Fight Tribe arbitrate dispute

March 28, 2014

MMA Junkie reports that Ronda Rousey and her estranged management group, Fight Tribe Management, are in an arbitration hearing today (Friday) before the California State Athletic Commission to determine the validity of Fight Tribe’s representation agreement with the UFC bantamweight champion.

Two weeks ago, Fight Tribe Management filed a petition for arbitration in Los Angeles Superior Court to determine the validity of the representation agreement.  Under California Business and Professions Code §18640 CSAC has the “sole direction, management, control of and jurisdiction” of mixed martial arts and can hear disputes such as these.

According to the Junkie article, Foster, along with assistance from the California attorney general, will review the briefing submitted by both parties, hear testimony from witnesses at the arbitration hearing and render a decision.

There appears to be a dispute on the validity of the contract and it’s not clear whether the CSAC ruling will end this dispute.

In its filing with the Court on March 7th, Fight Tribe indicated that it wanted the issues concerning the dispute confidential based on the terms of the contract entered into by Rousey and Fight Tribe.

Payout Perspective:

From its initial filing on March 7th, the disputed contract issue has not been made public although the commission’s decision will be public record.  So, it may be that we will not hear about the contractual issues in dispute until the CSAC renders its opinion sometime next week.  Even with the CSAC decision, the legal wrangling behind this dispute may not be over.  MMA Payout will keep you posted.

FS1 doc on Rousey nominated for Sports Emmy

March 27, 2014

The Fox Sports 1 documentary UFC Presents: Breaking Ground, Ronda Rousey has been nominated for a Sports Emmy for Best Sports Documentary.  It is just 1 of 3 Sports Emmys that the network has been nominated for in its first year in existence.

The one hour documentary which originally aired in September 2013 featured the UFC’s women’s bantamweight champion.  “The program examines the remarkable rise of the first female champion in UFC, detailing her childhood trauma and the complicated relationship with her mother that fueled her athletic endeavors,” is how the documentary is described by a Fox Sports release.

Breaking Ground Ronda Rousey

The Ronda Rousey documentary is up against 3 other documentaries.

-  First: The Official Film of the London Olympic Games NBC

-  LT. The Life and Times (Lawrence Taylor) Showtime

-  The Doctor (Julius Erving)

-  UFC Present Ronda Rousey:  Breaking Ground FS1

Payout Perspective:

ESPN (30) led the way in Sports Emmy nominations.  The awards will be handed out on Tuesday, May 6th. The UFC should try to do more of these types of documentaries despite the fact that they can be pricey.  It’s a revealing look at an athlete and can attract a broader audience due to the human interest part of the story. As one of only three nominations for the network, it shows that the UFC is a valuable part of the network.

Hendricks gets Times slide show

March 26, 2014

The NY Times did a feature on new welterweight champion Johny Hendricks.  The story is a personal feature on Hendricks, his training and family as he prepared for his fight with Robbie Lawler.

Entitled, “U.F.C’s Big Daddy: A Fighter’s Training Pays Off.” the feature is more slideshow pictorial than actual story but it focuses on his training regimen as well as a look at his home life with his kids.

The piece comes off good for Hendricks as he appears as a simple family man working out at his nearby gym and swimming pool in preparation for the biggest fight of his life.

Johnny Reebok

Payout Perspective:

Coming off of his big win at UFC 171, this is a great mainstream placement for the UFC.  It shows that the UFC (waiting on the AP style ruling on whether it is U.F.C.) is hoping that Hendricks can be the next big star for the UFC.  Without Anderson Silva and GSP, the UFC needs faces for the company and they hope that it gets one with a guy who is as tough a guy in the Octagon as he is nice outside of it.

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