UFC head Dana White has threatened to cease holding events in the state of California if a controversial piece of legislation passes in the state. Assembly Bill 2100 was introduced last Wednesday and is supported by the Culinary Workers Union while opposed by the UFC among others.
Via San Jose Mercury:
(Assembly member Luis) Alejo wants to eliminate what he sees as abusive contracts, freeing up fighters to make Assembly Bill 2100 would prevent promoters from claiming unreasonable future merchandising rights, prevent unreasonable restrictions on fighters’ seeking outside sponsors and prohibit other onerous contract provisions.
Dana White told the OC Register:
“Do you know what’s going on in Sacramento, right now?” White said. “They are trying to pass this bill to raise our taxes and do a bunch of crazy (expletive) to us. They voted 4-2 for the bill. There were a couple of people not present to vote on it. If that thing passes we won’t do anymore fights in California. All kinds of crazy (expletive) they’re trying to throw in this bill for MMA. You know who’s doing it? The Culinary Union from Las Vegas. These guys have been (expletive) with us in New York, too. That’s why we’re not in New York. These guys got a bunch of lobbyists together to try to pass this bill against MMA. They are putting pressure on my partners, the Fertitta brothers, because they own the fourth-largest gaming company in the country and they are non-union.”
More info on AB 2100 can be found in our previous post.
H/t: Bloody Elbow
Payout Perspective:
Would it hurt the UFC economically if it did not run events in either New York or California? It’s an intriguing question considering the UFC derives most of its income from PPV revenues and many of its live events are expanding to new areas or in Las Vegas. The UFC is expanding internationally and could find new venues in the US to hold events. Still, not holding events in the two biggest states in America does seem odd. The self-imposed ban on the state of California would affect Strikeforce more than it would the UFC. Although the UFC held its biggest event in Anaheim (UFC on Fox 1), Strikeforce has held events in San Jose or San Diego more often than the UFC has held events in the states. Of course, we do note that UFC on Fuel TV 4 will be in San Jose and UFC on Fox 4 will be in LA. So, maybe the strategy is to stress the economic impact Zuffa creates in the state with the 2 upcoming events and threaten that this will all end if AB 2100 passes.
yeah but the impact of SF is very small compared to even 1 UFC event. Especially now the Zuffa isnt putting any effort into SF.
I see very few of the examples of the contracts they are talking about. Zuffa should have the right to sign its talent to contracts and assure they are not promoting rival products. Each and every fighters has the right to not sign any contract. It is their choice. Like the Jon Fitch situation. Jon Fitch should not be allowed to fight in the UFC and be in a video game promoting a rival Promotion and a rival game maker of a UFC partner. At the same time if Fitch choose to go that route the UFC shouldn’t be forced to employ that person. One has to wonder if there would be a UFC game if the company have to buy all the rights of the fighters individually and license the UFC brand. These rules are only going to hurt the fighters, the sport, and the fans.
UFC won’t be able to force fighters to sign away their lifetime likenes rights?
sound great
This reeks of IL’s increase of the corporate tax. Unless they get other states, specifically NV to go along, they are just going to push business out of their state. No matter how good their intentions are, they will decrease revenues for the CSAC which will have a negative effect on smaller promotions/lower level fighters.
Off the subject but for those that follow such things: Hopkins-Dawson had an attendance of 7,700 for a $800,000 live gate.
Sounds kind of shitty for what is probably the biggest fight so far this year in Atlantic City, but I don’t know what they normally draw for a fight.
In North America, there are very few draws in boxing that can consistently command live gates in the millions of dollars. Ironically, though, the few that can are able to pull in insane amounts (i.e. Mayweather, Pacquiao, Cotto).
@ BrainSmasher,
The Fitch issue wasn’t because of him potentially being in a rival video game. It was him opposing to Zuffa owning his likeness forever, which is absurd.
Zuffa could put a clause in their fighter contracts which say they won’t sign with a rival video game company, merchandising, etc. while they are under a UFC deal…but to want to own their likeness forever is a joke.
Van Halen, Kenny Chesney and about 50 other music acts draw more than that every night on tour, but nobody in any sport short of the Super Bowl draws what Mayweather/PacMan can draw.
Interesting how the Fertittas and BLAF are upset at government intervention being used against them when that is the only reason they were able to buy the UFC! They refused to approve the UFC for licensing in Nevada to the former owners, even though New Jersey already had. Lorenzo was on the board and voted against UFC sanctioning because they then forced SEG to sell to them since they would never approve it.
Funny to see them bitching about someone else doing the same thing back to them, even if it is on a much smaller scale.
Rake,
I am aware of what Fitch was complainging about. But it came at a time when the UFC was scarambling to sign the fighters to be in the UFC game before EA signed them. Fitch refused to sign. It was still over a game regardless of what Fitch saw as the bigger picture.
I agree the UFC could make the deal for as long as they are in te UFC. But we both know that wont work. Fighters dont last in the UFC very long. Even big name guys dont last long. You cant have your merchendicing dangling on the unpredictable nature of a fighters career. The UFC would be forced to market prooducts with a fighter they could release do to poor performance in a year(3 bad fights) or be forced to keep bad fighters and water down the UFC product. The UFC created these fighters brand and set them up with product with their name on it and they make money doing so. Its crazy to say the UFC should have any rights. Second the fighters still have a choice to sign the lifetime agreement. It is a privilige to fight in the UFC not a right. I look at it like what American Idol does. They create stars and part of the agreement to be on the show is you have to sign yourt likeness away.
[Producer’s recordings of any and all behavior of the contestant “in and in connection with the
series” and the contestant’s likeness, voice and any or all biographical material may be exploited
by 19 Group forever and “throughout the universe.”]
Like anything else each person should decide what is best for them. Do you want to keep your likeness and fight else where. Or is fighting in the UFC without your likeness your best option. In the end if the UFC is not allowed to own the likeness they will use match making to weed out all those who dont benefit them. Ahhh the power of match making.
Squatdog,
It is just speculation that it was Fertita who voted against the UFC at the time. Evenso he could have honestly been against it at the time and only later pushed it through because it was his own which anyone would do. Second SEG was very irresponcible in their time running the UFC. Their past was enough to not get them into most commissions. Are you saying Fertita shouldnt hvae used his enfluence to get our sport legalized in NV and many other states?. You cant pretend Fertita was for MMA and just voted against it to force a sell because NV had been against the UFC the entire time that Lorenzo was on the board, long before it was ever for sell.
As someone who was following the situation at the time. It was never assume MMA would be passed in Nevada. NJ passed it but NJ like today had very little authority. It was a step in the right direction but everyone knew it would take years to get any other states on board. The UFC needed someone with pull and that was Lorenzo Fertitta. There is a reason no other state stepped up after NJ. That was because no one was going to without someone with pull. Lorenzo used his power and got it through probabley 3-5 years sooner than it would have other wise. Then other states followed slowly.
What you claim is the same as former SEG owner claimed on CNBC and they were forced to adit him out because he was caught lying. Here is a link.
http://www.mmafighting.com/2008/01/17/zuffa-seeks-retraction-of-statements-by-former-ufc-owner
To make it short. MMA was never supposed to be voted on. in 1999 it was on the commissions agenda to discuss the sport and start “doing their homework”. Marc Ratner formed a group that would go watch a live UFC and gather information. This shows they were open to the sport. It was 18 months after this that Lorenzo heard it was for sell and inquired about it. So Fertitta never voted against the UFC because there was never a vote in the first place. So you are just spreadign the sours grapes that Meyrwitz created because Zuffa has success with something he couldnt.
Brainsmasher brings up an interesting point about the American Idol/19 Group. That shows originates from California and their business contracts, which are more leveraged than Zuffa’s are, are deemed perfectly acceptable by the state of California. I know the regulatory departments within the state are different, but I still find that interesting. If I were a betting man, I’d bet that this Assembly Bill does not get signed into law. I’m not saying it doesn’t have some noble intentions, I just think that this isn’t a move that the state of California is willing to make when it all comes down to it. We shall see, though.
Hard to say it wouldnt be the first time Cali has cut off its nose to spite its face when it comes to jobs in the state. This would seem par for the course.
California is on the dark side of the moon as far as its own salvation is concerned. The state is run by incompetent servile bureaucrats whose sole mission in life is to spend other people’s money and pass legislation pandering to one or another specific donor group so they could stay in power. 4 million people have left the state in the past 2 years (or some similar statistic).
Cali is already 20+ billion in the hole, is building a 100 million dollar high speed train, and has the MOST oppressive regulations in the country, not to mention that just 10% of its brain-dead high school grads are ready for college. This state will be bankrupt in the not so distant future; which is the same direction this country is heading in the slightly more distant future; 17 trillion in the hole… Let’s give everyone more free crap; the sheeple will love it and vote for more.
Dana, stop supporting the usurpers. Find a place that supports economic freedom; there are many places in the world that still do. Try China.
Requiring a fighter to sign over their lifetime image rights if they wish to fight in the promotion that has a 90% share of the MMA market sounds like the definition of a coercive contract. It also sounds like the situation that regulation was invented for.
So because the UFC is successful the government should force them to do things with their private company they dont want to do? So everyone else can look out for their best interest except for the UFC? Also they dont have a 90% share of anything. That is just stupid. The fighters in the UFC make up way less than 1% of the fighters in the industry. There are many other places to fight.
I guess im just one of those guys who like it simple. I like the real fighters to appear on the game not have to create them because the game wasnt allowed to add them. Most of these guys will not need their right for anything after they leave the UFC. Look at some of the old UFC fighters who are on New games. What is Ron Waterman doing with his rights? Nothing! If not for the likeness contracts he wouldnt be on UFC games. He isnt worth tracting down to get a deal so all the old time fighters would be gone for no reason at all. What is Fitch doing with his likeness? Nothing! He got his name on a UFC game than got him more well known and got him more money from his sponsors. When he stops fighting in the UFC his name is worthless. But atleast UFC products can continue to offer them to fans rather than not offer them. The UFC isnt screwing fighters here. They didnt take over rampages movie and claim they own him and took his money. They are not stopping anyone from making money or having success in another career. They are only protecting their product against other promotions.
This is really a non issue expect the Culinary Union is making everyone believe its a big deal.
In North America Zuffa made something in the neighborhood of $50 mil at the gate last year. Now name the non Zuffa shows that made more than $100,000.
Zuffa has a $100 mil/year TV deal. Bellator has the 2nd biggest deal at what? $6 mil a yr? Does KOTC or Titan make even $1 mil – combined?
Zuffa’s ppv revenue is north of $200 mil for the US and Canada. Does anyone else even have a presence on ppv?
Zuffa makes tens of millions on sponsors and merchandise. Who else is making money on merchandise? Who else is making anything but a fraction what Zuffa does on sponsors?
I think a 90% share of the North American market is a pretty reasonable estimate.
And is your defense of fighters not retaining their image rights really based on guaranteeing their presence in a video game?
AB 2100 is for the sugar tax in soft drinks.. not sure which bill it actually is… but its not ab 2100
Solution is simple: all fighters should have the sense to retain legal representation during contract negotiations. If every fighter did this then the collective group could obtain more leverage and better terms. And all w/o the self-interested unions, and those pesky dues. Unions have NO fiduciary duties to their members, they care for nothing but maintaining power. All conflict with management is staged (just like national politics).
AB 2100:
http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2051-2100/ab_2100_cfa_20120424_122518_asm_comm.html
I don’t like the fact they are only trying to pass this in California.
Make it national imo.
John S
Maybe you should follow MMA a little more. You seem to not realize how many MMA promotions there are in North America. I recently went to a local MMA show that had a reported attencance of 2800 with i would guess a avg ticket price of $50. Thats well over 100K gate and you have never heard of them. It was their 13th show and only lie 3 pro card and no one had more than 3-4 wins. There is shows like this in every state all over the country and in Canada. In fact most states have dozens of these.
Lets not try to twist this shall we. You said 90% of the MMA market not North American market. There is Promotions in Japan and other countries that have pretty good tv deal and draw huge gates. Sherdog lists 56 MMA events this month alone and only 3 are UFC events.
My arguement about the image rights really has nothing to do with the video games. I dont even play them. My point was the rights is a meaningless debate. The fighters outside the UFC has no use for them. No fighters has lost anything outside the UFC because they signed their rights away. It only hurts the UFC and the sport by not signing. Jon Fitch saw this when he refused to sign and then didnt have a good reason why. All he had to say was he didnt want to do it for life as if he was going to be the next Justin Beiber when he left the UFC. In the end he realized it was a silly fight and admited he didnt mind signing the contract.
If I’m not mistaken, the part of the proposed bill that White is referring to when he mentions “taxes” is the part that says that any promoter holding a show in California that is broadcast on PPV has to pay 5% of the gross revenue from the PPV. The 5% fee is supposed to go into what would then be referred to as the boxers and mixed martial artists pension fund (it’s currently just for boxers). That part of the bill has been, at least temporarily, removed while they await the annual report on the boxer’s pension.
Zuffa isn’t p.o.’d about paying a 5% fee, because they can pass that cost on to the consumer; it would only be about $2,50 or $3.00 added to the cost of a PPV. What White and Zuffa are freaked about is that they would have to disclose to California what their gross revenue from the PPV is. They’ve been able to avoid letting anyone know that until now because they’re a private company.
If there is no federal statute or constitutional provision that prohibits a state from charging this kind of fee based on PPV revenue, we’ll eventually see all the major MMA states passing similar laws. Zuffa would have no choice but to eventually pony up. They can’t just avoid every state, because it would be nothing less than cutting off their nose to spite their face.
Ed, if I’m not mistaken that part (the 5% tax) has now been dropped from the bill. The version that was passed last week doesn’t contain it. Someone correct me if that’s not accurate.
I don’t get why it’s coercive because they control the market? All anyone has to do to run an event is sign a few fighters, obtain a promoter’s license, and secure a venue. The UFC doesn’t illegally prevent anybody from doing that. Clearly, you can’t sign their contracted fighters, and it may be a pain to get a promoter’s license, but you can’t use anybody else’s contracted employees in another industry and the promoter’s license has nothing to do with the UFC.
Agree with Nick. UFC fighters contracts are up for bid all the time. Fighters welcome new Orgs into the market to bid their price up. So anyone who wants to throw money at a big name is more than welcome to do so. But the UFC is just better at it than anyone else. They can pay more because they are more efficient and get more out of each fighter. You will not get more out of a Brock Lesnar than they can because they have put in the time and build up their company with a fanbase and connections to get better deals. They shouldnt be punished for having a lot of fan support and for doign their jon right and running a good business. Maybe they should have went the IFL route and took a bunch of MMA fans money ran the company into the ground so the their fans lost everything. Maybe then you would realize what a good job the UFC does when compared to everyone else.
Brainsmasher: Reported attendance does not mean everyone bought a ticket. I remember going to an IFL event in Portland (i believe when Lindland KOed Horn) where the day beforehand teamQuest literally had a stack of comped tickets they were giving out (i was a member of TQFC during the post-couture days). Bottom line is attendance is not an accurate indicator of who paid for their ticket.