By Zach Arnold | April 25, 2012
- California Assembly Bill could give fighters new rights, challenge UFC contracts
- Lorenzo Fertitta’s letter in opposition to AB2100 amendments
Today’s Assembly committee hearing in Sacramento (State Capitol, Room 437) for the committee for Arts, Entertainment, Sports, Tourism, and Internet Media to discuss amendments to AB2100 was quite an interesting hearing. Assembly chair Nora Campos, who oversaw testimony as a moderator for the hearing, had a thankless job of trying to manage so many different voices, both pro-AB2100 and con-AB2100. All things considered, she did a commendable job.
The hearing, which started at 11 AM, featured some real MMA star power. On the pro-AB2100 side, you had Frank Shamrock as the lead figure. He was joined by Christian Wellisch (fighter turned lawyer), Antonio McKee, and Rob Maysey as the four main figures presenting comment. In addition to their comments, there were many special interest political groups that stated their name and public support for AB2100. This included various labor unions (Teamsters, California Labor Federation), the Jockey’s Guild, and also Juanito Ibarra (Rampage Jackson’s former manager).
There was no question that Frank’s testimony, out of all the witnesses present for the hearing, was by far the most impressive in terms of persuading the committee. In these kinds of settings, he is really sharp and it’s hard to attack him. Larry Epstein, UFC’s attorney, tried to do this later on but in an ineffective, half-hearted way. More on that in a second.
Christian Wellisch talked about the issues that he faced at American Kickboxing Academy. I think we all remember the Jon Fitch episode over video game rights. I thought his testimony was good, but I’m not sure how persuadable it was.
Rob Maysey did a fine job presenting his case. He focused on the fact that fighters who sign Zuffa contracts give away rights for life, rights that they cannot get back when they are at the negotiating table with UFC for a new deal or with another promotion to sign a contract.
Antonio McKee was a surprise in terms of testimony & how influential his remarks were. I honestly didn’t see it coming. He talked a lot about the struggles he’s gone through in order to make it to where he has and he expressed concerned about fighters getting $50 pay days. He hoped that AB2100 amendments would pass, stating that it would open doors for younger fighters to be protected.
Overall, if you’re a supporter of AB2100, you had to be happy with the testimony performance of those who spoke on behalf of the bill’s amendments.
AB2100, as comments from our readership in the past have noted, has a lot of holes that can poked at in order to stop it dead in its tracks. What fascinated me the most about the anti-AB2100 testimony from the UFC camp is that I thought it was less effective and persuasive than the comments that were made by our readers. I was a little bit taken aback by how… flat… the performance was by Team UFC at the hearing. They had more ammunition to work with here than the pro-AB2100 team and I’m not sure they delivered enough to stop the process dead.
Tim Lynch, Zuffa’s top lobbyist (Platinum advisors), said that ‘the bill is a bit of a moving target’ because the pension tax for a retirement fund has been removed, but that he still considers the legislation problematic. He noted having a problem with the California State Athletic Commission being given the power to review if fighter contracts are coercive or not. Tim said that AB2100’s amendments would make it impossible for the UFC to book a large MMA event in California. He was quick, concise, and to the point. A good start.
Then came Ronda Rousey. Zuffa clearly thinks she’s persuasive and has sent her around to do a charm offensive with politicians (see: New York), but I thought her attitude here was not good at all if you are anti-AB2100. There were two big problems with her overall testimonial performance: 1) tone (condescending, arrogant) and 2) what she actually said in terms of numbers for what she gets paid did not come across as a positive to me. If I was a pro-AB2100 supporter, I would have been thrilled by her performance today in making my case for me.
Ronda started by promoting her Olympic career and her MMA career. She’s right up there when it comes to self-promotion, I’ll give her that. She said that the amendments to AB2100 were bad because it would allow the state to review a contract that she was happy with and the promoter was happy with.
(This was the standard argument Lorenzo Fertitta presented in the letter last week stating that AB2100 would be government interference in private contracts.)
Ronda stated that she did not support a contractual situation where a third-party, a person she doesn’t know, would have control over her business decisions. While she wouldn’t admit that there are contractual issues that fighters face, she said that ‘this bill does nothing to help solve it.’
At this point, her testimony was what it was. Later on is when things got worse.
Matt Hughes, along with Chuck Liddell, did the handshaking circuit yesterday in Sacramento and he was the best character witness UFC presented. Not even close. “I’m here for my experience and not my success.” He focused on the merchandising contracts with UFC and said that the deals with non-binding and gave royalties. He noted that Topps came out with a trading card of him and he got his own action figure. Matt said that when he retires that he can ’still create revenue throughout the years of not fighting’ because UFC will employ him.
“I’ve never signed a contract with anybody that my manager or lawyer hasn’t looked at before.”
He stated that he didn’t want a third-party to look over a contract that his manager & lawyer had negotiated. He went on to say that AB2100 would hurt smaller MMA shows and drive them away from California. He said that the shows would move to Las Vegas. (They would more or less move to Indian casinos rather than Vegas, but his point is well-taken.)
He went to say that the smaller MMA shows is Zuffa’s infrastructure, a farm system for developing talent if you will. (I guess The Ultimate Fighter wasn’t worth a mention.) Matt said that AB2100 would kill the MMA farm system in California within six to ten years.
“I really wonder why these other fighters think that this is a good bill. I would like to debate them on the merits of the bill.”
Marc Ratner then gave testimony and talked about his regulatory background. He didn’t say a lot. He called California one of the top commissions in the country, but they only have seven or eight employees. Marc claimed that AB2100 would severely hamper the commission because the bill’s provision would be very hard to enforce. He put over Lorenzo Fertitta as being a former member of Nevada’s athletic commission and Kirk Hendrick was Nevada’s senior deputy attorney general of state.
(I have no idea why he name-dropped Hendrick here.)
Ratner went to say that Zuffa has the ‘deepest regulatory bench in the world’ and that they run towards regulation, not against it. He said no athletic commission in the world would be able to handle the enforcement of AB2100. Ratner’s testimony performance was perfunctory and nothing special.
Lawrence Epstein, UFC’s lead attorney, presented the best & most effective argument against AB2100. However, that concise argument got lost when he went on… and on… and on about various issues. If you judged his performance at the hearing in general, it was OK but nothing special. He tried several times to interrupt and answer questions that were being bandied about by various Assemblymembers on the committee. Nora Campos had to stop him from speaking… a lot.
Epstein started out with a smug assertion that he wanted the hearing to be ‘operating with the proper set of facts.” He broke down the two kinds of contracts that Zuffa has fighters sign: 1) promotional agreements and 2) merchandising agreements.
He noted that promotional agreements are 1 year/3 fights or 2 years/6 fights and that these contracts are ‘relatively short compared to other sports.’ He claimed that the exclusive nature of the contracts was necessarily because ‘it makes commercial sense to be so.’ Epstein said it made no sense for fight-by-fight deals because of promotion hopping.
He tried to go after Wellisch, an attorney and former UFC fighter, over interpretation of Zuffa contracts, stating that “I think he frankly has a misunderstanding of the contract.”
As for the merchandising agreement, Epstein says that it’s non-exclusive and that the company shares revenues with the fighters. He further stated that fighters are free to do their own trading card & toy deals.
“We have literally created millions and millions of dollars through this [merchandising] rights program.”
Epstein said he would proudly stack up their merchandising system against ‘the other major leagues.’
(Be careful what you wish for there.)
Epstein talked about the Muhammad Ali act and how his previous background was in boxing. He claimed that he was involved in debates about the Ali act. Epstein said the Ali act was designed to deal with ‘very, very specific ills that were present in the boxing industry.’ He went on to throw Don King under the bus, saying that his contracts have ‘options upon options upon options.’ He also said the Ali act was needed to address reckless sanctioning bodies.
At this point, Nora Campos told him to wrap his testimony up. Epstein hurriedly said that AB2100 would result in hundreds, if not thousands of contracts that the California State Athletic Commission would have to review in terms of ‘coercive’ language. He said the commission would have to hire ‘a new law firm’ just to oversee all the contracts signed in MMA.
This, right here, was the best argument UFC had against AB2100 and Epstein didn’t focus in on it until the very end when he had to basically blurt it out.
Chuck Liddell gave a quick comment to the committee. This was not a highlight moment for him. He was nervous, which is understandable. He said that the CSAC already has the right to ‘take care of things’ related to contracts.
“It’s not going to help us any. … They have all the tools they need to come in and correct.”
Chairwoman Campos asked for any more remarks from the anti-AB2100 side. A spokesperson from the Howard Jarvis Tax Association, a very powerful political interest group in California, stepped up to the mic and asked if amendments to AB2100 including a pension tax or not. When notified that the pension tax language was dropped from the amendments, the spokesperson immediately dropped opposition to the bill.
That was key for the bill’s amendments to even survive for debate.
Questions and answers with the committee members
It should be duly noted that the three Republicans on the committee, Beth Gaines, Jim Silva, & Katcho Achadjian, pretty much gave away their thoughts on AB2100… as in they wanted nothing to do with it, but without actually blurting that out.
What was striking here from the line of questioning is that outside of Luis Alejo, the Assemblyman who is pushing for the AB2100 amendments, the other members of the committee do not know much about MMA.
As such, you ended up with questions like ‘have there been individual challenges to contracts?” in court.
One of the members, I think it was Tony Mendoza, came across as very supportive.
“This area of sport has not had the oversight or protections for athletes that boxers and others have had. So, we’re in a committee today. This bill’s going to have a light ahead of it.”
He further added that as a general policy statement of the state of California, this is a growing sport in popularity. His interest is that California establishes a foundation of non-negotiable protections and would look forward to that. Thanked Frank Shamrock for his testimony.
Christian Wellisch responded to the question about contractual challenges by saying that the reason fighters don’t challenge in court is due to intimidation of being fired, which he noted was his personal experience.
Assemblyman Alejo brought up the “ESPN documentary” (Outside the Lines) talking about fighter pay and why many fighters don’t want to go on the record.
Assemblyman Mendoza remarked that he agreed with what was said but that the opposition proposed ‘a lot of good points.’
“There’s some answering that needs to be done.”
He said that a tremendous case had been made in terms of fighters being intimidated, saying it was ‘eye-opening testimony for us,’ but that he hopes to come up with a reasonable conclusion.
I think, at this point, it was Assemblyman Katcho Achadjian (or Assemblyman Monning) who asked the question, ‘How are you treated in other states?” to which Epstein replied the same as in California. The Assemblyman noted concerns about the state losing business and said that he’d like to see the amendment language. What became clear after a few minutes is that many of the Assembly members voting had not read the latest revised amendment draft of AB2100, so many members on the committee took the stance of wanting to read the amended version of AB2100 before voting yes or no in committee.
Assemblyman Alejo responded by saying that the offices of the other members got the revised amendments to the bill and he did confirm that amendments related to a pension tax were removed.
An Assembly member asked if those in support of AB2100 were all retired fighters. Epstein made it quickly known that Frank Shamrock is labeled as a “UFC champion” but that he didn’t fight under the Fertitta/Dana administration. I have no idea why he felt compelled to state this.
How about a do-over?
Beth Gaines, who is Vice Chairwoman of the committee, asked a simple yet bizarre question: “Please clarify how you work the promotion process. How do you get a fight?”
Ronda Rousey stepped up to answer this. I’m betting Zuffa wished she didn’t after what she said.
Before answering the question, Rousey snarkily answered that “I’m actually the only current fighter here today.” At that point, a seat was made for Antonio McKee to step up to answer. One of the committee members tried to save Ronda from this faux pas.
Within seconds of this, Rousey hastily remarked, “What was the question again?” The written word cannot explain the tone during this question from her.
Rousey went to say that you find any kind of promotion putting on a show, get a matchmaker to find an opponent. She noted that she did this for three fights and ‘got paid nothing but got enough of a résumé.’ She was trying to say amateur fights, but if you’re not quick on the draw you wouldn’t have picked this up.
She noted her ‘next pro-fight’ was for King of the Cage and she got paid $800. Her next fight afterwards, same amount. Then she got picked up by Strikeforce and ‘they multiplied my salary many times over. … They re-signed me again for even more money.”
She started criticizing fighters who are supportive of AB2100, saying that people should take a look at what the record of those fighters is.
“If you’re bad at your job, you shouldn’t expect people to pay you for it.”
Antonio McKee then promptly chimed in and said he had one of the longest winning streaks in MMA, something that can verified by Sherdog.
At that point, Epstein stepped in and said that “one of his 50 or so fights was in the UFC.”
As Rousey continued her testimony, her tone got sharper and more aggressive.
She noted that her manager is Darren Harvey and her lawyer is Rod Lindstrom. She says they look over every single contract she signs. Rousey noted her last contract was $15,000 to show and $15,000 to win and that she had her manager ask for ‘a couple of extra grand.’ She claimed her manager told Zuffa that a couple of grand may not sound like a lot to you but it is to her, and she got the money.
“I do good work for them and I’m valuable to this company and they treat me like that and I have no complaints.”
You could sense that the more numbers Rousey started floating around, the worse things started looking for the anti-AB2100 side — especially if you are a politician who doesn’t follow the sport and are seeing some of these figures for the first time.
Stunningly, one Assembly member asked if the California State Athletic Commission currently oversees regulation of Mixed Martial Arts like they do for boxing. I kid you not, this was asked.
The same person then asked if the commission gave any input or comment about the bill. Nora Campos replied, ‘no, not at this time,’ and said the commission would develop a response at their next commission hearing.
(Let me save the committee some time. No, don’t expect the California State Athletic Commission to support the amendments proposed for AB2100.)
Assemblyman Alejo thanked everyone for the “Rumble in the Rotunda” and that his legislation is about promoting ‘equity and fairness for these [fighters].” He said that he doesn’t want to see MMA superstars 5-to-10 years down the road as exploited figures who are living in poverty. The Assemblyman said that California is a leader in political/social policy and that the bill would set forth a great standard for protecting fighters. Alejo said he’s a big MMA fan and that he wants to see fighters get paid enough to provide for their families and to pay for monthly training expenses. He listed off promotions of dead MMA promotions and said that when you buy out all the leagues and control the major names, it’s much more difficult for fighters to obtain a fair contract. He concluded by stating that he would work with both the pro-AB2100 and anti-AB2100 sides.
At this point, Nora Campos put up a motion for further bill discussion at a later time. Assemblymen Mendoza & Monning voted aye, with the Republicans voting no. The motion only required a second approval for further bill discussion and that was achieved.
I thought the pro-AB2100 side did about as well as you could expect in presenting their case.
I thought the UFC side was rather weak & pedestrian, given that they’re playing with the stronger hand here as far as MMA fan support goes.
I don’t see the California State Athletic Commission backing the amendments to AB2100 at all, but I could see DCA taking a stand for it. The DCA/CSAC political battle is nothing new.
The committee has 6 Democrats and 3 Republicans. The 3 R’s are solidly no.
It only takes 2 D’s to say no and the bill won’t pass committee. At best, I say the pro-AB2100 side has a 50% chance of the bill surviving committee. However, if you’re a wavering D, the testimony and numbers that Ronda Rousey floated may give you enough resolve to say ‘aye’ to the amendments.
There’s no question that Frank Shamrock delivered for his side here. In these settings, he’s really good at what he does.
Update: Eddie Goldman says the bill passed the committee on a 5-to-2 vote. The Contra Costa Times article (linked in comments section) said this as well. I’m… surprised. That wasn’t my takeaway as far as what they were voting on, I simply thought they were voting on further debate at a later point. Hmmm. I’ll get the roll call later.
The roll call
There was, in fact, an actual vote. You could have fooled me, given how close I paid attention to the proceedings. However, the vote was not 5-2 with two ‘present’ votes. The vote total was, in fact, 5-3 with one Assemblyperson abstaining. This lines up with what I noted during the hearing, which is the three Republicans who came out and said no.
So, the five Democrats on the panel voted ‘aye’ despite some of them admitting minutes earlier that they had not even received a copy of the amended AB2100 bill with the pension tax provision removed.
Ayes: Butler, Campos, Gatto, Mendoza, Monning
Noes: Achadjian, Beth Gaines, Silva
No Votes Recorded: Carter
I had been sitting here tonight wondering if I lost my mind and missed something procedurally. Turns out, I didn’t miss much at all. It’s the sausage-voting process itself, however, that resulted in the outcome we got today.
The amended AB2100 bill now is headed to the Committee on Appropriations.
List of parties in support and against AB2100 amendments
Support: American Rights at Work, Arete Agency. California Conference Board of the Amalgamated Transit Union. California Conference of Machinists. California Labor Federation, AFL-CIO. California Police Activities League. California Teamsters Public Affairs Council. Engineers & Scientists of California, IFPTE Local 20. Fighters Online, International Longshore and Warehouse Union, Jockey’s Guild, Mixed Martial Arts Fighters Association, Patient Networks, Professional & Technical Engineers, IFPTE Local 21, United Food & Commercial, Workers Western States Council, UNITE-HERE, AFL-CIO, Utility Workers Union of America, Local 132, two private citizens (Eddie Goldman & Juanito Ibarra)
Opposition: Goossen Tutor Promotions, Honda Center, Howard Jarvis Taxpayers Association, HP Pavilion at San Jose, Ultimate Fighting Championship