By Zach Arnold | December 17, 2014
— MMA Supremacy (@MMASupremacy) December 16, 2014
The long-rumored anti-trust lawsuit against UFC was officially filed in court on Tuesday. Specifically, in the Northern District of California federal court. The plaintiffs are Cung Le, Nate Quarry, and Jon Fitch.
One of the law firms involved is Joseph Saveri’s. That’s the same law firm that recently went after Apple, Google, Intel, and Adobe over allegations of poaching & hiring in the tech industry. The settlement figure was widely panned in the business press as underwhelming.
It’s been a hard enough challenge to find any fighters willing to sue UFC on a big scale. There have been two road blocks: jurisdiction and issues of state versus federal law. Going after UFC via anti-trust was really the only way anyone was going to make a serious legal challenge against the UFC in a federal courtroom, especially one outside of the state of Nevada. On a jurisdictional level, the fighters are signing contracts based on Nevada jurisdiction. Getting a lawsuit filed outside of Nevada was critical to challenging the UFC.
Tuesday’s anti-trust suit filed against the UFC was filed in the same Federal court chain that took on Ed O’Bannon’s anti-trust challenge against the NCAA. I can’t say for a fact that O’Bannon’s courtroom success in Oakland helped persuade the law firms involved in the anti-trust lawsuit against UFC, but it sure didn’t hurt the cause. With so many lawyers involved and so many big egos, the firms aren’t going to be spending tens of thousands of hours on contingency unless they think there’s a significant payoff in the end.
And that payoff doesn’t have to necessarily be a cash award from a jury, either. There are plenty of reasons for the Fertitta family to pay to make this case go away. The sooner, the better. The longer the interrogatory, discovery, and deposition process drags on, the more information lawyers are going to be be able to obtain about UFC’s business practices. That information could prove to be very, very valuable for other lawyers who may sue UFC in the future over their business practices. Regardless as to whether or not this anti-trust lawsuit against UFC goes to trial, the bottom line is that this lawsuit is perhaps the first salvo of many to come in the near future against Zuffa.
Let’s remember one thing here about where this lawsuit was filed. It was filed in San Jose, home to American Kickboxing Academy. That place that trains UFC Heavyweight champion Cain Velasquez and some guy named Daniel Cormier. Remember what happened to AKA when Dana White went after Jon Fitch for signing over his rights for image & likeness in video games? That happened five years ago and it is now going to be used as a proverbial sledgehammer in court against the UFC.
The big questions that must be answered
If you’re UFC and you’re looking for a silver lining, consider the following: Rob Maysey is the one guy involved who knows MMA. Apparently, the other lawyers involved have some knowledge about the industry but not expansive knowledge. With so many lawyers and so many egos involved, will the law firms be able to maintain a cohesive strategy all the way through or will they start splitting apart in regards to wanting to settle as fast as possible rather than going all the way to trial? Talk is cheap. Every lawyer always says they want to go to trial until they have to spend their own funds.
Which brings us to the next dilemma: is UFC really the only target here of this anti-trust lawsuit? Or is Fox Sports the ultimate target here? Follow the money. Fox has a lot more cash than the UFC. As we saw in the Ed O’Bannon case, O’Bannon went after Electronic Arts and EA settled for millions of dollars in his anti-trust case. Will the plaintiffs go after EA here in regards to profiting off of fighters who signed away the rights to their image/likeness? Will the plaintiffs go after Reebok now with the new uniform deal in place? You can bet that UFC’s lawyers will be studying the O’Bannon legal road map carefully.
There are a few points of order that I think must be raised in regards to the pending fishing expedition for information with this anti-trust lawsuit filed against UFC.
Number one: How can you prove damages & come up with a number?
This is going to be very difficult to calculate.
Number two: The ghost of PRIDE’s past
If Ed Fishman is still around in Malibu, I have to think that the plaintiffs may give him a call to ask about what exactly went down in Las Vegas when he was trying to buy PRIDE from Nobuyuki Sakakibara and how UFC magically managed to get into the picture to buy the assets.
A cursory look at our past articles & interviews with Ed on our site might give a glimpse into the kind of dirt digging that may ensue with the lawyers pressing UFC over PRIDE and what they knew about PRIDE at the time the asset sale deal was made. Especially on issues of due diligence. If memory serves me right, Zuffa claimed that they used Spectrum Gaming LLC to do the background check. Of course, it was the negative magazine campaign from Shukan Gendai in Japan about allegations of PRIDE supposedly being a front company for a powerful yakuza organization that led to Fuji TV pulling the plug and ultimately leading to PRIDE’s sale. What did UFC know, when did they know it, and what was their role exactly?
Fishman is a creature of Las Vegas and Atlantic City. The man is brilliant. He knows a lot of information that may prove to be useful to the allegations made by the Plaintiffs in their anti-trust lawsuit against UFC.
Number three: Sig Rogich & Harry Reid
You know what our opinion was in the past about the World Series of Fighting. You don’t have to look very far. We called WSOF the unofficial bastard child of the UFC. The founder of WSOF is Sig Rogich, the public relations mastermind who has close relationships with John McCain, Harry Reid, and associates from his days being around the Reagan & Bush families. Rogich didn’t exactly hide his fingerprints when it came to the paper trail for business incorporation in Nevada for WSOF.
It was our opinion that World Series of Fighting was a stalking horse of sorts that competed with Bellator for fighters while the UFC maintained their status as the one major organization in the sport.
In my opinion, I cannot imagine that Sig Rogich or Marc Ratner will be very happy if the lawyers for the Plaintiffs start grilling them about WSOF and Nevada State Athletic Commission business affairs. Sig was present at the Washington D.C. presser in which you had promoters in both MMA & boxing pushing the Lou Ruvo Cleveland Clinic fighter brain study. The connections between Arum, Reid, Rogich, and the Fertittas aren’t a state secret. One can only guess how interesting discovery & deposition could be against Rogich & those affiliated with WSOF.
Your guess is as good as mine in terms of the path that this anti-trust lawsuit against UFC will navigate in San Jose. UFC has managed to successfully keep a lot of their business affairs in secret. Remember, they contributed money to politicians in Florida who changed the state’s sunshine laws in the name of protecting ‘trade secrets.’
I’m not sure the flood gates of information will open in this anti-trust lawsuit, but I do reckon that the ground work for pending litigation from other attorneys is going to start in earnest.