By Zach Arnold | April 12, 2017
Spike, as @danrafaelespn reports, the first PBC network to bail. Others, industry execs say, will follow. Haymon creation crumbling.
— Chris Mannix (@ChrisMannixYS) April 12, 2017
Dan Rafael at ESPN is reporting that Spike TV has dropped PBC programming. The reporting tone at ESPN regarding Al Haymon is a far cry from when he was doing business with the network. Now the network is in bed with Golden Boy.
Rafael’s report claims that Spike TV was the only “non-premium” cable network paying a rights fee for PBC programming. This goes against what I had been told in the past regarding the deal PBC has with Fox Sports 1, but I could be factually wrong on that account. Nevertheless, PBC programming on FS1 continues while their deal with Spike TV is over.
The big picture now is the stability of PBC with other television networks. Chris Mannix claims PBC is about to get dropped by other television stations.
Things changed in a hurry for Al Haymon once PBC agreed to drop their exclusivity clauses from television contracts as part of the settlement with Top Rank. Top Rank settled their antitrust lawsuit against PBC. Golden Boy, however, did not. They lost their court case via summary judgment. However, Golden Boy got very lucky that they were not subjected to “loser pays attorney fees” status. Instead, the most that Al Haymon’s side could recover was court costs estimated to be around $35,000.
In the end, Golden Boy paid a lot in legal fees but so did PBC. That had to hurt.
While various reasons/excuses were stated for Spike TV dropping PBC, not mentioned in mass media reports is the fact that the legal climate for PBC changed once a few shareholders from the Ivy Fund in Kansas filed a shareholder derivative lawsuit against the hedge fund for financing PBC and allegedly putting $525 million dollars in a shell LLC (Media Holdings LLC). The lawsuit is attempting to get the hedge fund to claw back the money they invested into Al Haymon.
The lawsuit was filed in April of 2016. PBC had a big run in the Summer of 2016. Then things slowed down to a crawl. The shareholder lawsuit was part of (what we guestimated in past articles) a legal python strategy to choke the cash from PBC.
Even if PBC dies a slow & agonizing death, Al Haymon will have made his money. He will have cashed out big. As long as PBC isn’t subjected to future litigation by business partners or adversaries, things will be good for Al Haymon. He’ll be free and clear to do as he pleases in boxing. Can the same thing be said for the fighters he has signed to long term deals? Will fighters attempt to extricate themselves out of his management/advisory contracts?
Lost in the noise is what the impact will be on athletic commissions like California, Texas, and New York. A past breakdown I did of the revenue numbers in California showed that revenue from PBC & Al Haymon was around 15-to-20% for the state Athletic Commission. With UFC slumping and Al Haymon facing new economic realities, it’s not good news for the athletic commissions who helped propel Haymon’s rise in the boxing world.
By Zach Arnold | April 8, 2017
Anyone expecting Miragliotta to be able to tell whether those knees were legal or not in the moment are crazy.
— Mike Fagan (@ItsMikeFagan) April 9, 2017
There was a perfect storm of events heading into UFC 210 to create chaos in the Gegard Mousasi vs. Chris Weidman fight.
First, it’s Chris Weidman. There’s always something dramatic happening with him in or out of the cage. He came into the fight on a losing streak and was fighting for his career on home turf.
Second, Chris Weidman’s home turf is New York. The New York State Athletic Commission is still trying to learn the MMA industry. Plus, they’re one of the worst if not worst state athletic commissions in America for regulating combat sports. Which means there is even more pressure on UFC itself as an organization to try to figure out how to run the regulatory show with a bunch of incompetent, green regulators. See: Daniel Cormier weigh-in and Pearl Gonzalez breast implants.
Third, the California State Athletic Commission and their friends at the Association of Boxing Commissions pushed through new regulations to modify the Unified Rules of MMA. It’s created confusion. It’s created a split in the United States with several states not adopting the proposed ABC changes. This includes states such as New Jersey, Ohio, Missouri, Colorado, Virginia, Maryland and South Dakota.
This means that MMA referees who work shows in multiple states have to remember both the old Unified rules and the new Unified rules. Rather than build a full political consensus on having all states slowly modify the Unified rules, you have legalized anarchy that’s bound to create confusion even amongst the most experienced MMA referees in the business.
The biggest source of confusion between the old and new Unified rules deals with the definition of a grounded fighter. The old rules allowed fighters to protect themselves with a single finger on the ground. The new rules:
…now a fighter must have both hands down — palms or fists — or a knee or another part of the body besides the soles of his or her feet on the mat to be grounded.
Which leads us to the finishing sequence at UFC 210 for the Mousasi/Weidman fight. From MMA Junkie’s PBP of the event:
n the middle, Mousasi gets hold of Weidman and drills him with two knees while his hand is on the canvas – or so it seems. Miragliotta stops the fight and sends Mousasi to a neutral corner. Weidman will get looked at by the doctor. He gets five minutes. It looks like they may want to stop the fight. The replays show that the knees may have been legal. Now they’re consulting with the commission – and the fight is over. The place goes absolutely crazy with boos. It’s Weidman’s home state, he’s saying he can continue and wants to continue – and they’re shutting it down. It’s a TKO win for Mousasi – and the crowd is absolutely livid. Miragliotta made a mistake stopping the fight because the knees actually were legal. So when Miragliotta gave him time to recover, that was a problem. Weidman is pacing the cage during Mousasi’s interview, and he’s completely drowned out by the boos.
I am surprised that it took this long to see the fruits of confusion sewn over the definition of a grounded fighter.
If the knees were viewed to be illegal, Miragliotta should have taken point a point away from Mousasi while giving Weidman time to recover and return to action. Instead, there was a stoppage… and then the fight got stopped without Weidman having a chance to fight. Weidman is automatically appealing the decision and wants a rematch.
The problem is the rule. Why is a fighter in more danger if his hands are on the mat than he is if they are one inch off the mat? #ufc210
— Jonathan Snowden (@JESnowden) April 9, 2017
There are three points of future debate here for public consumption:
- The risk/reward debate between opening up more opportunities to hit an opponent to increase finishes for fighters while increasing risk for concussive injury
- Rules battles between states over old vs. new Unified MMA rules, making it even more of a challenge for MMA officials to properly do their job and not screw up split-second pressure calls
- “The human element” vs. using video technology to get calls right
I don’t foresee any helpful changes coming any time soon to erase doubts or confusion.
By Zach Arnold | April 6, 2017
Shareholders of the hedge funds financing Al Haymon’s PBC (Premier Boxing Champions) sued said hedge funds in Kansas state court. The lawsuit was a shareholder derivative lawsuit, meaning the shareholders sued the hedge fund in order to claw back money that the hedge fund invested or was about to invest in Al Haymon. Plaintiffs claimed that over $525 million dollars was being held in a Delaware LLC called Media Holdings.
The lawsuit involves prominent attorneys from both New York & Los Angeles along with local Kansas attorneys.
The defendants are: 1) Ivy Investment Management Company, 2) Waddell & Reed Investment Management Company, 3) Waddell & Reed Advisors Fund, and 4) a slew of individual defendants/trustees.
Here is the quick and dirty summary of what has transpired in state court:
- November 10th, 2016 – Judge Gerald T. Elliott denied a motion to dismiss (demurrer) from defendants Ivy Investment Management Company, Independent Trustees. The plaintiffs were allowed to file an amended petition.
- December 1st, 2016 – the plaintiffs filed their second amended verified complaint.
- February 6th, 2017 – new judge Rhonda Mason schedules a tentative trial date of July 16, 2018. Preparation for a one month trial timetable.
Which brings us to what happened in court on Thursday.
A statement from plaintiffs attorney Sam Bonderoff in response to today’s events:
“Although Judge Mason dismissed the derivative claim brought on behalf of the Waddell & Reed Advisors Fund, the derivative claim on behalf of the Ivy Fund remains and that fund is responsible for the overwhelming majority of shareholder losses from the Haymon-related investments. We will continue to press our claims vigorously.”
To be continued…
By Zach Arnold | March 23, 2017
So much for ESPN bothering to advertise their new television deal with Golden Boy.
The network didn’t run any ads for Thursday’s debut card from Fantasy Springs. Nothing on Olympic medalist Marlen Esparza. Zero on undefeated Randy Caballero. Nothing on Jason Quigley or veteran Glen Tapia. Even TruTV did more for Top Rank than ESPN did for Golden Boy.
What we did get was Teddy Atlas being… saucy. The old Teddy Atlas on ESPN used to dump on people and name names. The new ESPN-ified Teddy Atlas (thanks producers?) dumps on people without naming names, especially those working for athletic commissions.
The opening fight featured Marlen Esparza making her professional debut against Rachel Sazoff. On paper, it was designed to be a classic squash match. It was also a fight that should have never been approved by Andy Foster. Matchmakers book squashes all the time. It’s up to the Athletic Commission to say no. Andy Foster rubber stamped this squash just like he approved a nearly 60-year old female fighter versus a 300-pounder.
Teddy Atlas dumped on Golden Boy during the entire fight for booking this one-sided affair. After the fight, ESPN went to an interview spot with Teddy Atlas and Oscar De La Hoya where Atlas proceeded to question DLH on booking squashes because that’s not what fans want to see. It was a dressing down session.
Which brought us to Randy Caballero against Jesus Ruiz. It was more competitive in real time than the bout looked on paper. Teddy Atlas talked about Caballero finding real estate in the ring… and then proceeded to say that Caballero brought his “real estate agent.” It was one of those truly awkward Teddy moments that you used to see on Friday Night Fights.
HBO Boxing photographer Ed Mulholland noticed Teddy’s remark as well:
Well Teddy Atlas has taught me something new tonight apparently boxers take a lot of advice from real estate agents #boxing
— Ed Mulholland (@muls96) March 24, 2017
The main event brought us prospect Jason Quigley against grizzled veteran Glen Tapia. Tapia took a beating early and the fight could have reasonably been stopped. The old Teddy Atlas would have been screaming and shouting. The ESPN producer-ified Teddy Atlas was more gentle in nature even while protesting. The California State Athletic Commission allowed Tapia to continue boxing and Tapia, who took a man-sized beating, proceeded to expose Quigley for needing significant improvement on his defensive skills. But you wouldn’t have known that on the score cards which gave most rounds to Quigley. Carla Caiz (100-90), Max DeLuca (98-92), Zac Young (99-91).
After ring announcer Joe Martinez read the score card, Teddy Atlas questioned whether the judges had enough respect or knowledge of the sport… but didn’t mention the name of the judges. No significant build-up for the next fight. They went right off the air.
By Zach Arnold | March 20, 2017
Sandwiched in-between wall-to-wall coverage of the NCAA March Madness basketball tournament, ESPN decided to air a video package on Cris Cyborg and her brutal adventures in weight-cutting. It was built upon this video feature Cyborg put online several months ago about her torturous experience of dehydrating herself to the point where blood could not be drawn from her arm:
The video package itself was not entirely new but it was updated by ESPN to contain some interesting responses to its initial airing.
ESPN aired Cyborg’s claim that UFC refused to give her a fight at 145 pounds and that allegedly UFC made a u-turn on 145 pound fights when they found out about the Outside the Lines segment. Whether that is factually accurate or an issue of false light, I cannot say one way or the other. The segment claims that Cyborg rejected the offer of a 145 pound title fight and aired her various comments talking about how insulted she was that someone 0-2 was going to get a UFC 145 pound title shot. This drew an analogous response from Dana White saying that players for the New England Patriots don’t get to pick and choose when they participate in a title game.
Added to the context to the weight cutting issue was Cyborg’s recent USADA back-and-forth over a diuretic and whether she had properly gotten doctor’s permission to use it.
Andy Foster planted his flag in the ground to try to stop bad weight cuts
California State Athletic Commission Executive Officer Andy Foster has made it a mission to try to put a stop to the kind of massive weight cuts in boxing and MMA that have damaged kidney & organ function of fighters who knew better but decided to take the risk no matter what the price was to pay for such destructive, masochistic behavior.
California pushed the idea of early weigh-ins. Instead of making weight at the last minute, weigh-ins are taking place at 10 AM the day before a show and the traditional weigh-in events with fans are ceremonial in nature. The idea, which is entirely logical and reasonable on its face, was to give fighters more time to hydrate so that they wouldn’t be in such bad shape come fight time. Plus, if a fighter fails to make weight at 10 AM, there is always the opportunity for a promoter to negotiate a last minute replacement to save a fight card.
What appeared to be solid policy has backfired in a disastrous manner. More fighters are missing weight. More fighters are turning down last-minute opponents. Promoters are pissed. Fighters are extra pissed, not only at opponents for missing weight but for how much promoters are allegedly paying them (or not) in terms of show money. See: Tony Ferguson.
The carrot didn’t work, so bring out the stick
That’s the best way to summarize the newest policy evolution by Andy Foster and the state of California regarding punishment of fighters who miss weight.
Remember the days of “shower bonuses” under Lorenzo Fertitta? California is now pushing for a new policy on their bout contracts to require, I suspect under penalty of perjury, disclosure regarding potential win bonuses. If a fighter misses weight, they already lose 20% of their purse but they can still fight the next day and win both base money and bonus money. The new California policy would attack not only the base money but would also take a percentage of the win bonus.
I believe this will actually create an adverse impact and make the weight cutting situation even worse in California-regulated combat sports.
First, I expect managers, promoters, and fighters to try to hide any oral or written contractual bonus clauses and dare the Athletic Commission to administratively hound them with the Attorney General’s office for punishment. If the penalty for perjury isn’t criminal in nature, why are people in the fight business going to care?
Second, I would expect bonus agreements to go off the books. It’s hard enough to pry financial information honestly out of event participants. If this becomes too much of a headache for UFC, what’s to stop UFC from blowing their whistle and proclaiming win bonuses to be part of their contractual trade secrets that should be legally sealed?
Third, there isn’t enough money to be made for the majority of fighters to change their behavior by fining them. You can’t half-ass the punishment here. If you’re going to drop the hammer, drop the hammer and start suspending fighters the way you suspend fighters for doping. The threat of fining fighters for weight cutting will likely turn out to be mostly for show. Fighters want to fight. Take away their ability to fight the same way you get an athlete’s attention by telling them to sit down.
There is no easy answer on addressing the incredible dilemma of weight cutting. Changing weight classes in increments of 10 pounds per division is really where everything is heading. Until the fans and promoters agree to acquiesce to those changes, everyone is spinning their wheels and more fighters are going to end up in the hospital due to kidney failure.
California State Athletic Commission seeking permission to spend $200,000 more on athletic inspectors
By Zach Arnold | March 13, 2017
In the upcoming California state budget fight, the Department of Consumer Affairs is working with the legislature to have Governor Jerry Brown’s budget give the California State Athletic Commission authority to spend up to $1.65 million dollars for the upcoming Fiscal Year (starting July 1st).
In the concurrent state Assembly & Senate budget bills, there is an additional provision to give the Athletic Commission an additional $200,000 in spending authority in order to recruit more athletic inspectors and for athletic inspector training sessions.
Over the last couple of years, the Athletic Commission has improved its budgetary numbers but has gone on an infrequent training schedule regarding its frontline employees. Additionally, the revenue has been built on the back of professional wrestling (WWE) events. The Athletic Commission does not actively regulate wrestling events. They simply collect a check from the box office at the arena. WWE has not challenged the Athletic Commission in court for disparate treatment even with the voluminous amount of independent wrestling shows in the state each year.
According to a March 14th memo, the Athletic Commission has $1.1 million dollars in its bank account.
The concurrent budget bills in the California Legislature also request $55,000 in Athletic Commission spending authority for their neurological fund (with an extra $50,000 bump if requested) and $105,000 in Athletic Commission spending authority for their boxer’s pension fund.
By Zach Arnold | February 25, 2017
— Telemundo Deportes (@TelemundoSports) February 25, 2017
Nothing is ever standard in Florida, especially in combat sports.
On paper, a sleepy Boxeo Telemundo event from the Tony Rosa Community Center in Palm Bay, Florida created some great drama — the kind of drama you typically used to see on random ESPN Friday Night Fight cards. The kind of drama that helped elevate Joe Tessitore to top tier status at ESPN.
The ingredients: Florida’s Boxing Commission and referee Frank Santore. Promoter All-Star Boxing. Two young, undefeated boxers in Joshua Pagan and José “Little Pacquiao” Resendez. Pagan’s father was a three time Golden Gloves champion in New York.
It’s a six round fight. Fast-forward to round six. After a couple of questionable punches, Resendez gained momentum and had Pagan in trouble. Suddenly, a Pagan supporter jumped from the crowd to the ring apron to take a swing at Resendez. A melee breaks out at ringside with cornermen, security, and Florida boxing commission officials. Nobody really knows what to do. The two boxers go in opposite corners and take a breather. Resendez is on his knees but gets back up.
When I first saw the supporter jump onto the ring apron, I thought he was in Pagan’s corner and was trying to get the fight stopped. Nope.
After everything settled down, the fight re-started with around 50 seconds left in the final round. 30 seconds in, Joshua Pagan decided to take a knee — with 20 seconds left in the round. Santore gives Pagan a standing 8 count. At this point, the television announcers start name-dropping Mike Tyson and all sorts of crazy incidents in boxing’s past.
After the end of the fight, the score cards are read… and Pagan, who took the knee in R6, won by split decision over Resendez. Time for a re-match.
By Zach Arnold | February 22, 2017
If the California State Athletic Commission is considered the lowest of the state agency boards in terms of political power, why do so many movers-and-shakers get involved with the Athletic Commission?
It’s the easiest high-profile launching pad to get to bigger and better places in California government. Wednesday’s bulletin from Governor Jerry Brown announced that former Athletic Commission board member Dean Grafilo would be taking over the reigns at the Department of Consumer Affairs.
Dean Grafilo, 44, of West Sacramento, has been appointed director at the California Department of Consumer Affairs. Grafilo has been chief of staff in the Office of California State Assemblymember Rob Bonta since 2012. He was associate director of government relations at the California Medical Association from 2009 to 2012, chief of staff in the Office of California State Assemblymember Warren T. Furutani from 2008 to 2009 and a senior legislative assistant in the Office of California State Assemblymember Alberto Torrico from 2004 to 2008. Grafilo was an organizer representative at Service Employees International Union Local 925 from 2003 to 2004 and a political intern at the M.L. King County Labor Council in 2002. He was a field representative and organizer at International Longshore and Warehouse Union Local 142 from 1997 to 2001. Grafilo earned a Master of Public Administration degree from the University of Washington. This position requires Senate confirmation and the compensation is $176,691. Grafilo is a Democrat.
Consumer Affairs has oversight over the state Bar (attorneys), the medical board (doctors), the contractor’s board, the liquor licensing board, regulatory authority over medical marijuana, and pretty much everything under the Sun in California. Consumer Affairs has reportedly become so unmanageable that the Sacramento legislature is considering plans on combining certain boards and agencies.
The CV for Grafilo doesn’t state his tenure with the Athletic Commission but a quick search on Fight Opinion highlights Grafilo’s short-term appointment during the time when Consumer Affairs was doing everything in its power to fire George Dodd as the Athletic Commission Executive Officer. Now Grafilo is going to run the show.
Last Friday, Governor Jerry Brown’s office announced the re-appointments of attorney & former boxer Mary Lehman (good) and fixer Martha Shen-Urquidez (atrocious) to the Athletic Commission.
By Zach Arnold | February 8, 2017
Hollywood is melting down over President Donald J. Trump and WME-IMG, the new owners of UFC, are reportedly creating a mega Hollywood PAC to pump huge amounts of cash to go after the Trump agenda.
This is potentially a game-changing gift for the forces who are nudging Congress into amending the Ali Act to cover Mixed Martial Arts.
Ari Emanuel and Dana White triangulated the 2016 American political scene beautifully. They played both sides of the coin and ended up helping one of UFC’s biggest supporters become President. The loyalty Dana White showed to Donald Trump is something that Trump took very seriously. It gave Dana White a direct line to 1600 Pennsylvania Avenue. It gave Ari Emanuel, Trump’s former TV agent, a direct path to talk to the President. If they wanted Trump to veto signing an amendment to the Ali Act, they had clout to make the request and force Congress to override a Presidential veto.
With momentum building in Congress to amend the Ali Act, I switched my position from arguing that there was no chance of the Ali Act getting amended to a position where I could see a possible path of Congress amending the Ali Act, Trump vetoing, and Congress overring the veto. The chances were still slim, but growing.
Now this logic could potentially be turned upside down with WME-IMG and Hollywood going after Trump with tens, if not hundreds of millions of dollars in the form of a Political Action Committee. WME-IMG just cracked the door open for Trump signing an amendment to the Ali Act and gave him a motive — revenge.
The move by Ari Emanuel and WME-IMG to turn on a dime against Trump suddenly reverses course from the political strategy new ownership had in cementing UFC’s political security. Forming a mega Hollywood PAC to go after Trump and work against the implementation of his agenda is going to piss him off. It has the potential of reversing all the carefully crafted work WME-IMG engaged in over the last 12 months to make Trump a top ally.
The problem for WME-IMG? Their Hollywood clients are so hot at Trump that WME-IMG is getting backed into a corner to abandon all the political work they did over the last six months in protecting UFC. If you’re in the camp working hard to amend the Ali Act to cover MMA, these new political developments could be just what the doctor ordered to bring much needed change.
By Zach Arnold | January 26, 2017
Not even a week after Golden Boy signed a two year contract with ESPN, Oscar De La Hoya’s world is on the rocks. He got cited for DUI, no-showed a HBO presser to promote a Fantasy Springs event, and got his antitrust lawsuit against Al Haymon terminated in Federal court.
In one of the most direct & blunt Motion for Summary Judgment rulings I can ever recall reading, Los Angeles Federal Judge John F. Walter essentially agreed with every point raised by Al Haymon’s legal team as to why the Golden Boy anti-trust lawsuit should be terminated. So much so, in fact, that one came away with a clear impression that even if Golden Boy had produced the evidence they had promised the court, it wouldn’t have mattered because the evidence didn’t meet the legal standards to prove the merits of their causes of action.
My charitable interpretation of what the judge told Golden Boy:
- You have unclean hands (specifically matchmakers Eric Gomez & Robert Diaz)
- You failed to provide credible evidence to back up your claims and relied on hearsay
- Your attorneys didn’t depose boxers or fully follow legal rationale such as the Rule of Reason to prove your antitrust argument
- Even if you provided the evidence you said you would, so what? Your legal arguments failed based upon the facts presented to the court
This Motion for Summary Judgment ruling was a complete and total public repudiation of Golden Boy attorney Ricardo Cestero.
Barriers to entry
Golden Boy argued that Al Haymon using PBC to sign exclusive deals with TV networks created a barrier to entry. Team Haymon argued that PBC TV deals created no barrier because Golden Boy & Top Rank could still do business in the regular channels that carry boxing. Judge Walter stated that Golden Boy failed to properly define the boxing market or show that Al Haymon created barriers for Golden Boy for doing business in the boxing marketplace.
It should be noted that ESPN claimed they started negotiating with Golden Boy after Al Haymon reached a settlement with Bob Arum in his Federal court to eliminate the PBC exclusivity clauses in television contracts.
Haymon boxers and coercion
Golden Boy argued that Al Haymon’s stable of boxers were pushed into deals that benefitted him and tied up fighters from working with other promoters like Golden Boy. The judge ruled against this argument, stating Golden Boy provided no declarations or depositions from any boxers on this matter and that Haymon’s fighters made more money as a result of working with him because fights he signed with other promoters were lucrative.
Judge Walter turned the tables against Golden Boy and used their own words against them:
In fact, the evidence suggests that it is Golden Boy, not Defendants, that has refused to deal with the Haymon Entities during the pendency of this lawsuit. Indeed, in May 2015, Robert Diaz (Golden Boy’s matchmaker) received a suggestion from the manager of then Golden Boy-promoted heavyweight, Luis Ortiz, to try to place Mr. Ortiz in a bout that is featured within a PBC show. Mr. Diaz responded, “Are you serious? You do know we have sued Haymon right?”.
Golden Boy argued that Al Haymon allegedly (with intent) booked arenas that they were wanting to use for shows and then canceled those arena bookings after he supposedly achieved his desired result of keeping GB out of the arenas they wanted to run.
Judge Walter argued that there are plenty of arenas in Southern California available for booking and that their argument of Haymon locking up only one venue doesn’t satisfy the argument they brought to the court.
In other words, even if Haymon was guilty of locking up venues it simply wasn’t possible for him to lock up *every* venue and that Golden Boy had plenty of opportunities to conduct business as usual.
Golden Boy argued that PBC, as a monopoly, would sign all the top fighters in boxing and push promoters to the side in order to dominate market share and take over the boxing market to control salaries and prices for consumers.
Judge Walter sided with Al Haymon. PBC aired on free television, lost a lot of money, and that there’s no evidence a jury would discover showing that Haymon could ever recover his financial losses to complete the circle of predatory pricing.
Ali Act violations
Golden Boy argued that Al Haymon blatantly violated the Ali Act by acting as both a manager (Haymon Sports) and as a promoter (PBC). Haymon argued that Golden Boy had no standing to raise the issue of the Ali Act because the Ali Act is meant for usage by government agencies or by boxers who have suffered financial damages, not promoters.
The judge sided with Haymon on the issue of standing, stating that the Ali Act was not intended to compensate promoters for lost profits.
“In this case, after conducting substantial discovery, Plaintiffs have been unable to present any evidence of harm to competition. Instead, Plaintiffs have merely presented evidence of harm to themselves.”
State vs. Federal causes of action
Judge Walter dismissed the Federal causes of action raised by Golden Boy against Al Haymon. He dismissed their state causes of action (Unfair Competition Law) without prejudice, meaning Golden Boy could conceivably file suit against Al Haymon in state court if they wanted to.
Oscar De La Hoya’s lawsuit against Al Haymon had the big names and pizzazz to grab everyone’s attention. In reality, it was unlikely the lawsuit would destroy Al Haymon in the first place. And the final result is that the discovery process revealed or confirmed pretty much what you thought about both sides heading into the case. Al Haymon legally admitted that he is a manager and our records requests with the various state athletic commissions proved that he was applying for licensure in Nevada. If a fighter is going to argue that Haymon is both acting as a manager and as a promoter, at least there’s documentary evidence of him legally admitting to being a manager. Find the documentary evidence of Haymon admitting or applying to be a promoter and maybe you could pursue some sort of action against him.
Although Defendants deny that Haymon Sports acts as a promoter, Haymon Sports has indicated that, at some point in the future, it may decide to become a promoter. Although the Court recognizes that there is a genuine dispute as to whether Defendants act as promoters, this dispute does not preclude the Court from granting summary judgment as to Plaintiffs’ federal claims for relief.
The Golden Boy suit was not the lawsuit that was going to destroy Al Haymon. The lawsuit that has had a direct impact on Al Haymon is the Kansas shareholder derivative lawsuit against the hedge fund that backed Al Haymon’s PBC venture. It was filed in April of 2016 and took a few months to make a real impact before everything changed on the PBC front regarding the amount of shows booked. Going after Haymon’s cash was always the most effective legal (python) strategy. Nothing has changed on that front.
By Zach Arnold | January 19, 2017
The news: Starting in March 2017, ESPN will air Golden Boy events on ESPN2 and ESPN Deportes. 18 events in 2017, 24 events in 2018, ESPN has an option in 2019. Similar to Fox Sports 1 series except ESPN will not pay Golden Boy a rights fee. Tecate will be the main sponsor.
The big takeaways
First, ESPN’s rationale for doing a TV deal with Golden Boy is being publicly stated as a result of the anti-trust settlement in Los Angeles Federal Court between Bob Arum and Al Haymon to have PBC ditch the TV exclusivity clauses in their deal.
This acknowledgement certainly will be a major component in the Golden Boy/Al Haymon trial in Los Angeles Federal court this March should the judge allow it to proceed. The motion for summary judgment happened in late November and both parties are proceeding, my opinion based on court records, as if this thing is going to trial.
Second, ESPN curiously stated that they were negotiating this Golden Boy TV deal over the last six months. That would put the timetable around July of 2016, a couple of months after the big shareholder derivative lawsuit was filed in Kansas state court against the hedge fund that backed Haymon’s PBC venture. Haymon had a big run of shows in the Spring & Summer of 2016. Things changed after that shareholder lawsuit to try to recover the alleged $525 million dollars remaining in the Media Holdings LLC shell that the hedge fund that put cash into for PBC.
Third, Golden Boy desperately needs television oxygen to recruit fighters. Once Richard Schaefer left, we saw the different direction Golden Boy was heading in with Eric Gomez and
Robert Garcia matchmaker Robert Diaz. TV exposure matters and so does having a business kingpin on your side.
Fourth, ESPN signing the new TV deal with Golden Boy is proof that the network is still interested in boxing but only on a limited, no-risk scale due to the company bleeding households by the millions. The fact that ESPN is publicly acknowledging that they are going to give Golden Boy production control is quite an admission — and one that UFC no doubt is paying close attention to.
With Joe Tessitore doing college football and Todd Grisham doing UFC, it will be interesting to see if Golden Boy will go with reliable hands like Bernardo Osuna or Beto Duran… or if they are willing to hire someone with a bigger profile.
Fifth, Fox Sports 1 should have never allowed Golden Boy to sign a deal with ESPN. They need all the programming they can get. The Golden Boy shows were unspectacular but solid on FS1. Golden Boy could have meant a lot more to Fox than to ESPN, especially given the Southern California connections. Fox blew a chance to make this work.
By Zach Arnold | January 11, 2017
Brock Lesnar’s smile at the Winnipeg Jets game on Tuesday got wiped away in a hurry after Mark Hunt officially filed a lawsuit in Federal court in Las Vegas for fraud, unjust enrichment, and racketeering.
Hunt, along with his attorney, curiously telegraphed their impending lawsuit for several months. From our vantage point, it seemed to be a transparent attempt to reach some sort of settlement before the lawsuit was ever filed. When UFC didn’t reportedly implement the kind of contractual clauses that Hunt wanted for future fighters caught doping, it became a game of chicken between UFC & Hunt.
Mark Hunt had no choice but to file a lawsuit against UFC & Brock Lesnar. If he didn’t, he would have lost all face in the matter. The good thing for Hunt is that the attorneys on his side are excellent at what they do and their first complaint filed in court is well-done in terms of length (27 pages) and writing style. Attorneys often fall into a trap of prosecuting their entire case in the complaint. Complaints get 60, 80, sometimes 100 pages long and leave lots of room in the motion game to get sliced & diced. The point of a complaint is to make your allegations that cover the elements in the various causes of action to prevent a motion to dismiss from succeeding without trying your whole case up front. Let the discovery & deposition provide the future evidence for you.
What to look for
In October of 2016, we previewed what Mark Hunt’s lawsuit would look like and it largely played out as predicted.
The first, naked twist in the complaint is the attempt to file suit in Federal rather than state court in Nevada. Hunt’s attorneys attempt to make this work by filing for the Federal cause of action regarding racketeering. Nevada has its own state version of racketeering which is similar. What makes the racketeering attempt look so transparent in trying to play the jurisdictional game is that Hunt filed for a conspiracy for racketeering COA on the state level but then cited the Federal RICO statute. The point is to keep this lawsuit out of state court, where there is a perceived advantage for UFC.
An additional point: Nevada’s racketeering law covers the last five years of business activity. The Federal statute covers a time period of 10 years. That certainly comes into play when you look at the era of the testosterone hall passes and the Chael Sonnen debacle with Anderson Silva as background for the plaintiff to rely upon in court for racketeering allegations.
What’s next: UFC’s first move will likely involve a motion to transfer from Federal to state court. If the case gets transferred to state court, then it’s onto a motion to dismiss or a motion to strike the causes of action. The success of that will likely be limited in scope. As the motion game plays out, the clock will begin immediately for discovery although UFC’s side will try to stall for as much time as possible with extensions (professional courtesy or court motions).
Why didn’t UFC pay Mark Hunt before this lawsuit got filed?
Now that Hunt has officially filed the lawsuit against UFC & Brock Lesnar, they really don’t have much of a choice but to settle this thing quickly and pay the attorney’s fees. Otherwise, this time bomb is going to produce terrible discovery for UFC’s side. The general public won’t get to see that discovery if it’s under seal but certainly could get a sneak peek if there are future amended complaints detailing the evidence discovered to buttress Hunt’s COAs.
And that’s the larger point here — Nevada has some great attorney-friendly causes of actions. California has some doozies like the nebulous Unfair Competition Law but the old-school unjust enrichment COA remains potent in states like Nevada and Florida. The principle is simple — if you’re profiting from ill-gotten gains, that’s unjust enrichment. Just as one can be criminally prosecuted for receiving stolen property or embezzlement/conversion, one can be sued for unjust enrichment. It’s a wide-ranging COA that really is a big, big problem for UFC.
UFC’s testosterone-era garbage left them vulnerable to doping lawsuits
They deserve everything they’re going to get in court and more for the last decade of anabolic steroid policy.
The established track record for UFC makes them extremely vulnerable in deposition. From Lorenzo Fertitta to Keith Kizer to Dr. Tim Trainor to Dr. Jeff Davidson to Marc Ratner, all of these people would be put under very uncomfortable depositions regarding who gave permission to which fighters and under which pretenses. Can you imagine the internal company memos produced during the testosterone era explosion in 2010?
None of this will likely come to fruition in reality. Maybe a 5% chance but perhaps I could be wrong. Perhaps UFC could be stupid enough to fight this out, thinking that the legal bills will mount and that Hunt will have to give up. But what if the attorneys are taking this case at a discounted rate (for publicity) or on a contingency? There’s a lot of money to make here on a settlement, let alone a trial. Sounds delicious for a trial attorney to me.
But what about Brock Lesnar?
Mark Hunt’s lawsuit is against UFC, Brock Lesnar, Dana White, and Does 1-50. Any of the parties involved can settle at any time. It would be in their best interest to do so and in a hurry.
What happens, though, if one of the parties involved doesn’t want to settle while the others settle?
The UFC made their money off of Brock Lesnar. Dana White indicated recently that Lesnar’s not likely to return to active MMA fighting. If UFC settles and leaves Lesnar on his own, what’s his leverage over them?
Which brings us the scenario that Team Hunt probably would dream of the most — Brock Lesnar racing to settle first and providing damning evidence that can be used against UFC to ramp up for a larger settlement.
The lawsuit contends that UFC made ill-gotten gains for UFC 200 because Brock Lesnar’s fight made the event such a success at a time when the company was in the process of being sold. The same company that gave Lesnar a USADA waiver that allowed him to immediately fight rather than engage in multiple months of pre-fight drug testing.
There are millions of reasons for the UFC to race to settle first before Brock Lesnar. There are also millions of reasons for Brock Lesnar to race to settle first and possibly help Team Hunt bolster their case to squeeze UFC by the balls to get more money and get the contractual provisions they wanted all along.
By Zach Arnold | January 5, 2017
Ari Emanuel reportedly wants to give TV networks more production & creative control over UFC for the next big television package. Be careful what you wish for.
Ronda Rousey, the UFC’s golden child whom WME-IMG had the double squeeze of juice on as both promoter and manager, is getting savaged by the UFC’s television partner. The hit men of Jamie Horowitz are ripping through the carcass.
Lorenzo Fertitta would have never let this happen under his watch. In six months time, things have dramatically changed for the UFC and not all for the better. Creative control was an absolute core belief under Zuffa’s tenure that helped sell UFC for $4 billion dollars. There was a reason that this was so important. Anyone who watched WCW a generation earlier and read the voluminous reports about Turner’s “standards and practices” knows all too well how powerful creative control is.
A week after Ronda Rousey’s decisive loss to Amanda Nunes, the verbal insanity has gone through the roof. The millionaire sports pundits smell blood in the water.
Voice #1 – Dana White
Within 45 minutes of Amanda Nunes retaining her UFC Bantamweight title, Dana White went on Fox Sports 1 television and made an ass out of himself. He bragged about how big the crowd at T-Mobile Arena in Las Vegas was and went on one of his “this is why I’m the promoter and you’re not speeches.” And during his rant, White stated that he could have spent $100 million dollars in advertising on Amanda Nunes for UFC 207 and nobody would have known who she was.
Dana’s theory? Fighting Ronda Rousey would make Amanda Nunes a bigger star than any ad buy UFC could ever deliver. In other words, purposely push Amanda Nunes as the b-sider and expect that defeating the A-level face of the company would instantly transfer the energy over to the b-sider. If this strategy worked, Holly Holm wouldn’t have been fighting on free television and Al Haymon would be the king of boxing.
So where was the Ronda bashing here? It wasn’t Dana bashing Ronda so much as it was a media portrait being painted after the fight of a prized former champion who somehow is an emotionally stunted little child crying for 45 minutes with boogers and snot coming out. Paired with Ronda’s refusal to deal with the media leading into the fight and it was the reddest of red meat possible for the critics. I was flabbergasted that Dana managed to weave in Godfather Promoter Dana with Uncle Dana the therapist in one interview segment.
Voice #2 – Clay Travis
Nobody smells blood in the water faster than Clay Travis. The Nashville attorney who claims that he voted for Barack Obama twice but has no qualms going after “PC Bromanis” (Bomani Jones) who view themselves as social justice warriors and speech police.
Travis scorched Rousey after her UFC 207 loss as a fraud who was propped up by white liberal feminists and social justice warriors in sports media pushing women’s empowerment. He called Ronda Rousey the Bernie Madoff of female athletes. Three months earlier, Travis proclaimed Rousey to be the most powerful female athlete ever.
Clay’s ability to make your head explode is par excellence. The problem is that if you attack the hyperbolic part of his arguments, it forces you to confront the other issues where there’s grains of truth.
Ronda Rousey did not invent women’s MMA. Gina Carano and Cris Cyborg were tearing the house down long before she came on the scene. ESPN called her a trailblazer. She was (and is). But it was embarrassing to see ESPN try to make Ramona Shelburne into Ronda’s Ahmad Rashad. It was laughable to see Ring Magazine put Ronda Rousey on its cover and ask if Ronda would take over women’s boxing as well as women’s MMA.
Ronda Rousey was great for Ronda Rousey and great for UFC.
Voice #3 – Jason Whitlock
In a scorching hot take on Thursday, Jason Whitlock refined Clay Travis’s argument and made it significantly more expolosive. Whitlock buttressed Clay’s argument that white liberal feminists, social justice warriors, and the PC police were the ones building up the myth of Ronda Rousey by adding that this same crowd intentionally pushed Ronda Rousey at the expense of powerful black women athletes like Serena Williams. Whitlock noted that when Miss Williams had her Serena (Grand) Slam in tennis, it was Rousey who ESPN gushed over for awards and their body issue.
Where do you begin to attack or unpack this argument? You can’t attack hot takes with logic and facts. Logic and facts don’t persuade people. Emotion does. How you feel is what makes an impact. Scott Adams, the Godfather of 2016 American political analysis, wrote the book on this – How to Fail at Almost Everything and Still Win Big.
This is why you don’t give creative control over your sports product to television networks.