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UFC’s massive debt load is being used against them by fighters to create unforced errors

By Zach Arnold | May 9, 2017

Dana White is telling the public that UFC “lost its date” of September 16th for the proposed Conor McGregor/Floyd Mayweather fight after Golden Boy announced Canelo Alvarez vs. Gennady Golovkin. UFC perpetuating the charade of McGregor/Mayweather highlights what a precarious position WME-IMG is in right now.

Lorenzo Fertitta would have never let Conor McGregor hold UFC hostage like this. He certainly gave McGregor plenty of perks and put up with a lot of shenanigans. What Lorenzo didn’t allow was his company to become prey for a hostile takeover. He just left the headaches for his business partner, Ari Emanuel, to deal with. Once WME-IMG paid $4 billion dollars in a highly speculative play on UFC, the whole business model changed.

All of this has taken a toll on Dana White. Look at White’s current behavior. The man who sold the public on being able to put together the fights you wanted to see is now getting exposed by Oscar De La Hoya, of all people.

Desperate times call for desperate measures

The point of the fight business is to make matches that the public wants to buy.

You would think that WME-IMG’s UFC, saddled with monstrous debt, would be sensitive to booking fights that the public wants to watch. Instead of demonstrating matchmaking consistency, WME-IMG decided to play along with Conor McGregor’s hostile takeover. Give him what he wants. If he wants to fight Floyd Mayweather, then UFC gets its cut. Go for the home-run. Go for broke. Go for the fastest way to make a payday on paper. Why make money incrementally? Swing for the fences.

From the outside looking in, UFC’s strategy in dealing with Conor McGregor looks simple. Appear to give a good faith attempt on booking the Mayweather fight, watch things fall apart, and then come back to McGregor when his act has cooled off or squeeze him when the next big fight comes along. That next big fight is Canelo Alvarez vs. Gennady Golovkin.

UFC’s preoccupation with playing the leverage game on Conor McGregor has robbed them of oxygen in the matchmaking department for the rest of the company. A flood of cheap interim title matches with the end result being more fighters getting contractually tied up to UFC because of the dreaded “champion’s clause.” Fighters are starting to stand up and refuse interim title fights because of this onerous legal provision. Better late than never even if it’s a risky strategy. Luke Rockhold, like many UFC fighters, understands what the game is now:

“I don’t know, man,” he told Ariel Helwani when asked about his situation. “You can’t predict anything these days. So, [the UFC is] just chasing to pay off a debt really, is what they’re doing, trying to put these megafights together that don’t make sense. I don’t know. You never know what they’re going to do these days. Who knows.”

The reaction from UFC is the kind of cheesy, half-hearted laser pointing of Dana White publicly questioning what the worth of a fighter like Nate Diaz is.

UFC has one solid big money fight on the horizon — Daniel Cormier vs. Jon Jones. They have a second fight that could do good in Michael Bisping vs. GSP. The overarching WME-IMG philosophy on matchmaking is simple — go for the grand slam. If everything else gets plugged up, that’s collateral damage. Where else are fighters going to go?

Focus on the star power. Hang in there until a new television deal arrives. Then consider the option of flipping the company to another set of venture capitalists or the option of embracing an IPO. The strategy may pay off but the downside is incredibly treacherous. The business fundamentals that brought UFC to the point of being sold for $4 billion dollars have been abandoned. The company’s word is ringing hollow to fans and fighters.

The weather vane known as ESPN

Remember how hot and bothered ESPN got over covering UFC events over the past few years? Once Ronda Rousey’s career imploded, they cooled off a little bit. Things cooled a little bit more when Al Haymon cut a deal to air PBC events on the network. The PBC experiment backfired and ESPN ended up cutting a deal with Golden Boy. Suddenly, ESPN toned down the “boxing is dead” rhetoric to pump up Oscar De La Hoya & Canelo Alvarez.

As ESPN went in bed with Golden Boy, the on-air love fest with UFC got smothered by a proverbial wet blanket. After Canelo Alvarez easily defeated Julio Cesar Chavez Jr., an ESPN anchor had the temerity to declare Canelo/Chavez the biggest fight in the history of Mexican sports. Just as quickly, ESPN went into promotional mode for Canelo Alvarez vs. Gennady Golovkin. A real fight that fans want to see. Red meat over cotton candy. The only media defender of UFC continuing to pursue Mayweather vs. McGregor is Fox Sports 1 and that’s because they need UFC to stay relevant in order for their network to remain carried by cable & satellite providers.

ESPN cooling off on UFC is a telling sign. ESPN thought they could gain street cred among the 18-to-34 year old social media demographic by going all-in with UFC. Now they’re backing away and pushing their own business interests with Golden Boy. Unless ESPN decides to get in bed with UFC on the next television contract, I would expect ESPN to continue with its new-found half-hearted treatment of an MMA product that is frequently getting colder. That’s the price WME-IMG is paying for the gamble they’ve made in their business strategy to address the massive financial debt load they have.

Topics: MMA, Media, UFC, Zach Arnold | 9 Comments » | Permalink | Trackback |

Put up or shut up time for California in recruiting the Canelo Alvarez vs. Gennady Golovkin fight

By Zach Arnold | May 7, 2017

The California State Athletic Commission has spent a year groveling to promoters in order to attract a major fight to the state. Useless pamphlets. Pleas for money marks to pay for sold shows. False promises of tax breaks while California voters continue to support higher taxation rates. Even consideration of the Athletic Commission creating their own title belt.

Sacramento’s targeted fight has been Canelo Alvarez vs. GGG. They went as far as to kiss promoter Tom Loeffler’s ass with an award. Now a date has been set for the proposed Canelo/GGG fight: September 16th. The venue has yet to be determined.

It’s go time for Andy Foster and the California State Athletic Commission. There are major politicians who want the Canelo/GGG fight in Los Angeles, come hell or high water. Now that a date has been set for September 16th, the political & business pressure to obtain the Canelo/GGG fight is going to significantly increase in the next 45-to-60 days. It will likely be a topic of discussion at the next Athletic Commission meeting in Anaheim on May 16th.

The alternatives to California for Canelo/GGG are: Nevada, Texas, or New York. Florida is an option but an unlikely one. Texas makes a ton of sense at JerryWorld (Cowboys Stadium). Nevada makes a lot of sense given that it would be easy to get a site fee. New York, however, would be a swift kick to Sacramento’s balls. High taxation, high cost of doing business in NYC, and a terribly tarnished athletic commission. California losing Canelo/GGG to Nevada or Texas would hurt the Athletic Commission and cause political frustration at Consumer Affairs. Losing the fight to New York would produce backlash in the Legislature at a time when the Athletic Commission is requesting $200,000 in spending authority for athletic inspectors and Athletic Commission Chairman John Carvelli is spending over $65,000 in a short lobbying period for his Liberty Dental company regarding Governor Brown’s budget and the Medi-Cal dental (Denti-Cal) program. A lot of money is at stake here for both parties.

Andy Foster prides himself on being a salesman with a gift of gab. John Carvelli views himself as a deal-maker and closer. They’ve been talking big about recruiting the Canelo Alvarez fight with GGG. They must deliver this fight for California or else politicians in the Sacramento Legislature will start meddling (again) with the Athletic Commission’s business & political activities. Consumer Affairs and Sacramento wants the Canelo/GGG fight for two reasons: 1) the revenue and 2) the tickets so that politicians and their associates can go and be seen on camera. There is no bigger fight on the horizon than Canelo/GGG.

Al Haymon wins again

Lost in the charade that was Canelo Alvarez easily defeating Julio Cesar Chavez Jr. on Saturday night in Las Vegas was the fact that Al Haymon, once again, cashed in big on a lopsided fight.

Haymon had a piece of the action with Chavez. Chavez was a Top Rank fighter who ended up with Haymon. Chavez and Haymon made a lot of money on Saturday night.

Just a few months ago, Haymon defeated Golden Boy in court when he successfully fought off their anti-trust lawsuit in Los Angeles. Golden Boy immediately did business with him after he won. The PBC may be on the rocks but Haymon’s ventures in boxing will remain profitable for a long time to come. Reported rumors from a few weeks ago regarding ESPN considering litigation with Haymon appear unfounded — at the moment. There are no lawsuits filed in Federal court.

Topics: Boxing, CSAC, Media, Zach Arnold | 2 Comments » | Permalink | Trackback |

ESPN’s financial collapse ensures that Fox Sports is the only major TV player for UFC

By Zach Arnold | April 26, 2017

About WME-IMG’s plan of spreading UFC programming in the future on multiple networks…

ESPN overspent on NBA and NFL programming packages. They built a business plan based on outbidding everyone else for sports programming. Then cord-cutting started. In response to cord-cutting, the network became more political and more infatuated with both social media & popular culture. The spiral downward accelerated. Unable to break free from the massive television contracts they’ve signed, ESPN is in firing squad mode to get rid of their reporters and television personalities. At least the professional ones.

This is why Fox Sports has and will remain the one major television partner for UFC in the future.

Without UFC, there is no major justification for cable & satellite networks to keep Fox Sports 1 in programming bundles.

Fox Sports is the only television network that truly understands how the MMA industry operates. They’re the only television partner willing to work hand-in-hand with UFC on how to market and hype events. Fox has the money to pay WME-IMG to keep UFC. The question is whether or not WME-IMG’s gamble on tripling or quadrupling UFC’s TV rights fees will pan out. I say no. This has a similar feeling to the showdown between USA Network and WWE a couple of years ago that resulted in WWE only getting a modest increase in rights fees.

Rather than go the WWE route of going all-in for their own streaming service, it feels like (from the outside-looking-in) that WME-IMG is intent on packaging Fight Pass as part of the next TV rights deal package and letting the future TV partner manage or navigate the Fight Pass business model. Think: Turner Sports and NBA TV.

ESPN, meanwhile, is in a disadvantageous position to negotiate becoming the main home of UFC programming. They got rid of Todd Grisham. The Al Haymon/PBC experiment imploded. ESPN continues to do a piss-poor job of hyping programming that isn’t NBA or NFL-related. You don’t even see ads for future Golden Boy shows on the network. If you’re UFC, are you going to sacrifice your hype machine to the mercy of ESPN management? Not a chance in hell.

And just how much demand is there for the “new” UFC? I think a lot of the ‘new’ UFC sucks. The Ultimate Fighter franchise is as desirable as stepping on a rusty door nail. UFC shoulder programming on Fox Sports 1 is a dreadful watch, especially with Karyn Bryant getting so much air time. The cards for Fox network television events aren’t treated with importance or significance. UFC continues to highlight Mighty Mouse on network television despite not having a real plan on how to market him to the masses or push the right buttons to make him somewhat of an attraction. The inability of UFC to treat Cris Cyborg like a human is grating. UFC has failed to capitalize on making the right deals to cash in on Nick & Nate Diaz post-McGregor re-match. The matchmaking for the women’s 135 pound division is an unholy mess. How many champions can the average UFC fan name right now?

Most important of all – the massive debt load that WME-IMG is trying to manage. Perhaps that’s all they will have in common with ESPN when it comes time to negotiate a new television deal.

Topics: MMA, Media, UFC, Zach Arnold | 4 Comments » | Permalink | Trackback |

Spike TV drops PBC; what’s next for Al Haymon and the major athletic commissions?

By Zach Arnold | 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.

Topics: Boxing, Media, Zach Arnold | 4 Comments » | Permalink | Trackback |

Devil’s advocate on Dan Miragliotta at UFC 210 — ABC has fault for confusion on grounded fighters

By Zach Arnold | April 8, 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.

There are three points of future debate here for public consumption:

I don’t foresee any helpful changes coming any time soon to erase doubts or confusion.

Topics: MMA, Media, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |

The legal war in Kansas over Al Haymon’s hedge fund money heats up

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:

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…

Topics: Boxing, Media, Zach Arnold | 1 Comment » | Permalink | Trackback |

Golden Boy’s ESPN debut consisted of Teddy Atlas dumping on matchmaking & California commission

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.

Rachel Sazoff is an MMA fighter. A 1-7 MMA fighter. A 1-7 MMA fighter and 0-2 boxer facing an Olympic medalist in a 4-rounder. It wasn’t a contest.

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:

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.

Topics: Boxing, CSAC, Media, Zach Arnold | No Comments » | Permalink | Trackback |

ESPN’s brutal weight cutting video package demonstrates the incompetence of the fight industry

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.

Topics: Boxing, CSAC, MMA, Media, UFC, Zach Arnold | 6 Comments » | Permalink | Trackback |

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.

Topics: Boxing, CSAC, MMA, Media, Zach Arnold | No Comments » | Permalink | Trackback |

Boxeo Telemundo and Florida’s boxing commission deliver the crazy on Friday night

By Zach Arnold | 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.

Topics: Boxing, Florida, Media, Zach Arnold | 2 Comments » | Permalink | Trackback |

Jumping from the California State Athletic Commission to running California’s most powerful agency

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.

Topics: Boxing, CSAC, MMA, Media, Zach Arnold | 3 Comments » | Permalink | Trackback |

What? WME-IMG forms mega Hollywood PAC against Trump & now gives him a motive to sign Ali Act

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.

Topics: MMA, Media, UFC, Zach Arnold | 7 Comments » | Permalink | Trackback |

Judge brutally & viciously eviscerates Golden Boy’s antitrust lawsuit against Al Haymon

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:

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?”.

Venue blocking

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.

Predatory pricing

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.

Bottom line

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.

Topics: Boxing, Media, Zach Arnold | 12 Comments » | Permalink | Trackback |

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