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PRIDE never die: Fabricio Werdum becomes MMA royalty by submitting Fedor, Cain, and Nogueira

By Zach Arnold | June 13, 2015

Remember when Fabricio Werdum was brought into Mirko Cro Cop’s camp as a training partner? A master of butt-scooting? Yeah, that guy. The guy who was going to make Mirko into a world champion. After Fedor/Mirko, the paths for Mirko and Werdum became totally different.

10 years later, Werdum has not only lived up to all of the hype as a submission wizard and magician but has managed to submit three of the greatest heavyweights ever in Mixed Martial Arts history.

The altitude played a huge role in the fight performance for everyone on the UFC 188 card. It was crap. No way to get around this fact. There’s also no way to get around the fact that Werdum’s experience and guts can never be questioned. His win not only is historical but also opens up the Heavyweight division in several ways.

We’ve seen so many fighters, especially in the bigger weight classes, be hyped up as special and all-time prospects. Most of the time, they fail and fall flat on their face in spectacular fashion. Werdum beat the odds. Rafael Cordeiro is the Godfather. The ghost of Rudimar…

Father time catches all. Cain’s body is his own worst enemy. And he’s not getting any younger. He’s still the scariest athlete I’ve seen in Heavyweight MMA. I expect a re-match, perhaps for a New Year’s Eve show in Las Vegas. Please, for the love of God and country, do not push the idea of Werdum vs. Andrei Arlovski.

As for the semi-main event between Gilbert Melendez and Eddie Alvarez… the less said, the better.

UFC 188 was a garbage card. It was the complete opposite of the UFC event last weekend in New Orleans headlined by Dan Henderson vs. Tim Boetsch. I can’t recall a time where the UFC product has become so manic. It’s either really good or really terrible. When it’s great, it’s fantastic. When it’s terrible, it is abominable.

It has been a problem for a while now but the commentating disconnect between Mike Goldberg & Joe Rogan with their analysis of who is winning a fight versus the reality of the in-cage action is exacerbated right now. I could not come up with a more glaring example than the commentary given during the Henry Cejudo/Chico Camus fight. They were hyping Camus hard. His takedown defense. His supposed display of offense. If you didn’t listen to the commentary, it was a pedestrian 30-27 or 29-28 win for Cejudo. Bowling-show ugly, yes, but still an easy win. The commentators made it sound like Camus was winning all the way. At some point, management behind the scenes and on TV needs to display some honesty or else they will be completely tuned out by the fans.

Efrain Escudero’s choke-out of Drew Dober in under a minute made for quite the highlight.

As for TV coverage of the event? Very little. FX covered the prelims because Fox Sports 1 was covering a car race. Fox Sports 1 didn’t have post-fight coverage due to covering the men’s U-20 match between America and Serbia. ESPN focused on Chicago’s Game 5 Stanley Cup win over Tampa.

Topics: MMA, Media, PRIDE, UFC, Zach Arnold | 16 Comments » | Permalink | Trackback |

Let’s play 20 questions regarding the new UFC & USADA drug testing program

By Zach Arnold | June 3, 2015

1. Who will ultimately pay the highest price for financing UFC’s new drug testing program? The fighters?

2. Will the improvement in drug testing level the playing field or will it create a competitive disadvantage with top fighters being able to afford their own designer drugs?

3. Why did UFC decide on working with USADA as a partner and not with Dr. Margaret Goodman & VADA?

4. How many more fighters would UFC catch using VADA-style testing as opposed to USADA-style testing protocols?

5. Given USADA’s behavior in handling Erik Morales’ failed drug test, can USADA be fully trusted to handle test failures the right way?

6. How compatible will UFC’s drug testing program with USADA be in relation to the drug testing programs set up by various state athletic commissions, including California (which is on its way to implementing its own out-of-competition program)?

7. If missing a Nevada commission drug test can cost you years in suspension, how can this be reconciled with USADA’s policy of three missing tests = a test failure?

8. Given that UFC is implementing their own company drug testing program in addition to the drug testing done by state athletic commissions, can UFC use a failed drug test for negotiating leverage with a top fighter in order to take a pay cut in exchange for the failed result not going public?

9. UFC & USADA will suspend a fighter for one year if they test positive for marijuana metabolites. However, Nevada’s punishment for a marijuana test failure can be 18 months or longer for repeat offenders. Whose punishment do you go with if a fighter fails both a USADA and NSAC drug test for marijuana metabolites? Concurrent or stacked suspensions?

10. In international sport, there is a court of appeal regarding drug testing. What administrative recourse does a fighter have after failing a UFC company drug test? Arbitration in a UFC-friendly venue?

11. How do you define “aggravating circumstances” for a failed drug test in a statutory manner?

12. How will UFC suspend a fighter who doesn’t fail a drug test but gets caught when arrested with drugs?

13. How you do resolve conflicts regarding Therapeutic Use Exemptions between the TUEs USADA grants and the hall passes from athletic commissions? (E.G. Fighters fails state athletic commission drug test, proclaims a TUE from USADA for permission to use a certain drug)

14. How many top athletes outside the MMA world will want to come and fight in UFC if they think the sport is cleaner? Conversely, how many fighters or future prospects will avoid fighting in UFC due to the new drug testing program?

15. Will UFC force fighters to sign new contracts (like they did after PRIDE acquisition) with modified contractual language to request permission for this new drug testing program? What if a fighter currently under contract says “no”? Can that fighter petition a Vegas court for declaratory relief and become a free agent? Arbitration?

16. If a fighter fails a UFC/USADA drug test and is given a suspension longer than the time left on that fighter’s contract, is such a suspension enforceable a) legally in court and/or b) with all the various state athletic commissions?

17. Will fighters be tested with the same drug screens or will certain fighters be tested for certain drugs and other fighters tested differently?

18. Why was Jeff Novitzky hired by UFC if USADA is the agency running UFC’s drug testing program?

19. Who will see the actual USADA drug testing results besides UFC? Will all positive test results be released to the public? Given that USADA is working for UFC and not for an athletic commission, how will the public be able to access all results given that it is done by a private, not public entity? The honor results with whatever is posted online?

20. If a fighter wishes to appeal a drug test result and has to appeal the result in Las Vegas, are the fighters inherently at a disadvantage due to how many attorneys have worked for the Fertittas in the past and therefore can’t take on clients due to conflicts of interest considerations?

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

California legislature ready to approve 40% fine for fighters who fail drug tests

By Zach Arnold | May 28, 2015

Did that headline grab your attention?

We recently discussed the UFC-lobbied Senate Bill 469 in Sacramento that would set up out-of-competition drug testing of all licensed fighters for California fights. UFC has spent $30,000 through their lobbyist Tim Lynch at Platinum Advisors to muscle this bill on their behalf and, indirectly, California State Athletic Commission Executive Officer Andy Foster. Nothing illegal at all. Just good old fashioned politicking.

Unlike Nevada’s recently proposed changes where promoters have to pay the bill for out-of-competition drug testing, California SB 469 sticks the cost onto the state Athletic Commission. The big question was how the Athletic Commission was going to be able to finance this proposition. SB 469 proposes two new ways to finance this endeavor.

The first method is to completely destroy the purpose of the state’s arbitration system by shifting the costs of such hearings onto the parties involved in disputes. California’s arbitration system allowed indigent fighters or managers to be able to get a fair hearing in order to resolve contractual battles. It was a system that didn’t require a party hiring an attorney. Given that most low-level fighters cannot afford legal representation, California’s arbitration system was a way to go to the Athletic Commission and determine a resolution from adhesive contracts.

By most standards, arbitration hearings should not cost that much money. At most, a couple of thousand dollars. However, the Athletic Commission refuses to hire independent counsel and instead deals with the Attorney General’s office on all matters. The AG’s office, in turn, socks a fat legal bill to the Athletic Commission. In addition, Andy Foster is having to rely on the San Diego AG’s office rather than Sacramento AG attorneys to help in arbitration matters.

On average, there are about four or five arbitration hearings a year in California. In order to try to finesse budget matters, Andy Foster is going to shift all arbitration costs onto the parties involved in contractual disputes. This completely goes against the spirit and good intentions behind the arbitration process in the first place. The Ali Act allows a fighter a Private Right of Action to sue a manager or a promoter for an adhesive contract. That’s great… if the fighter has access to an attorney and can afford one. It’s not so great if a fighter can’t afford an attorney. California’s arbitration system was created to help fighters who couldn’t pay for legal bills. With SB 469 running full steam ahead, those arbitration financial protections will be fully erased.

And the reaction from those within the fight industry and the media towards this destruction of California’s arbitration system? Dead silence.

Shifting the costs of arbitration onto the parties involved is step one of the proposed financing scheme in SB 469.

The second prong to finance out-of-competition drug testing was announced on Thursday. SB 469 was previously voted and approved by the Senate’s Business & Professions committee on an unanimous vote. Today, the Senate Appropriations committee passed SB 469 on an unanimous vote. In Appropriations, SB 469 was modified to change the punishment system for fighters who fail drug tests. The maximum fine used to be $2,500. That has now changed… to a fine of 40% of a fighter’s purse.

Because the financing mechanism in Senate Bill 469 puts a lot of pressure on the state to find a way to recover the costs associated with out-of-competition drug testing, there will be enormous & aggressive incentive on nailing fighters who are doping because it will be in their economic interest to do so.

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

A legal Rampage for defamation: When not saying “I’m sorry” equals crazy attorney fees

By Zach Arnold | May 24, 2015

A nearly six-year long legal battle has ended between Juanito Ibarra, his former clients Tito Ortiz & Rampage Jackson, and a slew of media writers who were sued for libel & slander in Los Angeles federal court. A formal settlement was agreed upon between the two sides on May 15th by Ibarra’s formidable attorney, Samuel J. Smith.

The six years of legal proceedings saw Rampage Jackson burn through numerous lawyers. There were court filings/hearings for sanctions. There were a litany of defendants filing anti-SLAPP motions to strike and a billion different legal lessons to learn for anyone concerned about speech & public participation laws on the Internet. In many respects, the wild and crazy six year legal battle is a blueprint that I would strongly recommend any writers or future writers to carefully study regarding the intersection of Federal & state public participation laws.

Late last week, statements were issued on behalf of both Tito Ortiz & Rampage Jackson in regards to allegations made in the press about Juanito Ibarra’s personal & business character.

Quinton “Rampage” Jackson: “Juanito Ibarra and I have resolved the lawsuits that have been pending for a number of years. While we have had our differences in the past, it is all now behind us. Some things were said in the past, which I now retract and I am deeply sorry that they were said. I wish nothing but the best for Juanito in all of his future endeavors and know that he will continue to do the Lord’s work.”

Jacob “Tito” Ortiz: “In 2008, I gave an interview to Punch Drunk Gamer entitled “Wherever I may roam…..I want the Title.” In that interview, I made several statements including the allegation that Juanito Ibarra was a thief who had mismanaged the finances and stolen from and taken advantage of Quinton “Rampage” Jackson. I made these remarks based on what Rampage had told me. After several years in court and review of all the available records, I realize that Mr. Jackson and I were wrong. Juanito didn’t steal from or take advantage of Rampage and he didn’t mismanage Rampage’s money?it was all accounted for. I regret the effect my words had on Juanito’s life. Juanito is a trainer and manager of superior skills and the fact is, he helped to make Rampage a champion. Anyone would be blessed to be taught by Juanito. So there is no confusion, and so the public and the MMA, boxing and sports community at large know, I retract all of the negative statements, inferences and accusations that I directed at Juanito and sincerely apologize to Juanito and his family. I am grateful to have ended my dispute with Juanito and look forward to refocusing on building a better MMA community with him.”

Why did they spend all that time and money on attorneys in order to avoid the inevitable outcome of issuing retractions and apologies?

The case was set to go to trial in July. On the Los Angeles court web site, it appears there were attempts to try to bifurcate the defendants (Tito and Rampage) in the defamation case, which would have meant separate trials.

In the end, both sides reached a settlement but it cost a lot of money and each side learned some painful lessons in the process — lessons that you should carefully study if you end up on the other end of a Strategic Lawsuit Against Public Participation (SLAPP).

Continue reading this article here…

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

After UFC 187, Chris Weidman says MSG is next goal after “putting Shelly Silver into jail”

By Zach Arnold | May 23, 2015

Luca Fury has long argued that fighters who are testosterone users don’t really end up with a winning edge over their opponents. He’s right. Vitor Belfort’s performance at UFC 187 was proof positive. After a spirited flurry of punches, Chris Weidman dispatched of Vitor with relative ease. The whole fight seemed to have an odd hype dynamic heading into the encounter. Weidman went the Randy Orton legend killer route by stating that a win over Belfort would finish off all the Middleweights from the Brazilian-dominated era. Meanwhile, it was ixnay on discussing why Belfort has had trouble fighting in Nevada (read: testosterone). Throw into the mix the tough article by Patrick Wyman on Weidman, Frank Mir, and Fabricio Werdum < "">hanging out with an alleged Russian war criminal and you ended up with a nuttier-than-usual public relations battle on Saturday.

Truth be told, there wasn’t much drama to be expected from Weidman’s title fight. The real interest was in the main event and whether Rumble Johnson would knock out Daniel Cormier. He couldn’t but not for a lack of trying. And Rumble was summarily taken apart. He’s still a very scary man.

The fight result now leads us to a rematch between Cormier and Jon Jones and I’m not sure there are as many fans this time who think Cormier has a chance of winning as there were for the first encounter. It will sell a lot of tickets, however…

Continue reading this article here…

Topics: MMA, Media, UFC, Zach Arnold | 15 Comments » | Permalink | Trackback |

California: UFC spent $30,000 in Q1 2015 lobbying for blood & urine out-of-competition drug testing

By Zach Arnold | May 16, 2015

Official lobbying records from the state of California show that Zuffa LLC, the parent company of UFC, spent $30,000 in Q1 of 2015 to lobby for state Senate Bill 469.

Senate Bill 469, introduced by Senator Appropriations chair Ricardo Lara, would:

The bill is currently in the Senator Appropriations committee and placed on the suspense file, meaning it will be revisited after a new state budget has been passed.

Intriguingly, a Senate Appropriations committee analysis of the bill claims yearly projected Athletic Commission expenditures of $1.6 million dollars. Recently, the Athletic Commission’s spending authority was pushed from $1.2 million a year to $1.44 million a year. The Senate analysis, curiously, projects annual Athletic Commission revenues at $1.7 million. In the Athletic Commission’s current state, you would be lucky to get a $1.3 million year for revenue. You would have to go back to the days of Armando Garcia to even come close to sniffing a $1.7 million year for revenue. It appears the increased projection for revenue is based on changing the fine structure of fighters who fail drug tests.

The SA committee analysis also claims that out-of-competition drug testing would cost the Athletic Commission $100,000 more each year to implement.

Amusingly, the Senate report also makes this claim:

The Fund is expected to have a reserve of approximately $1 million at the end of the 2015-16 fiscal year, which is sufficient to support the additional expenditures related to this bill while maintaining a healthy reserve for the duration of the sunset period.

Given two recent lawsuit settlements and impossible-to-make monthly projections for revenues that are hit-or-miss, asserting a claim of $1 million dollars in the Athletic Commission bank account at the end of the Fiscal Year in two months seems… ambitious.

UFC’s lobbying firm in California is the Sacramento-based Platinum Advisors LLC. Tim Lynch from PA is UFC’s top conduit at the capitol. John Carvelli, the Chairman of the California State Athletic Commission, uses Platinum Advisors LLC for lobbying efforts on behalf of his Liberty Dental Inc. company.

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

Is Reebok’s UFC deal a public relations nightmare that could scare away future sponsors?

By Zach Arnold | May 14, 2015

It started years ago with UFC slapping a “sponsorship tax” on companies who wanted to sponsor individual fighters. The idea was that UFC had a right to get paid for creating the stage for advertisers to market their products to the masses. The idea was also couched in terms of protecting fighters by weeding out deadbeat companies.

Then it morphed into rumors a couple of years ago of UFC creating fighter uniforms in order to control sponsorships.

It’s now morphed into UFC inking a corporate deal with Reebok. It was supposed to revolutionize fighter sponsorships and make UFC a ton of coin. Instead, the UFC/Reebok partnership merely became a pretext for all of the major economic problems between management, fighters, and managers to rise to the surface for all the public to see.

In short, the Reebok sponsorship is being treated as rotten in the court of public opinion by everyone except UFC. The fruit from a poisonous tree.

We had the anti-trust lawsuit filed in San Jose against UFC. Fighters uncharacteristically spoke out in protest of the new proposed pay scale by UFC in regards to how much Reebok money they would get. The protests escalated thanks in part to fighters no longer being able to cut their own nickel-and-dime sponsorship deals. The protests claimed that their nickel-and-dime deals have been reduced to penny-ante Reebok payoffs.

Continue reading this article here…

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

No more free California arbitration for fighters or managers?

By Zach Arnold | May 13, 2015

Some very interesting and perhaps important changes are being debated in the California Legislature to amend the way business is handled by the California State Athletic Commission.

Senate Bill 469, amended on April 22nd, includes several key amendments.

No more free arbitration for fighter/manager contract disputes

“Under existing regulation, a person who seeks arbitration of a contract dispute is required to send a written request for arbitration to the commission and to the Office of the Attorney General, as specified.

“This bill would codify these regulatory provisions in statute and would authorize the commission to recover the costs for the arbitration from the parties subject to the arbitration.”

Question: how will indigent, cash-strapped fighters who can barely afford legal representation be able to afford the costs of paying both the athletic commission & the Attorney General’s office?

A change in the fine structure for fighters who fail drug tests

B & P code section 18843 says the Athletic Commission can fine a fighter up to $2,500 for each violation. The new Senate bill would change the fine limit:

“(b) Notwithstanding any other provision, the commission may also assess a fine equal to __percent of the total purse for a violation of Section 18649 related to the use of prohibited substances.”

On Monday (May 11th), SB 469 passed the Senate Appropriations committee on a 7-0 vote.

The bill has now been placed on the “suspense file,” meaning it will be revisited after a new budget is passed in order to analyze what the economic impact of the bill will be.

Continue reading this article here…

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

UFC Adelaide: Assault and battery on Mark Hunt

By Zach Arnold | May 9, 2015

UFC’s event in Australia may have been internet-only viewing but those who watched it found themselves saying they wanted to take a shower after watching the fight.

Stipe Miocic violently battered Mark Hunt with over 350 blows in a heavyweight fight. Look at Hunt’s face:

As Brent Brookhouse astutely pointed out, we have UFC fighters on the receiving end of these kinds of beatings while getting locked into Reebok sponsorship deals that may pay $5,000 or less.

This latest beating for Hunt in the UFC cage comes after the last pummeling he endured in Australia 17 months ago from Bigfoot Silva. Silva would fail a drug test after that fight. After gaining some political traction for MMA regulation in Australia, tonight’s scenario was a worst-case scenario for the portrayal of the company’s image in Australia.

It got worse. Here’s UFC fighter Robert Whittaker:

Is that a first?

Topics: MMA, Media, UFC, Zach Arnold | 2 Comments » | Permalink | Trackback |

If Nevada’s athletic commission is a raging inferno, then Texas is a flaming turd

By Zach Arnold | May 9, 2015

On Friday, Bill Brady resigned from the Nevada State Athletic Commission board. As bad as athletic commissions like Texas and New York have been, I gave them slight praise for turning things around.

And then Saturday afternoon’s Al Haymon card in Hidalgo, Texas reasserted Texas as the worst major athletic commission in the United States.

On paper, a middle-of-the-road main event featuring Omar Figueroa Jr. and Ricky Burns turned into a nice little fight that was dominated & marred by the discretionary & unjustifiably risky antics of long-time referee Laurence Cole.

Ricky Burns had a clear strategy — smother Figueroa and make him fight out of the proverbial phone booth. Figueroa drove his head into Burns, which made him more vulnerable to getting hit in the back of the head. Coles repeatedly warned Burns for punching Figueroa in the back of the head.

It’s one thing to warn a fighter. It’s another to physically alter his behavior and place the fighter in a precarious position. During multiple active clinches between Figueroa & Burns, Cole physically yanked one of the arms of Ricky Burns. Not only did he repeatedly yank one of Burns’ arms, he did so without separating the two fighters. He yanked a fighter’s arm while during active punching. It was incredibly disruptive & dangerous. Burns could have gotten seriously injured. Much credit should be given to the CBS announcing team led by Mauro Ranallo in calling out Cole for his in-ring behavior.

Referees instruct fighters before bouts to protect themselves at all times. How can a fighter protect himself at all times when the referee is repeatedly yanking on one of his arms during live action?

The good news is that Cole didn’t work the bigger fight in Texas on Saturday night, which was Canelo Alvarez demolishing James Kirkland. However, Cole was assigned a main event on an Al Haymon CBS show for a fight that impacted two men at different points in their careers.

For many years, Cole’s father Dickie ran the athletic commission under the Department of Licensing & Regulation umbrella. Not only did Laurence Cole get top referee bookings, he also actively sold & continues to sell event insurance policies to promoters running boxing, kickboxing, and MMA events in the state of Texas.

Laurence Cole Insurance Agency at Cole is listed on the Farmers website as an insurance agent in Dallas.

If the athletic commission in Texas wants to demonstrate that they are serious about cleaning up the mess that Dickie Cole made, they would call a board meeting to start the process of stripping Laurence Cole of his referee license. That’s my opinion and I’m sticking to it. His in-ring actions on Saturday afternoon in Hidalgo, Texas could have potentially led to an injury and a fat lawsuit against the state of Texas.

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

Bill Brady’s resignation from Nevada State Athletic Commission cements agency’s crisis point

By Zach Arnold | May 8, 2015

Things were supposed to get better for the Nevada State Athletic Commission after tone-deaf, loved-to-hear-his-own-voice Executive Director Keith Kizer resigned in order to get a pay raise to work in the AG’s office on Gaming Commission matters.

Instead, a dumpster fire has turned into a raging inferno with Bob Bennett as Executive Director and Andre Agassi’s lawyer, Francisco Aguilar, as the commission’s front man/Chairman for public relations.

Bill Brady, who had been on the commission board during it’s most tumultuous time period before Aguilar and casino/marijuana permit guy Anthony Marnell came aboard, resigned on Friday. He told the truth by stating that his heart wasn’t into working on the Commission panel any more. According to Brady, the fallout from the Manny Pacquiao/Floyd Mayweather fight was the straw that broke the camel’s back.

The corrosion of the image of the Nevada State Athletic Commission is almost irreversible at this point given the political entities involved in meddling and strong-arming the regulators. Look at what has happened since Marc Ratner’s departure:

The timing of Bill Brady’s resignation tells you everything you need to know about the state of regulatory affairs in Nevada. The image of the Athletic Commission is at an all-time low. It’s a circus. While Texas and New York are (slowly) trying to dig out of the immensely deep holes they have dug for themselves, Nevada continues to sink further into chaos. The Pacquiao fight last Saturday night only highlighted how concerning the problems are to the masses. The Athletic Commission got exposed in the bright lights.

The commission’s profits are as high as its image of integrity is as low amongst the fans, fighters, and promoters.

Bill Brady had nothing to personally do with the many regulatory failures of the Athletic Commission. He just had the common sense to be the first one to walk away after what happened last Saturday night.

It will be interesting to see if the 2016 Senatorial opponent to Governor Brian Sandoval uses the athletic commission as a campaign issue. Sandoval deserves all the criticism for allowing what has happened with the Athletic Commission under his watch.

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

If ABC & Golden Boy claim Al Haymon is violating the Ali & Sherman Acts, why not cite RICO?

By Zach Arnold | May 7, 2015

You’ve read the Association of Boxing Commissions letter to US Attorney General Loretta Lynch.

You’ve read the various causes of actions listed in Golden Boy’s federal lawsuit against Al Haymon.

Both ABC & Golden Boy accuse Al Haymon & associates of violating the Muhammad Ali Act. ABC accuses Haymon of violating his fiduciary responsibility as a boxing manager to his various fighters because he also supposedly acts as a promoter through the PBC series. Golden Boy’s lawsuit alleges Haymon & company of violating the Sherman & Clayton Antitrust Acts. Both ABC & Golden Boy accuse Haymon and his business associates of conspiring in an illegal scheme with others in order to create a monopoly in the boxing industry by supposedly violating the Ali Act.

Which begs the following question: why didn’t ABC or Golden Boy, in their letter and legal complaints, bring up RICO (Racketeer Influenced and Corrupt Organization) as a cause of action if they’re alleging that Haymon & associates are supposedly involved in an illegal business/scheme?

By its legal definition, racketeering involves an organized group of individuals conspiring & engaging in an illegal business or scheme.

If ABC & Golden Boy have evidence that Al Haymon & associates are engaged in an conspiracy to commit an illegal business or scheme via violations of the Ali Act, why aren’t they citing the RICO statute as a potential cause of action?

To level charges publicly against Haymon that he is somehow violating the Ali, Sherman, & Clayton Acts, ABC & Golden Boy better have hard evidence to prove their case in a court of law. In civil court, only a preponderance of the evidence is needed to win. So why are the lawyers on behalf of ABC & Golden Boy confident enough to claim that Haymon is supposedly violating various federal acts via an illegal scheme but not confident enough to accuse Haymon & his business associates of racketeering?

18 U.S.C. Chapter 96 deals with RICO (Racketeer Influenced and Corrupt Organizations). In order to cite RICO as a cause of action, one must prove that the individuals being sued are involved in a criminal enterprise that has allegedly committed two or more specific violations within a 10 year time period. There is a list of various crimes that fall under the RICO statute, which provides both criminal & civil remedies.

Given the various legal claims made by both ABC & Golden Boy, there are two Code sections that stand out for hypothetical discussion:

18 U.S. Code § 1952 – Interstate and foreign travel or transportation in aid of racketeering enterprises

18 U.S. Code § 1957 – Engaging in monetary transactions in property derived from specified unlawful activity

In order to satisfy one of the requirements of “unlawful activity” for 1952, section 1957 applies. As defined by Findlaw, 1957 states the following:

(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished as provided in subsection (b).

(1) the term “monetary transaction” means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title, but such term does not include any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution; (2) the term “criminally derived property” means any property constituting, or derived from, proceeds obtained from a criminal offense; and (3) the terms “specified unlawful activity” and “proceeds” shall have the meaning given those terms in section 1956 of this title.

Golden Boy and ABC both allege that Haymon & associates have made money illegally by supposedly violating the Ali Act.

18 U.S. Code § 1962 – Prohibited activities breaks down the racketeering issue in plain English. Take note of sections B & C.

ABC is asking the US Attorney General to launch a criminal investigation into Al Haymon’s business activities. Golden Boy is pursuing civil remedies. In regards to civil remedies available for RICO causes of actions, read 18 U.S. Code § 1964 – Civil remedies:

(a) The district courts of the United States shall have jurisdiction to prevent and restrain violations of section 1962 of this chapter by issuing appropriate orders, including, but not limited to:

  • ordering any person to divest himself of any interest, direct or indirect, in any enterprise;
  • imposing reasonable restrictions on the future activities or investments of any person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise engaged in, the activities of which affect interstate or foreign commerce;
  • or ordering dissolution or reorganization of any enterprise, making due provision for the rights of innocent persons.

(c) Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962. The exception contained in the preceding sentence does not apply to an action against any person that is criminally convicted in connection with the fraud, in which case the statute of limitations shall start to run on the date on which the conviction becomes final.

(d) A final judgment or decree rendered in favor of the United States in any criminal proceeding brought by the United States under this chapter shall estop the defendant from denying the essential allegations of the criminal offense in any subsequent civil proceeding brought by the United States.

If both ABC & Golden Boy are going to accuse the Haymon Defendants of running an illegal business/scheme which allegedly involves violating the Muhammad Ali Act in order to create a monopoly in boxing, then why aren’t they citing RICO as a cause of action?

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A look at Golden Boy’s Sherman Antitrust & Clayton Act lawsuit against Al Haymon

By Zach Arnold | May 7, 2015

On our site, we posted the letter that the Association of Boxing Commissions sent to US Attorney General Loretta Lynch alleging that Al Haymon is violating the Muhammad Ali Act.

On Tuesday, Golden Boy filed suit against Al Haymon and his business partners in Los Angeles federal court. The lawsuit alleges that Al Haymon is violating the Sherman Antitrust Act, the Clayton Act, and the Muhammad Ali Act.

Most of the initial text in the lawsuit filing mirrors the claims that ABC made in their letter to Loretta Lynch. So, we will focus on the various causes of action that Golden Boy, through attorney Bert Fields, has filed in their complaint against Haymon.

One item from the background claims in the complaint, however, is worth highlighting:

Plaintiffs are informed and believe and, on that ground, allege that defendants Waddell & Reed Financial, Inc. and Waddell & Reed, Inc. (collectively “Waddell”) are Delaware corporations in the business of supplying venture capital to businesses through controlled entities. Waddell financed and aided the Haymon Defendants through Ivy Asset Strategy Fund, WRA Asset Strategy and Ivy Funds VIP Asset Strategy (the “Waddell Funds”). These are investment funds established, owned and controlled by Waddell and their investors. Ryan Caldwell (“Caldwell”) is manager of the Waddell Funds (the Waddell Funds, Caldwell and Waddell are sometimes called the “Waddell Defendants” in this Complaint). The Waddell Defendants have provided more than four hundred million dollars to finance the unlawful activities of the Haymon Defendants alleged hereinbelow and have also advised, aided and abetted the Haymon Defendants in carrying out such activities and have conspired with them to do so.

Before the events on which this action is based, defendants sought to eliminate competition in the business of promoting Championship-Caliber Boxers by acquiring total ownership of Golden Boy and sidelining De La Hoya as a competitor. To that end, Waddell offered to purchase 100% of the equity interest in Golden Boy through another Waddell controlled fund, but conditioned its offer on obtaining an onerous and lengthy non-competition agreement from De La Hoya. Plaintiffs are informed and believe and, on that ground, allege that, in fact, the intended buyers of Golden Boy were the Haymon Defendants, that Waddell was to finance the acquisition of Golden Boy with the Waddell controlled fund as the nominal buyer, and that the involvement of the Haymon Defendants was to be concealed, since their acquisition of Golden Boy, a major promoter, would violate the law and perhaps expose defendants’ scheme to monopolize the promotion business. Defendants’ proposed acquisition of Golden Boy was not completed, because De La Hoya refused to accept the onerous, anti-competitive restrictions on his boxing related activities demanded by the proposed buyers.

With that noted from the Complaint, let’s take a look at the causes of actions listed in the court filing.

Continue reading this article here…

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