Post by The Ultimate Nullifier on Dec 16, 2014 13:51:13 GMT -6
According to Bloody Elbow, several fighters are banding together to sue the UFC, alleging that the UFC has violated antitrust laws by abusing their "market power" to intentionally and systematically cripple the free market. A press conference is planned for tomorrow in San Jose, California to announce the lawsuit.
Cung Le, Nate Quarry, and Jon Fitch file class action lawsuit against UFC
Tuesday, 16 December 2014 13:04
By Josh Nason, Wrestling Observer.com
Updated: here's the full audio of the conference.
Thanks for joining us here for today's live coverage of what is believed to be a class action lawsuit against the UFC. Scheduled to kickoff at 4 PM EST, I'll be providing live updates as the call progresses. Dave Meltzer is live in San Jose, CA, and will give additional information later on today. There's a lot of rumors surrounding who and what will exactly be involved today, so if nothing else, this should be newsworthy.
4 PM EST -- MMA Junkie is reporting that in a press packet handed out, Cung Le, Nate Quarry, and Jon Fitch are listed as filing the suit, but that doesn't mean they are the only ones involved. Still waiting for the call to officially begin.
4:05 PM EST -- Some notes from Greg Savage who is there in person: "The civil action is entitle Cung Le, et al v. Zuffa, LLC, d/b/a Ultimate Fighting Championship and UFC."
Call just began...
Joe Saveri, a lawyer that handles antitrust litigation, is the person leading the conference. He introduces Cung Le and Nate Quarry live in person. Jon Fitch is on the phone. He introduces Benjamin Brown, Michael Dell'Angelo, Robert Maysey.
12:45 PM this afternoon, the three filed a class action lawsuit, antitrust laws for monopolization against Zuffa.
- One real promotional option is UFC - The reason: systematically shut down competitors, prevented any real competitors from coming into market - Consequences: very serious, athletes unable to attain what theya re worth, lost control of likenesses, ability to profit from own ability
Purpose: to right wrongs, restore healty competition in this industry.
- Culmination of a lot of work, UFC built on backs of fighters, fighters sacrificed a lot, top fighters are paid a fraction of mere revenue as compared to boxing. UFC's profit margins are among highest in sports.
- UFC has monopolized highest levels of the sports. Quotes Dana White that there isn't any competition, they're the NFL, there is no other guy.
- UFC used exclusive arrangements, bought out and shut down the competiton.
- In '11, Strikeforce was only competitor left. Threatened to become major player and UFC bought them. After that, they controlled everyone and everything.
- Problem is a web UFC has with venues and sponsors, anti-competitive restraints. Insistence on perpetual identity rights for anyone who ever fights for the UFC. Prevents fighters from benefiting from using their likeness, even after their death.
- UFC can terminate a contract, but they retain the rights.
- UFC has signed up nearly every fighter with provisions to extend contracts indefinitely. Cuts off competition. Gives them all the leverage they need to drive fighter pay down. Fighters have little opportunity to escape UFC and when they do, they lose the rights. Promoters can't openly bid for UFC talent in prime of their careers.
- Only alternative promotions are effectively minor leagues without access to top sponsors.
Robert Maysey, Mixed Martial Arts Fighting Association:
- Thanks Carlos Newton who is in attendance, but not directly named in the suit - Is very emotional speaking - Reiterates the main points, inflecting on the compensation portion and a lack of a marketplace
- Thanks his family for the support and everyone involved in the suit - Wants to have a better situation for future fighters
- Brings up journalists that are negative about the UFC having credentials taken - Thanks Newton and says he made it possible - Suit is about fairness for athletes - Says UFC has dictated terms for everything, "new religion for how things will be" - Says UFC has taken things for granted for too long. If we don't take a stand now, nothing will change.
- How long putting this suit together? Didn't want to say, but this didn't come together overnight.
- Ultimate goal? This will all take a while, goal is to defeat whatever comes their way, obtain class certification, will seek to win damages and an injunction from the court. They want free and fair competition, but wouldn't go into details about the injunction.
- What would competition look like if successful? Didn't want to get into specifics, long way from an injunction but said "free and fair competition".
- NFL, MLB, etc. are league sports and individually owned, so there's competition. All leagues are repped by players associations.
- Unionize fighters? Nothing to do with this.
- PGA, Tennis more comparable? Similar.
- Costs and damages will be discussed in complaint and the lawsuit, but didn't want to reveal money.
- As far as global calculated costs, economists are going to offer up what salaries and compensation should be. The difference between that and what fighters earned will be what they're seeking for damages. They say it's "substantial".
- Lawsuit about particular antitrust claim and this particular fight will be to right a particular wrong and will hopefully straighten up other wrongs.
- Working with any other player organizations? Not right now.
- Will other fighters be added to the suit? They are unsure right now, but if so, it will be public.
- Early timeline for what happens next? 1st thing is complaint is filed, Zuffa will be filed formally and can answer it or move to dismiss. if they answer, they enter a discovery period and move toward trial. If they move to dismiss, they answer with a brief and then move forward if the court deems the suit valid.
- If a trial goes forward, they would hope to have it in San Jose.
- What about Bellator MMA's place in the market and in the lawsuit? Kind of granular question they don't want to get into at the moment, but that is mentioned in the complaint.
- Does Viacom have any involvement in this suit? No.
- Did the drug test have anything to do with this, Cung? Drug test issue didn't have anything to do with this.
- What types of things in contracts are fair and not fair to them? Not filing lawsuit about fairness of specific contracts, but that the UFC is deriding rival promoters of opportunities. Not talking about particular provisions, but why certain parts of the UFC contract allow them to do what they do.
- What's the deal on use in video games? To them, they believe a typical deal means that the UFC can use a fighter's likeness for up to 2-3 years following contract termination and expires if they don't use them during that time.
- Any response from UFC yet? Not that they're aware of.
- Do the lawyers have documents and proof that UFC engaged in this? They wouldn't have filed the complaint if they didn't have something.
- What are they seeking during discovery and who to dispose? Too granular. Won't go into at this time.
- Fitch reiterates the open competition claims and issues. The goal is to benefit competition and hopefully benefit the fans.
- What is Cung's status with UFC? He's still under contract.
- What about Gil Melendez who did get a matching offer and benefited from UFC and Bellator bidding? That's the kind of thing we'll deal with in the suit, but when there's one entity engaging in activity, it often appears it's competition but it's not. All activity has been supressed, and there should be more of it.
- Would Le fight for the UFC if they called him? He wouldn't.
- To Carlos, why are you here? Wanted people to know MMA is most restrained sport in world and UFC is most monopolized sport in the world. Wants to live and fight in a democracy, not in a dictatorship. Wants to give back and create a better world and sport.
Post by The Ultimate Nullifier on Dec 16, 2014 20:45:56 GMT -6
A potential first step towards a class action lawsuit against the UFC was taken this week, as a group announced their intent to sue the world's top MMA organization. The group, led by Jon Fitch, Cung Le and Nate Quarry, held a press conference in San Jose Tuesday to state that they'll be "identity class plaintiffs" and hope to add more names. Le is currently on the UFC roster, while Fitch and Quarry are former championship contenders for the brand. The successful lawfirms Joseph Saveri Law Firm, Cohen Milstein Sellers & Toll, and Berger & Montague are all involved.
The lawsuit accuses the UFC of violating the Sherman Antitrust act via elimination of competition. This leaves the UFC as the only viable promotion in which these fighters can earn a living in comparison to where they would elsewhere else.
"This lawsuit really is about fairness," said Quarry. "It's about a fair market value for the athletes. Over and over again, we've seen that's just not been the case. The UFC has taken over the entire industry and dictated its terms upon the fighters without any say. We don't have any rights. It's the word that comes down. It's time for those things to change. We deserve to reap the fruits of our labors."
During the press conference, a comparison was drawn to the NFL as "the only game in town," but says that there are multiple teams within that league driving up competitive prices for the athletes involved. The UFC's controversial sponsor policies are also mentioned, as the UFC doesn't permit sponsors that have previously shown allegiance to other brands or rival promotion's fighters. The complaint filed against Zuffa referred to Bellator MMA as a "minor league" to the UFC.
The suit will be open to ""All persons who competed in one or more live professional UFC-promoted MMA bouts taking place or broadcast in the United States during the Class Period. The Bout Class excludes all persons who are not residents or citizens of the United States unless the UFC paid such persons for competing in a bout fought in the United States."
A look at the Sherman Act and the lawsuit against the UFC
By Ryan Pike
The recent lawsuit filed targeting the Ultimate Fighting Championship claims unfair business practices in violation of the Sherman Antitrust Act. The act was passed by Congress in 1890 and has generally been used to regulate unfair business practices that stifle competitive markets; section one regulates cartels, section two regulates monopolies. The second section would likely apply to this case. Case law has established a three-pronged test for monopolies and gradually set the burden of proof for plaintiffs fairly high, particular a specific distinction between what have been termed “coercive” and “innocent” monopolies. Merely being dominant in a particularly-defined market isn't itself illegal; becoming dominant by means other than superior product, business acumen or sheer dumb luck is illegal, and the plaintiffs have to provide sufficient means of proof of unfair or predatory conduct in doing so. In their 1993 judgment in Spectrum Sports Inc. v. McQuillan, the U.S. Supreme Court explained the purpose of the act very succinctly: “The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.” In the same judgment, the Court outlines the generally-accepted test: “Consistent with our cases, it is generally required that to demonstrate attempted monopolization a plaintiff must prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.” The Court also noted that defining the dangerous probability of monopolization has “generally required a definition of the relevant market and examination of market power.” As such, the UFC has a few ways to wiggle out of this. They can claim they are not a monopoly given the number of competitors promoting mixed martial arts. They can claim they are a sports league and that they are a small player in a broader sports market, or pull a WWE move and claim they are competing in the ever-crowded entertainment market. And even if the court doesn't buy any of their “we're not a monopoly” arguments, it has to be proven that they used unfair or predatory practices to become one. Considering the fates of many of their past competitors were at least as much because of those competitors over-spending or otherwise shooting themselves in the foot as they were due to UFC promoting against them, this may be their best road to success in this situation. As for what happens, and if this even reaches court, only time will tell.
Post by The Ultimate Nullifier on Dec 19, 2014 17:16:35 GMT -6
MMAJunkie.com reported that Tito Ortiz was approached to be one of the names in the class action lawsuit against the UFC, but declined. The sense was that Ortiz wants to be an agent, and thus doesn't want to be representing talent while he's suing the UFC.