Bellator and UFC legal battle brewing?
New UFC owners, WME-IMG, are getting much more than they bargained for. After purchasing the company last year for $4 billion, they now find themselves in the midst of several legal battles.
One has to wonder if WME-IMG is starting to regret their purchase. Not only do they have multiple pending legal challenges, they’ve also recently lost the services of some of their top-drawing stars. Ronda Rousey’s pending retirement, Conor’s sabbatical, and Brock Lesnar’s retirement are all financial hardships for the company. If some of their legal challenges don’t go the way they want, their investment could become a disaster.
UFC Legal Challenges
One legal challenge the company currently faces is the possible extension of the Ali act to cover MMA as well. The Muhammad Ali Boxing Reform Act was passed by the United States congress in 1999 in order to protect boxers from shady promoters.
One aspect of the act which could be particularly damning for the UFC is that it requires challengers for championships be determined by a 3rd party. It would then be a commission who decides which fighter is the #1 contender for a title.
This portion of the act would prevent the UFC from choosing their own title fights. Dana White would not like that.
Anti-Trust Lawsuit
In addition to the above stated legal problems, Cung Le, Nate Quarry, Jon Fitch, Brandon Vera, Javier Vazquez and Kyle Kingsbury are all suing the UFC. Their anti-trust lawsuit contends that the UFC owns a monopoly and creates unfair conditions for rival promotions and fighters.
As part of their defence the UFC has subpoenaed Bellator to release many of their financial records. The UFC then intends to use Bellator’s practices to compare with their own in an attempt to show they do not operate a monopoly. Oddly enough, the better Bellator is doing financially the better it is for the UFC in terms of this lawsuit. If another MMA promotion is on solid financial ground, then the UFC does not have a monopoly.
Bellator Files Lawsuit
Yesterday, Bellator filed a lawsuit to prevent the UFC from obtaining their financial records. If successful, the lawsuit would quash the subpoenas from the UFC. Bellator would then no longer have to provide the UFC with information on fighter contracts and/or records of contract negotiations.
Scott Coker wrote an 8-page declaration in the lawsuit. In the documents Coker describes how releasing such information to the UFC would harm his business.
“Armed with Bellator’s information, a dominant market player such as UFC could easily allocate its resources to one-up Bellator on critical deals, counter-program Bellator, and appropriate its business strategies, either to obstruct and stifle Bellator’s initiatives or to exploit its weaknesses.”
Some of the statements Coker makes seem to provide support for the anti-trust lawsuit against the UFC as well.
“UFC is an aggressive and ambitious enterprise, and I believe that if UFC were able to gain an advantage against Bellator by receiving Bellator’s confidential information or even simply leveraging the disadvantage caused by disclosure of Bellator’s confidential information to athletes and others, it would certainly do so,”
Sounds like Coker isn’t going to hand over his information without a fight.
