MMA Universe

MMAJunkie broke the news that FullTiltPoker.com, PokerStars.com, and AbsolutePoker.com were seized today by the FBI and indicted for bank fraud, illegal gambling, and money laundering.

The implication of these charges could have a great impact on MMA, as FullTiltPoker.com (among other poker sites) invest a great deal of money into sponsoring MMA promotions  such as the UFC and Strikeforce,  as well as individual fighters.

Sam Spira, owner of Xtreme Couture management said the following:

“This is a disturbing development,” Spira told MMAjunkie.com (www.mmajunkie.com). “Full Tilt was one of the remaining pro-fighter sponsors that has strongly supported MMA over the past few years. The importance of the ongoing interplay between supporters and fans of poker and supporters and fans of MMA cannot be underestimated.”

Ken Pavia of MMA Agents gave some input as to what the poker companies are going through right now:

“The online poker companies don’t have a complete handle on it at this time, but they’re doing their due diligence to find out what the full impact is,” Pavia said. “In the short-term, it will severely impact fighters’ sponsor revenue, which traditionally matched their show pay for our televised clients. I would venture to say the poker industry is equal to apparel industry as the No. 1 sponsor of fighters outside the UFC.”

Jene Gene of Magnetic MMA points out that the “.net” versions of the poker sites are the ones sponsoring the promotions and fighters, and that they are compliant since they are for educational and entertainment purposes, not for gambling (FullTiltPoker.net is still functional).  As for Zuffa’s newly acquired MMA promotion Strikeforce, which FullTiltPoker is a major sponsor, they told MMAJunkie that  they are “looking into the situation specifically how it relates to our deal”, and would not comment any further.

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Payout Perspective:

ESPN goes into more details regarding the charges on the poker companies:

The Manhattan U.S. Attorney announced the indictments of those involved with the online poker sites as well as those who were responsible for the financial transactions. The 11 defendants are Isai Scheinberg and Paul Tate (PokerStars), Raymond Bitar and Nelson Burtnick (Full Tilt Poker), Scott Tom and Brent Beckley (Absolute Poker) and Ryan Lang, Ira Rubin, Bradley Franzen, Chad Elie and John Campos (involved with payment processors).
…
Manhattan U.S. Attorney Preet Bharara said in the indictment: “As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits.
…
The companies are all based overseas. The indictment sought $3 billion in money laundering penalties and forfeiture from the defendants.

As for the penalties the companies are facing:

The charges are conspiracy to violate Unlawful Internet Gambling Enforcement Act (UIGEA), violation of UIGEA, operation of illegal gambling business, conspiracy to commit bank fraud and wire fraud, and money laundering conspiracy . Maximum penalties from these charges range from five years in prison and a $250,000 fine to 30 years in prison and a $1,000,000 fine (or twice the gross gain or loss).
…
“These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck,” said Janice Fedarcyk, FBI assistant director-in-charge. “They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee. The defendants bet the house that they could continue their scheme, and they lost.”

Zach Arnold of FightOpinion.com points out the potential severity for the MMA landscape:

This is enormous news. Full Tilt is a Strikeforce sponsor and they also recently made a deal with the Fertittas to try to work on getting legalized gambling in the states. (Harry Reid and others in Congress were on the same wavelength.) The huge irony — this same prosecutor is one that Dana White thanked in fighting piracy of UFC footage.

…

When discussing this story, you simply can’t avoid the politics of it. The political climate was growing in the US Congress to work out legislation for online gambling in the States. Harry Reid, who Zuffa management helped out politically in his 2010 re-election campaign, was receptive to the idea of legalization. Several other key players, like Barney Frank, were also keen on the idea. After all, legalize-and-tax made perfect sense. The political climate became so positive that the Las Vegas casino power players like Steve Wynn and the Fertittas got involved in deals with companies like Full Tilt Poker.

Arnold points out the irony involving the prosecutor in this case, which is the same who Dana White publicly thanked in being aggressive in anti-piracy efforts relating to copyright issues with Zuffa property.

Another interesting point to note is that due to the charges, Forbes reports that Steve Wynn has cut ties with PokerStars, one of the poker sites indicted, after announing to team up with the company only a few weeks ago.  The UFC and the Fertittas are in the same boat, as  Full Tilt Poker and  Fertitta Interactive just announced an online poker deal just weeks ago and the UFC was working on promotional deals with FullTiltPoker for upcoming events and would further it’s involvement if the online gambling bill was ever passed.  Strikeforce has expanded their promotional dealings with FullTiltPoker since they were acquired by Zuffa as well. The Las Vegas Review-Journal has the story behind Fertitta Interactive and FullTilt:

Online gaming giant FullTilt Poker and Fertitta Interactive, which is co-owned by the family that founded Station Casinos, have struck a partnership to operate an Internet poker website if the activity gains federal approval.
…

The agreement covers only potential federal legislation for Internet poker, said Tom Breitling, who co-owns Fertitta Interactive with brothers Frank Fertitta III and Lorenzo Fertitta and his longtime business partner Tim Poster.
…

“We believe that a federal law for online poker is the way to go,” Breitling said. “We do believe that a federal online poker bill would be good for Nevada. Nevada is a leader in gaming regulation, and we need the thousands of high-paying high tech jobs and the millions in tax revenues associated with online poker.”

The political and gambling ties don’t stop there for the Fertittas, who own Station Casinos and backed up and openly campaigned for Nevada Senator Harry Reid, who is now trying to legalize online poker, a move that could make UFC and Station Casino owners a good amount of money. ESPN also ran with a story titled “UFC Pikcing Political Sides”, stating that UFC’s Chuck Liddell, Randy Couture, and Dana White were openly campaigning and swaying the UFC fanbse to become supporters of Reid.

The Wall Street Journal reports on Reid and the gambling bill:

Mr. Reid, who has opposed online gambling in the past, is holding his cards close to his vest regarding plans to move forward with the legislation. Passing such a measure is highly uncertain as the heated session winds down, given the sensitive nature of the subject.
…
Previous attempts at online-gambling legislation haven’t moved forward, but casino interests believe that given Mr. Reid’s powerful position atop the Senate, he might be able to push the poker measure into another bill, according to people familiar with the discussions.
…
The legislation would overturn a bill passed in 2006 that bans financial institutions from processing online-gambling transactions. That led publicly traded companies to pull out from operating online sites in the U.S. In their place, offshore sites have gathered an estimated 10 million U.S. poker players, according to the Poker Players Alliance.
…
According to the draft of the bill reviewed by The Wall Street Journal, Mr. Reid’s office is considering language that would allow only existing casinos, horse tracks and slot-machine makers to operate online poker websites for the first two years after the bill passes, which could limit the ability of other companies to enter the market.

Back in October of 2010, BloodyElbow’s Luke Thomas wrote a piece titled “UFC Tries to Help Nevada Senator Harry Reid, Deepens Political Involvement”, which delves deeper into UFC’s political involvement regarding the legalization of MMA, legalizing online poker, fighting internet piracy, and their ability to make and use political allies to accomplish future goals and further expand their bottom line.

UFC Light Heavyweight Thiago Silva waived his right to an attorney yesterday and decided to accept his fate after admitting to altering his post-UFC 125 drug test. The NSAC revoked his license for 12 months, took a percentage of his purse and rendered his fight with Brandon Vera a no contest.

MMA Junkie reports that the NSAC reduced its original punishment due to Silva’s “candor and honesty”. Silva admitted to using a “urine adulterant” when giving a sample to the NSAC officials. Apparently, owning up to his wrongdoing has granted him some leniency with the NSAC.

Via MMA Weekly:

Silva issued a statement through his camp at American Top Team explaining the situation, and apologizing for his misdeeds.

“We make decisions every day of our lives. Some are good and some are bad. When you make a bad decision, you can either make the situation worse by trying to cover it up or lie about it or just stick your head in the sand and refuse to acknowledge it even happened or you can own up to it with an honest explanation, accept the consequences of your actions, apologize to the people affected by it, learn from it and move on. I’m choosing the second option,” Silva wrote.

Via MMA Junkie:

NSAC commissioners originally recommended a fine of one-third of Silva’s “show” purse, as well as his entire win bonus, but citing the Brazilian’s “candor and honesty” eventually settled on 25-percent of his purse ($13,750) and $20,000 of the win bonus for a total fine of $33,750.

Silva dodged a bit of a bullet with his suspension, as NSAC executive director Keith Kizer recommended the 12-month suspension begin with Thursday’s hearing rather than the more traditional procedure of backdating the first day of the suspension to the date of the fight in question.

Kizer cited Silva’s reluctance to fess up to the charges until his “B” sample returned with the same findings as the first test. However, the commissioners instead elected to reward Silva for his belated admissions and chose to stick with the traditional routine. Silva is eligible to reapply for a license on Jan. 2, 2012, and he will have to provide a drug-free (and authentic) urine sample.

Despite a lackluster performance, the UFC reinstated Brandon Vera due to the questions concerning Silva’s drug test.

Payout Perspective:

Does it makes sense that he was docked only a percentage of his win bonus although the bout was changed to a no contest? Shouldn’t Silva have been stripped of the full win bonus?

Its interesting that the NSAC granted Silva some leniency even though he attempted to cheat the system and then did not admit to wrongdoing until it was apparent that he would be caught. Still, a year out of work and $33K plus in fines is a stiff penalty and serve as some sort of deterrent to those that would follow the same path as Silva. Obviously, this does not help with any of his sponsors. Will they be there when he comes back in 2012? Silva is a good fighter that did not need to cheat to win.

What this means for further drug tests is that the NSAC will have to be more intrusive in watching athletes as they submit the urine sample.

Saturday’s New York Times features an op-ed calling for the legalization of MMA in New York State. Entitled, “It Only Looks Dangerous,” and written by the editor of Men’s Health, David Zinczenko, he states that he has changed course on his position on MMA and is now a firm supporter of the sport.

Coincidentally, this month’s Men’s Health features GSP on the cover.  Zinczenko states that he had opposed MMA and prohibited MMA from its front cover in the past.

Via NY Times:

But I’ve come to believe that, in fact, the New York Legislature is wrong. Mr. Reilly is wrong. And more to the point, I was wrong (an admission my brother will hold over my head as long as I live). Mixed martial arts may be a violent sport, but it is much safer than other, supposedly more civilized competitions, and New York and its fellow holdouts should finally sanction it.

With West Virginia regulating MMA recently, New York, Connecticut and Vermont are the only states with athletic commissions that have not legalized MMA. Connecticut has legislation pending.

Zinczenko subtely calls out the traditional sports of football and boxing as more dangerous than MMA. He cites the appearance of safety in helmets and padded gloves as not safe at all.

These (helmets and boxing gloves) are, in fact, more like the equivalent of poorly designed sunscreen — “protection” that allows athletes to submit to even greater levels of punishment.

(H/t Fight Lawyer)

Payout Perspective:

This is another editorial attempting to educate the public (and more specifically New Yorkers) that MMA is not as dangerous as other popular sports. The op-ed seemingly is an admission of wrong by the author as he has changed course after discovering that MMA is not as dangerous as boxing or the NFL. Hence, New York should rethink its position on banning it in the state. This is a sound argument and good for proponents of MMA. But, the fact that GSP is on its cover prior to one of the UFC’s biggest events of the year colors the opinion. Is the author changing position because it sees the success of the UFC and is jumping on the bandwagon to sell magazines? Secondly, what of the subtle diss of the NFL and boxing in essentially calling the sports unsafe. This position probably would not sit well with Roger Goodell. Despite the fact that the NFL is in labor strife, calling out the sport now may not be a wise decision.

A recent op-ed on CBSNews.com believes that the UFC will be able to gain mainstream acceptance as the NFL muddles in labor uncertainty. It also takes aim at lawmakers that don’t see the sport as a source of revenue for a stumbling economy.

Via CBSNews.com:

The UFC may appear like an upstart against the NFL powerhouse in terms of fan base, revenue and reputation, but securing absolute ownership of the elite athletes of the sport signals that Dana White and company are an entertainment force to be reckoned with. Bringing together the sport under one brand allows greater fan loyalty, more marketing opportunities and exponential revenue growth. It’s a game-changer within an industry historically dominated by the NFL, NBA, MLB and NHL.

But now the UFC has been elevated to the elite club of sports entertainment organizations. And like most grassroots movements, the mainstream media and politicians are the last to realize it.

…The UFC has risen from its humble beginnings in 1993 to surpass the one billion dollar mark; and it’s now broadcasting in more than 130 countries. Fighters Randy Couture and Quinton Jackson are crossover successes and starred in two Hollywood blockbusters last year – The Expendables and The A-Team, respectively. When Charlie Sheen’s fight with Chuck Lorre and CBS erupted, he name dropped the octagon – the UFC’s standard fight structure – as the place to bring his tiger blood and fire-breathing fists. And the UFC is one of the premiere case studies of how social media can deliver when done right. White’s embrace of Twitter showcases his strong personality and fan-appeal and he has personally won over legions of paying followers with his unparalleled direct dialogue. With a rabid and growing fan base, the UFC’s ceiling is nowhere in sight.

As the NFL’s labor situation spirals out of control and with the NBA only a few months from a similar fate, UFC’s owner Zuffa LLC and White are surely brushing up on their history. The redneck, uncouth reputation that’s unfairly been attached to the UFC like a scarlet letter is starting to fade. Don’t let the tattoos, dark music and gallons of blood spilled on the mat fool you, this is a multi-billion dollar industry.

The article goes on to ask why lawmakers have neglected the sport as a revenue stream:

The political elites in Washington, financial whizs on Wall Street and studio heads in Hollywood ignore the sport at their own peril. An economic impact report last year determined the sport could generate $25 million a year in benefits to New York alone if the state allows fights to be held and regulated. That’s based on holding only two events. In the midst of the financial crisis, legislators in Albany and Washington, DC have foolishly failed to ignore the sport. And taxpayers should be outraged.

You don’t have to be a football or mixed martial arts fan to appreciate the spectacle of an American sports entertainment industry rising to world-wide prominence. It’s a uniquely American story that should be celebrated by even government tax collectors.

Payout Perspective:

This is a good piece from a mainstream outlet that understands that MMA is a profitable sport and should be given its due. Its rare to see articles that are willing to accept MMA and realize the economic impact it can have.  It does a good job of calling out Albany in pressuring lawmakers to legalize MMA in NY.

Following up on my post, Bill to Legalize MMA in New York Out of the Gate Early in the Senate, I am happy to report that  New York Senate Bill 1707A, i.e. the bill to authorize mixed martial arts in New York, overwhelmingly passed the Senate Standing Committee on Cultural Affairs, Tourism, Parks and Recreation, by a vote of 13-1 this morning.

If last year is any indication, the bill will now go straight to the full Senate for a vote.

The overwhelming support for the bill is a good sign and so is the fact that the bill is through the Tourism Committee this early in the legislative session, i.e. approximately three (3) months before the bill was referred out of the Tourism Committee last year.

As I said in my earlier post:

While I hesitate to read too much into anything when it comes to New York politics, in my view, the early action on the bill in the Senate (in particular, before the budget process has been resolved) is a step in the right direction.

By the time the bill passed the Senate last year it was near the end of the legislative session, which did not give proponents of legalizing MMA in the Assembly too much time to use that leverage and publicity to work on pushing the bill in the Assembly.

Now, however, if the Senate can pass the bill in April or even early-May, there will be more time to force the issue in the Assembly.

If this happens, I think the New York grassroots movement can be a critical force by getting the issue on the radar of representatives (who are not otherwise sponsors of the bill or aware of the issue) up in Albany.

I will continue to monitor.

Fight Lawyer

Justin Klein is a partner of the law firm Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

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The West Virginia legislature passed legislation on Saturday which would allow the state to host mixed martial arts events. West Virginia is one of the last states that did not regulate MMA in its state. New York is the most notable holdout of MMA in its state.

Via WSAZ.com:

West Virginia could host mixed martial arts events under legislation passed by the state Legislature.

The Senate voted 23-10 in favor of the measure Saturday.The House then sent the bill to acting Gov. Earl Ray Tomblin on a 71-26 vote.

Opponents criticized the sport’s violence and argued it would hurt boxing. Supporters pushed the sport in part because it could bring in national sporting events.

Mixed martial arts combines elements of karate, judo, jujitsu and kickboxing. Of the 48 states with athletic commissions, all sanction the sport except West Virginia, Connecticut, New York and Vermont.

H/t John Luther via twitter.

Payout Perspective:

This news tops off a monumental day for the state of MMA. This is good news for supporters of MMA since Connecticut recently contemplated similar legislation. New York is still the big holdout here although new legislation has been introduced in its senate.

I am happy to report that New York Senate Bill 1707A, i.e. the bill to authorize mixed martial arts in New York, is off to an early start in the Senate Standing Committee on Cultural Affairs, Tourism, Parks and Recreation.

Specifically, the bill is on the Tourism Committee Agenda for next week.

As you may recall from earlier posts, the bill is sponsored by District 47 Senator, Joseph A. Griffo, of Utica New York and originates in the Tourism Committee.

Last year, although the bill passed the full Senate in mid-June, it was not debated and referred, i.e. passed, out of the Tourism Committee until June–near the end of the legislative session.

For a discussion on what happens after the bill passes the Senate, see this post.  Essentially, because there is a virtually identical bill that has been introduced in the Assembly, that bill must follow its committee progression (similar to the Senate bill) and ultimately pass the full Assembly before the joint bill would go to the Governor for signature.

The Assembly, of course, was the sticking point last year.  The bill was referred out of the Tourism Committee (of which Assemblyman Reilly is a member), the Codes Committee, and ultimately hit a wall in the Ways and Means Committee where no action was taken.

While I hesitate to read too much into anything when it comes to New York politics, in my view, the early action on the bill in the Senate (in particular, before the budget process has been resolved) is a step in the right direction.

By the time the bill passed the Senate last year it was near the end of the legislative session, which did not give proponents of legalizing MMA in the Assembly too much time to use that leverage and publicity to work on pushing the bill in the Assembly.

Now, however, if the Senate can pass the bill in April or even early-May, there will be more time to force the issue in the Assembly.

If this happens, I think the New York grassroots movement can be a critical force by getting the issue on the radar of representatives (who are not otherwise sponsors of the bill or aware of the issue) up in Albany.

I will continue to monitor.

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Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

MMA Junkie reports that due to budget cuts, the Nevada State Athletic Commission has eliminated out of competition drug testing. This type of drug testing is thought to be a strong deterrent to performance enhancing drugs in pro competition.

Via MMA Junkie:

With state governments around the country tightening their belts amid a widening recession, the NSAC’s budget for out-of-competition testing was reduced to $12,000 (from $18,000) in fiscal year 2009-2010. Regulators then asked the commission to give back all of the money before the year’s end, (NSAC Executive Director Keith) Kizer said.

In fiscal year 2010-2011, there is no money in the NSAC’s budget for out-of-competition drug testing, though athletes are still tested either the day prior to an event or immediately following it, and sometimes both.

The enforcement gap has nevertheless prompted the commission to get creative in coming up with the money to reinstate the program. One solution expected to be addressed at a meeting early next month is to draw a portion of funds from the amateur combative sports program, which pays for some of the safety and administrative costs associated with amateur boxing, kickboxing and MMA. The program is funded by a “ticket fee” assessed by the NSAC at professional events that is separate from the commission’s live gate fee, which takes a percentage of the money generated by ticket sales. The ticket fee amounts to .50 per ticket with live gates totaling less than $1 million, and $1 per ticket above that figure.

Commissioners will decide during the March meeting whether to lobby legislators on changing the NSAC’s funding statutes for the next state budget, which runs from July 1, 2011 to June 30, 2013. Nevada legislators are working to close a $2.2 billion dollar shortfall in the state’s general fund, which has prompted governor Pete Sandoval to recommend harsh cutbacks in education and government spending in his budget proposal.

Payout Perspective:

The out of competition testing was a way that the commission would keep fighters honest even when not training for an upcoming fight. The elimination of this does not mean that fighters will immediately use PEDs, but it takes away a deterrent. Although I think that the out of competition drug tests are valuable, I do not think the NSAC should shortchange amateur programs to fund this testing. In a time when states are crunching budgets, a lot of tough choices will need to be made.

The Hartford Courant reports that lawmakers are considering the introduction of a bill that would sanction mixed martial arts.

Via the Hartford Courant:

State Sen. Joan Hartley, a Democrat from Waterbury who co-chairs the public safety committee, asked at a hearing Tuesday how MMA differed from the professional wrestling shows staged by the Connecticut-based World Wrestling Entertainment. “We’re not scripted entertainment,” responded Marc Ratner, vice president of government and regulatory affairs for Ultimate Fighting Championship, the Las Vegas-based company that promotes most of the top-ranked MMA matches. “These are real fights.”

Hartley said she is open to the idea of sanctioning MMA matches, provided the regulatory requirements don’t burden the state’s budget.

“This bill will put mixed martial arts on an equal footing with boxing, allowing the thousands of MMA fans in Connecticut the opportunity to watch their pastime without leaving the state,” state Rep. Matthew Lesser told the legislature’s public safety committee Tuesday afternoon. “In addition, it would generate economic activity and should be revenue positive.”

A 5 percent tax on MMA gate receipts would bolster the state’s bottom line, Lesser said.

Forty-six states currently sanction MMA competitions. Massachusetts joined the list last year. Vermont and New York are two of four states that have not. And that, say proponents, provides an opportunity for Connecticut, given its proximity to a large base of fans in the Empire State.

Payout Perspective:

A very positive article about the possibility of legalizing MMA in Connecticut. The article did not provide an opposing view on the legalization of MMA with the exception of the usual “human cockfighting” quote. The backers of this bill see this as a way to stimulate the state’s economy. While they are realistic about how much it can assist, they also realize that the state can take advantage of New York’s ban on MMA and solicit the UFC, Strikeforce or other organizations to sponsor events instead of New York.

H/T: Robert Joyner via twitter

The Hartford Courant reports that lawmakers are considering the introduction of a bill that would sanction mixed martial arts.

Via the Hartford Courant:

State Sen. Joan Hartley, a Democrat from Waterbury who co-chairs the public safety committee, asked at a hearing Tuesday how MMA differed from the professional wrestling shows staged by the Connecticut-based World Wrestling Entertainment. “We’re not scripted entertainment,” responded Marc Ratner, vice president of government and regulatory affairs for Ultimate Fighting Championship, the Las Vegas-based company that promotes most of the top-ranked MMA matches. “These are real fights.”

Hartley said she is open to the idea of sanctioning MMA matches, provided the regulatory requirements don’t burden the state’s budget.

“This bill will put mixed martial arts on an equal footing with boxing, allowing the thousands of MMA fans in Connecticut the opportunity to watch their pastime without leaving the state,” state Rep. Matthew Lesser told the legislature’s public safety committee Tuesday afternoon. “In addition, it would generate economic activity and should be revenue positive.”

A 5 percent tax on MMA gate receipts would bolster the state’s bottom line, Lesser said.

Forty-six states currently sanction MMA competitions. Massachusetts joined the list last year. Vermont and New York are two of four states that have not. And that, say proponents, provides an opportunity for Connecticut, given its proximity to a large base of fans in the Empire State.

Payout Perspective:

A very positive article about the possibility of legalizing MMA in Connecticut. The article did not provide an opposing view on the legalization of MMA with the exception of the usual “human cockfighting” quote. The backers of this bill see this as a way to stimulate the state’s economy. While they are realistic about how much it can assist, they also realize that the state can take advantage of New York’s ban on MMA and solicit the UFC, Strikeforce or other organizations to sponsor events instead of New York.

H/T: Robert Joyner via twitter

Getting anything done in Albany is difficult and leads to frustration and efforts to legalize MMA are no exception.  As I stated recently during an interview with TapouT Radio, I believed the odds of MMA being legalized in New York State this year would go up dramatically if Governor Cuomo, like Governor Patterson last year, included a provision in his Executive Budget lifting the ban on MMA.

Unfortunately, today we learned that Cuomo would take no such step.  Indeed, there is no provision in the 2011-2012 Executive Budget permitting MMA in New York.  Moreover, and perhaps more troubling, the Governor’s Executive Budget proposes “[e]liminat[ing] the salary for the Chair of the State Athletic Commission.”

I am not really sure what to make of this proposal, but it seems like a bad sign for all combative sports, not just MMA, and may shed some light on the Governor’s view of the “economics” of these sports in New York in general.  I have previously written about why I believe “economics” cannot be the focus of the debate to legalize in New York.  As Governor Cuomo’s Executive Budget makes clear, he is tackling a $10 Billion dollar budget deficit and MMA with an estimated $23 million in “economic impact” is simply not compelling.

As you may recall from my earlier post, “Zuffa’s Support of Cuomo — Does It Really Mean Anything?,” the New York Post reported (in fact, Zach Arnold at Fight Opinion first reported) that “Las Vegas firm Zuffa Entertainmen [sic] has pumped $74,600 into Cuomo’s campaign coffers — and hopes the Democrat will use his political muscle to bend the Legislature into approving the controversial cage fights in New York.”

As I reported back then (and as recently as a few weeks ago when the UFC conducted its press conference at Madison Square Garden), Governor Cuomo has never taken a position on the issue of legalization and so I did not read too much into the campaign contribution by Zuffa.

Bottom line, we still do not really know where Governor Cuomo stands on the issue but his failure to include a provision permitting MMA is not a good sign in my view.  That said, I do not read the absence of the provision from the budget as an indication that Governor Cuomo would necessarily vote against the bill if it passed through the normal legislative channels, i.e. the Senate and the Assembly.  Keep in mind, Governor Cuomo is currently facing a $10 billion deficit and is planning on cutting nearly 10,000 state workers in an effort to cut costs.  MMA with an estimated $1.3 million in direct revenue to New York and $23 million in “economic impact” is clearly not going to be a budget priority.

Accordingly, there is still hope this legislative session and we should continue to fight to educate the legislators about MMA as a sport as I have previously written.

Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

On Thursday January 13, 2011, the Ultimate Fighting Championship conducted a press conference at Madison Square Garden “to announce a plan to bring UFC to The World’s Most Famous Arena, as soon as the sport of mixed martial arts is approved in New York.”

As you may recall from my earlier article, “A History Lesson (or History’s Lesson) on Mixed Martial Arts in New York,” one of my observations after tracking the history of MMA was that “the media (and public opinion) can have a significant effect on the legislative process in this state.”

Based on this observation, I reached the conclusion that “if through events like the MMA World Expo and other grassroots movements we can convince the media that the sport is not what it once was, we may be able to move the legislature towards legalization.”

With this in mind, the UFC press conference at MSG seemed like a great opportunity to outline a “plan” to educate the media, and by extension the public, on the true nature of the sport in 2011 as we move towards legalization.

Certainly one way to educate is to shed light on the economic benefit of legalization, i.e. economic impact to the state if MMA is legalized.  This angle occupied a significant portion of the press conference (and the entirety of the post-press conference press release) as the UFC unveiled a new economic impact study created by HR&A Advisors.

This new study estimated that the net economic activity for two UFC events in New York State would be approximately $16M and the economic impact from other, non-UFC, promotions would be $6.7M .  The HR&A Advisors study also estimated that legalization of MMA in New York would lead to the creation of 212 jobs, $1.3M in State Fiscal Benefits, $12.9M in Direct Ticket Sales, and Annual Attendance of 145,000.

Notably, the $1.3M figure representing direct revenue to New York if MMA is legalized is a decrease from the revenue figure proposed in former-Governor Paterson’s proposed Executive Budget last year, i.e. $2.1M.

It should come as no surprise (and I have written about this before) that the non-MMA media in attendance quickly picked up on just how small this direct revenue figure is when viewed in light of New York’s massive budget gap.  See e.g., New York 1 (“$1.3 million annually in state revenues – [is] a drop in the bucket when it comes to closing a $9 billion budget gap”).

While the media in attendance certainly grasped (and articulated in subsequent articles and videos) the economics presented in the HR&A Advisors study, it is still apparent, as Cage Potato notes, that “local media outlets were forced once again to confront the question: ‘What’s Mixed Martial Arts, anyway?’”

And this is where I think there is room for improvement in the MMA legalization effort.  Economic benefit to the state alone may influence some politicians, but it is clear that there has to be an understanding about the sport, the safety record, the regulations in place, the need to curb unregulated “underground” fighting in the state etc. within the local non-MMA media before we can expect the voters in New York to voice their support for the bill.

In this regard, during the press conference Dana White was asked about a Marist poll from January 2010 where 68% of New York voters responded that they were opposed to legalizing MMA in New York.  Dana responded that the origin of the poll needs to be analyzed and he predicted that if you polled 18-34 year olds in New York, 100% would be in favor of legalizing the sport.

Dana was obviously exaggerating, but his point about the popularity of the sport in this demographic is well established.  That said, I know many people in New York in this age demographic who could care less about MMA and whether it is legalized – and who know very little about the sport and still believe it is as they remember it from the early 90’s.

Importantly, however, the poll – whatever its flaws may be – likely shows that voters’ perceptions of the sport need to change.  This can be accomplished by educating the media first who can then educate the public.

This message, it appears, is not lost on the UFC.  As Bill King notes in his excellent Sports Business Journal article, UFC goes another round in effort for N.Y. sanction:

Lobbying is the top-down piece of the UFC’s legislative equation. There’s also a piece that works from the bottom up. Since 2008, Zuffa has employed Global Strategy Group to design and manage a campaign to mobilize MMA fans to push for legislation. Zuffa paid Global $35,000 a month in 2008 and the first half of 2009, and $22,500 a month since then to build a grassroots campaign and drum up conversation online and in the media. The website it created and manages is packed with information that argues for sanctioning. It also offers easy ways for fans to e-mail legislators and craft letters to their local newspapers.

How long it takes to successfully implement this approach is anyone’s guess, but part of this effort should focus on inviting the media to events like those that are planned by the Coalition to Legalize MMA in New York.  At this point the Coalition is planning a roundtable with politicians and gym owners to discuss the real impact that legalization of the sport will have on the state and its businesses and constituents.

Fight Lawyer

Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

On Thursday January 13, 2011, the Ultimate Fighting Championship conducted a press conference at Madison Square Garden “to announce a plan to bring UFC to The World’s Most Famous Arena, as soon as the sport of mixed martial arts is approved in New York.”

As you may recall from my earlier article, “A History Lesson (or History’s Lesson) on Mixed Martial Arts in New York,” one of my observations after tracking the history of MMA was that “the media (and public opinion) can have a significant effect on the legislative process in this state.”

Based on this observation, I reached the conclusion that “if through events like the MMA World Expo and other grassroots movements we can convince the media that the sport is not what it once was, we may be able to move the legislature towards legalization.”

With this in mind, the UFC press conference at MSG seemed like a great opportunity to outline a “plan” to educate the media, and by extension the public, on the true nature of the sport in 2011 as we move towards legalization.

Certainly one way to educate is to shed light on the economic benefit of legalization, i.e. economic impact to the state if MMA is legalized.  This angle occupied a significant portion of the press conference (and the entirety of the post-press conference press release) as the UFC unveiled a new economic impact study created by HR&A Advisors.

This new study estimated that the net economic activity for two UFC events in New York State would be approximately $16M and the economic impact from other, non-UFC, promotions would be $6.7M .  The HR&A Advisors study also estimated that legalization of MMA in New York would lead to the creation of 212 jobs, $1.3M in State Fiscal Benefits, $12.9M in Direct Ticket Sales, and Annual Attendance of 145,000.

Notably, the $1.3M figure representing direct revenue to New York if MMA is legalized is a decrease from the revenue figure proposed in former-Governor Paterson’s proposed Executive Budget last year, i.e. $2.1M.

It should come as no surprise (and I have written about this before) that the non-MMA media in attendance quickly picked up on just how small this direct revenue figure is when viewed in light of New York’s massive budget gap.  See e.g., New York 1 (“$1.3 million annually in state revenues – [is] a drop in the bucket when it comes to closing a $9 billion budget gap”).

While the media in attendance certainly grasped (and articulated in subsequent articles and videos) the economics presented in the HR&A Advisors study, it is still apparent, as Cage Potato notes, that “local media outlets were forced once again to confront the question: ‘What’s Mixed Martial Arts, anyway?’”

And this is where I think there is room for improvement in the MMA legalization effort.  Economic benefit to the state alone may influence some politicians, but it is clear that there has to be an understanding about the sport, the safety record, the regulations in place, the need to curb unregulated “underground” fighting in the state etc. within the local non-MMA media before we can expect the voters in New York to voice their support for the bill.

In this regard, during the press conference Dana White was asked about a Marist poll from January 2010 where 68% of New York voters responded that they were opposed to legalizing MMA in New York.  Dana responded that the origin of the poll needs to be analyzed and he predicted that if you polled 18-34 year olds in New York, 100% would be in favor of legalizing the sport.

Dana was obviously exaggerating, but his point about the popularity of the sport in this demographic is well established.  That said, I know many people in New York in this age demographic who could care less about MMA and whether it is legalized – and who know very little about the sport and still believe it is as they remember it from the early 90’s.

Importantly, however, the poll – whatever its flaws may be – likely shows that voters’ perceptions of the sport need to change.  This can be accomplished by educating the media first who can then educate the public.

This message, it appears, is not lost on the UFC.  As Bill King notes in his excellent Sports Business Journal article, UFC goes another round in effort for N.Y. sanction:

Lobbying is the top-down piece of the UFC’s legislative equation. There’s also a piece that works from the bottom up. Since 2008, Zuffa has employed Global Strategy Group to design and manage a campaign to mobilize MMA fans to push for legislation. Zuffa paid Global $35,000 a month in 2008 and the first half of 2009, and $22,500 a month since then to build a grassroots campaign and drum up conversation online and in the media. The website it created and manages is packed with information that argues for sanctioning. It also offers easy ways for fans to e-mail legislators and craft letters to their local newspapers.

How long it takes to successfully implement this approach is anyone’s guess, but part of this effort should focus on inviting the media to events like those that are planned by the Coalition to Legalize MMA in New York.  At this point the Coalition is planning a roundtable with politicians and gym owners to discuss the real impact that legalization of the sport will have on the state and its businesses and constituents.

Fight Lawyer

Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

Nevada State Athletic Commission Executive Director Keith Kizer responded to comments made by Joe Rogan after the controversial Nam Phan/Leonard Garcia decision. Kizer does not believe that there is a problem with NSAC officials and indicates that Rogan’s on air criticism was not warranted.

After the decision, Rogan aired out his opinion of the judges’ decision:

“You should be able to leave it in the hands of the judges,” Rogan said. “You should be able to just fight. And we should point out that that is the situation because of the Nevada State Athletic Commission. That’s what it is. It has nothing to do with the UFC, and people keep saying the UFC is corrupt. We have no say whatsoever in who judges these fights.

“Keith Kizer has denied that there’s an issue. I think there’s a huge issue, and I think he needs to clean house. There’s a few very good judges surrounded by a bunch of incompetent morons that know absolutely nothing about the sport. And they’ve got to do something about that. Because it’s ruining MMA, and it’s making people think that this sport is corrupt, and it has nothing to do with corruption. It’s sheer, complete, total incompetence.” (h/t MMA Junkie)

In a recent interview, Kizer addressedRogan’s comments. Although shocked by the  judges’ decision, Kizer dismisses the argument that he needs to “clean house,” as suggested by Rogan. In his defense, he points out that the UFC continues to use NSAC judges despite the calls for a house cleaning.

In response to Kizer’s comments, Rogan posted a response.

Zach Arnold states that Kizer will lose this PR battle:

This is not a winnable war for Keith Kizer, neither in public nor in private. If the Fertitta family is angry, they have the financial muscle to make a difference. If they’re not happy with the ways things are run in Nevada, they can run shows elsewhere and help other states make money while Nevada is on the sidelines. Don’t think that the local politicians ignore this kind of thing. Commissioners come and go. but UFC and their deep pockets are not going anywhere. If you’re a betting person and had to choose between who’s going to last longer in power, Keith Kizer or the UFC in Nevada, Mr. Kizer’s drawing the short end of that stick.

Payout Perspective:

A tough week for Kizer. Last week, Chael Sonnen suggested that he told Kizer he was taking TRT but Kizer advised he need not disclose the information. Next, he comes under fire by Joe Rogan during a live broadcast for a split decision in favor of Leonard Garcia. In response to Rogan’s on air criticism, Kizer responded in defending the commission.

However, Kizer cannot win this battle. As Arnold points out, Zuffa is major business in Nevada. As we know, Dana White and the Fertittas are tied in politically in the state.  They supported Harry Reid this past November.  They have the leverage in this situation. I do not believe that the UFC would hold back shows in Nevada because of Kizer, but could make it known of its concern for officiating.

This situation could have been disarmed if Kizer were to have stepped back and reviewed the Phan/Garcia fight, admit that the judges made a mistake (or that the fight was a close call) and ensure that all NSAC officials refresh themselves with the MMA scoring system. Although Rogan’s comments were inflammatory, Kizer could have taken a diplomatic tact in his response as it would be beneficial for him to maintain a working relationship with the UFC.

On Wednesday, December 1, 2010, I coordinated a discussion on the legalization of mixed martial arts (“MMA”) in New York for the Sports Law Committee of the New York City Bar Association.  The participants included:  (1) New York State Assemblyman Bob Reilly, who is widely considered the voice of the opposition to the legalization of MMA in New York; (2) Nick Lembo, Deputy Attorney General for the State of New Jersey, Counsel to the New Jersey State Athletic Control Board, and involved in the drafting and passage of the Unified Rules for Professional Mixed Martial Arts as New Jersey, in 2000, was the first North American jurisdiction to fully legalize and completely regulate mixed martial arts events; and (3) the members of the Sports Law Committee, i.e., lawyers who represent sports leagues, athletes, and who are in-house counsel for various sports teams and leagues in New York.

The discussion was civil and all participants were respectful, which I think is important to advance the cause no matter how much I may disagree with certain opinions.  The Committee meetings are closed-door and so I will not go into the specific discussions that occurred at the meeting in this article.  However, I can say that the arguments against legalization were the same arguments that Assemblyman Reilly has articulated in other forums, including recently in a Fight Week interview, and Assemblyman Reilly was credibly challenged by both Mr. Lembo and the members of the Committee.

Mr. Lembo had a wealth of knowledge concerning the regulation of MMA – and the lack thereof in New York – and Mr. Lembo did a very nice job addressing Assemblyman Reilly’s arguments.  After the meeting, I had a lengthy discussion with Mr. Lembo about MMA regulation in New York and we discussed one interesting point that Mr. Lembo raised in response to a question during the meeting concerning revenue to New York if MMA were legalized.  Specifically, Mr. Lembo stated that MMA should be regulated because it is a sport, if for no other reason, and while we can all agree that revenue is a good benefit, it is a tangential benefit and should not be central to the movement towards legalization.

By way of background, the main argument – or at least main publicized argument – for legalizing MMA has been the revenue that it will bring to the state.  See e.g., King, David, Punching, Kicking and Wrestling for Revenue, Gotham Gazette, April 7, 2010.  Indeed, a provision in the Governor’s proposed Executive Budget this year would have lifted the ban on MMA in New York for the revenue that purportedly would be generated for the state.

This main argument, however, has been problematic in the fight for legalization.  At the outset, I am not talking about Assemblyman Reilly’s nonsensical economics argument, i.e. his claim that it “ultimately saves [New York] money by not having this sport in New York.”

It is simply not credible to suggest that New York would lose money if the sport was legalized.   For those interested, Assemblyman Reilly’s argument for how the state would lose money if MMA was legalized was articulated in a recent political debate transcribed below:

And why those who advocate this violent and vicious sport for the reason that it will bring money to this state, I, in fact, claim it will not. The owners of ultimate fighting who have recently spent $174,000, giving that money to various legislators and political parties and have paid their lobbyists $10,000 a month for a number of years are in fact in bankruptcy court in Las Vegas at this very moment to the tune of $7 billion. These are the people who some people advocate bringing in to New York.

Notwithstanding the fact that Zuffa is just one promoter (albeit the one promoter that has been up in Albany pushing for legalization), it simply defies logic to suggest that the state would lose money if MMA was legalized in New York and Reilly, to my knowledge, has never fleshed out this argument and so we are left with Reilly’s clear implication that Zuffa’s alleged financial wherewithal could hurt the state’s coffers with no factual or logical argumentative basis.

That said, there is also no question that legalizing MMA in New York would do very little to close the tremendous budget gap plaguing this state.

To be clear, the estimated budget gap for 2011 in New York was upwards of $8B and the Governor’s Executive Budget this year estimated only approximately $2M in direct revenue to the state if MMA was legalized.

Moreover, even under the Zuffa commissioned study that estimated “economic” impact to the state if MMA was legalized, i.e. a figure that would include economic impact to hotels, restaurants, bars, venues, employment to staff and organize events etc., the amount of economic impact was $11.3M for an event “Downstate” and $5.3M for an event held “Upstate.”  Zuffa estimated putting on 2-3 events in New York a year.

Up to $35M a year (it could be more with some other promotions or less depending on where in New York Zuffa held the events) is real money, but let’s be honest with ourselves and recognize that with an $8B deficit this amount is highly unlikely to turn many heads up in Albany and is not the type of money needed to make a compelling argument for legalization based on economics alone.

Moreover, the economics argument is a straw man for the opposition.  For example, New York State Senator Liz Krueger, who is not nearly as invested or knowledgeable about MMA as Assemblyman Reilly, had this to say:

How can we legalize a sport which has shown time and again to have tragic consequence for its participants? Because promoters and even the State can make money off of it? I’m sorry, but no price will make up for the damage this will do to the New Yorkers who partake in this sport.

Senator Krueger has gone further in a Wall Street Journal interview stating that there are a lot of things that could bring money to the state, but that does not mean that all of these things should be legalized.  Similarly, Assemblyman Reilly has hinged part of his argument against the economics on the fact that we could legalize dog fighting and prostitution (like Nevada he jabs) to make money.

While these attempted analogies are weak (or inept), there is still some appeal to the argument that money can’t be the deciding factor when making determinations on controversial issues.  Which leads me back to the earlier dilemma—the MMA lobby has framed the debate in a way that is both not compelling on the numbers (i.e., a maximum of around $35M with a deficit of over $8B) and easily undermined as a practical matter (i.e. ignoring objections based on the violent nature of the sport – yes, the sport is violent — because money will come to the state).

While money should not fall from the debate entirely, it is my view that the debate needs to be re-focused with an emphasis on the sport itself.  A sport that is simply traditional martial arts (and Olympic sports) rolled into one with a significant, developed body of rules, clear and strict medical requirements and requirements that ambulances and doctors are available at the event, referees that are knowledgeable about the sport, and incredible athletes like Georges St. Pierre, Frankie Edgar, and Randy Couture that understand the sport and know how to defend themselves in all areas, including once the fight hits the ground.

The question then becomes how we re-frame the debate.

The answer I propose is to first tap into an underutilized resource in the debate and that is the wealth of knowledge possessed by experienced individuals who have been involved with the sport (and the evolution of the sport) such as:  (1) Mr. Lembo; (2) Dr. Sheryl Wulkan, the lead MMA Physician for the New Jersey State Athletic Control Board, the American Association of Professional Ringside Physicians Ringside Physician of the Year winner for 2010, and a New Yorker; (3) Jeff Blatnick, the Olympic wrestling gold medalist, a long time NJ judge, a New Yorker, and tireless advocate for the sport who played a crucial role in the drafting of the Unified Rules and the push toward legalization;  (4) Ring of Combat promoter and Brooklyn school owner Louis Neglia, who has promoted 33 MMA events since 2000; (5) local gym owners and renowned trainers and coaches such as Renzo Gracie and Phil Nurse of New York City and Ray Longo of Long Island;  and (6) local athletes like Matt Serra, Dave Branch, Nick Pace and John Cholish.

Second, with the right core of these knowledgeable individuals, the debate can be shifted to focus on some of the real issues that warrant legalization, including, inter alia, the statistical safety of the sport based on experience when properly regulated and when proper medical protocol is followed and the proliferation of underground fight clubs and the safety and welfare issues that these fight clubs present that could be curbed if MMA is legalized.  See e.g., Abramson, Mitch, Back alley fights abound as New York heads toward bill to legalize MMA, New York Daily News, June 6, 2009 (“Since the show was unregulated with no state commission oversight, there was no advertising, no physicals, no drug-testing, no rules, no ambulance waiting outside and no one to tell Wall that it might not be a good idea to treat his cauliflower ear himself”).

As Mr. Lembo can tell you (he has been actively involved in educating legislators across the country about the sport), it is this type of ground level movement that has led to legalization in states across the country and there is no reason to think that New York is any different.  It will take time, but the sport needs to be credibly presented as a sport with a tangible impact on New Yorkers and not simply a revenue line-item.

If you read my earlier article, A History Lesson (or History’s Lesson) on Mixed Martial Arts in New York, you will recall that the media had a large impact on the complete reversal in Albany in 1997 that led to the current ban on MMA.  What better way to engage the media than with legitimate information from local individuals involved in the sport and local stories about how the sport (and the ban) is impacting New Yorkers.  Numbers are nice, but when they are divorced from New Yorkers, they are simply not that compelling.

Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry.  He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website.  He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training.  Justin lives in New York City where he trains in jiu jitsu and boxing.

DISCLAIMER

The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship.  I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.

As many of you know, UFC middleweight Chael Sonnen reduced his year long suspension to 6 months this past Thursday at his appeal hearing before the California State Athletic Commission. With his attorneys, Sonnen used several defenses claiming that the protocol of the CSAC did not provide a mechanism for him to reveal his reasons for using testosterone.

Hypogonadism. This was the primary argument made by Sonnen’s defense. In sum, Sonnen lacks testosterone of normal men. As a result, he allegedly did not go through puberty. The legal theory behind this is that since Sonnen suffers from hypogonadism, he is protected under the American with Disabilities Act and should be able to fight. As the Fight Opinion points out, the ADA was not drafted to cover Professional MMA Fighters. The argument is artfully crafted, but practically illogical. A person whose profession is mixed martial arts, claims he has a disability which requires them to use a substance known to enhance athletic ability. Another interesting argument provided by his counsel was that at UFC 117′s pre-fight drug screen Sonnen felt uncomfortable about writing down that he used TRT because he was in a room full of fighters. Did Sonnen need to show the rest of the fighters what he wrote down or did the commission representative state out loud what everyone other fighter was using.? In his own testimony, Sonnen said that he did not want to relive being teased as a child and thus did not disclose TRT use.

At the hearing, Sonnen claims that he was told by Nevada State Athletic Commission Executive Director Keith Kizer that he did not need to disclose the fact that he was using testosterone replacement therapy (TRT). Kizer denies that he ever told Sonnen this. Yet, this claim creates an ambiguity for the public to question whether Kizer had spoken with Sonnen about TRT. Thus, it wasn’t Sonnen’s fault that he didn’t disclose because Kizer told him he did not need to. It seemed that Sonnen’s defense team tried to use the NSAC as a template for what Sonnen thought would happen with the CSAC.

In their opening statement, Sonnen’s counsel laid out its defense and testimony, notwithstanding objection, which was much more persuasive than any testimony they could have ellicited that day. It can be argued that they basically read their arguments into the record to ensure the arguments were clearly articulated rather than rely on witnesses. The attorney for California made reference that the Commission comment on the record the credibility of the witnesses if this case were heard in a court of law.

Sonnen’s physician was not a credible witness. Although the hearing was not a court of law, I would think that the doctor would have dressed up a little more for it. It looked like he was just reading off of script and being fed line by line testimony.

The CSAC appeared unprepared, unorganized and not in control of the hearing. They were concerned about time and someone had to leave early. I was put off when the commission asked, “Who is Dana White?” Yes, the commission does cover a lot of issues, but shouldn’t it know the head of the UFC? Perhaps the UFC should do more in getting its name out to the commissions that regulate it? (I’m somewhat joking). Truly not its best hour.

After the hearing, Sonnen took part in post-hearing damage control by appearing in an exclusive interview with Mike Straka on Inside MMA:

Payout Perspective:

Prior to seeing the hearing, I followed the hearing via tweets and summaries on the internet. My initial reaction was that the defense was swinging for the fences in trying to clear Sonnen’s name. After viewing the hearing on ustream (h/t Fight Lawyer), I thought the Sonnen defense created enough of a defense for CSAC to cut his suspension in half (although the fine remained the same). The hypogonadism defense was “creative” and provided pretext for the underlying argument about the lack of protocol for informing officials about TRT.

The attorney for the State of California was decent. He did bring up the Casey Martin case when addressing the ADA claim.  In their closing, Sonnen’s attorney seemed to back of the ADA argument.

It will be interesting to see when Sonnen will next appear in the UFC.  When he returns, will Sonnen continue to use TRT, and if so, will he be cleared to fight by a state commission. What about if the fight was in Vegas? Would Keith Kizer let this happen?

As for Sonnen’s post-hearing interview, like a politician, he provided his talking points about the commission’s lack of protocol in informing about TRT usage. The questions were not biting or hard, but more of feeding Sonnen so that he was able to get out his major points. Also, Sonnen introduced a ”red herring“, a federal government investigation. He did not go into specifics, but it has to do with the reason he had to pull out of the state senate race in Oregon.

Not to neglect a sponsorship opportunity, Sonnen wore a GreenLightDaily.com t-shirt.  Does anyone know what it is? The web site doesn’t have much on it.

Chael Sonnen will break his silence Thursday as he appeals the California State Athletic Commission ruling that he used a banned substance prior to his fight with Anderson Silva at UFC. 117. The CSAC fined Sonnen $2,500 and suspended his license for a year beginning Sept. 2, 2010.

A huge hurdle Sonnen will face is his response to why he used Performance Enhancing Drugs (PEDs). There is much debate as to whether he will be able to use the defense that he was using testosterone replacement therapy (TRT) but did not realize that he needed to seek an exempton prior to each fight. But, it seems that this theory will fall flat since Sonnen never requested an exemption for TRT . Prior to his fight with Nate Marquardt, he requested and received an exemption to take Soma/carisprodol, a muscle relaxer and an anti-acne medication.

The details of the hearing are here in this pdf. The information pertaining to Sonnen starts at page 31.

Sonnen’s paperwork for his pre-fight drug tests indicates that Sonnen took 1 shot of testosterone on August 5th. As you recall, the fight with Silva took place on August 7th. Sonnen’s urine sample was taken to the UCLA Olympic Analytical Laboratory on August 10th for testing.

Sonnen will be represented by attorney Howard Jacobs.  He is a specialist in the field of drug testing and has represented the likes of cyclist Floyd Landis, Olympian Marion Jones and MMA fighters Sean Sherk and Antonio Silva.

Zach Arnold of Fight Opinion provides us with food for thought:

What I think will be most interesting about Thursday’s meeting is not what the outcome of Chael Sonnen’s suspension will be but rather if the current debate on PED usage in MMA somehow gets advanced (if there are new defenses being used or new techniques revealed publicly that were once kept in the shadows). I have low expectations about Thursday’s appeals hearing, but if the hearings are going to serve any purpose then I think we may hear some explanations that could progress the media debate as to what is happening in the business for PED usage.

If Sonnen is the main event for Thursday’s hearing, Josh Barnett is the co-main event as he will appear before the CSAC seeking a reinstatement of his license. Barnett was signed by Strikeforce but has yet to fight for the organization.

Payout Perspective:

With the debunking of the TRT defense, it will be interesting to see what theories Sonnen will have about his use of PEDs. The Fight Lawyer had some interesting back and forth on twitter regarding Sonnen’s admission to the CSAC that he used PEDs. One of the more interesting questions that I would like to see come out at the hearing is what was the reasoning for allowing Sonnen to fight even though it was known he would test positive for a banned substance?

We will have more on this after Sonnen’s hearing.

British sports journalist Gareth Davies of the London Telegraph takes on New York Assemblyman Bob Reilly in a BBC debate over the moral and legal nature of mixed martial arts competitions.

Payout Perspective:

I think it bears repeating that it’s not enough to just call Bob Reilly ignorant and dismiss him. He’s got the ear of many people in New York and has proven to be an influential member of the Assembly, especially where MMA is concerned.

Reilly is a shining of example of where MMA’s effort to seek legalization needs to be taken to the next level. It’s not about shoving this $15-20 million economic windfall down New York’s throat, but instead sitting down with these people and addressing their concerns. That’s why it’s important to get Reilly and others like him to an event. These staunch opponents need to see the sport with their own eyes and have someone available to answer their questions openly and honestly.

In Reilly’s case, perhaps he’s already been extended numerous invitations by the UFC or even attended an event, but the way he speaks about the sport leads me to believe he’s yet to see an event for himself (or even watch but more than a highlight clip on the internet).

If Reilly truly is the rational, honest and good intentioned man that he claims to be, he’ll do everything in his power to educate himself about the sport on the whole – not just what he perceives to be bad, but all parts of the sport. That means watching an event, interacting with the crowd, and engaging in more due diligence than simple informal polls or “people come up to me on the street” non-sense.

I don’t expect he’ll do a complete 180 and start attending UFC events on the regular, but maybe he gains a better understanding of the sport that limits the extent of his now endless hyperbole or comes to see the sport as this generation’s version of his beloved boxing.

There’s no guarantee that either of those outcomes happen, but at least the MMA community will have done everything in its power to educate and convince a prominent opponent of its worth.

• Two-year Vancouver trial MMA period, Vancouver fires head of athletic commission
• Ultimate fight: to convince Victoria
• UFC Hires Leadership to Open China Office
• UFC Announces Anti-Piracy Settlements with 500 Businesses and Individuals
• Strikeforce’s August schedule, UFC 119, 120, 121 Announcements

Two-year Vancouver trial MMA period could end with only one pro event having been held

Ongoing insurance and indemnity issues surrounding professional mixed martial arts in the city of Vancouver could well see the two-year trial of regulated MMA pass with only a single professional event having been held, according to Vision Vancouver city council member Dr Kerry Jang and licensing staffer Tom Hammel. (Vancouver Sun)

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Vancouver fires head of athletic commission

City council fired the head of the Vancouver Athletic Commission on Thursday after city staff and others complained about his conduct during the recent debate over allowing an Ultimate Fighting Championship event.

Citing a lack of confidence in Mirko Mladenovic, the council appointed Dave Rudberg, a longtime city bureaucrat, to replace him as head of the commission when it reconvenes later this month. (Vancouver Sun)

Ultimate fight: to convince Victoria (Australia)

THE Ultimate Fighting Championship will use Geelong star George Sotiropoulos and the lure of a $15 million tourist injection to convince the Victorian government to allow cage-fighting into Melbourne, after the sport was again rejected by the state.

Having sold out its debut Australian event at the 17,000-capacity Acer Arena in Sydney in February within 90 minutes, the UFC will be returning early next year but wants to infiltrate the Victorian market, with figures suggesting the state harbours the most mixed martial arts fans in the country. (Sydney Morning Herald)

UFC Hires Leadership to Open China Office

The UFC’s global expansion has become a business in and of itself lately, and the next stop for the promotion will be in China.

Just weeks after the UFC opened an office in Canada – with former CFL commissioner Tom Wright leading the charge – the company hired a leader for a new office in China, which should open in the next few weeks.  (MMAWeekly) … (MMAPayout Perspective)

UFC Announces Anti-Piracy Settlements with 500 Businesses and Individuals

The organization today announced it has reached “confidential settlements” with more than 500 businesses and individuals as a result of illegal broadcasts and viewing of UFC events…The settlements span over the past two years.

“We are committed to standing toe to toe with anyone trying to illegally broadcast or stream UFC events,” UFC President Dana White stated. “Today’s announcement further drives home the fact that we are fully prepared to pursue any business or individual that steals our programming.”  (MMAJunkie) … (MMAPayout Perspective)

Strikeforce’s August schedule, UFC 119, 120, 121 Announcements

Strikeforce Houston Card (8/21): “King Mo” Lawal (7-0) vs Rafael “Feijao” Cavalcante (9-2) [LHW Title] , Tim Kennedy (12-2) vs “Jacare” Souza (12-2) [Vacant MW Title], KJ Noons (9-2) vs Jorge Gurgel (13-6), Bobby Lashley (5-0) vs TBA, POSS: Sergei Kharitonov (16-4) vs Antonio “Big Foot” Silva (14-2) have all been rumored for the card at the Toyota Center.  Erin Toughill (10-2) vs Shana Olsen (4-0) has also been recently rumored for this event, where the winner would take on “Cyborg” Santos in a future 145 lbs Title bout.

Strikeforce Phoenix (8/13): J. Riggs (32-11) v L. Taylor(6-1), D. Cormier (2-0) v TBA, Women’s 1-Night 135 lbs GP: Maiju Kujala (4-1), Hitomi Akano (15-7), Miesha Tate (9-2), and TBD.

Strikeforce Washington (7/23): Shane Del Rosario (9-0) v Lolohea Mahe (4-1), Sarah Kaufman (11-0) v Roxanne Modafferi (15-5) [135 lbs Title], Mike Kyle (16-7) v Abongo Humphrey (7-1), Corey Devela (9-4) v Bobby Voelker (21-8).

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UFC 119: A rematch between heavyweights Frank Mir (13-5 MMA, 11-5 UFC) and Antonio Rodrigo Nogueira (32-6-1 MMA, 3-2 UFC) headlines September’s UFC 119 event.  (MMAJunkie) ..  this event is also rumored to have Ryan Bader vs. Antonio Rogerio Nogueira penciled in as their co-main event, which would be the first time in UFC history to have twins headlining an event.

UFC 120: A middleweight bout between Michael Bisping and Yoshihiro Akiyama will be part of October’s UFC 120 event in London.  (MMAJunkie) .. UFC 120 is also set to have Dan Hardy vs Carlos Condit as the co-main event and the event is scheduled to be televised on Spike TV from London.

UFC 121 : UFC 121, which was rumored to be taking place in Germany, is now reported by MMAJunkie to be likely moving to California.  Germany has made a firm stance against the UFC moving into the country, as was reported back in March, when they banned UFC from television.  The rumored main-event here was Vitor Belfort (19-8) versus the winner of Anderson Silva (26-4)/Chael Sonnen (24-10). UPDATE: Brock Lesnar vs Cain Velasquez signed for UFC 121 (MMAFighting).

QUICK HITS

• FC: The Uprising Airing Live on Viewers Choice Canada (The Fight Network)
• HDNet to Broadcast ‘HDNet Fights: DREAM 15′ Live (PRESS RELEASE)
• SUFFER Signs Robert Drysdale Endorsement Deal (MarketWatch)
• Strikeforce’s August schedule headlined by ‘King Mo’ title defense (LA Times)
• Sifting through the rubble of the Fedor fallout (Yahoo! Sports)
• STRIKEFORCE Looks to Phoenix’s Dodge Theater for AUG. 13 (ULTMMA)
• Strikeforce Defy Boycott, Put Card in Arizona (Exile In Fightville)
• German UFC lightweight Dennis Siver hoping for MMA acceptance in home country (MMAJunkie)
• Voting ends Saturday for 2010 ESPY voting, UFC’s St-Pierre and Edgar nominated (MMAJunkie)
• Faber Out of WEC 50, Expected Back in September (Sherdog)
• Riggs-Taylor Heads Up Aug. 13 Strikeforce Challengers (Sherdog)
• Strikeforce Champion’s Clause an Issue in Fedor Talks (MMAFighting)
• Brock Lesnar vs. Cain Velasquez Won’t Happen at UFC 119 (MMAFighting)
• CAIN VELASQUEZ WAITING ON A CALL FROM THE UFC (MMAWeekly)
• SYLVIA VS. BUENTELLO IN AUGUST; PULVER RETURNS (MMAWeekly)
• Torres vs. Valencia Slated For Co-Main Event Of WEC 51 (Heavy)
• UFC 121 In The Works For Oct. 23 in Anaheim (Heavy)

TV LISTINGS

• HDNet Fights: XFC: The Next Generation at 9 PM ET on HDNet (07/09/10)
• Fighting Words with Mike Straka (Frank Shamrock) at 1 AM ET on HDNet (07/10/10)
• HDNet Fights: Affliction Day Of Reckoning at 1:30 AM ET on HDNet (07/10/10)
• HDNet Fights: DREAM.15 at 3 AM ET on HDNet (07/10/10)

UPCOMING EVENTS

• HDNet Fights: XFC: The Next Generation at 9 PM ET on HDNet (07/09/10)
• HDNet Fights: DREAM.15 at 3 AM ET on HDNet (07/10/10)
• Strikeforce Challengers: Del Rosario vs Mahe at 10 PM ET/PT on Showtime(07/23/10)
• HDNet Fights: K-1 World Max 2010 Final 10 PM ET on HDNet (07/23/10)
• HDNet Fights: K-1 World GP 2010 at 10 PM ET on HDNet (07/23/10)
• UFC on Versus 2 : Jones vs Matyushenko at 10 PM ET on Versus (08/01/10)
• Strikeforce Challengers: Riggs vs Taylor 10 PM ET/PT on Showtime (08/13/10)
• HDNet Fights: KOTC: Imminent Danger at 9 PM ET on HDNet (08/13/10)
• UFC 117 : Anderson Silva vs Chael Sonnen at 10 PM ET on PPV (08/18/10)
• WEC 50: Cruz vs Benavidez at 9 PM ET on Versus (08/18/10)
• Strikeforce: King Mo vs Rafael Feijao at 10 PM ET/PT on Showtime (08/26/10)
• HDNet Fights: Sengoku Raiden Championships 14 on HDNet (08/27/10)
• UFC 118: Edgar vs Penn 2 at 10 PM ET on PPV (08/28/10)

Lance Pugmire of the LA Times reports on the latest development in the anti-doping world regarding a new test capable of detecting human growth hormone in blood samples. Early this week it was announced that a British rugby player had tested positive for the previously undetectable banned substance. However, while promising, the jury is still out as to whether the test will make its way to the North American sports world any time soon.

Yet, as the NFL and Major League Baseball push to institute blood-testing programs to unearth HGH users, how Newton dealt with his positive result is unlikely to be repeated any time soon in the U.S., where the test is not automatically accepted by American athletes — and their advisors — as indisputable proof.

 

“This guy [Newton] just said, ‘OK, you caught me,’ but a major league baseball player will never do that,” said Victor Conte, founder of the Bay Area Laboratory Co-Operative (BALCO) who was briefly imprisoned for distributing performance-enhancing drugs to world-class athletes, including sprinter Marion Jones, boxer Shane Mosley and the personal trainer of baseball slugger Barry Bonds.

 

“I know the anti-doping authorities are painting this as a big victory, but this doesn’t prove the test is reliable and valid,” Conte said. “That will only occur in a court of law, after the player, supported by a team of scientists and lawyers, takes his turn.”

 

Nevertheless, authorities such as World Anti-Doping Agency Director General David Howman assessed Newton’s positive (secured by the United Kingdom Anti-Doping agency) as a reason for the world’s sporting bodies to increase blood testing — especially out of competition — to catch those who have “been using this substance with no impunity for a number of years.”

 

The NFL this year told its players union of its interest in testing for HGH.

 

“Our position is that HGH blood testing has advanced to the point where we are taking steps to incorporate it into our program,” NFL spokesman Greg Aiello said. “Blood work is part of our players’ annual physical. We do have mandatory blood testing already.”

 

An NFL Players Assn. representative has said “there’s no reason” to implement blood testing at this time, but Aiello said a request by the league to do so can be done “between now and training camp,” in advance of collective-bargaining sessions, with the opportunity to have testing in place before the 2010 season.

 

“The argument that there’s no longer a valid test no longer holds water,” said Dr. Gary Wadler, chairman of WADA’s prohibited list. “There’s now a positive, the test is commercially produced. There’s no excuses to hide from testing anymore, and the pressure is on all sports leagues to implement blood testing.

 

“The fact is there’s a way to detect HGH now and even if lawyers try to pick apart at it, or people say they didn’t take it, we can now find out. This is the wake-up call.”

Payout Perspective:

This is great news for the sports world as a whole – especially the Olympic movement – but we’re probably a long way from seeing its impact on the sport of MMA (or boxing for that matter).

The current testing standards employed by most commissions range anywhere from average to woefully inadequate (depending on who you ask). Critics claim the limited breadth and frequency of the testing gives savvy cheaters enough time to cycle off most of the higher end drugs. Thus, the entire testing system would need a complete overhaul before an HGH test could even be implemented; and that says nothing about, at this point, the questionable legitimacy of the testing results.

So, what might need to happen, exactly, before HGH is testable in MMA? First, and foremost, the industry as a whole would need to fully commit to ridding combat sports of performance enhancing drugs; without buy-in from the commissions and biggest promotions, nothing will happen. 

Then, from an operational perspective, you’d likely need a global body to organize, coordinate, and implement the testing. The financial implications of that, of course, are quite steep: testing isn’t cheap, especially when you consider the frequency with which fighters, who train all over the world, would have to submit in order to ensure their clean form. Moreover, who is going to pay for that, and why?

Lastly, the issue of compliance is also important; as much as the commissions/promotions would need to buy-in, so would the fighters. There would need to be a little bit of a culture change in the way people in the industry not only submit for testing, but handle those that don’t.