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The UFC argued to have the antitrust lawsuit filed by current and former fighters thrown out of Las Vegas federal court today. Paul Gift was in the courtroom and has all the details.
For a quick summary of the respective positions of the fighters and the UFC, see yesterday's piece. Today is about what actually went down in the courtroom.
Court rules prohibited live updates, but I was allowed to take notes of the proceedings.
3:59pm - The attorney army just grew. I feel like if I fall down and hurt my arm, I'll be well represented.
4:07pm - UFC's up first. They start with two issues dispositive of the whole complaint: Has their been foreclosure of a market and has a relevant market been defined. Boom: UFC already mentions The Carlos Newton.
4:09pm - Judge immediately challenges UFC attorney right off the bat. Judge asks why plaintiff allegations aren't specific for "a motion to dismiss stage." Attorney answers and judge interrupts again. He's really challenging UFC attorney hard.
4:13pm - UFC: "They won't tell us how long the contracts are...Plaintiffs can come in with plainly insufficient contracts and make that claim...if you just allege an exclusive contract, that's not an antitrust claim...exclusive contracts are procompetitive...the issue is how long are you locking them up and how many are they locking up."
4:15pm - Judge: "Allegedly your client signs contracts to more fighters than they have bouts for."
4:16pm - UFC focuses on all the things plaintiffs are "not telling you" about contract details.
4:18pm - They're going over prior cases now. Focus is on amount of foreclosure and length of exclusive contracts. Judge notes they're not binding on this court. Asks for 9th circuit case. UFC can't produce one. Judge keeps asking why he need to require such specificity "at this stage."
4:23pm - Plaintiffs are up. Got walked out by security for having an iPad open and missed three minutes, even though I got it approved in advance. Argh!
4:25pm - Plaintiffs are arguing long-term nature of contracts...in perpetuity. "Here the contracts we allege in perpetuity are essentially as long as the UFC wants those fighters.
4:26pm - Plaintiffs are now comparing this case to an old championship boxing case in front of the Supreme Court.
4:27pm - UFC is up to respond. Judge asks why plaintiff allegations aren't enough. He's required to draw factual inferences and accept allegations in complaint at this point.
4:28pm - UFC says plaintiffs don't quote any contractual language that says contracts are in perpetuity.
4:30pm - Judge says that if the UFC has the right to match a contract after one expires, "That's not a 2 or 3 year contract, that's forever." Whoa! He could be probing, or that could be a huge statement right there showing his mindset.
4:32pm - Judge: "So your argument is that they have to quote actual contract terms in the complaint if they're going to use contract claims in the complaint."
4:33pm - Are they summarizing contract terms or stating a legal conclusion? That seems to be the issue most relevant to the judge.
4:34pm - Now we're moving on to the definition of the relevant market for "Elite MMA Fighters." Judge asks why the market should not be accomplished vs. non-accomplished fighters.
4:35pm - UFC is focusing on circular logic in plaintiffs relevant market. If Microsoft has the best coders in the world, is the relevant market Microsoft Coders only?
4:38pm - Judge asks what distinguishes this market definition from championship boxing case. What would complaint need to say to satisfy pleading requirement? UFC: Something with a metric that can distinguish between who fights for Bellator...got interrupted. Judge: It sounds like you're saying they'd have to say something like certification, number of fights, something that UFC could test. UFC says that's basically it.
4:41pm - Judge: "What you're saying is you can't just say they're good fighters." UFC agrees.
4:42pm - Plaintiffs are up to respond. What are elite fighters? They focus on products or services that are reasonably interchangeable with each other. Plaintiffs cite NCAA case about quality distinction for relevant markets. Plaintiffs now cite Ed O'Bannon case that UFC attorney was successful on. Interesting. Judge says plaintiffs don't need to spend time on circular nature of relevant market. He's not persuaded by it so we're not wasting time on it.
4:47pm - Plaintiffs say it's not necessary to show monopoly or monopsony power because the UFC earns 90% of MMA revenue!
4:48pm - UFC comes up and focuses on how all these other examples may be good quality but are not one company, NFL, NCAA, and championship boxing.
4:49pm - UFC moving on to segments of case which they say are "absurd," locking up venues, sponsor, and TV networks with exclusive contracts. Discovery is expensive and these claims are "so wildly implausible."
4:50pm - UFC moves on UFC restraints when fighters are fighting, but no restraints when they're not fighting. "Doing whatever they want to do with their own rights" when they "don't have a UFC logo on." UFC argues this is not antitrust. There is no anti-competitive injury.
4:54pm - Judge asks UFC to remind him of which part we're talking about, monopoly or monopsony. Writer's note: It can get confusing. Judge: "I'm learning as I go."
4:55pm - UFC: Plaintiffs own complaint lists five competitors to the UFC. "One of the reasons you know the don't have contracts in perpetuity is because the plaintiffs have fought" in the other promotions.
4:56pm - Judge: "I think the issue really is whether or not the combined effect of exclusive contracts has an impact." The Carlos Newton! Asks at what point the collective effect matters.
4:57pm - UFC is arguing exclusive contracts with beer companies and others are pro-competitive. Should not mix allegedly legal and illegal things.
4:58pm - UFC says only piece which is potentially difficult is fighter contracts. Other areas are clearly pro-competitive. Should not lump them together. Antitrust law should enable these, not dissuade these. Judge seems to be struggling at times with antitrust lingo. Have to wonder if it's his first antitrust case. That's probably not a good sign for the UFC.
5:01pm - Plaintiffs come up and argue that we aren't at the stage where pro-competitive issues matter. Judge asks why not. Plaintiffs: "The way the UFC operates is not pro-competitive." They quote Dana fighting words!
5:04pm - Plaintiffs argue fighters get less revenue percent in UFC than any other major sport. "Why is that? Because they're a monopolist."
5:06pm - Plaintiffs now discuss exclusive deals with sponsors and venues. Argue judge is correct and Carlos Newton holds. Imagine Miami Heat had exclusive with all LeBron's sponsors and now he wants to go to the Cavs and loses all sponsors. He lost me a bit here.
5:08pm - Judge remembers the pictures of the complaint. Plaintiffs argue venue and sponsor exclusives contribute to the foreclosure, not cause the whole thing. After purchase of Strikeforce, there are no other major MMA promotions. Only minor leagues.
5:11pm - UFC is up for final words. "They allege we have an exclusive deal with Bud Light, which leave a lot of other beer companies...if we have one exclusive deal with one apparel company, that's pro-competitive." They (rivals) can go to the others. Same with the venues. UFC has listed all other venues plaintiff fighters have been in.
5:14pm - Wild west is mentioned. Judge: "Some of that is in the complaint. There are some very colorful statements."
5:15pm - UFC: "I'm sure if anyone wants to look at our internal documents someday, there's going to be colorful rhetoric. That's the nature of the business."
5:16pm - Judge asks what weight he should give Dana White's colorful, brash statements now at the motion to dismiss stage. Should he consider DW's eliminating competitor statements (e.g., RIP) for their implications for competition, absent his colorful language? Should he give weight to statements "that smack of monopolistic, monopsonistic conduct?" UFC attorney focus is those statements were about one competitor, not competition as a whole. Those are pro-competitive statements "that competitors can and should say."
5:18pm - Plaintiffs quoting all of Dana White's statements now. Relating it to a political gaffe, where a politician "accidentally tells the truth." Judge says yeah but there's no context at the moment. "From my perspective, I just don't now that I can really consider them anything other than an officer bragging about the company."
5:21pm - Plaintiffs: "Hopefully from our perspective we get to take the depositions of Mr. White and consider them in their full context."
5:23pm - Whoa! In a shocker, the judge says he's going to rule from the bench in 10 minutes. Brett and I think there's no way the UFC's winning today. My guess is 2/3 odds of a partial denial and partial granting of the motion to dismiss (with leave to refile) and 1/3 odds of a full denial.
5:39pm - And we're back. And the full motion to dismiss is denied. The entire case progresses.
UFC loses motion to dismiss antitrust lawsuit - Bloody Elbow
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