This week’s big news saw Bellator MMA file a lawsuit against their biggest competition and dominant brand in the MMA industry, the UFC.
This past Wednesday, Bellator filed the suit in U.S. District Court (California) to try to stop the release of confidential legal documents which the UFC could possibly use to their advantage.
The issue all stems from the class-action, anti-trust lawsuit that was filed against the UFC in 2015 by several fighters including former UFC fighters Cung Le, Jon Fitch, and Nate Quarry.
According to the press release at the time for the potentially multi-million dollar lawsuit, UFC was accused of “illegally maintaining monopoly and monopsony power by systematically eliminating competition from rival promoters, artificially suppressing fighters’ earnings from bouts and merchandising and marketing activities through restrictive contracting and other exclusionary practices.”
The UFC requested that the case be dismissed shortly after the issue was raised and they also filed two subpoenas which would require that Bellator would have to share information on their financial and contractual operations.
Now, almost two years later, Bellator finally responded to this by filing this week’s suit, with the intention to stop their information from being shared with their biggest competitor.
Bellator president, Scott Coker explained his reasoning for the lawsuit in the an eight-page court document this week. “I am informed and believe that Bellator has agreed to provide documents in response to many of the Parties’ document requests,” he wrote. “However, Bellator cannot guarantee to produce some of the confidential documents that the Parties have demanded, as doing so would lead to grave harm to Bellator.”
Of course, Coker does not want to share private information with the UFC. To share your financial details and information on contracts with talent and beyond is business suicide and Bellator is well within their rights to try to keep this information private and away from the prying eyes of the UFC.
Coker said that the release of such information would “undermine Bellator’s bargaining leverage and ability to attract and retain the best athletes necessary to build a successful promotion.” He also made the good point that Bellator would not ask to be privy to any information when it comes to the UFC’s contracts/negotiations, making the playing field uneven in this case.
“For example, if individual athlete contract information were provided Bellator’s competitors, they would be able to anticipate Bellator’s recruitment strategics, outflanking its ability to sign the best fighters, anticipating its strategics in each respective weight class and geographic market, and compromising its strategic plans to develop the best overall promotion,” Coker said. “Armed with Bellator’s information, a dominant market player such as UFC could easily allocate its resources to one-up Bellator on critical deals, counter-program Bellator, and appropriate its business strategies, either to obstruct and stifle Bellator’s initiatives or to exploit its weaknesses.”
Coker is no stranger to the UFC’s power when it comes to taking over and driving companies out of business, with the UFC taking over Strikeforce from him and other investor in 2011, something which he referenced in his closing statement. He commented that the UFC “buys out, marginalizes, and even drives competitors from the business.”
“UFC is an aggressive and ambitious enterprise, and I believe that if UFC were able to gain an advantage against Bellator by receiving Bellator’s confidential information or even simply leveraging the disadvantage caused by disclosure of Bellator’s confidential information to athletes and others, it would certainly do so,” Coker wrote.
Bellator has provided more than 2,000 documents in response to the UFC’s subpoenas, according to Bellator attorney Phillip Kelly.
Kelly explained in more detail that UFC is seeking information not relevant to the case including the right to see all Bellator fighter contracts, the negotiation history of those deals, and in addition information on dates, locations, venues, and payouts for Bellator fights.
Also, both parties are also seeking Bellator’s quarterly financial reports which are not public knowledge at the moment.
What the UFC is asking to see here is something which only senior Bellator executives and its legal team are privy too. Not everyone at Bellator even knows this information, so for it to fall into the UFC’s or any other competitors hands could be fatal for Bellator’s bright future, something Coker is fully aware of and is trying to stop here.
If the UFC is not releasing this information on their end as part of the case, then I can’t see any reason why Bellator should have to. It seems as if the UFC is trying to make the best out of a bad situation, turning a lawsuit against them into an advantage over their biggest and fast growing competition.
I can’t these subpoenas holding up. Bellator will, of course, have a great legal team through Viacom and I’m sure that they will manage to quash this. If not, Bellator could be greatly damaged.
Since Coker took over, the company has grown into a real threat to the UFC, taking some of their top and big name talent like Chael Sonnen, Benson Henderson, Rory MacDonald, Tito Ortiz, Rampage Jackson, and others, signing Fedor Emelianenko, and showcasing other legends such as Royce Gracie and Ken Shamrock, harnessing the star power of the late Kimbo Slice and building homegrown talent like Michael Chandler and Michael Page,
Now, with the recent signing of top UFC Light Heavyweight Ryan Bader and the possible signing of the former longtime voice of the UFC, Mike Goldberg, Bellator is gaining on the UFC and becoming real competition for the industry leader, which has essentially had it all to themselves for too long now.
While the lawsuit will likely disappear without much in the way of fireworks, this move is self-preservation for Bellator. At the same time, it is yet another shot from them towards the UFC that they will stand up and be counted, that they are the competition, and that they won’t back down.
Strikeforce, Pride, and more have fallen to the UFC, but Bellator seems to be in it for the long haul and, with Viacom backing them, their upside is high.
NOW CHECK OUT LAST WEEK’S COLUMN: THE SUNDAY SUPPLEMENT: What does it mean to UFC’s 2017 that they’ve reached terms on George St. Pierre returning for multiple fights?