UCLA
UCLA Entertainment Law Review
Title
Let’s Get Ready to Unbundle! It’s Time for the UFC to Offer Individual
Fights For Purchase
Permalink
https://escholarship.org/uc/item/7k678644
Journal
UCLA Entertainment Law Review, 27(1)
ISSN
1073-2896
Author
Cornor, Nick
Publication Date
2020
DOI
10.5070/LR8271048855
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111
LET’S GET READY TO UNBUNDLE!
It’s Time for the UFC to Offer Individual Fights
for Purchase
Nick Cornor
A
A bedrock principle of U.S. Copyright law normally dictates that when a
person steals your original work of authorship, a court should issue an injunc-
tion and require the violator to pay damages. For centuries this principle has
sufced; however, a lack of deep-pocket defendants and continued lobbying
efforts by internet service providers have made this principle untenable when
applied to illegal online streaming. This is especially true for the Ultimate
Fighting Championship (UFC), a mixed martial arts promoter that has seen its
live broadcasts pirated over the internet at an alarming rate, thereby threaten-
ing the bulk of its revenue.
This Comment advocates that the UFC unbundle its current pay-
per-view business model in favor of charging market-based prices for each
individual ght. The primary benet of this approach includes increased rev-
enue for the UFC by enticing consumers away from illegal online streaming
with lower prices. Potential adjacent benets include reforming ghter com-
pensation schemes, incentivizing ghters to promote their own individual
ghts, easing controversies regarding unionization efforts by the ghters, and
providing the UFC with greater marketing data. Therefore, by unbundling its
business model, the UFC will ultimately be able to bypass the shortcomings
of U.S. Copyright law and take the lead in a digital media landscape already
changing at lightning speeds.
© 2020 Nick Cornor. All rights reserved.
* J.D., South Texas College of Law Houston; M.A., University of Oklahoma, 2013; B.S.
University of Texas at Arlington, 2008. Thank you to Dru Stevenson and Phillip Page
for their insightful and valuable guidance. Thank you also to my sister, Sarah Cornor,
for helping me with my research. Finally, and most importantly, thank you to my wife,
Janeen Cornor, for helping me edit my Comment and tolerating my love of mixed mar-
tial arts.
112 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
T C
I .......................................................................................................113
I. UFC B .....................................................................................114
A. Overview of the UFC ...........................................................................114
1. A History of the UFC: From Human Cockghting
to a Multibillion Dollar Enterprise ..............................................114
2. Current UFC Broadcast Structure ...............................................115
B. UFC Revenue .......................................................................................117
1. Live Events .....................................................................................117
2. UFC PPV Revenue ........................................................................118
3. Other UFC Revenue .....................................................................118
C. UFC Fighter Compensation ................................................................119
1. Base Salary ......................................................................................119
2. Reebok Deal ...................................................................................120
3. Bonuses ...........................................................................................120
4. PPV Points ......................................................................................121
II. U.S. C L B ...........................................................122
A. U.S. Copyright Law .............................................................................122
B. Digital Millennium Copyright Act .....................................................122
C. Viacom v. YouTube Decision ..............................................................123
D. Law of Diminishing Marginal Utility ................................................126
III. R .......................................................................................126
A. Three Approaches ................................................................................126
B. Unbundling the PPV ...........................................................................128
C. Benets of Unbundling to Fighters and the UFC .............................128
1. Possible New Compensation Schemes ........................................129
2. Incentivizes Fighters to Promote their Individual Fights ..........129
3. Easing of Controversy Regarding the Unionization
of Fighters .......................................................................................130
4. Providing the UFC With Greater Marketing Data ....................132
IV. O ..................................................................................................133
A. Fights Lower on the Main Fight Card May Not be Purchased .......133
B. Unbundling Will Essentially Dissolve the Fight Card ......................134
C. Time Delay ...........................................................................................135
D. Casual vs. Die-Hard Fans ....................................................................136
V. A O B ..........................................................137
A. Other MMA Promotions ....................................................................137
B. Boxing ...................................................................................................138
C. Cable Television Series ........................................................................139
C ..........................................................................................................140
2020] LET’S GET READY TO UNBUNDLE! 113
I
Mixed Martial Arts (MMA) is a full-combat sport that is a combination
of boxing, Brazilian jiu-jitsu, and other martial arts disciplines.
1
MMA pro-
motional companies such as the Ultimate Fighting Championship (UFC) and
Bellator MMA air monthly ght cards on various cable television (TV) net-
works. These promoters also own online streaming networks and facilitate
pay-per-view (PPV) services.
2
While technology allows promoters to provide
their audiences with ever-increasing options to view these ghts, it also opens
opportunities for illegal live streaming over the internet.
3
Although U.S. Copy-
right law affords promoters a remedy for forcing Internet Service Providers
(ISP) or web hosts to remove the illegal online content, this remedy (in the
context of illegal live streaming) has been largely ineffective.
4
In turn, com-
mentators argue Congress should reform U.S. Copyright law—namely the
Digital Millennium Copyright Act (DMCA)—to provide MMA promoters
with better remedies against ISPs engaged in illegal live streaming.
5
Contrary
to these common calls for legislative reform, this Comment will advocate that
promoters themselves should unbundle PPV events, thereby incentivizing con-
sumers to refrain from illegally live streaming and instead purchase individual
ghts at lower prices.
Part I of this Comment provides an overview of the UFC, including its
history and current business model. Part II looks at U.S. Copyright law as it
relates to illegal live streaming and focuses on some of the unique legal aspects
associated with MMA. Part III recommends that the UFC mitigate the effects
of illegal streaming by unbundling its monthly PPV events. Part IV analyzes
1. Jason J. Cruz, Sport and Spectacle: Should MMA be Protected Under the First Amend-
ment?, 17 U. D. S E. L.J. 63, 66 (2015).
2. Keith Black, Technical Knockout: How Mixed Martial Arts Will Change Copyright En-
forcement on the Web, 21 F I. P. M E. L.J. 739, 740–41 (2011).
3. Id. at 744–45.
4. Jeff Yostanto, Comment, The Commercial Felony Streaming Act: The Call for Expansion
of Criminal Copyright Infringement, 20 M. I. P. L. R. 315, 319–21 (2016)
(“In the case of live streaming, if there is infringing copyrighted material, it becomes
somewhat impossible to go through with the DMCA takedown notice, because the
damage was already done.”).
5. Sepehr Shahshahani, The Role of Courts in Technology Policy, 61 J.L. E. 37, 37
(2018) (presenting a general model that argues that in cases where a newcomer has
developed technology that threatens established business models, courts should rule
for a resource constrained party, even if an opposite ruling would be optimal as the
Court’s nal choice or policy); Yostanto, supra note 4, at 316 (advocating for “proactive-
ly seek[ing] better ways to clarify current copyright laws in ways that do not also impede
access to online content” as opposed to passing new legislation); Black, supra note 2, at
742 (supporting “a legislative scheme that holds websites liable for monetary, equitable
and other relief when websites provide or host illegal live streams, so long as the web-
sites have some knowledge, whether constructive or actual, of the infringing content.”).
114 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
the merits of possible objections to this model. Finally, Part V shows how this
same model can be applied to other companies’ business models.
I. UFC B
A. Overview of the UFC
MMA is a relatively new broadcast sport that struggled for both pro-
fessional and nancial legitimacy from the beginning. However, today’s
MMA—through the widely successful UFC—has blossomed in the new digital
age, having found lucrative footholds in the current online streaming landscape.
While so much progress having been made, the UFC continues to operate in
a traditional PPV bundling business model. Additionally, ghter compensa-
tion has been one of complexity and mystery which must be explored in order
to fully understand how an unbundling model may be benecial not only to
the UFC, but also to the ghters. These themes will be explored in the follow-
ing Subparts.
1. A History of the UFC: From Human Cockghting to a Multibillion
Dollar Enterprise
Although the UFC’s success as a leading MMA promoter is perhaps most
evident in its current risk of becoming genericized with the sport itself,
6
the suc-
cess of the sport (and its largest promoter) faced considerable barriers at its
outset. The origins of MMA can be traced all the way back to the Olympic
Games when it was called pankration.
7
In its modern form, MMA rst aired
on November 12, 1993 on PPV to 80,000 viewers,
8
where ghters from a vari-
ety of disciplines gathered in Denver, Colorado, to settle the age-old question of
which ghting style was superior.
9
Organizers of the event, billed as the “Ulti-
mate Fighting Championship,” chose Denver as their venue because the UFC
event had very few rules and Colorado did not have a boxing commission at the
time to object to its organization.
10
This led to Arizona Senator John McCain’s
6. Carl J. Gaul IV, Comment, The Ultimate Fighting Championship and Zuffa: From ‘Hu-
man Cock-Fighting’ to Market Power, 6 A. U. B. L. R. 647, 648–49 (2017) (“The
association of the sport with the organization is so prevalent that many consumers con-
fuse the organization with the sport itself; the UFC is synonymous with MMA the way
‘Kleenex’ is synonymous with ‘tissue.’”).
7. Symposium, Digital Entrepreneurship: The Incentives and Legal Risks: Student Work:
Fighting for Respect: MMA’s Struggle for Acceptance and How the Muhammad Ali Act
Would Give it a Sporting Chance, 112 W. V. L. R. 269, 271 (2009) (pankration com-
bined boxing, wrestling, and ghting with the feet and was described by ancient Greek
philosopher Philostratos as “the most exciting and worthiest of all sports in ancient
Olympia.”).
8. Id. at 271–72.
9. Id. at 271.
10. Id. at 271–72. (“An early marketing campaign for the event declared that there were
three ways to win, ‘by knockout, submission, or death.’”).
2020] LET’S GET READY TO UNBUNDLE! 115
attempt to ban the UFC.
11
Many believed that McCain’s opposition to the UFC
was in part motivated by his close connection to Anheuser-Busch, one of the big-
gest boxing sponsors in the world, and thus a powerful supporter of UFC’s main
potential competitor.
12
Whatever McCain’s motivations, his inuence proved
effective with a number of states passing legislation to ban MMA.
13
Eventually, in an attempt to gain public acceptance, the UFC implemented
new rules which came to be known as the Unied Rules of Mixed Martial
Arts Combat (Unied Rules).
14
In 2000, New Jersey became the rst state to
legally sanction MMA.
15
A year later, the near-bankrupt UFC was bought by
Las Vegas casino owners Frank and Lorenzo Fertitta for $2 million.
16
This sale
provided the UFC with the nancial backing and political support needed to
succeed.
17
Nevada followed New Jersey and also adopted the Unied Rules
on July 23, 2001.
18
The Fertitta brother’s acquisition of the UFC proved to be a
lucrative investment and in June 2016, the Fertitta brothers ultimately sold the
UFC to the talent agency William Morris Endeavor- International Marketing
Group while keeping Dana White as its president.
19
2. Current UFC Broadcast Structure
In 2011, the UFC entered into a seven-year distribution contract with Fox
Broadcast Company to broadcast live UFC events, as well as the UFC’s reality
series, The Ultimate Fighter.
20
After Fox Sports’ exclusive negotiation window
for the UFC’s TV rights expired in late 2017, ESPN and the UFC entered into a
11. Id. at 272–73. (In 1995, Senator McCain wrote to all fty governors urging them to ban
ultimate ghting which he compared to “human cockghting”).
12. Id. at 273 (Senator McCain’s wife was the daughter of James Hensley, one of the na-
tion’s largest Anheuser-Busch distributors).
13. Id. at 274.
14. Id. at 275.
15. Id.
16. Id.
1 7. Id. (“Lorenzo Fertitta was a former member of the Nevada State Athletic Commission
and knew the politics involved in the ght industry.”).
18. Id. (“The new rules featured ve weight classes, rounds, time limits, a list of over thir-
ty-one fouls, and eight possible ways for the ght to end. The Unied Rules provided
not only safety, but also uniformity in regulating MMA amongst the states.”).
19. Daniel L. Maschi, Comment, Million Dollar Babies Do Not Want to Share: An Analysis
of Antitrust Issues Surrounding Boxing and Mixed Martial Arts and Ways to Improve
Combat Sports, 25 J S. M S L.J. 409, 422 (2018) (The sale price of $4
billion set a record for the largest purchase in sports history with the Fertitta brothers’
company, Zuffa, (the UFC’s parent company) netting a 2000 percent return on its orig-
inal purchase price of $2 million in 2001).
20. Mike Whitman, UFC, Fox Announce 7-Year Broadcast Deal, S (Aug. 18,
2011), https://www.sherdog.com/news/news/UFC-Fox-Announce-7Year-Broadcast-
Deal-34862 [https://perma.cc/Q8NR-6G6V]. Before partnering with Fox, the UFC had
a longstanding relationship with Spike TV that produced 13 seasons of “The Ultimate
Fighter,” and 24 UFC Fight Night live specials. Id.
116 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
ve-year deal for the UFC’s broadcast rights, purported to be worth $150 mil-
lion per year.
21
The current viewing landscape for UFC consumers includes a
somewhat complicated mix of programming across ESPN’s traditional cable
broadcast and streaming services, as well as UFC’s own streaming service.
For example, ESPN currently airs three “Fight Nights” each month view-
able on ESPN’s online streaming service, ESPN+.
22
These ght cards
23
typically
consist of four preliminary ghts followed by ve main card ghts.
24
All ghts are
scheduled for three, ve-minute rounds, with a one-minute rest period between
each round.
25
In addition to these “Fight Nights” on ESPN+, ESPN also hosts a
monthly “UFC on ESPN” event aired on the ESPN cable network, which typi-
cally consists of a single ght card holding eleven ghts.
26
Finally, the UFC airs a
monthly numbered UFC event on its own streaming service, Fight Pass, consist-
ing of four “Early Prelim” ghts.
27
Once these ghts are complete, viewers may
then switch over to ESPN to watch four “Preliminary Card” ghts.
28
Following
21. A.J. Perez, ESPN Wrestles UFC TV-Rights Deal from Fox Sports, USA T (May 23,
2018, 5:54 p.m.), https://www.usatoday.com/story/sports/ufc/2018/05/23/espn-ufc-TV-
rights-deal/635801002 [https://perma.cc/N2GD-TNRH]. The deal, which began on Jan-
uary 1, 2019, includes “42 live events annually.” Id.
22. See UFC Events, UFC (last visited Apr. 28, 2019), https://www.ufc.com/events [https://
perma.cc/X7YA-Y3ZD]; Chris Welch, ESPN+ Will Launch on April 12th for $4.99 per
Month, T V (Apr. 2, 2018, 12:38pm), https://www.theverge.com/2018/4/2/17188752/
espn-plus-launching-april-12th-pricing-features-content [https://perma.cc/2QCM-
YQUN]. At $4.99 per month or an annual price of $49.99, ESPN+ has been pitched as
a direct-to-consumer streaming service that provides viewers with live sports, one free
Major League Baseball (MLB) and National Hockey League (NHL) game each day.
Id. Additionally, the service will feature “high-quality original shows and lms, exclu-
sive studio programs, and an unmatched on-demand library.” Id.
23. Black, supra note 2, at 743 n.26 (“A ‘card’ is the set of ghts scheduled to be put on at
any one particular event.”).
24. See UFC Events, supra note 22.
25. Michael Kim, Mixed Martial Arts: The Evolution of a Combat Sport and Its Laws and
Regulations, 17 S L. J. 49, 57 (2010).
26. Id. While the ght card is scheduled for 11 bouts, ghts are routinely cancelled where
ghters are injured during training prior to the ght, or more recently, ghters are rou-
tinely being pulled from a ght card for complications during the weight cut. See Scott
Harris, Weight Cutting: Solving ‘The Biggest’ Problem in Combat Sports, B
R (Aug. 31, 2015), https://bleacherreport.com/articles/2555772-weight-cutting-
solving-the-biggest-problem-in-combat-sports [https://perma.cc/9CNH-6Y3U].
2 7. See UFC Fight Pass, UFC (last visited Apr. 28, 2019), https://www.ufc.tv/page/ghtpass
[https://perma.cc/6TUP-7S3U]. UFC Fight Pass costs customers $9.99 per month, $8.99
per month with a six-month commitment, or $7.99 per month with a twelve-month com-
mitment after a seven-day free trial. Id. Much like ESPN+, Fight Pass provides custom-
ers with unrestricted access to the live prelims on numbered UFC ght cards as well as
the ability to watch hundreds of past events. See id.
28. E.g., UFC 247: Jones vs. Reyes, UFC, (last visited Apr. 24, 2020), https://www.ufc.com/
event/ufc-247#958 [https://perma.cc/75YZ-TMTD].
2020] LET’S GET READY TO UNBUNDLE! 117
these preliminary ghts, viewers have the option to purchase the “Main Card” on
PPV which consists of ve ghts.
29
The numbered UFC main card presents the most popular and successful
ghters with the two top ghts being characterized as the main and co-main
event.
30
Typically, the main and co-main event will feature a championship
title bout, where the winner will be awarded a belt and declared the UFC’s
world champion in that weight class.
31
Since 2011, all main and co-main events
are scheduled for ve (rather than three), ve-minute rounds, with a one-min-
ute rest period between each round.
32
The PPV is structured as a bundle, so
regardless of how many ghts the customer chooses to watch, the customer is
billed a set amount.
B. UFC Revenue
1. Live Events
Each of the previously mentioned UFC ght cards occur at differ-
ent locations around the world in various arenas.
33
The price of admission is
determined by a number of factors such as location and date, but the main
29. See, e.g., id. On April 13, 2019, ESPN+ expanded its deal with the UFC to 2025 and
became the exclusive distributor of PPV events for the UFC in the U.S. Hilary Russ,
ESPN’s Digital Service to be Exclusive UFC Pay-Per-View Provider in U.S., R
(Mar. 18, 2019, 1:04 PM), https://www.reuters.com/article/us-media-sport-espn/espns-
digital-service-to-be-exclusive-ufc-pay-per-view-provider-in-u-s-idUSKCN1QZ2E6
[https://perma.cc/EYW9-ADGS].
30. See, e.g., The MMA Plug, UFC 248 Recap: Co-Main Dazzles, Main Event Flops, Mile
High Sports (Mar. 9, 2020), https://milehighsports.com/ufc-248-recap-co-main-dazzles-
main-event-ops [https://perma.cc/QS7S-W95H].
31. See, e.g., id.
32. MMA Junkie Staff, UFC Implements Five-Round Non-Title Fights for All Future Main
Events; Evans vs. Davis Exempt, MMA J (Jun. 9, 2011, 9:35 PM), https://mmajunk-
ie.com/2011/06/ufc-implements-ve-round-non-title-ghts-for-all-future-main-events-
evans-vs-davis-exempt [https://perma.cc/75Y5-36JJ]. Occasionally, a main card ght
will be cancelled, and the ght before the main card will be elevated to the title of “main
event.” Id. Typically, because these ghters have trained to ght a three-round ght and
it would be unfair to have them compete for all ve rounds, the UFC will often allow
the ght to only go for three founds, thereby being the exception when a main event will
be three, not ve, rounds. See, e.g., Alex Chippin, Adesanya-Silva Still 3 Rounds Despite
Elevation to UFC 234 Main Event, MSN (Feb. 2, 2019), https://www.thescore.com/mma/
news/1714121 [https://perma.cc/BTZ8-A9EY].
33. See UFC Events, supra note 22. For example, in 2019, of the 41 events that took place,19
occurred in a foreign country (3 in Brazil, 3 in Canada, 2 in Australia, 2 in Russia, 1 in
England, 1 in Sweden, , 1 in the Czech Republic, 1 in Denmark, 1 in Mexico, 1 in Sin-
gapore, 1 in South Korea, and 1 in the United Arab Emirates) with the rest located in
various states with 3 in Las Vegas, Nevada and 1 in New York City, New York. Id.
118 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
determination is demand: higher prole ghters garner higher admission pric-
es.
34
Live events account for 12 percent of the UFC’s overall revenue.
35
2. UFC PPV Revenue
The largest share of UFC revenue comes from “Content,” including
all revenue generated by UFC broadcasts through TV rights deals or online
streams.
36
Within Content, 51 percent is attributed to PPV.
37
All other revenue
comes from media rights and the UFC’s own streaming service, Fight Pass.
38
Unlike admissions for live events, customers pay the same amount for each
PPV main card regardless of the prole of ghters on the card.
39
3. Other UFC Revenue
The remaining 12 percent of revenue comes from “Sponsorship” and
“Consumer Products.”
40
The UFC has a number of advertisers that are pri-
marily aimed at the company’s target demographic: males aged between 18
and 35.
41
Advertisers’ logos are featured prominently at live events, as well
34. Statistics from the top 35 UFC events in Las Vegas, Nevada since 2006 shows an over-
all average ticket price of $452.90 with the highest event’s average ticket price being
$963.77 and the lowest being $335.11. See Nevada’s Top 35 MMA Gates, N S
A C (last visited Apr. 28, 2019), http://boxing.nv.gov/results/Top_
MMA_Gates [https://perma.cc/2RMN-PXGY].
35. Ben Fowlkes & Steven Marrocco, What Investor Documents Tell Us About the UFC’s
Past—And Its Future, MMA J (Oct. 31, 2016 1:05 PM), https://mmajunkie.
com/2016/10/what-investor-documents-tell-us-about-the-ufcs-past-and-its-future
[https://perma.cc/DZH7-8QBX].
36. Id. (showing 76 percent of total UFC revenue in 2015 coming from “Content” amount-
ing to a value of $462 million).
3 7. Id. (42 percent for residential PPV and 9 percent for commercial PPV).
38. Id. (28 percent for U.S. media rights, 18 percent for International media rights, and 3
percent for Fight Pass).
39. Russ, supra note 29 (“PPV UFC ghts will cost $59.99 per event for current ESPN+
subscribers, slightly less than the $64.99 fans usually paid in the past. New subscribers
will pay $79.99 for their rst PPV event and get one-year of ESPN+ access.”).
40. Fowlkes & Marrocco, supra note 35 (9 percent from Sponsorship and 3 percent from
Consumer Products for $52 million and $19 million, respectively).
41. Jonathan Shrager, Bud Light and the Top 11 Sponsors in the UFC Today, B
R (Jul. 14, 2011), https://bleacherreport.com/articles/767373-bud-light-and-the-
top-11-sponsors-in-the-ufc-today#slide6 [https://perma.cc/FZL4-65P7]. However, a re-
cent report showed that the median age of viewers for most sports with the exception
of basketball, baseball, and tennis is aging more rapidly than the overall U.S. popula-
tion. See Ryan Harkness, New Report Shows Once-Coveted UFC Demographic has
Gotten Old...Fast, MMA MANIA (Jun. 7, 2017, 12:00 PM), https://www.mmamania.
com/2017/6/7/15753610/average-age-ufc-TV-viewers-demographics-ratings-advertis-
ers-fox-sports-mma [https://perma.cc/6XKG-7KE5]. It should be noted that the study
only covers TV viewers and not internet viewers, which points to the UFC’s recent
decision to move all PPV purchases to the ESPN+ online streaming service as a smart
move. Id.
2020] LET’S GET READY TO UNBUNDLE! 119
as in promotional materials that the UFC uses to advertise upcoming ght
cards.
42
While ghters traditionally wore any apparel they desired while ght-
ing—thereby giving the ghters the ability to generate income through their
own sponsorships—the UFC signed an exclusive apparel deal in 2015 with
Reebok whereby ghters could only wear an approved Reebok “ght kit” in
competition.
43
These ght kits, along with other UFC apparel, are also sold to
consumers but only account for a modest 3 percent of total revenue.
44
C. UFC Fighter Compensation
The distribution of these revenues to the ghters themselves involves a
somewhat complicated scheme. UFC ghters are compensated under a multi-
faceted model involving appearance fees, sponsorships, performance bonuses,
and per-point participation. Understanding this scheme is important to con-
ceptualize the potential effects of unbundling.
1. Base Salary
Instead of paying its ghters a regular wage or salary, the UFC pays
athletes only when they compete in ghts or appear on its reality show, The
Ultimate Fighter.
45
Additionally, ghters are paid a set amount for showing up
on the day of the ght and can have this amount doubled by winning their ght,
often called a win bonus.
46
42. Michael Silver, Inside Sponsorship and Marketing Surrounding UFC’s International
Fight Week, F O S (Jul. 13, 2018), https://frntofcesport.com/ sponsorship-
marketing-ufc-ght-week [https://perma.cc/ARE6-4RPH]. Currently, the UFC’s main
sponsor is the beer company Modelo, which features prominently in the center of the
octagon’s canvas. Id.
43. Matt Hlinak, Ultimate Fighting Contractors? How the UFC Misclassies its Athletes
and Why it Matters, 28 M L.J. 81, 88 (2018). A ght kit is essentially the ghter’s
uniform, which consists of shorts for male ghters and shorts and a sports bra for female
ghters. See MMA Junkie Staff, What You Need to Know About the UFC-Reebok ‘Fight
Kit’ Uniforms and Gear, MMA J, (Jun. 30, 2015, 11:00 AM), https://mmajunkie.
com/2015/06/what-you-need-to-know-about-new-ufc-reebok-ght-kit-uniforms-and-
gear [https://perma.cc/U7LJ-SSVH]. The uniforms are largely the same but have differ-
ent color variations with the UFC and Reebok logos featuring prominently along with
the ghter’s name. Id.
44. Fowlkes & Marrocco, supra note 35.
45. Hlinak, supra note 43, at 85.
46. Id. The “win bonus” has been the subject of considerable controversy, leading to lead-
ing UFC commentator Joe Rogan to call for its end, stating that “I don’t think anybody
ghts harder for [the win bonus]....” Ben Fowlkes, Do Win Bonuses Incentivize MMA
Fighters to Give Their All—Or Play it Safe, MMA J (Mar. 23, 2018, 3:30 PM),
https://mmajunkie.com/2018/03/joe-rogan-ufc-win-bonus-contract-ght-purses-incen-
tive-ghters-play-it-safe [https://perma.cc/W75Z-SN5G]. It should also be noted that
some ghters with more negotiating leverage have entered contracts with no win bo-
nuses. Id. For example, at UFC 209, Mark Hunt was paid $750,000 with no win bonus
for his knockout loss to Alistair Overeem, who also negotiated an $800,000 purse with
no win bonus for his narrow majority decision against Fabricio Werdum, which he of
120 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
2. Reebok Deal
As previously mentioned, the 2015 Reebok deal created a tiered system
where ghters are paid sponsorship money based on the number of ghts that
the ghter has had in the UFC.
47
Because the Reebok deal is an exclusive
apparel deal with the UFC, ghters cannot be sponsored by non-Reebok enti-
ties during the ght, weigh-ins, or the week leading up to the ght.
48
This has
caused considerable discontent among ghters who claim that prior to the
Reebok deal, they were able to negotiate more income through their own
sponsorships.
49
However, the UFC has not seen a mass exodus of ghters leav-
ing for other promotions, most likely due to the fact that the UFC has the most
highly competitive pool of MMA ghters among promoters.
50
3. Bonuses
Another controversial compensation mechanism is the payment of
bonuses.
51
For each ght card, the UFC awards bonuses of $50,000 to indi-
vidual ghters for the “Performance of the Night” as well as $50,000 to each
ghter in a ght that is crowned “Fight of the Night.”
52
The awarding of the
course would have been paid if he had lost the bout. Ben Fowlkes, Is it Time to do Away
with the Show Money/Win Bonus Pay Structure in MMA?, MMA J (Jul. 14, 2017,
8:30 PM), https://mmajunkie.com/2017/07/ufc-mma-show-money-win-bonus-pay-struc-
ture-gegard-mousasi-alistair-overeem-ryan-bader [https://perma.cc/BSE7-7WVU].
4 7. Fighters with 1 to 5 UFC ghts are paid $2500, 6 to 10 ghts are paid $5000 and so on.
The sponsorship money caps out at 21 or more ghts for a sponsorship payment of
$20,000. Additionally, champions are paid $40,000 while challengers are paid $30,000.
Andrew Brennan, Why Is The UFC-Reebok Deal Exploiting UFC Fighters and Condon-
ing Pay Gaps?, F (May 16, 2016, 1:22pm), https://www.forbes.com/sites/andrew-
brennan/2016/05/16/is-it-the-ufc-or-is-it-reebok-that-is-exploiting-ufc-fighters-and-
condoning-pay-gaps/#5b4079e94a93 [https://perma.cc/YJV7-8N9T]. So, for example,
when Darren Till fought Tyron Woodley for the UFC Welterweight Championship, he
only had six ghts in the UFC and would have only received $5000 in Reebok money;
however, because it was a title ght and he was the challenger, he received $30,000 from
Reebok. See Darren Till, UFC (last visited Apr. 28, 2019), https://www.ufc.com/athlete/
darren-till [https://perma.cc/KDR3-QWUW].
48. Brennan, supra note 47.
49. Id. UFC veteran Vitor Belfort has stated that the Reebok deal has left the ghters
“pretty much living in slavery.” Id. Also, former UFC Champion Meisha Tate has high-
lighted that “the tier system is inherently discriminatory against women because wom-
en didn’t participate in the UFC until 2012. As all women have fewer [UFC] bouts then
[sic] male ghters, they all earn in the lower tiers of the Reebok sponsorship deal.” Id.
50. Id.
51. Hlinak, supra note 43, at 85.
52. Adam Guillen Jr., UFC Changed ‘Fight Night’ Bonus Structure to Ensure Allotted $9.8
million Would Go to its Fighters, MMA M (Feb. 13, 2014, 5:00 PM), https://www.
mmamania.com/2014/2/13/5408704/ufc-bonus-structure-changed-ensure-allotted-
money-goes-to-ghters-mma [https://perma.cc/E6FD-483L].
2020] LET’S GET READY TO UNBUNDLE! 121
bonuses are subjective with the number of awards and recipients decided upon
by the UFC leadership.
53
4. PPV Points
A more complicated and largely unknown compensation system includes
what is referred to as PPV points.
54
In addition to their base salary, Reebok sti-
pend, and possible bonuses, some ghters receive a small percentage of every
PPV purchase.
55
Because the PPV points are negotiated into a ghter’s indi-
vidual contract, they are not publicly available.
56
However, some ghters have
challenged various aspects of their contracts in court, thus shedding light on
how much the ghters are being compensated via PPV points.
57
While it is
53. Brent Brookhouse, UFC’s Main Card Fighters Get 70% of Bonuses White Has Threat-
ened to Eliminate, B E (Jul. 4, 2013, 6:01 PM), https://www.bloodyelbow.
com/2013/7/4/4494058/ufc-dana-white-eliminate-bonuses-ghter-pay [https://perma.cc/
J5HJ-ULTW]. In response to complaints about the bonuses by ghters, UFC President
Dana White stated “You don’t like the structure? All right, we’ll pay the lower-level
guys more money—no more f--king bonuses.” Id. One study that looked at UFC end-
of-the-night bonuses during an eight year timespan found that 36 percent of main event
ghters take home some form of bonus, while ghters in the twelfth spot on a card—
typically the rst ght of the night—won a bonus just 7 percent of the time, including
zero “Fight of the Night” bonuses. Ben Fowlkes, The Economics of UFC Fight-Night
Bonuses, MMA J (Jul. 21 2013, 12:00 AM), https://mmajunkie.com/2013/07/the-
economics-of-ufc-ght-night-bonuses [https://perma.cc/D3AR-H74N].
54. Matt Connolly, Estimating UFC’s Highest-Paid Fighters Of 2016: Conor McGregor,
Ronda Rousey Lead Top Moneymakers, F (Jan. 12, 2017, 02:40 AM), https://
www.forbes.com/sites/mattconnolly/2017/01/12/estimating-ufcs-top-earners-of-2016-
mcgregor-rousey-lesnar-diaz-lead-million-dollar-moneymakers/#188f2713217a [https://
perma.cc/A2J3-CKGB].
55. Id.
56. Id.
5 7. Id. In a 2007 lawsuit over whether or not former UFC heavyweight champion Randy
Couture was able contract with other MMA promotions, his PPV point scale was re-
leased which showed a tiered system:
100,000–175,000: $1 per buy
175,000–300,000: $1.50 per buy
300,000–330,000: $2 per buy
Over 330,000: $3 per buy. Id.
The contract was for UFC 68 which reportedly had 520,000 PPV buys, amounting to $892,500
in compensation to Couture for his PPV points. Adam Swift, UFC Pay-per-view Bonus
Scale Goes Public, MMA P (Oct. 26, 2007), http://mmapayout.com/2007/10/ufc-
pay-per-view-bonus-scale-goes-public [https://perma.cc/J8VK-NWJW].
In 2013, Bellator lightweight champion Eddie Alvarez became a free agent and was re-
portedly offered a contract that would pay him $1 for each PPV buy between 200,000
and 400,000, $2 per buy between 400,000 and 600,000 buys and $2.50 per buy over
600,000 buys. Steven Marocco, Eddie Alvarez’s UFC Offer States Intent for Quick Title
Shot, PPV Cut (Updated), MMA J (Jan. 10, 2013, 1:45 AM), https://mmajunkie.
com/2013/01/eddie-alvarezs-ufc-offer-includes-immediate-title-shot-pay-per-view-cut
[https://perma.cc/DU9R-TPQG].
122 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
unknown which ghters receive PPV points, past competitors have caused
some controversy by suggesting only the top ghters in the UFC receive them.
58
II. U.S. C L B
A. U.S. Copyright Law
The United States Constitution incentivizes the creation of art via the
Copyright Clause.
59
The Copyright Act of 1976, codied in Title 17 of the
United States Code, provides protection for original works of authorship
“xed in any tangible medium of expression,” including audiovisual works.
60
While the UFC’s PPV and cable TV broadcasts are not technically “xed” at
the time of broadcast, the Copyright Act allows for a work to be “xed” if there
is xation simultaneous with transmission.
61
Because the UFC produces a live
audiovisual work that is simultaneously xed upon transmission, the UFC’s
PPV and cable TV broadcasts are both afforded Copyright protection.
62
B. Digital Millennium Copyright Act
In response to the ease with which digital works could be copied and dis-
tributed worldwide virtually instantaneously with the creation of the internet,
Congress passed the Digital Millennium Copyright Act (DMCA).
63
Congress’s
concerns were two-fold: Congress worried (1) copyright holders would be hes-
itant to make their works readily available on the internet without reasonable
assurances against massive piracy, while (2) internet service providers (ISP)
would also hesitate to “make the necessary investment in the expansion of
the speed and capacity of the Internet” without clarication of their liability.
64
Therefore, the DMCA was passed in 1998 “to strike a critical balance between
58. UFC 234 was supposed to feature a middleweight title ght between Robert Whittaker
and Kelvin Gastelum as the main event, however, due to Whittaker pulling out of the
event at the last minute due to a hernia, the co-main event became the main event
between Israel Adesanya and Anderson Silva. Dave Doyle, Israel Adesanya on Asking
for UFC 234 PPV Points: ‘Fair is fair’, MMA F (Feb. 24, 2019, 8:00 PM), https://
www.mmaghting.com/2019/2/24/18223832/israel-adesanya-on-asking-for-ufc-234-ppv-
points-fair-is-fair [https://perma.cc/46W4-PEL8]. After Adesanya’s win, he expressed
that he should have received a cut of the PPV buys, suggesting that even the co-main
event ghters do not receive PPV points. Id.
59. U.S. C. art. I, § 8, cl. 8 (granting Congress power “[t]o promote the Progress of
Science and useful Arts, by securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Discoveries”).
60. 17 U.S.C. §§102, 102(a)(6) (2006).
61. Id. §101.
62. Black, supra note 2, at 746.
63. Viacom Int’l, Inc. v. YouTube, Inc., 718 F. Supp. 2d 514, 519 (S.D.N.Y. 2010) (quoting S.
Rep. No. 105-190 (1998)).
64. Id.
2020] LET’S GET READY TO UNBUNDLE! 123
the rights and interests of copyright holders and the protection of [ISPs],” and
to enable Copyright law to keep pace with the expansion of the internet.
65
Title II of the DMCA, separately titled the Online Copyright Infringe-
ment Liability Limitation Act (OCILLA) is designed to strike this balance
by creating a series of “safe harbors” for ISPs.
66
In order to qualify for the
safe harbor protection, a party must meet a set of threshold criteria.
67
Once
the threshold criteria have been established, the OCILLA establishes four
safe harbors that allow ISPs to limit their liability for claims of copyright
infringement.
68
The safe harbor most relevant to the UFC broadcasts is information
“residing on systems or networks at direction of users.”
69
In order to qualify
for this safe harbor, an ISP must (1) not have actual knowledge of the infring-
ing activity, (2) must not receive a nancial benet directly attributable to the
infringing activity, and (3) must expeditiously remove or disable access to the
claimed infringing material upon notication.
70
A copyright holder has the abil-
ity to inform the ISP that there is infringing content on their website by issuing
a “takedown notice” that, if complied with, will protect the ISP from liability.
71
C. Viacom v. YouTube Decision
The safe harbor provision of the DMCA was tested when media con-
glomerate Viacom sued YouTube, a website that permits its users to upload
and view video clips, free of charge.
72
Viacom claimed that “tens of thousands
of videos on YouTube, resulting in hundreds of millions of views, were taken
unlawfully from Viacom’s copyrighted works without authorization” and that
YouTube “had actual knowledge and were aware of facts and circumstances
65. Black, supra note 2, at 746 (“For purposes of the DMCA, an Internet service pro-
vider (also called an Online Service Provider) is dened as ‘a provider of online ser-
vices...including an entity offering the transmission, routing or providing of connec-
tions for digital online communications.’”).
66. Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004).
6 7. First, a party must be a “service provider” as dened in the statute. 17 U.S.C. §512(k)(1)
(B) (2010). Second, a qualifying ISP must satisfy certain eligibility conditions and not
be a “repeat infringer.” Id. §512(i)(1)(A). Finally, a qualifying ISP must accommodate
“standard technical measures” that are “used by copyright owners to identify or protect
copyrighted works.” Id. §512(i)(1)(B), (i)(2).
68. The four safe harbors are (a) transitory digital network communications, (b) system
caching, (c) information residing on systems or networks at direction of users, and (d)
information location tools. Id. §512(a)–(d).
69. Id. §512(c).
70. Id.
71. Id. §512(c)(3). “The DMCA requires that a takedown notice contain the copyright
holder’s physical or electronic signature, the exact location of the infringing work, the
work it allegedly infringes, and a statement that the copyright holder has a reasonable
belief that the allegedly infringing work is actually infringing.” Black, supra note 2, at
7 4 7.
72. Viacom Int’l Inc. v. YouTube, Inc., 718 F. Supp. 2d 514, 518 (S.D.N.Y. 2010).
124 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
from which infringing activity was apparent, but failed to do anything about
it.”
73
YouTube moved for summary judgment, stating that they were entitled to
the DMCA’s “safe harbor” protection against Viacom’s direct and secondary
infringement claims.
74
The critical question for the District Court was whether
Viacom could show that YouTube had “actual knowledge” that the material on
its website was infringing by either a general awareness of the infringement,
or alternatively that YouTube had to have “actual or constructive knowledge
of specic and identiable infringements of individual items.”
75
The District
Court granted YouTube’s motion for summary judgement.
76
On appeal, the UFC, through their parent company Zuffa, LLC led
an amicus brief on behalf of Viacom, urging the court to take the view that
YouTube did in fact have actual awareness of the infringement.
77
The Second
Circuit disagreed with Viacom that the District Court’s grant of summary
judgement was improper with respect to the question of whether YouTube had
actual knowledge of infringement, and remanded the question back to the Dis-
trict Court.
78
On remand, YouTube moved for summary judgement, which the Dis-
trict Court granted.
79
While Viacom had appealed the decision, a week before
the parties were set to appear again before the Second Circuit, a settlement
was announced.
80
Ultimately, the outcome of the Viacom case suggests that websites like
YouTube will be able to escape copyright liability through the safe harbor
73. Id. at 518–19.
74. Id. at 516.
75. Id. at 519.
76. Id. at 529. “Mere knowledge of prevalence of such activity in general is not
enough....To let knowledge of a generalized practice of infringement in the industry,
or of a proclivity of users to post infringing materials, impose responsibility on service
providers to discover which of their users’ postings infringe a copyright would contra-
vene the structure and operation of the DMCA.” Id. at 523.
7 7. Brief for American Society of Composers, Authors and Publishers, et. al. as Amici Cur-
iae Supporting Plaintiffs, Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012)
(No. 1:07-CV-03582-LLS).
78. Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 34 (2d Cir. 2012). Viacom presented
internal emails from YouTube employees that showed they were aware of infringement,
including specic instances. Id.
79. Viacom Int’l, Inc. v. YouTube, Inc., 940 F. Supp. 2d 110, 113–23 (S.D.N.Y. 2013).
80. Jonathan Stempel, Google, Viacom Settle Landmark YouTube Lawsuit, R (Mar.
18, 2014, 6:05 AM), https://www.reuters.com/article/us-google-viacom-lawsuit/ google-
viacom-settle-landmark-youtube-lawsuit-idUSBREA2H11220140318 [https://perma.
cc/7322-JYZU]. While the terms of the deal were not disclosed, it was reported that no
money changed hands. Id.
2020] LET’S GET READY TO UNBUNDLE! 125
provisions in the DMCA.
81
Therefore, many copyright holders no longer view
the DMCA as an effective solution to copyright protection.
82
Despite the Viacom ruling, the UFC continues to pursue litigation
in order to stop illegal streaming, relying on a variety of legal theories. For
instance, the UFC brought an action against Justin.tv—a website that allows
users to stream live videos across the Internet—for copyright and trademark
infringement.
83
The UFC even sought relief from an individual who had ille-
gally streamed live ghts, resulting in a default judgment of $11,948.70, almost
half of which was attorney’s fees.
84
In 2014, the UFC sought $32 million in dam-
ages from twenty-seven-year-old Steven Messina, who they claimed uploaded
141 UFC presentations.
85
While the UFC may win judgments in some of these
lawsuits, it is likely that they primarily intended to send a message.
86
The UFC
has also retained the services of antipiracy rms to combat illegal streaming of
their events.
87
Despite these measures, viewers continue to successfully stream
these ghts illegally.
88
81. Benjamin Boroughf, The Next Great Youtube: Improving Content ID to Foster Creativi-
ty, Cooperation, and Fair Compensation, 25 A. L.J. S. T. 95, 103 (2015).
82. Id.
83. Zuffa, LLC v. Justin.tv, Inc., 838 F. Supp. 2d 1102, 1103 (D. Nev. 2012). Justin.tv won a
partial motion to dismiss for the noncopyright claims and statutory immunity. Id. Ulti-
mately, Justin.tv reached a settlement agreement with the UFC. Wendy Davis, Justin.tv,
UFC Settle Copyright Lawsuit, MP (Apr. 20, 2012) https://www.mediapost.com/
publications/article/172946/justintv-ufc-settle-copyright-lawsuit.html [https://perma.cc/
AK54-G678].
84. Zuffa, L.L.C v. Pryce, No. 8:12-CV-1584 (NAM/RFT), 2013 U.S. Dist. LEXIS 134687 at
*3 (N.D.N.Y. Sept. 20, 2013). “The complaint sets forth well-pleaded facts supporting
plaintiff’s claim that defendant knowingly, willfully and unlawfully received, viewed and
illegally accessed UFC broadcasts #130 and #131, the subject copyrighted broadcasts, on
May 28, 2011, and June 11, 2011, without paying plaintiff the appropriate pay-per-view
fees.” Id.
85. Selim Algar, UFC: Web ‘Pirate’ Wwes $32M for Streaming Live MMA Events, N Y
P (Apr. 30, 2014, 1:55 PM), https://nypost.com/2014/04/30/ufc-web-pirate-owes-32m-
for-stealing-live-mma-events [https://perma.cc/5BWF-PD2N]. According to the UFC,
Mr. Messina was uploading the ghts “to controversial le-sharing sites like Piratebay
and provided a PayPal donation link to keep the illegal practice going.” Id.
86. According to UFC President Dana White, the goal of the subpoenas against Justin.tv
was to put people in jail, which never happened, nor was it a likely possibility. See Black
supra note 2, at 756.
8 7. Sam Carp, UFC Tapped VFT to Combat Piracy During McGregor-Khabib, S-
P (Oct. 8, 2018), http://www.sportspromedia.com/news/conor-mcgregor-khabib-ufc-
illegal-streaming-piracy [https://perma.cc/MJP6-X6QM].
88. Terry Collins, Millions Illegally Streamed Mayweather-McGregor Fight, CNET (Aug. 29,
2017, 6:37AM), https://www.cnet.com/news/illegal-streaming-of-mayweather- mcgregor-
ght-reaches-millions [https://perma.cc/K9Z3-FD2M]. While not a UFC event, an es-
timated 2.9 million people illegally streamed UFC ghter Conor McGregor take on
the undefeated Floyd Mayweather Jr. in a boxing match, making it “‘one of the most
pirated, if not the most pirated boxing matches we have ever seen.’” Id.
126 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
D. Law of Diminishing Marginal Utility
While the UFC’s antipiracy rms may take down an illegal stream during
a ght, viewers can nd another, as-yet undiscovered link and watch the ght
until the rm discovers and takes down the new link. This process can repeat
itself as many times as necessary, like a game of “‘real-time cat-and-mouse
whack-a-mole.’”
89
Companies like the UFC are eager to get the content taken
down in real time because of the law of diminishing marginal utility, a princi-
ple unique to live sporting events.
90
Viewers watching a live UFC ght have no
way of knowing how the ght will play out, and it is likely that this unknown
aspect of a ght accounts for the high value of realtime sports content. The
viewer obtains the maximum amount of utility from watching the ght in real-
time (instant replays notwithstanding) and not knowing how the ght will end.
This can be a problem for both the UFC and the viewer. For the UFC,
once the ght has been illegally live streamed, there is no meaningful way to
rectify the damage.
91
For the viewer, once the link to an illegal live stream they
are watching is taken down, the viewer must search for an active link that has
not yet been taken down by the UFC. The viewer does this while the ght is
still in progress, thereby meaning that the viewer is missing part of the action.
With the fast-paced nature of combat sports, it is highly possible that by the
time the viewer nds an active link, the ght may already be over due to some
ght-ending action, leaving the ghter to have to view it via an instant replay,
which as previously discussed, does not provide the viewer with the maximum
amount of utility.
III. R
A. Three Approaches
U.S. copyright law’s inability to stop illegal live streaming poses a clear
problem for the UFC. One solution is for Congress to amend the DMCA.
92
89. Queenie Wong, Anti-Piracy Battle Unfolds in Real Time on Periscope, Live-Stream-
ing Apps, T M N (Aug. 12, 2016, 2:05 AM), https://www.mercurynews.
com/2015/09/20/anti-piracy-battle-unfolds-in-real-time-on-periscope-live-streaming-
apps [https://perma.cc/7LC3-WT8X].
90. Gary Lawson, Efciency and Individualism, 42 D L.J. 53, 71 (1992). The law of
diminishing marginal utility “states that each additional, or marginal, unit of a good
will be less highly valued by an actor than previous units.” Id.; “‘The value of real-time
sports content diminishes rapidly after that event has ended....’” Wong, supra note 89.
91. Black, supra note 2, at 771. UFC President Dana White as stated that “‘[a]ll this [pay-
per-view privacy] stuff is brand new....When our event gets stolen, it’s dead. It’s over.
You know the results. A live event is different than anything else.’” Id.
92. Black, supra note 2, at 774. “Considering that the DMCA was passed over a decade
ago, and the evolving technology in this day and age, the time has come for Congress to
reassess the functionality of the DMCA and assess how copyright owners and website
owners should interact with one another to better enforce copyright protection.” Id.
2020] LET’S GET READY TO UNBUNDLE! 127
Some members of Congress have attempted to address this concern with an
amendment to the Combating Online Infringement and Counterfeits Act
(COICA).
93
This legislation has been met with criticism from Internet engi-
neers concerned that the legislation would hurt technological innovation as
well as law professors concerned that the amendment would abridge free
speech.
94
Oregon Senator Ron Wyden put a hold on the bill, thereby prevent-
ing it from reaching a vote in the Senate.
95
Another proposed solution is judicial, arguing that based on eco-
nomic game theory, when faced with developing technology that threatens
older companies’ established business models, judges should rule for the
resource-constrained party, even if it runs counter to public policy.
96
The essential problem with these approaches, from the UFC’s perspec-
tive, is that they are both exogenous. The rst approach relies on Congress to
change the law, which as discussed previously, looks more and more unlikely.
97
The second approach may be effective for the UFC if they were to go after
large ISPs, but because of the U.S. judicial system’s reliance on precedent, stat-
utory interpretation, and the doctrine of stare decisis, as well as possibly the
Constitution’s Equal Protection Clause, it is unlikely that this approach would
bear much fruit for the UFC.
The UFC thus has no option but to be proactive in addressing this prob-
lem independently of the government.
93. See Combating Online Infringement and Counterfeits Act, S. 3804, 111th Cong. (2010)
[hereinafter COICA]; the amendment “would require the Attorney General to receive
information from the public—including content owners—about sites that are dedicated
to committing infringement and provide content owners information about informing
the Department of Justice of these sites.” Black, supra note 2, at 775. The Attorney
General would then be able to ask for a temporary restraining order or injunction to
prevent any further action as well as bring an in rem action against such websites. Id.
94. See Peter Eckersley, An Open Letter from Internet Engineers to the Senate Judiciary
Committee, E F F. (Sept. 28, 2010, 2:34 PM), http://www.eff.org/
deeplinks/2010/09/open-letter [https://perma.cc/E7MG-PE2S]; see also Law Profes-
sors’ Letter in Opposition to S. 3804 (Combating Online Infringements and Counter-
feits Act), E F F. (Nov. 16, 2010, 6:22 PM), https://www.eff.org/
les/lenode/coica_les/professors_letter_re_coica_and_signatories.pdf [https://perma.
cc/5M2Y-22UK].
95. Ezra Klein, Interview: Sen. Ron Wyden’s ght to stop SOPA and save the Internet, T
W. P (Jan. 17, 2012), https://www.washingtonpost.com/blogs/ezra-klein/post/in-
terview-sen-ron-wydens-fight-to-save-the-internet/2011/08/25/gIQAqnHG6P_blog.
html?noredirect=on&utm_term=.4d1b7baa202a [https://perma.cc/4NW4-47EC]. The
Senate attempted to rewrite COICA with the PROTECT IP Act, but Sen. Wyden again
placed a hold on it, thereby effectively defeating its passage in the Senate. Id.
96. Shahshahani, supra note 5, at 37–39.
9 7. See Klein, supra note 95.
128 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
B. Unbundling the PPV
The third approach to combating illegal online streaming would be for the
UFC to offer an unbundled PPV package alongside its bundled PPV events.
Here, consumers would have a choice between purchasing the ve packaged
PPV ghts for the current price and purchasing the ghts individually.
Under this model, the price of the ght could correspond to the ghters’
popularity. For example, since the rst ght on a PPV ght card typically has
the least popular ghters, a viewing could be set at a low price of $5.00. The
next ght could be offered for $7.00 and so on building up to the main event,
which could be priced at $30.00. These numbers are speculative and provided
only for illustration.
The UFC would also be able to charge premium pricing for their most
popular ghters. For example, Conor McGregor is arguably the UFC’s most
popular ghter, headlining four out of ve of the highest grossing UFC PPV
events in Nevada.
98
Therefore, the UFC may be able to justify a price higher
than $30.00 for any Conor McGregor ght.
While illegal streaming may be free in the monetary sense, there are many
costs associated with it.
99
Regardless of the costs an individual faces associated
with illegally streaming UFC ghts, the fact that so many potential UFC cus-
tomers continue to illegally stream PPV events shows that these costs must
be lower than the UFC’s PPV price tag. By unbundling the PPV model, these
viewers will have the ability to purchase ghts at a lower price, which, in com-
bination with developments in antipiracy enforcement, may be low enough to
make the efciency of watching legitimate sources outweigh the cost.
C. Benets of Unbundling to Fighters and the UFC
This increase in revenue from viewers who otherwise would have watched
the ght via an illegal stream is the most obvious benet of unbundling the
PPV ghts for the UFC.
100
Additionally, unbundling would also provide the
UFC and its ghters a variety of ancillary benets.
98. Nevada’s Top 35 MMA Gates, S. N. A C’ (last visited Apr. 28, 2019),
http://boxing.nv.gov/results/Top_MMA_Gates [https://perma.cc/A4EQ-GRCA].
99. Christina Sterbenz, How Sketchy Streaming Sites Really Work—And Why Some Are
Legal, B I (Apr. 24, 2014, 3:40 PM), https://www.businessinsider.com/are-
streaming-sites-legal-2014-4 [https://perma.cc/3RAK-9EJL] (These costs may include:
lower video and sound quality; multiple popup advertisements; risk that clicking on
the wrong link will result in les downloading to a viewer’s computer that may contain
viruses or malware; and risk that viewing a ght could result in being sued by the UFC.
It is possible that some viewers may suffer morally from knowing that they are not con-
tributing to the UFC’s prots, but no research to date has demonstrated as much.).
100. See Josh Peter, Digital Pirates Steal Signals, Money from Leagues, USA TODAY (Oct. 7,
2014, 5:14 PM), https://www.usatoday.com/story/sports/2014/10/07/TV-pirates-pay-per-
view-ufc-n-nba-nhl-mlb/16871583 [https://perma.cc/MLC7-MFNJ].
2020] LET’S GET READY TO UNBUNDLE! 129
1. Possible New Compensation Schemes
Typically, only the ghters in the main event receive PPV points because
purchasers’ primary desire is to view the main event ght.
101
By unbundling,
these ghters would be in a better position to negotiate PPV points as the
UFC could no longer claim that they are free riders. Because ghters have
criticized the PPV point system, it is likely that UFC ghters lower on the ght
card would welcome the opportunity to negotiate new ght purses that incor-
porate PPV points.
102
This could alleviate pressure from ghters to unionize
and improve relations.
2. Incentivizes Fighters to Promote their Individual Fights
Currently, because of the PPV point system, ghters lower on the ght
card receive no monetary incentive from the UFC to promote the ghter’s
own ghts. Extension of PPV points to these ghters would create an incen-
tive for them to self-promote so as to increase viewership and therefore their
own pay. In the world of MMA, however, incentivizing individual ghters to
promote their ghts can be problematic due to the danger of “trash talk” and
interghter rivalries getting out of hand.
103
101. Connolly, supra note 54. This was most evident with Conor McGregor being removed
from UFC 200 for refusing to full his obligatory media duties. See Mark Critchley,
Conor McGregor is Responsible for his Removal from UFC 200, says Dana White,
INDEPENDENT (Apr. 28, 2016, 11:13 AM), https://www.independent.co.uk/sport/
general/mma/conor-mcgregor-ufc-200-dana-white-daniel-cormier-jon-jones-a7004856.
html [https://perma.cc/PV23-C6XV].
102. See Dave Doyle, Israel Adesanya on Asking for UFC 234 PPV Points: ‘Fair is fair’, MMA
F (Feb. 24, 2019, 8:00 PM), https://www.mmaghting.com/2019/2/24/18223832/isra-
el-adesanya-on-asking-for-ufc-234-ppv-points-fair-is-fair [https://perma.cc/PF4R-PCHC].
103. A great case study in the dangers of allowing ghters to individually promote their own
ght involves the 2018 feud between UFC ghters Conor McGregor and Khabib Nurma-
gomedov. On April 5, 2018, McGregor, along with ten others, entered the Barclays Center
in Brooklyn, New York, and threw a hand truck at a bus carrying UFC ghters, causing
injury to one ghter, causing him to be pulled from the UFC 223 ght card. Daniel Victor,
Conor McGregor Is Charged With Assault Before UFC 223, N.Y. T (Apr. 5, 2018),
https://www.nytimes.com/2018/04/05/sports/conor-mcgregor-ufc- barclays.html [https://
perma.cc/FQ5U-SWGM]. The incident was recorded and quickly became international
news. Id. McGregor turned himself into the police later that night and was charged with
three counts of assault and one count of criminal mischief. Id.
McGregor’s actions were reportedly in retaliation against Nurmagomedov, who
had an early altercation with McGregor’s friend and teammate, Artem Lobov. The
Associated Press, Conor McGregor Gets Community Service for Barclays Melee N.Y.
T, (Jul. 26, 2018), https://www.nytimes.com/2018/07/26/sports/conor-mcgregor-
community- service-barclays.html [https://perma.cc/5MRV-2QF2]. For the incident,
McGregor pleaded guilty to disorderly conduct and was sentenced to perform ve days
of community service and an evaluation for an anger-management program. Id.
Six months later, the UFC scheduled a ght—UFC 229—between McGregor and
Nurmagomedov and used the footage from the bus attack to promote the ght. Karim
Zidan, Incredibly, Conor McGregor May Prot After Farcical Nurmagomedov Scenes,
130 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
3. Easing of Controversy Regarding the Unionization of Fighters
For many years, ghters have expressed a strong desire to unionize.
104
T G (Oct. 7, 2018, 5:11 PM), https://www.theguardian.com/sport/2018/oct/07/
conor-mcgregor-khabib-nurmagomedov-ght-ufc-229 [https://perma.cc/64BK-5VH6].
At UFC 229, moments after defeating McGregor, Nurmagomedov “scaled the oc-
tagon cage and launched himself at McGregor’s team.” Id. A brawl ensued which
resulted in three members of Nurmagomedov’s team arrested. Id.
In the buildup to the ght, McGregor made derogatory remarks about Nurmago-
medov’s family, his Muslim faith and the Dagestan region of his homeland. Khabib on
UFC McGregor Brawl: ‘He Talked About my Religion’, A J (Oct. 7, 2018), https://
www.aljazeera.com/news/2018/10/nurmagomedov-mcgregor-mass-brawl-mars-ufc-ti-
tle-bout-181007171904647.html [https://perma.cc/KHX7-956X]. In a post-ght press
conference, while apologizing for his actions, Nurmagomedov stated “[h]e talk about
my religion, he talk about my country, he talk about my father, he come to Brooklyn and
he broke bus, he almost killed a couple people—what about this?” Id.
For their actions, both McGregor and Nurmagomdeov were ned by the Nevada
Athletic State Commission (NSAC)—$50,000 for McGregor and $500,000 for Nurmag-
omedov, which amounted to one-fourth of his purse—and given a suspension from ght-
ing in the UFC, six months for McGregor and nine months for Nurmagomedov. Cindy
Boren, Conor McGregor, Khabib Nurmagomedov Suspended for Their UFC 229 Brawl,
T W. P (Jan. 29, 2019), https://www.washingtonpost.com/sports/2019/01/29/
conor-mcgregor-khabib-nurmagomedov-suspended-their-ufc-brawl/?utm_term=.
c9ad871b6555 [https://perma.cc/2JTN-V7SF]. During the disciplinary hearing, NSAC
Executive Director Bob Bennett expressed concern that “trash talk” used to promote
ghts had become problematic: “I denitely think, unequivocally, that’s something we
need to take a more active role in and hold ghters accountable for their language.”
Justin Park, Nevada Fighters and the Right to Trash Talk, R (Feb. 2, 2019, 4:25 PM),
https://reason.com/2019/02/06/nevada-ghters-and-the-right-to-trash-t [https://perma.
cc/WD4A-VTU6].
These sentiments were echoed by NSAC chairman Anthony Marnell, stating
“[t]he verbal part of the promotion, in my opinion, has gotten so out of line that it’s
embarrassing.” Maria S., ARE ATHLETES’ SPEECH RIGHTS BEING THREAT-
ENED?, F I. P., M, E. L.J. B (Mar. 15, 2019), http://www.
fordhamiplj.org/2019/03/15/are-athletes-speech-rights-being-threatened [https://perma.
cc/7RDR-P5XS]. When questioned about the Constitutionally of NSAC limiting ght-
ers’ speech, Marnell said, “I haven’t thought that far. I guess you can say whatever you
want at any time, but that doesn’t mean you should earn a privileged license.” MMA
Weekly Staff, NSAC Chairman Compares Potential Fighter Trash-Talk Regulations to
NFL, NBA, and MLB, Y F (Feb. 27, 2019), https://nance.yahoo.com/news/
nsac-chairman-compares-potential-ghter-182941092.html [https://perma.cc/7XP8-
L7TT]. This led UFC President Dana White to comment that such oversight by a gov-
ernment entity might be overstepping its bounds. Id.
104. Cheryl Robinson, UFC Fighter Fighting For a Bigger Cause, F (Apr. 28, 2018, 10:00
AM), https://www.forbes.com/sites/cherylrobinson/2018/04/28/ufc-ghter- ghting-for-
a-bigger-cause/#222aac85c049 [https://perma.cc/B7MV-7XWY]. After joining failed
attempts to create a ghter’s union, UFC ghter Leslie Smith determined that “the
only way any type of association was going to work was if it was ghter-driven.” Id.
Therefore, she helped form Project Spearhead, which is striving to get 30 percent of
UFC ghters to sign authorization cards, which will then be submitted to the National
Labor Relations Board (NLRB). Id. The NLRB will then look at a list of 11 factors to
2020] LET’S GET READY TO UNBUNDLE! 131
Unionization would provide a variety of benets, most notably including
greater leverage in negotiating the ghters’ compensation.
105
The greatest
hurdle to unionization, however, is that the UFC categorizes their ghters as
independent contractors as opposed to employees, leaving them ineligible for
protection under the National Labor Relations Act (NLRA).
106
The National
Labor Relations Board (NLRB) uses a highly exible test that could be used
to show that UFC ghters are being misclassied as independent contractors
when they actually are employees and thereby entitled to the right to unionize
under the NLRA.
107
In order to have the NLRB make this determination, at
least thirty percent of UFC ghters would need le a petition with the NLRB.
108
To date, three organizations have been formed with the goal of collec-
tive bargaining for the UFC.
109
With three organizations of ghters vying for
membership, none of the three has obtained the requisite thirty percent of sup-
port for certication by the NLRB. Additionally, former Bellator CEO Bjorn
Rebney’s association with one of the organizations, the Mixed Martial Arts
Athletes Association, has sparked intense controversy and made it even less
likely that the ghters would agree to unionize.
110
decide whether or not UFC ghters are independent contractors or employees. Id. See
also P S, http://www.projectspearhead.com (last visited Apr. 28, 2019)
[https://perma.cc/L2HB-JW23].
105. “The formation of a recognized ghters’ union within the UFC would allow ghters to ne-
gotiate with the promotion on such issues as minimum ght guarantees, pensions, health
care, grievance procedures, disability benets, physical therapy and training, agent super-
vising, revenue splits, and other pressing issues.” Genevieve F.E. Birren & Tyler J. Schmitt,
Mixed Martial Artists: Challenges to Unionization, 28 M. S. L. R. 85, 91 (2017).
106. “The NLRA gives employees the right ‘to form, join, or assist labor organizations, to
bargain collectively through representatives of their own choosing, and to engage in
other concerted activities for the purpose of collectively bargaining or other mutual aid
or protection.’” Birren & Schmitt, supra note 105, at 89 (emphasis added) (quoting 29
U.S.C. §157 (2017)).
107. Birren & Schmitt, supra note 105, at 90; See FedEx Home Delivery, Inc., 361 N.L.R.B.
No. 55 (2014).
108. Birren & Schmitt, supra note 105, at 100; See Conduct Elections, N.L.R.B. (last visited
Apr. 28, 2019), https://www.nlrb.gov/about-nlrb/what-we-do/conduct-elections [https://
perma.cc/4RWH-PK9F].
109. Birren & Schmitt, supra note 105, at 90 (“In August 2016, sports agent Jeff Borris, labor
attorney Lucas Middlebrook, and economist Andrew Zimbalist formed the Profession-
al Fighters Association (PFA). .. . On November 30, 2016, the Mixed Martial Arts
Athletes Association (MMAAA) was formally announced....”). Project Spearhead is
also seeking to be the exclusive collective bargaining agent for the ghters. Robinson,
supra note 104.
110. “It was a mistake during the announcement to have [Bjorn] be a public presence....”
Ryan Harkness, Tim Kennedy Distances the MMA Athletes Association from Bjorn Reb-
ney, SBN (Jan. 23, 2017, 6:30 PM), https://www.mmamania.com/2017/1/23/14364782/
tim-kennedy-distances-mmaaa-from-bjorn-rebney [https://perma.cc/RF2B-RFUY].
UFC President Dana White also used Bjorn’s presence to question the motives
of the entire organization, saying “‘You’ve got to gure out whose hand you want in
132 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
The UFC itself presents perhaps the greatest difculty in unionization
because their contracts promote rapid turnover in their roster.
111
While unbun-
dling the PPV model would not solve all of the problems that the ghters hope
to solve through unionization, offering PPV points to all ghters on the main
ght card may work to discourage unionizing efforts and keep ghters from
jumping ship to other MMA promotions by providing them a direct monetary
incentive to remain with the UFC.
112
4. Providing the UFC With Greater Marketing Data
A major benet of ESPN being the exclusive distributor of UFC PPV
events in the United States is that the UFC will now have marketing data
regarding who is purchasing the PPV ghts.
113
This data, however, only details
the customer demographics for a bundled PPV event, not the customers’ rela-
tive interest in individual ghts.
114
By allowing customers to purchase individual
ghts as opposed to the PPV ght card as a whole, the UFC will have objective
your pocket. And I guarantee you, you don’t want Bjork’s [sic] hand in your pocket.
You know what I mean?’” Id. Two law rms involved in a UFC class action anti-
trust lawsuit sent a letter to Bjorn Rebney expressing “concern over certain statements
actions taken by Rebney that they worry could harm MMA ghters by undermining
the class action suit.” John S. Nash, Letter Raises Questions About Rebney and CAA’s
Involvement with MMAAA, SBN (Dec. 7, 2016, 4:15 PM), https://www.bloodyel-
bow.com/2016/12/7/13863614/letter-ufc-lawsuit-raises-questions-about-rebney-caas-
involvement-with-mmaaa [https://perma.cc/29F8-42YC].
111. According to the standard UFC ghter contract, “If a ghter loses just one of their
agreed upon amount of ghts for the UFC, they can be cut. The promotion utilizes this
clause heavily, often cutting ghters after two to three losses, which along with signing
new ghters just as frequently, results in an ever-changing roster.” Birren & Schmitt,
supra, note 105, at 101. With an ever-changing roster, it is unlikely that any organization
will obtain the required thirty percent of athletes needed in order to even have a chance
to be certied as employees by the NRLB. Id. After the UFC cut UFC ghter and
Project Spearhead interim president Leslie Smith from their roster, Smith began con-
sulting with New York labor attorney Lucas Middlebrook—also an advisor for Project
Spearhead—in ling a lawsuit against the UFC for violating sections 8(a)(1) and (3) of
the NLRA which makes it unlawful to discharge an employee because they support a
union or because they engage in union activities. EMagraken, How Leslie Smith’s Legal
Action Against the UFC May Achieve Project Spearhed’s Goals, C S L
(Apr. 25, 2018), https://combatsportslaw.com/2018/04/25/why-the-ufc-may-have-just-
shot-themselves-in-the-foot-by-axing-leslie-smith [https://perma.cc/BLV6-MEDE].
112. Jesse Holland, Dana White Just Admitted Other MMA Promotions are Now Pay-
ing More Than UFC, SBN (Jun. 6, 2018, 11:04 AM), https://www.mmamania.
com/2018/6/6/17433538/dana-white-just-admitted-other-promotions-now-paying-more-
than-ufc-mma [https://perma.cc/EQ4S-CMTJ].
113. Russ, supra note 29 (“The deal will also give the UFC something it has never had before:
data about its PPV audience, including information about who is buying event access
and viewers’ propensity to purchase goods, said UFC Chief Operating Ofcer Lawrence
Epstein.”).
114. See id.
2020] LET’S GET READY TO UNBUNDLE! 133
data regarding the popularity of up-and-coming ghters. This objective data
could also be incorporated into the UFC’s ghter ranking system and used in
determining championship ghts, a practice that has come under much scru-
tiny in recent years.
115
For example, Oklahoma Representative Markwayne
Mullin called for the Muhammad Ali Boxing Reform Act to be extended to the
UFC.
116
While this data would still be tied to a ghter’s marketability, it would
no longer be based upon the subjective determination of a UFC executive han-
dling the matchmaking process, which has become an important issue for class
certication in a class-action antitrust case against the UFC.
117
I V. O
The drawbacks to unbundling must also be considered. It should be
noted from the outset that this Comment does not advocate the abolition of
bundling, but rather that consumers be given the choice to purchase and view
individual ghts. The reasoning is that the U.S. Copyright Codes’ licensing
scheme is too complex to be translated to establishments that carry a commer-
cial license to broadcast a UFC PPV event.
118
A. Fights Lower on the Main Fight Card May Not be Purchased
Fights lower on the main ght card might not be purchased and viewed
frequently by audiences, thereby injuring the careers of these ghters. The
115. Alex Daugherty, A Mixed Martial Arts Fighter Quit a Title Fight. Now He Wants Con-
gress to Help, MC DC B (Dec. 29, 2016, 3:32 PM), https://www.mcclatchy-
dc.com/news/politics-government/congress/article123589634.html. In 2003, UFC ght-
er Pete Spratt was offered a title ght for $8,000 while his opponent, UFC hall-of-famer
Matt Hughes, then champion, would receive a $50,000 to ght and $50,000 to win. Id.
When Spratt’s counteroffer of $25,000 to ght was rejected, he was never offered anoth-
er UFC title shot. Id. “Now Spratt is hoping Congress will get into the ght, expanding
a 16-year-old law intended to...force the UFC to...set up independent rankings that
will award title bouts to ghters based on their records and not on UFC’s judgment of
their marketability.” Id.
116. Paul Gift, Representative Markwayne Mullin Called UFC Executive’s Testimony ‘Mis-
leading’; It Wasn’t, F (Nov. 10, 2017, 8:30 AM), https://www.forbes.com/sites/
paulgift/2017/11/10/representative-markwayne-mullin-ufc-marc-ratner-mislead-
ing-congress-mma-news/#3d0dc6684881 [https://perma.cc/X5R3-KVQG]; see also
Les Carpenter, Longtime Matchmaker Joe Silva Reportedly Retiring After Sale of
UFC, T G (Sep. 1, 2016), https://www.theguardian.com/sport/2016/sep/01/
joe-silva-ufc-matchmaker-retiring-after-sale-reports [https://perma.cc/KV4M-3PHF]
(“Among the Ali Act’s provisions are stipulations that promoters must...use indepen-
dent rankings in putting together championship bouts.”).
1 1 7. Paul Gift, UFC Hearing: Judge Calls For Expert Witness And Joe Silva Questioning,
F (Dec. 20, 2018, 10:00 AM), https://www.forbes.com/sites/paulgift/2018/12/20/ufc-
hearing-judge-calls-for-expert-witness-joe-silva-questioning-mma-news/#3fc3a9691902
[https://perma.cc/958A-TEMP].
118. See generally, Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat.
2827 (1998).
134 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
bundled PPV would still be available for purchase, thereby increasing the
chance that ghters lower on the main ght card would be viewed by anyone
purchasing the bundled PPV. Additionally, the UFC could mitigate this risk
by not extending the unbundled PPV option to licensed commercial estab-
lishments seeking to show UFC ghts. Residential PPV purchases constitutes
the bulk of revenue for the UFC.
119
The deeper pockets of commercial PPV
purchases makes them an easier target for litigation
120
as opposed to residen-
tial PPV purchasers as evidenced by the near nonexistent litigation between
the UFC and individual residential PPV purchasers.
121
This would ensure that
ghters lower on the card would still receive exposure through commercial
establishments even if the residential revenue is lower.
122
B. Unbundling Will Essentially Dissolve the Fight Card
In 1982, Jack Valenti, then president of the Motion Picture Association
of America, warned that videocassette recorders would kill his industry.
123
But eight years later, box ofce revenue had increased sixteen percent even
when adjusted for ination.
124
The music industry has also expressed similar
concerns with taping and the Internet.
125
These concerns, however, have not
stopped new technologies from reshaping these industries business models.
126
119. 76 percent of the UFC’s overall revenue comes from “Content” of which 42 percent
comes from residential PPV. Fowlkes & Marrocco, supra note 35.
120. Joe Hand Promotions, Inc. v. Maupin, 2018 U.S. Dist. LEXIS 89185 (E.D.N.Y. 2018)
(holding that a commercial establishment that purchased a noncommercial UFC PPV
and broadcast the program to its patrons was liable for statutory damages of $6,000 in
violation of the Federal communications Act, 47 U.S.C. §§553 and 605, and the Copy-
right Act, 17 U.S.C. §§106 and 501).
121. This default judgement seems to be the only evidence that the UFC has successfully
sued an individual for illegally streaming its content. Zuffa, L.L.C v. Pryce, No. 8:12-CV-
1584 (NAM/RFT), 2013 U.S. Dist. LEXIS 134687 at *12 (N.D.N.Y. Sept. 20, 2013).
122. . As discussed later, those viewing UFC ghts at a commercial establishment are more
likely to be casual fans, rather than die-hard fans.
123. Jake Rossen, How Hollywood Can Capitalize on Piracy, MIT T. R. (Oct. 17, 2013),
https://www.technologyreview.com/s/520336/how-hollywood-can-capitalize-on-piracy
[https://perma.cc/5BCT-QK5H] (“He called [videocassette recorders] a ‘parasitical in-
strument’ and told Congress in 1982: ‘The VCR is to the American lm producer and the
American public as the Boston Strangler is to the woman home alone.’”).
124. Id.
125. Ian Morris, Technology Is Destroying the Music Industry, Which Is Great For The Next
Taylor Swift, F (Nov. 17, 2014, 3:41 PM), https://www.forbes.com/sites/ianmor-
ris/2014/11/17/technology-is-destroying-the-music-industry-which-is-great-for-the-
next-taylor-swift/#458213bb236b [https://perma.cc/9U4P-NYAE].
126. John Schwarz, How To Survive the Rising Tide of Tech Change, F (Mar. 5, 2018, 9:00
AM), https://www.forbes.com/sites/forbestechcouncil/2018/03/05/how-to- survive-the-
rising-tide-of-tech-change/#56adfbdb1486 [https://perma.cc/5GD7-TE5Y] (“Through-
out history, new technologies have reshaped the economy—from the Industrial Revo-
lution to modern conveniences like the telephone, automobile, airplane, television and
computer.”).
2020] LET’S GET READY TO UNBUNDLE! 135
While iTunes essentially destroyed “the album”, consumers today still purchase
music.
127
Therefore, while concerns that unbundling the UFC PPV model
could lead to the dissolution of the entire ght card are valid, that does not
mean that consumers will no longer purchase UFC ghts. Instead, the ways in
which those ghts are viewed will simply change.
C. Time Delay
Another, more practical concern, is that the nature of how an MMA ght
ends could jeopardize unbundling the PPV. All ghts are scheduled for three,
ve-minute rounds, with a one-minute rest period between each round with
the exception of main and co-main events which are scheduled for ve, ve
minute rounds.
128
While the ghts may be scheduled for a set time, they can
end in numerous ways.
129
Therefore, unless a ght ends via decision, there is
no way of knowing, with certainty, when a ght will end.
130
This could be prob-
lematic for a customer who purchases a single ght, say the second ght on the
main PPV card. If the rst ght on the card ends early, the customer would not
know when to tune into the second ght. If they assumed that the rst ght
ended after seventeen minutes of action, tuning in at that point may mean that
they would be begin watching somewhere in the middle of the ght, and might
have missed the beginning. This problem, however, can easily be solved.
First, because UFC PPV has become purely digital,
131
it would not be
difcult for ESPN+ to provide a notication on the customer’s device letting
127. Carl Bjurling, The Inevitable Cycle of Business is that Strengths Become Weaknesses,
M: D D I (Oct. 23, 2018), https://medium.com/datadriveninves-
tor/the-inevitable-cycle-of-business-is-that-strengths-become-weaknesses-efe9112b-
9c4b [https://perma.cc/E58A-ZAAN].
128. Kim, supra note 25, at 57.
129. Jordan T. Smith,: Fighting For Regulation: Mixed Martial Arts Legislation in the United
States, 58 D L. R. 617, 636 (2010).
“A bout can end by: 1) submission, which is when a competitor signals either
physically or verbally that he does not wish to continue; 2) a technical knock-
out, where the referee stops the contest; 3) a knockout, when a competitor fails
to rise from the canvas; and 4) a decision, where the contest has gone the full
number of rounds and the winner is determined by totals on the panel of judges’
scorecards. Additionally, a referee may stop a contest in the interest of safety
for a number of reasons, including: 1) if he determines that one of the compet-
itors has sustained an injury; 2) if the contest is too one-sided and a competitor
is at risk of injury; or 3) if one of the competitors is deemed not to be honestly
competing.” Id.
130. For example, UFC ghter Duane Ludwig holds the record for fastest knockout record
in the UFC for his win over Jonathan Goulet at UFC Fight Night 3. See George Mills,
Crash, Bang Wallop: The Five Fastest Ever Knockouts in UFC History, D S S-
(Oct. 20, 2017, 1:49 PM), https://www.dailystar.co.uk/sport/ufc/653888/UFC-news-
fastest-ever-knockouts-Gdansk-stream-video-Darren-Till-Cowboy-Cerrone [https://
perma.cc/9JKX-LMWD].
131. Russ, supra note 29.
136 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
them know when their ght was starting. Second, many customers actually
seem to prefer the practice of timeshifting, which would render the live nature
of the ght obsolete.
132
D. Casual vs. Die-Hard Fans
Finally, the question must be asked: will unbundling have any meaningful
impact on die-hard fans? Most viewers of sports are considered casual fans.
133
A
casual fan might be dened as viewing a sporting event strictly as a form of enter-
tainment.
134
By contrast, a die-hard fan puts a tremendous amount of investment
into his or her fandom.
135
From an economic standpoint, these two types of fans
have different price elasticities of demand.
136
Casual fans most likely have elastic
demand curves for viewing the UFC, as they will be more responsive to changes
in price. In contrast, die-hard fans, who most likely have inelastic demand curves
for viewing the UFC, will be less responsive to changes in price.
137
This is due to
the fact that the most important determinant of a consumer’s price elasticity of
demand is the availability of substitutes.
138
For a die-hard UFC fan, there are not
as many substitutes to watching the UFC as there would be for a casual fan who
has many other sports that they may enjoy watching.
Therefore, it is likely that unbundling the PPV model would have the big-
gest effect on casual fans. Still, as evidenced by former UFC ghter Brendan
132. One court dened “time-shifting” as watching a televised copyrighted audiovisual work,
in its entirety, at a later time. Ned Snow, The TIVO Question: Does Skipping Commer-
cials Violate Copyright Law, 56 S L. R. 27, 81 (2005) (referencing Sony Corp.
of Am. v. Universal City Studios, Inc., 464 U.S. 417, 449 (1984)).
133. Jason Mays, Fan Loyalty and Motivation, UNLV T, D, P
P, C, 1348, 1349 (2012).
134. Id.
135. Id. Die-hard fans may subscribe to magazines, websites, or blogs. Id. They may also
purchase merchandise and travel long distances to see live events. Id.
136. Price elasticity of demand is dened as the “proportional effect on the quantity de-
manded of a proportional change in price.” R A. P, E A
L §9.1 (9th ed. 2014).
137. Id. A perfect illustration of this concept was former UFC heavyweight and MMA pod-
caster Brendan Schaub’s experience purchasing the UFC’s rst PPV event via ESPN+.
See Milan Ordoñez, Schaub: UFC ‘Lost so many Casual Fans’ with ‘Two Paywalls’ and
Problematic ESPN+ PPV Stream, B E (Apr. 19, 2019, 1:00 PM), https://
www.bloodyelbow.com/2019/4/19/18507211/brendan-schaub-ufc-lost-so-many-casual-
fans-with-problematic-espn-plus-stream-ufc-236-mma-news [https://perma.cc/SYM5-
6ZA4]. After approximately $80 to purchase UFC 236, Schaub detailed the technical
problems he experienced by purchasing it through ESPN+. Id. After attempting to
troubleshoot the problem, Schaub clicked on an illegal link that his followers sent him
on social media. Id. Schaub, a self-described die-hard fan, perfectly illustrated that
casual fans have much more elastic demand curves for view the UFC by stating “[the
UFC] just lost so many casual fans. Cause you know what my dad did when I couldn’t
gure it out? He went, ‘Who cares? Oh it’s too much. I’m out.’” Id.
138. Enrique Guerra-Pujol & Orlando I. Martínez-García, Does The Prisoner’s Dilemma
Refute the Coase Theorem, 47 J. M L. R. 1289, 1311 (2014).
2020] LET’S GET READY TO UNBUNDLE! 137
Schaub’s UFC 236 experience,
139
while a die-hard fan may be more likely to
stick with a legal stream than a casual fan, it is possible for a die-hard fan to
reach a tipping point where they may decide to “go over to the dark side” and
watch an illegal live stream. Thus, while the unbundling model could primarily
target casual fans, die-hard fans may also benet. Additionally, because casual
fans make up the bulk of the UFC fan base, a business model that primarily
targets casual fans will be advantageous for the UFC’s bottom line.
V. A O B
A. Other MMA Promotions
While the UFC is arguably the world’s largest MMA organization,
140
there are a number of other promotions that also show MMA ghts on a wide
variety of platforms. One such platform, Bellator, is widely regarded as the
UFC’s main competitor.
141
Owned by entertainment giant Viacom, Bellator
broadcasts its ghts on TV via the Paramount Network, as well as the stream-
ing service DAZN.
142
For a monthly fee, subscribers can view a variety of
sporting events including the monthly Bellator events.
143
Bellator follows a
similar model to the UFC with monthly ght cards that feature a preliminary
ght card that is viewable through the Bellator website, and then a main card
that is viewable on cable TV or online.
144
Because Bellator bundles its ghts
via a streaming service, it would be entirely possible to offer an unbundled
streaming service as advocated by this Comment.
In addition to Bellator, the UFC competes with the Professional Fight-
ers League (PFL).
145
Unlike the UFC and Bellator, the PFL follows a format
139. Ordoñez, supra note 137.
140. Black, supra note 2, at 742.
141. Alan Dawson, Scott Coker Explains why Bellator is Ready to Top UFC as the Biggest
Company in Cage Fighting, B I (Jul. 23, 2017, 3:39 AM), https://www.busi-
nessinsider.com/scott-coker-bellator-ufc-mma-2017-5 [https://perma.cc/5WBW-2LHG].
142. See B (last visited Apr. 28, 2019), http://www.bellator.com/about [https://perma.
cc/7G3L-UPVG]; DAZN (last visited Apr. 28, 2019), https://my.dazn.com/help/about-
dazn-de [https://perma.cc/T3FZ-66D9].
143. Lance Pugmire, DAZN to Raise Monthly Price and Offer New Annual Pass, L.A. T
(Mar. 21, 2019, 10:30 AM), https://www.latimes.com/sports/boxing/la-sp-dazn-raises-
price-20190321-story.html [https://perma.cc/LLS9-YUQ6]. “While current subscribers
paying the original $9.99 monthly fee that was set at DAZN’s U.S. debut last year can
continue in that model for one year, the service will alter its monthly fee to $19.99 for
new subscribers next week while instituting a new $99.99 annual plan.” Id.
144. See Events, B (last visited Apr. 28, 2019)., http://www.bellator.com/events
[https://perma.cc/HT2K-3RCD].
145. Kurt Badenhausen, The New Fight Game: How An MMA Startup Wants to Capture
The Sport’s 450 Million Global Fans, F (Dec. 28, 2018, 6:00 AM), https://www.
forbes.com/sites/kurtbadenhausen/2018/12/28/the-new-ght-game-how-an-mma-start-
up-wants-to-capture-the-sports-450-million-global-fans/#a5e1ceb139e8 [https://perma.
cc/BRW6-C75G].
138 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
used in professional sports leagues like the NBA and NFL, where there are
established playoff and championship seasons.
146
Fans can view PFL ghts via
Facebook Watch, the social media rm’s video on-demand service, as well as
cable TV on the NBC Sports Network.
147
Because the PFL does not charge a
fee to view their ghts online, the PFL functionally offers an unbundled busi-
ness model where viewers can choose which ghts they wish to see.
148
It will
be interesting to evaluate the Facebook Watch data, and analyze viewers’ con-
sumption habits to determine if viewers commonly watch entire ght cards, or
only opt to see particular ghts.
Outside of the United States, ONE Championship is Asia’s largest MMA
organization.
149
Like the PFL, ONE Championship streams its ghts for free
via their online app, obtaining most of their revenue from live events and
advertising.
150
As with the PFL, offering their ghts for free online functions
as an unbundled business model, and an analysis of the viewing habits of their
customers will be very interesting in years to come.
B. Boxing
After airing boxing for forty-ve years, HBO recently announced that it
will no longer air professional boxing events.
151
HBO Sports executive Peter
Nelson made the decision in response to audience research that suggested
that the availability of boxing programming was “no longer a determinant
factor for subscribing to HBO.”
152
Despite this, other television networks have
reached deals with boxing promotions to air ght cards.
153
As boxing promo-
tions are currently in a shake-up, with various promoters looking to ink deals
146. See id.
1 4 7. Id.
148. See id.
149. Brian Mazique, ONE Championship And the UFC Represent Global Duopoly in
Martial Arts, F (Aug. 20, 2018, 11:53 AM), https://www.forbes.com/sites/brian-
mazique/2018/08/20/one-championship-and-ufc-represent-global-duopoly-in-mar-
tial-arts/#60dda9ab43d4 [https://perma.cc/F4F4-LSF5].
150. Jesse Holland, ONE Championship App Lets You Watch Live MMA Events—For
Free—Anywhere in the Word, MMA M (May 4, 2018, 11:49 AM), https://www.
mmamania.com/2018/5/4/17319584/one-championship-app-lets-you-watch-live-mma-
events-free-anywhere-in-world [https://perma.cc/N35R-T4B7].
151. Wallace Matthews, HBO Says It Is Leaving the Boxing Business, N.Y. T (Sep. 27,
2018), https://www.nytimes.com/2018/09/27/sports/hbo-boxing.html [https://perma.cc/
N34T-S4E9].
152. Id.
153. Id. Fox Sports signed a four-year deal with Premier Boxing Champions. Id. “Match-
room Boxing recently signed a $1 billion deal with DAZN (pronounced “Da-Zone”),
a new digital platform, to televise ghts over the next eight years.” Id. In August 2018,
ESPN completed a seven-year deal with ghter promotion Top Rank to present 54
boxing shows on its various networks, including ESPN+. Id. Additionally, “Showtime,
whose ghts were once used as a feeder system by HBO, presented 22 live boxing events
in 2018...[and] has committed to a ‘more robust schedule for 2019.’” Id.
2020] LET’S GET READY TO UNBUNDLE! 139
with various television and online networks, it seems to be a prime oppor-
tunity to thwart the traditional bundled PPV model with one advocated by
this Comment.
C. Cable Television Series
Premium cable television networks have also experienced online piracy
concerns. By offering streaming services, these companies have essentially
unbundled the traditional cable television model, but not entirely.
154
While
subscribers pay a far more modest monthly fee to stream programming than
they otherwise would with a traditional cable TV service, these subscribers
still have access to the entirety of the network’s video library, much of which
includes programming that subscribers are likely not watching. These pre-
mium cable television networks may be served well by offering consumers the
option to purchase an entire season of a show rather than only offering a sub-
scription to the network’s entire library of programming, thereby unbundling
their own subscription service. Indeed, companies like Amazon offer consum-
ers the ability to purchase previous seasons of television shows.
155
This service,
however, only applies to previous seasons, and not currently airing seasons.
156
Because some consumers are unwilling to purchase a monthly subscription for
the cable television service to view currently airing seasons of a television show,
many have turned to illegal streaming.
157
Instead, illegal streaming may be
curbed by allowing consumers to purchase individual episodes of the most cur-
rent season of a show, or by allowing consumers to purchase the entire season
and watch along with those who have a cable television online subscription.
158
Additionally, in the advent of social media, the law of diminishing marginal
utility also comes into play
159
: just like a UFC fan would rather see a knock-
out in realtime and not a replay, a Game of Thrones fan, for example, would
154. See id.
155. See, e.g. Westworld Season 2, A (last visited Apr. 24, 2020), https://www.amazon.
com/Phase-Space/dp/B079LF4JPK/ref=sr_1_2?dchild=1&keywords=purchase+west-
world+season+2&qid=1587774205&s=instant-video&sr=1-2 [https://perma.cc/MP5C-
YHTJ]. The most recent complete season of Westworld can be purchased on Amazon
for $3.99 per episode. Id.
156. See, e.g., Westworld Season 3, A (last visited Apr. 24, 2020), https://www.amazon.
com/gp/video/detail/B07RYFVFKG/ref=atv_dp_season_select_s3 [https://perma.cc/
X9KE-5V67]. By contrast, individual episodes of the current, third season, cannot be
purchased. Id. Fans must purchase an HBO subscription for $14.99 per month. Id.
1 5 7. Sterbenz, supra note 99.
158. Id.
159. Because so many viewers of Game of Thrones posted about the most recent episode on
social media, Google enabled the ability for users to black out any social media posts
mentioning the show. Robert Moran, How to Avoid Game of Thrones Spoilers, S
M H (Apr. 15, 2019, 11:38 AM), https://www.smh.com.au/entertainment/
tv-and-radio/how-to-avoid-game-of-thrones-spoilers-20190415-p51e8e.html [https://
perma.cc/62VA-ER3H].
140 UCLA ENTERTAINMENT LAW REVIEW [VOL. 27:111
prefer to learn that Jon Snow is banished to the Night’s Watch to appease the
Unsullied rather than reading it on social media...or in an academic paper.
160
With a typical TV season lasting a few months, fans who do not wish to pur-
chase a subscription to a cable television online service would have to severely
restrict their social media, (as well as their ofine social interactions) and wait
until a service like Amazon offers the season for purchase. Is it any surprise
that these fans are turning to illegal streaming? Therefore, by applying the
UFC PPV unbundling model advocated by this Comment, these cable tele-
vision networks could experience increased revenue that would otherwise be
lost to illegal online streaming.
C
Before each ght, Bruce Buffer, billed by the UFC as the “Veteran Voice
of the Octagon” always hypes up the crowd with his signature catchphrase “It’s
Time!”
161
Indeed, it is time for the UFC to thwart illegal live streaming of their
ghts by offering customers an unbundled PPV option. While there will be
tradeoffs to this approach, this Comment demonstrates that an efcient alloca-
tion of economic resources favors unbundling.
Additionally, this same approach may also be applicable to other MMA
platforms, premium cable television networks, and professional boxing. Bruce
Buffer’s brother, legendary ght announcer Michael Buffer, has begun count-
less boxing matches with his catchphrase, “Let’s Get Ready to Rumble!”
162
Perhaps now we should say, “Let’s Get Ready to Unbundle!”
160. According to Vulture, the statute of limitations for spoilers of narrative TV shows al-
lowed within the text of an article is the day after the show runs in its normal time slot.
Dan Kois, Spoilers: The Ofcial Vulture Statute of Limitations, N.Y. M. (Mar. 13, 2008),
https://www.vulture.com/2008/03/spoilers_the_ofcial_vulture.html [https://perma.cc/
T6XB-EYZX]. Because this Comment refers to the series nale of Game of Thrones,
which aired on May 19, 2019, the statute of limitations on spoilers has not been violated.
Id.
161. Kelsey Borresen, UFC Announcer Bruce Buffer Gives Couple The Ultimate Wed-
ding Entrance, HP (May 22, 2014, 3:41 PM), https://www.huffpost.com/entry/
bruce-buffer-wedding_n_5374400 [https://perma.cc/5QW4-UWAB].
162. Charles Curtis, Michael Buffer on his Signature Phrase and Losing his Voice Be-
fore Mayweather-Pacquiao, USA TODAY (Dec. 11, 2018, 2:09 PM), https://ftw.
usatoday.com/2018/12/michael-buffer-lets-get-ready-to-rumble-origin-canelo-rocky-
muhammad-ali-interview [https://perma.cc/7PZA-L94G].
