- An influencer boxing event took place on June 12 and some of the contestants say they were not paid.
- Two production companies are each placing the blame on the other.
- The lead attorneys for Simply Greatness Productions and LiveXLive explain their lawsuits.
An influencer boxing event took place on June 12, but some of the famous contestants say they have yet to be paid.
Now, an explosive legal battle is afoot between the two companies who produced the pay-per-view competition special — and one lawyer says there's a chance nobody will see profits from the event at all.
Austin McBroom, who is part of the "ACE Family" YouTube vlog channel he shares with his wife Catherine Paiz McBroom and their three children, was the mastermind behind "Social Gloves: Battle of the Platforms." He fought as a headliner in the YouTubers vs. TikTokers boxing matches and he also runs Simply Greatness Productions (SGP), which hired another media company, LiveXLive, to help co-produce the show.
SGP and LiveXLive have filed lawsuits against each other after the event failed to live up to financial expectations set by the success of other fights featuring influencers such as Logan Paul vs. Floyd Mayweather on June 6.
Over one month later, some of the fighters say they haven't been paid the millions they were offered, according to LivexLive's lawsuit. Brooklyn Nets star James Harden who invested $2 million says he hasn't made any money either, Page Six reported.
Simply Greatness Productions says they think LiveXLive is not being transparent about how much money they made
SGP is suing LiveXLive, alleging breach of contract and fraud. SGP is accusing LiveXLive of selling endorsements and sponsorship agreements that SGP was not aware of, and spending money that would not be returned.
SGP and McBroom are also placing blame on their former business partner Paul Cazers, whom they say over-exaggerated his experience in the entertainment industry, according to the lawsuit. Cazers did not respond to a request for comment.
Just hours after that suit was filed on July 21, LiveXLive filed its own lawsuit in return against SGP and the McBrooms for $100 million — a figure largely derived from potential damage to their reputation in the industry, according to the suit.
James Sammataro, a partner at Pryor Cashman LLP and the lead attorney for SGP's suit, said in an interview with Insider that because of LiveXLive's financial decisions, nobody involved would see a profit.
"Quite frankly, we'll never see that," Sammataro said of the 75% of the profits SGP was supposed to receive. "I think we are realistic enough to realize that we're not at the point that there's ever going to be any profits for this event."
That may mean some of the influencers who fought in the event won't be paid in full: AnEsonGib, VinnieHacker, DDG, FaZe Jarvis, Landon McBroom, Ryan Johnston, Bryce Hall, Tayler Holder, Deji, Nate Wyatt, Michael Le, Ben Azelart, and Cale Saurage. Those influencers did not respond to requests for comment.
But Insider's Dan Whateley previously reported that one fighter's manager, who requested anonymity to avoid damaging their relationship with the event organizers, said they had no issues with payment.
LiveXLive kept asking for more and more money and went over budget "by millions," Sammataro alleged, with the promise that the end result would deliver a bigger profit.
But the several billion supposed social-media impressions did not translate to a major sale of pay-per-view subscriptions for the event. Pay-per-view packages started at $49.99 and went up to $89.99 if viewers wanted to purchase extras such as shows or an NFT (a non-fungible token).
In the end, the event only sold 136,000 subscriptions. But Jeffrey Katz, a senior partner at Watkins & Letofsky, LLP, the lead attorney representing LiveXLive, told Insider that LiveXLive warned McBroom and SPG that they would not break 200,000 purchases if they didn't follow through with the marketing strategy they had outlined.
"LiveXLive said, we are telling you right now, that if you do not improve your marketing strategy, you will not break 200,000," Katz told Insider. "And they rejected it. Sheer and utter hubris on the part of the McBrooms."
McBroom has "dug himself an enormous hole" by refusing to implement the marketing strategy put forward by LiveXLive's experienced team, thinking he could sell tickets based on his social-media following alone, Katz said.
According to Sammataro, it is unclear why more viewers did not end up paying for the event, and that's one question SGP and McBroom want to be answered by the lawsuit. He said it could be as simple as TikTok users not being accustomed or willing to pay for something, as TikTok is a free app.
"Three and a half billion impressions, all the media buzz that was surrounding this, didn't convert to pay per view sales," he said. "Maybe it was priced too high. Maybe the execution wasn't done right. Maybe it was pirated. Maybe it wasn't marketed and promoted properly, or maybe there's something sinister going on."
But still, SGP said that LiveXLive is not being transparent enough about how much money the event made.
"We know there's not enough money to cover everyone, but we think there's more money than has been reported," Sammataro said. "So the truth is somewhere in the middle."
LiveXLive will not release the funds until the lawsuits are resolved, Sammataro said. Until then, SGP cannot know how much each fighter will be paid — and the company is trying to avoid bankruptcy, he said.
LiveXLive has filed a defamation lawsuit against the McBrooms and Simply Greatness Productions for $100 million
LiveXLive's return lawsuit against McBroom and SGP seeks $100 million in damages.
Katz told Insider that LiveXLive does currently hold the funds made from the event, but the challenge in releasing them is that the McBrooms and SGP "sold people a bag of lies." The money is dramatically insufficient to meet the bloated expenses and contracts incurred by McBroom, according to LiveXLive.
"The McBrooms and their entire approach to this event was built upon a stack of lies, lies that even LiveXLive fell victim to," Katz said.
The company was approached with a marketing deck by McBroom, which showed he expected the event to make $225 million based on the fighters' followings on YouTube and TikTok, according to Katz.
SGP approached LiveXLive in crisis because their partnership with streaming platform Live Nation had fallen through and they had no venue for the event, Katz said. This was when LiveXLive stepped in at SGP's request and procured business deals and secured the Hard Rock Stadium, he said.
When the final numbers came in, SGP tried to flip the narrative, according to Katz, and accused LiveXLive of "lying and cheating and diverting sales."
"That is the basis in part to the complaint that LiveXLive has brought," he said. "We're a public company. Our reputation is important. We are followed by the market. We are followed by investors. If we get a reputation of lying to our clients that is death to us."
LiveXLive's stock price has dropped from $4.81 to $3.69 since June 12.
Katz could not say how the total profits from the event compared to McBroom's initial estimate of $225 million, but he called the loss "substantial."
Insider has seen a letter from a bankruptcy attorney hired by SGP, saying that it has been enlisted to represent SGP in working out the claims of all its creditors or, "if a workout is not feasible, a likely bankruptcy filing."
Katz said LiveXLive has tried every avenue to avoid going to court, but the company is stuck in a "Gordian knot" until SGP cooperates. He said the time leading up to the impending court cases "will be very telling."
"It's come to this legal battle because they've put themselves in a position where they're extremely desperate," he said.
"So what they're doing is — and this is not atypical and what I see in my business — they've chosen to become victim and to deflect blame."
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