In the lead up to the event, LiveXLive allegedly showed McBroom financial models which projected more than 1 million in PPV sales performances at $50 apiece, plus fees, and $5 million in projected sponsorship sales, generating as much as $62 million in total. By missing the sales target and only generating $6.5 million in revenue, the Battle of the Platforms is facing an estimated $10 million revenue shortfall. LiveXLive is accused of inducing Simply Greatness Productions "to fund a spare-no-cost, Gatsby-style spectacle with knowingly-false financial projections," attorney James G. Sammataro with the firm Pryor Cashman LLP wrote in the civil complaint, which alleges breach of contract, fraudulent inducement, negligent misrepresentation and breach of the covenant of good faith and fair dealing.
According to the complaint, LiveXLive allegedly never provided Simply Greatness Productions with a final accounting of the event and had conditioned the disbursement of funds on the release of LiveXLive of all liabilities and claims. That's made it impossible to pay the event's fighters, including Bryce Hall, who was promised $5 million for his fight against McBroom, writes Sammataro.
Sammataro also alleges that LXL has been "fraudulently concealing revenues generated from hidden agreements," including a deal with blockchain merch company Cybertino to create NFT memorabilia in the fighters' likenesses. McBroom only found out about the NFT contract in a press release, the lawsuit says, and was not included in the $3 million payment the company allegedly made to LiveXLive. Sammataro also says that LiveXLive has not provided the McBroom family with a financial accounting of in-person tickets for the event at the Hard Rock Stadium in Miami, which were to be split 75-25 in favor of Simply Greatness.
"This venue commitment was a questionable decision because the June 12, 2021 event would follow on the immediate heels of the June 6, 2021 Floyd Mayweather-Logan Paul fight at the same venue, potentially saturating the market and cannibalizing the market for in-person ticket sales," the lawsuit reads.
McBroom is also suing Paul Cazers, a former CAA agent hired by the McBrooms to produce the event. Sammataro claims Cazers didn't fulfill his obligations outlined in the producer agreement he signed in March. Cazers did not comment for this story.
Billboard reached out to LiveXLive chairman and chief executive Rob Ellin for comment, but neither he nor the company's senior vp of corporate communication Aileen Budow responded. LiveXLive is now facing eight open lawsuits, and is being pursued by two law firms over unpaid legal bills and a number of music festivals for non-payment. On Friday, lawyers representing an early LiveXLive investor released the transcript of a 400-page deposition Ellin sat for in October where he lobbed jokes at the opposing attorney and recounted a January 2020 fire that severely damaged the exterior of the KoKo nightclub in Camden, England, which was owned by Ellin's former business partner.
"Karma comes back at you," Ellin said while recounting the incident, according to the transcript of deposition, which was accompanied with information about early investors. "Here's the best part. I got all my stock back as well," he added.
On June 28, the company released its fiscal year financials, revealing that LiveXLive had racked up $41 million in losses for the year, showing an accumulated deficit of $169 million since going public in 2017. As of March 31, the report showed LiveXLive is carrying $77.6 million in liabilities on its books.
LiveXLive is now allegedly using the event as a proof of concept for future boxing events, Sammataro writes. Two weeks after the Battle of the Platforms concluded, LiveXLive announced the launch of Self-Made KO, an all-female pay-per-view boxing match pitting social media influencers against one another.
"In the final score card, [Simply Greatness Productions] has been left with crippling financial debt; the talent and fighters are owed substantial amounts (which LXL refuses to release) and LXL has walked away from its breaches of contract and tortious conduct with no debt and a competing brand, which it was able to build using [Simply Greatness Productions] money," the complaint reads. LiveXLive has also allegedly warned McBroom to stop investigating the matter, claiming that his "alleged defamatory statements has resulted in $100 million in damages" to LiveXLive.