Inside the Bellator Contract
March 17, 2009
With Bellator Fighting Championships making their debut in early April, MMAPayout.com thought now would be an ideal time to take a look at the standard Bellator contract. While most of the contract is the same old legalese native to any promotional agreement there were a few areas that were of note. The key areas of interest were the compensation, control of ancillary rights as well as the terms of the contract. All three of these areas had their own little spin on things that seem to be unique to Bellator.
Tourney Compensation -
Lose in the First Round of Bellator Tournament – $10,000
Win in the First Round of Bellator Tournament – $25,000 ($10K base, $15K Bonus)
Lose in the Semi-Finals – $25,000
Win In Semi-Finals – $50,000 ($25K base, $25K Bonus)
Lose in Finals – $40,000
Win in Finals – $100,000 ($40K base, $60K Bonus)
If a fighter is used as a substitute in the tournament he will receive a base pay of whatever round he lost at, but his bonus payment for a win will correspond with whatever round he is being inserted at. For example if someone lost in the first round, and was inserted into the Semi’s and won they would receive $10k as base for the semi’s and for winning would get a bonus of $25 for total compensation for that round of $35k.
Non-Tourney Compensation-
If a fighter wins a tournament, and subsequently fights in a non-tournament bout, he will receive $7k in base and $7k to win for his initial bout. With each subsequent win the base and win bonus would both increase by $1k. If they lose, their base and bonus would remain the same for the next bout. As you go further down the tournament standings the pay winnows down as well.
Tournament Winner – $7K base and $7K bonus with these numbers increasing by $1K and $1K with each subsequent win.
Tournament Runner Up – $6K base and $6K bonus with these numbers increasing by $1K and $1K with each subsequent win.
Lose in the Semi’s – $3K base and $3K bonus with these increasing by $1K and $1K with each subsequent win.
Lose in Opening Round – $2500 base and $2500 bonus with these increasing by $500 and $500 with each subsequent win.
Analysis: The whole thought process behind this strategy is cost certainty. If you’ve ever delved much into salary cap-ology, then you are familiar with the term. Bellator are looking to have strict control over payroll that can be planned around, this is key especially in their start-up phase. They will be funding the show out of equity and whatever programming fee they will be getting from ESPN. They hope to gradually move over into the PPV area at some point judging from their investor prospectus, that is where the real money is to be made but until then they are going to have to run a tight ship fiscally. Cost containment through this tightly structured compensation model will bolster Bellator’s hopes of viability.
Ancillary rights -
This area contains the usual boilerplate stuff associated with most any fight company. This area is generally one-sided in favor of the company, with nothing in the way of royalties for the fighter in regards to things like DVD’s, etc. The company doesn’t explicitly delineate a separate licensed merchandising agreement at this time (doesn’t seem that Bellator has these plans at a viable stage at this point) but does require the the fighter negotiate in good faith when such efforts are undertaken by Bellator in the future.
One area of the ancillary agreement that is raising the ire of fighter advocates and mangers is a clause that has Bellator reserving the right to register as a trademark the fighter’s name, stage name, or identity for the purposes of Bellator carrying out their promotional duties. This sort of arrangement hearkens almost to the type of deals prevalent in the WWE, where the company holds trademarks over the performers stagenames and likenesses. As jaded as MMA reps are at this point by the contractual grabbiness of Zuffa contracts, this clause is seen in some quarters as being beyond the pale, which takes some doing. While some of the higher profile fighters like and Eddie Alvarez likely have the pull to bargain this clause out of their final deal, it leaves the majority of Bellator’s fighters with a bad deal in respect to the trademark issue. If they hold to this clause steadfastly, they may run into problems in the future recruiting new talent into the organization, provided they continue as a going venture.
Term of the Contract-
The standard term is 36 months or eight bouts, whichever comes first. The contract also has a clause that states that if a fighter is declared champion of his division, wins a tournament or is a tournament runner-up, the contract automatically extends by 18 months or three fights. This is almost a self-fulfilling talent retention process, with the the talent being locked in for longer terms as they achieve within the organization. While not strictly analogous to the UFC’s champion clause, it serves some of the same intents, ie binding the fighter to organization over and above the original term of the contract. The way the contracts read, the contract exclusively binds the fighter to Bellator during that time, Alvarez may be an exception owing to his other contractual ties to manager Monte Cox.
