TMZ first reported that UFC heavyweight Alistair Overeem has sued his ex-management group, Golden Glory. According to TMZ, the lawsuit requests that the court break his contract with Golden Glory. Since the filing, Golden Glory has fired back at Overeem.
First the lawsuit.
Via the Fight Lawyer:
Overeem is suing “Knockout Investments, B.V., Golden Glory, Golden Glory California, Bas Boon” and a bunch of “Does.” According to the complaint, KOI is the legal entity that manages Overeem and allegedly KOI performs its management function through its affiliate, Golden Glory.
According to the allegations in the complaint, Overeem’s contract with KOI and GG was signed in July 2007 and is for a 5-year term. The agreement has an automatic renewal provision (for another five-years) unless either party does not want to renew and then any such notice must be served six months before renewal.
The agreement provides that KOI and GG were to provide a number of services–Overeem alleges that some of these terms are ambiguous and unenforceable (e.g., “acting as a ‘confidential agent,'” “looking for personal sponsors,” and “making publicity”) in a personal services contract.
Under the agreement, Overeem alleges that KOI and GG are entitled to 35% of Overeem’s pre-tax income. Overeem alleges that under the contract the same 35% is due “for any deals ‘within one year after this contract has expired and/or were prepared during the duration of this agreement.'” Overeem claims the management agreement also includes a provision that fines Overeem $10,000 for any breach of the agreement and a $5,000 per-day penalty for each day the violation continues.
Overeem asserts two claims–one for breach of contract seeking “an amount in excess of $151,000” and a judicial declaration concerning the parties’ respective rights under the management contract. Essentially, he wants the court to declare that KOI and GG are not entitled to his UFC money. Overeem also seeks an accounting.
A few thoughts — and I am doing this quickly. The liquidated damages clause — i.e., the 10k penalty and 5k a day add on as the violation continues– is not, in my view, by any stretch of the imagination enforceable. That said, there is no allegation that I saw that KOI or GG are seeking to enforce that provision. So it may be a moot point.
Turning to the crux of the complaint. Overeem lists a bunch of “failures” on the part of KOI and GG — chiefly, failures to pay, including money from FEG, Dream/K-1s parent, but he really alleges nothing specific, e.g., an amount. He also claims he was not “properly informed” and alleges that KOI and GG failed to “protect [his] interests.” Overeem also alleges that he believes KOI and GG received some undisclosed bonus arising from Overeem’s signing with the UFC–nothing more.
While certainly some of the provisions in the agreement could have been written more eloquently, whatever services Golden Glory provided, it seems pretty clear based on my read of the complaint (which is biased for Overeem) it is entitled to 35% of his pre-tax income and it also seems pretty clear that they have a trailing commission for a year even after the contract has expired. Some of the allegations arguably make KOI and GG look bad, e.g., allegedly managing him in jurisdictions where KOI and GG were not licensed and allegedly pushing him to fight when injured. But not sure that gets him around the 35% or somehow renders the management contract a nullity.
In any event, I read this quickly but sounds like Golden Glory has a nice little claim for the UFC 141 income, which would presumably include sponsorship money as well.
All of this said, let’s see how the story unfolds as there may be more out there.
Now the response by Golden Glory.
Via MMA Weekly:
“We are currently in receipt of a copy of Mr. Overeem’s lawsuit and our clients are assessing all available defenses and counterclaims,” read the statement from Golden Glory’s legal counsel at The Law Offices of Roderick J. Lindblom, APC.
“This lawsuit is a preemptive action on the part of Mr. Overeem and his counsel in response to KOI’s recent notification to Mr. Overeem of numerous violations by him of his management agreement with KOI, including but not limited to his failure to pay commissions for past fights and endorsement deals secured by KOI and Golden Glory.”
Payout Perspective:
The lawsuit makes one think about Dana White’s previous statements about Golden Glory business practices when Zuffa unloaded the Golden Glory stable. The lawsuit is in its infancy stages and we will have more as time goes on.
Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry. He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website. He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training. Justin lives in New York City where he trains in jiu jitsu and boxing.
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Overeem is an idiot. Sorry to be so blunt. But who in the world signs a 35% agreement like that? The worst part of the contract is the 1 year fee he has to pay when he leaves. So when he leaves the new agent will get 10-15% and GG is still getting 35% off of contracts they didn’t even acquire. So after both agents get their cut and after taxes Overeem could end up with less than 30% of his contracted pay.
Then you have the penalty. Why would you agree to the terms with the penalty then piss and moan later about it being there. No one made him sign the contract.
In 2007 Overeem was still a known name. It wasnt like he had no options and they were the only ones who could get him work.
Depending on how this suit plays out i expect Overeem to be hurt a lot in 2012. Mayb ehe can push back the few super fights he has to after the GG contract expires. lol
“Overeem is an idiot. Sorry to be so blunt. But who in the world signs a 35% agreement like that? ”
Every other fighter in the Golden Glory stable.
From what little research I have done, that contract is not all that unusual for European kickboxing gyms in general. I wouldn’t be surprised if Vos gym or Mike’s gym had similar management contracts.
If the gym fees are included then that isnt all that bad. Still a little high but im sure it cost 10% at most gyms and 10-15 for agents. But the extra year and the penalties onto a high price is crazy. Specially when Overeem was in a good position when signing I cant remember to many GG fighters but there isnt many who are making what Overeem was even in SF.
That said he should honor his contract even if HE signed over 100%. It is dirty of him to try and get out now that he is cashing in and should make millions.