More on Overeem-Golden Glory contract

January 6, 2012

The lawsuit filed by Golden Glory against Alistair Overeem in Clark County, Nevada last week included the Golden Glory-Overeem contract.

As The Fight Lawyer points out, this lawsuit is not the same as Overeem’s lawsuit filed in Los Angeles in November. A summary of that lawsuit is here. However, both lawsuits relate to the contract dispute the UFC Heavyweight had with his former gym.

The contract attached to the Nevada lawsuit is interesting insight into the terms and conditions Knockout Investments (KOI) and Golden Glory (GG) had with Overeem. An initial impression is that it was not drafted by an attorney and has certain clauses which seem one-sided and unenforceable. Yet, we presume that Overeem signed the contract with knowledge of its terms.

Here are some interesting tidbits from the Nevada lawsuit:

- The 2007 contract with Overeem was set for 5 years. KOI/GG would receive 30% of essentially everything made by the fighter.

- In paragraph 34 of the Complaint, it states that Overeem receives $2.00 per view for sales in excess of $500,000 in the United States, Canada and online. Later in the Complaint, it claims that Lorenzo Fertitta told Overeem that the $1 million signing bonus was Overeem’s and that KOI/GG was “ripping him off.”

- The terms of the UFC contract also includes a $1 million “signing bonus” paid over the first 3 fights of Overeem’s contract. Overeem’s contract guarantees the first 3 fights and could “potentially” cover 8 fights. Here, it appears that the UFC has the option to pick up the additional 5 fights.

- In addition to the UFC-Zuffa contract, the Complaint indicates that there is a separate Merchandise Rights Agreement. No known value was stated although its believed to be in excess of $100,000.

- Overeem made $50,000 from sponsorships from his June 2011 fight with Fabricio Werdum. Of which, KOI/GG demand 30% or $11,000. In addition, Overeem did not pay KOI/GG its cut of Overeem’s fight purse for the Strikeforce fight. Basically, Overeem was paid for his June Strikeforce fight and withheld payment to KOI/GG because he believed that his then managers owed him money.

- Article 10 of the contract includes a monetary penalty for violation of the contract. A $10,000 penalty plus a $5,000 per day penalty for each day the contract is in violation. It also states that the fine “can’t be lowered by any legal authority.”

Here is a further explanation of the Nevada lawsuit from F4WOnline (subscription required):

Knock Out Investments claimed that due to Overeem’s existing five-year contract with them that was signed in 2007, they are entitled to 30%. 30% of [Overeem’s] pay between all the money he got for UFC 141 is $684,000, so they are fighting for a huge chunk of change. They also alleged Overeem never paid them their 30% from the 6/18 fight with Fabricio Werdum. Overeem had already, in November, filed suit against Knock Out Investments, claiming they owed him $151,000 prior to the Werdum fight based on fights he already had, and asked for a court order stating that due to that, his contract should be null and void. Prior to the Werdum fight, almost all of Overeem’s fight money, whether it was from Japan or previously with Strikeforce, was sent to Knock Out Investments and then after they got paid and took their cut, they paid their fighters. Zuffa, after purchasing Strikeforce, refused to continue that practice, stating that they were going to pay fighters and not management teams. At one point Zuffa even fired all of the Golden Glory fighters, including Overeem, because Golden Glory made the demand that they wanted the money to be paid to them. After firing a number of fighters, Overeem included, Golden Glory relented and agreed to let Zuffa pay the fighters. By that time Overeem had been fired and removed from the Strikeforce tournament, and at the time nobody knew the future of Strikeforce and Overeem would have been far more valuable on the UFC side.

“The reality is that a fighter is paid within 24 hours of the bout,” wrote Knock Out Investments attorney Roderick Lindblom. “Given past failure to pay management and training fees, there is serious concern on my client’s part that Mr. Overeem will simply walkaway with the money.”

An explanation of what occurred regarding the failure to recoup UFC 141’s payment is here. Essentially, a surety bond needed for garnishment after the order was issued was never secured.

Payout Perspective:

One has to wonder why Overeem agreed to some of the terms of the contract and whether he had his own legal counsel look over the contract. Notably, Overeem was granted a $1 million signing bonuses (spread over the course of 3 UFC fights) after he was released from Strikeforce. What interests most people with the terms of Overeem’s Zuffa-UFC contract is the PPV points he received for UFC 141. Its rare that the general public get to see the portion fighters receive for PPVs. One might assume that Brock Lesnar received more of a portion of the PPV revenue due to his status with the company.

15 Responses to “More on Overeem-Golden Glory contract”

  1. Ed Stock on January 7th, 2012 10:03 AM

    “…Overeem receives $2.00 per view for views over $500,000…”

    I’m assuming that’s a typo in either the complaint or the contract and the dollar sign shouldn’t be in front of the 500,000. My guess is it’s for PPV *buys* in excess of 500,000. So, if UFC sold 600,000 PPVs, Reem would get $200,000, which is $2.00 X 100,000.

  2. BrainSmasher on January 7th, 2012 3:35 PM

    Is that info from Overeem or is it assumptions from GG?

    I cant understand why the UFC would not count such a trivial amount of PPVs in the PPV bonus. If it is truely $500K and not 500K buys then i am amazed.

    I doubt Brock is getting a bigger cut of PPV buys. My guess is the $2.00 is standard. It is a great standard of payment for the biggest draw. You dont have to change the $2 because the bigger draw will get more PPV’s. So the bigger draw will always make more money on his fights than anyone else. Overeem got to piggyback Brock on his PPV bonus. That wont be the case moving forward. If indeed Overeem made 2 million plus. It will be a logn time before he makes that from a fight again if ever. Yet Brock was making this every single fight. Actually this was his lowest PPV since his first fight or two. So he ussually makes more. There really isnt a need to change the $2 amount.

    Under the current structure mentioned in the PPV contract. Overeem could headline and draw a horrible 250,000 buys. A number the UFC can draw with anyone random name in their company. Yet they would still have to pay Overeem almost $800,000 for a complete bomb. If that is the case i am surprised the UFC didnt protect themselves better. I believe a fighter should not get a cut of PPVs unless the event breaks 500K. If you cant do that then you are not really a draw and dont deserve any more than the other fighters on the card.

  3. BrainSmasher on January 7th, 2012 3:45 PM

    “Jose Mendoza on January 6th, 2012 5:05 PM

    BrainSmasher, Diego, Henry:

    Here is the exact language from the complaint, which details the contract:

    A “Pay Per View” bonus of $2.00/view for each viewer, for all revenues received by UFC-Zuffa for telecast of the Lesnar fight in the US, Canada or over the internet in excess of $500,000.00.”

    We will post a link and some more details ASAP.

    - Jose

    I will reply to this on this newer article.

    Jose, i assume the complain is by GG and they wouldnt have access to Overeems contract and are only assuming or guesstimating what the contract is. Is that correct or do they actually have access to the contract? Is it possible the $500K is incorrect?

    Thanks. Sorry to go on about this. Im just blown away. Overeem really didnt have much leverage to demand THAT much more money. Then on top of that you look back at Couture who was in equal sized PPV events and he wasnt getting $2 million for hsi fight. I dont understand why they would want his to be the highest paid fighter when he really hasnt proven himself yet in the UFC or as a draw compared to guys like a Chuck, Couture, and many others. The UFC has never been known to do business like that.

  4. Diego on January 7th, 2012 4:00 PM

    Brain,

    We’ve never known who does and doesn’t get the PPV cut since that portion of the compensation (as well as signing bonuses) isn’t disclosed. For all we know Chuck and Couture also got this deal. I’m tempted do assume that that is the case. It’s definitely good money for the upper echelon fighters.

  5. Jose Mendoza on January 7th, 2012 4:56 PM

    BrainSmaher:

    From what I recall, GG worked the UFC deal for Overeem before he seperated from them, hence the lawsuit. You think they would know the language in the contract and have a copy of it.

    If the accusations are incorrect, hence the money GG is requesting is incorrect, then it will be pointed out in the future by Overeem’s legal team.

    This is what we have at the moment and it appears accurate, although odd, as several people have pointed out..

    Diego:

    Several of the top fighters do have PPV bonus. Nick Diaz, Overeem, Hendo, Jon Jones are some of the latest. Obviously Lesnar, GSP, Chuck, Tito, Randy, etc have all had them as well. From my sources, Lesnar’s PPV cut was better than Overeem’s. So, it is fair to assume that Lesnar got somewhere around $2.5M on average. Made roughly around $17M in UFC career with 7 fights.

    So, if we make these assumptions:

    Overeem pay based on 800K UFC 141 PPV Buys:

    [((23K*45)/2 = $500K in revenue) * 0] + (777K PPV Buys * $2) + $385K (disclosed pay) + $333K (signing bonus) = $2.27M

  6. John S. on January 7th, 2012 6:14 PM

    Jose,

    I think what’s been released about Diaz’s contract is that he gets a ppv bonus if it’s a title fight and didn’t get one against BJ.

    What I want to know about Overeem’s bonus was when did he get that offer? When GG was negotiating or after he dropped them? And if after it raises the question was dropping them part of the deal to get the bonus.

    Interesting to note how much a better deal Overeem got than Carwin to fight Brock and how of the 3 fighters that came over from Strikeforce that got ppv cuts how 2 of them had boxing and K1 options in their contacts to use as leverage.

  7. BrainSmasher on January 7th, 2012 9:26 PM

    Thanks Jose.

    Diego,

    Information on Coutures PPV bonus was released during his hold out by Zuffa. IIRC his bonus was 500,000. The UFC paid him in two checks of 250,000. Here is a copy of one of them.

    http://cdn3.sbnation.com/imported_assets/305998/randycouture_signbonus.jpg

  8. Jose Mendoza on January 8th, 2012 3:13 AM

    John S.:

    Check above, addressed some of those same issues BrainSmasher had. GG team worked the Overeem UFC deal I believe before splitting up.

  9. Diego on January 8th, 2012 6:14 AM

    BS,

    It looks like that check is for a signing bonus. Was there information on how much his cut of PPV revenues was?

  10. BrainSmasher on January 8th, 2012 8:29 AM

    It was for his PPV cut not a signing bonus. It just says bonus because that’s how the UFC files it.

  11. Machiel Van on January 9th, 2012 8:45 AM

    I believe we discussed this to a certain extent here: http://mmapayout.com/2010/07/payout-revisited-minimum-fighter-payouts/

  12. Machiel Van on January 9th, 2012 8:50 AM

    This is also relevant to the discussion: http://www.fightlinker.com/advanced-randy-math

  13. Diego on January 9th, 2012 10:07 AM

    MV,

    That last link was interesting. Randy made around $832k (PPV bonus) + $250k show money back in 2007. I figured he was getting around $500k per fight at the time but he was doing double that.

  14. Diego on January 10th, 2012 6:25 AM

    Looking at the numbers again in the link MV posted, under that pay structure if Randy’s fight had done 800k PPVs (instead of 500k), he would have made around $2M, which is essentially what Overeem is making ex-signing bonus. That makes more sense to me. Yes, Overeem is getting good money, but it’s not out of line with what others are getting.

  15. Jake on January 10th, 2012 9:10 AM

    Interesting that a Dutch fighter using a Dutch Manager would have the contract written in english since the official language of the Netherlands is Dutch.

    I would assume that they have duplicate written in Dutch. It would interesting to see how two versions match up

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