Bellator files opposition for Friday hearing in Alvarez lawsuit

January 24, 2013

Bellator has filed its opposition briefing for Eddie Alvarez’s preliminary injunction.  It includes two declarations which supports the contention that the organization had matched Zuffa’s offer.

On Friday, January 25th, the Court will hear Alvarez’s Order to Show Cause regarding a preliminary injunction sought by the lightweight so that he may seek a contract with Zuffa.

Bellator’s opposition includes two declarations.  The first is from Main Events boxing CEO, Kathy Duva.  Duva’s declaration states that matching rights clauses are commonplace in fight contracts and that guaranteed purses are the customary measure to determine whether a third party has matched terms of the contract.  Duva also indicated that she is an attorney-at-law with a law degree from Seton Hall.

The next declaration is from former Showtime exec, and current EPIX TV consultant, Ray Langbord.  Mr. Langbord addressed two issues in his declaration.  First, he addresses the right to match issue.  In reviewing the contracts in question, he opines that Bellator matched Zuffa’s offer and actually offered more non-speculative monetary compensation.  Langbord also indicated that matching rights measure is guaranteed payouts as Duva addressed in her declaration.  He also goes into a discussion about weighing Fox versus SpikeTV and states that Spike TV is more experienced in MMA than Fox.

Langbord, also an attorney, addresses the PPV issue.  He states that despite the fact that Bellator has not run a PPV it still is capable of doing so.

As for the legal brief, we addressed the elements needed to prevail here.  The most notable argument is whether Alvarez would likely prevail on the merits. Bellator argues that New Jersey does not require “matching of immaterial terms, or what appears to be the same thing, [and] do not let insubstantial variations between the third party offer and the right’s holder offer to defeat the right.”

Bellator also brings up the issue of a “poison pill” clause that has been addressed by courts in New Jersey.  Essentially, poison pill clauses violate the duty of good faith and fair dealing in contracts.  Bellator attorneys cite a USA Cable vs. World Wrestling Federation case as authority.

Payout Perspective:

It will be interesting to see what happens Friday.  Certainly, Bellator attorneys make a good case against the injunctive relief sought by Alvarez.  The declarations are helpful for Bellator but necessarily instructive for the court.  Yet, it does support Bellator’s belief that it matched the guaranteed money offered by Zuffa.
The poison pill clause is something that has been used in the NFL and NBA.  Jeremy Lin’s contract with the Houston Rockets is an example of such a poison pill.  Basically, the poison pill is something in the contract that the other side cannot or will not be able to match.

7 Responses to “Bellator files opposition for Friday hearing in Alvarez lawsuit”

  1. Ron on January 25th, 2013 8:06 AM

    They “make a good case” by getting two lawyers not in the mma biz to say so?? Seems to me Eddies lawyers could easily debunk these two “witnesses” which is all they seem IMO. 1st, they could say Duva has no idea at all what a “Customary” MMA contract is and that her statment is no more inciteful then having a statement from the owner of the St. Louis Blackhawks about what hockey contracts entail. All the other guy did was make pronouncements… “gauranteed payouts” is the measure? Oh, we don’t need a trial to see if it matched because Langbord says it does. Bellator hasn’t run a PPV in it’s 4yr existance? So what, Langbord says it is capable.

  2. Jason Cruz on January 25th, 2013 8:34 AM

    The declarations are helpful not instructive. They are helpful for Bellator to be clear in laying out its argument as to what is the norm in matching fight agreements. So obviously Zuffa will discredit with the fact that these two do not work in MMA but it will have to address the issue to the court. What will its supporting evidence be to rebut? The thing is that both have now basically availed themselves as witnesses and likely depositions if the litigation goes forward.

    Also, its interesting that a former Showtime exec submits a declaration against Zuffa. Prior history?

  3. Weezy02 on January 25th, 2013 8:59 AM

    First of all, I think that Bellator will likely win this judgement. So don’t get me wrong, I think they will win. However, I think their biggest vulnerability lies here: It sounds like some of the argument (referenced by Mrs. Duva) centers around not having to match exposure on the exact same network that another contract offers. I would think her interpretation is correct IF the average audience size is at all comparable. However, it is not in this case. Possibly fighting on a primetime network telecast is not the same as fighting on a primetime SPIKE TV telecast. That’s not a knock at all on SPIKE TV. It provides good exposure in my opinion and it is a big boost to the sport to have Bellator on that channel. However, it’s a big stretch to argue that possibly offering a spot on a SPIKE TV primetime event is equal in value to possibly offering a spot on a primetime network television event. For an admittedly extreme comparison, consider promotion A offering a potential fight on primtime NBC and promotion B offering a potential fight on the Home Shopping Network. Now, one could say that Bellator doesn’t have to match at all since it’s a potential offer and not outright stated in detail as a certainty. That may end up being a deciding factor here.

  4. Henry on January 25th, 2013 3:37 PM

    It looks like Bellator has this one in the bag.

    The explanation above is pretty clear. Expect to see Alvarez back in Bellator.

    However, despite working in the TV industry, Ray Langbord has little idea of how UFC PPVs work. This is his opinion:
    “He also goes into a discussion about weighing Fox versus SpikeTV and states that Spike TV is more experienced in MMA than Fox.”

    Everybody knows the UFC is in charge of it’s own production, that was the case at Spike, and it’s the same at Fox. UFC PPVs are as they’ve been. What’s in question is Bellator PPVs, something that doesn’t exist at this time.

    What is of interest to me is how Spike/Viacom handle Bellator –now that they are majority owners. How will the interest of the network versus the sport be balanced. Bellator cares about MMA, Spike/Viacom, what do they care about the most?

    Watch this space.

  5. Sampson Simpson on January 27th, 2013 7:20 PM

    Viacom care about bringing in target demographic to sell to their advertisers.

  6. Ron on February 13th, 2013 8:56 AM

    Thanks for the reply Jason, I appreciate it. Thanks for the insight as well. Interesting that whatever a witness says has to be rebutted. Goes to answering the question of why trials in the U.S. take so frigging long!

  7. Jason Cruz on February 13th, 2013 9:13 AM

    No problem Ron. Thanks for reading. It will be interesting now since Dave Meltzer has filed what amounts to a rebuttal to Bellator’s declarations.

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