Alvarez-Bellator lawsuit enters settlement discussions
February 18, 2013
The Eddie Alvarez-Bellator situation may be drawing closer to a possible settlement as Patrick English, attorney for Bellator, sent a letter to the Court requesting an extension of time to respond to Alvarez’s Counterclaims. The parties have agreed to the extension until March 1, 2013 and the Court approval should be a mere formality.
Mr. English attached a Consent Order requesting an extension of time for Bellator to receive an extension of time to file an Answer to the Counterclaim until March 1, 2013. Previously, Bellator had an extension to respond until Tuesday, February 19th. This second extension appears that the parties are willing to negotiate a settlement without further litigation.
Obviously, the Court’s denial of Eddie Alvarez’s Preliminary Injunction weighs heavy into the decision to settle the lawsuits without further litigation. At the preliminary injunction hearing, Alvarez’s attorneys failed to show the Court that it would have a reasonable probability of success on the merits and they failed to show that Alvarez would suffer irreparable harm. These were two of the four factors required to prevail on a preliminary injunction. If Alvarez would have succeeded, it would have been likely that he would have signed a contract with the UFC.
However, Bellator had a strong opposition brief which included two declarations which addressed the issues of the 1) right to match, 2) the Fox v. Spike TV comparison, and 3) the PPV issue. Prior to the preliminary injunction hearing, a Certification of MMA journalist Dave Meltzer was filed on Alvarez’s behalf. The certification rebuts the declarations filed by Bellator in its opposition to the preliminary injunction. The certification identified UFC PPV buy rates with the belief that Alvarez would have made more if he would have been allowed to fight in the UFC.
The Court did not agree with Alvarez’s argument that Bellator could not provide an identical match was a failure to match. The Court held this argument untenable although it did not discount that Alvarez could not win based on this theory. So, while Alvarez lost on this point here, he could win after the discovery phase.
As for the irreparable harm argument, the Court held that Alvarez’s argument that he would be harmed if he could not fight in the UFC on April 27th was speculative at best. There was no illegal restraint on Alvarez by Bellator and he could still compete professionally even if an injunction were not granted.
It will be interesting to see if the parties can come up with a settlement that would make both parties happy. The fact Alvarez lost the injunction does not make him bound to the contract offered by Bellator. He could continue with the lawsuit if he truly wanted to fight the issue. But,we might see some compromise in which Alvarez can be bought out of his contract after a certain number of fights if he truly wants to head to the UFC. If Alvarez did not want to stay, it would make sense for Bellator as I do not see the company wanting a malcontent with its new partnership with Spike. Maybe the number of fights with Bellator is reduced without a right of first refusal or matching rights clause so that he can fight elsewhere. However, Bellator may make Alvarez a solid offer as a way to make him happy and be a face for the company. He could be made one of the top (if not the top) paid fighters in the company. We should know by March 1st which way Alvarez goes.