Alvarez produces “smoking gun” document

May 13, 2013

Eddie Alvarez produced via twitter a document he claims Bellator altered after he had agreed to the terms of the renegotiation period. Alvarez stated that Bellator changed the matching issue from “all terms” to “material terms.”

 

In the October 30, 2012 letter from Bellator to Alvarez sent via email and Certified Mail, the letter states in reference to matching terms with Zuffa:  “Upon receipt of such an offer, you are thereafter obliged to produce to Bellator a true copy of the proposed agreement with Zuffa, LLC at which time Bellator shall have fourteen (14) business days from receipt of the full agreement to consider whether it will match the material terms of the offer.” (our emphasis in bold and italics).  In a subsequent letter, the sentenced was changed from material to all.

Alvarez had noted this change during his interview with Ariel Helwani on The MMA Hour and on MMA Junkie Radio.  He essentially cited this as an unethical business practice.

Bjorn Rebney responded to Alvarez’s claims in an article on MMA Fighting.  The November 1, 2012 letter was produced which stated “all terms” instead of material terms was produced in the article. Rebney refuted Alvarez’s accusations stating that he was aware of the language and that Alvarez’s attorneys were aware as well.  Rebney also responded to several issues regarding pay concerning Zach Makovsky, Cosmo Alexandre and whether or not Bellator attempted to sign Leonard Garcia.

Payout Perspective:

The letter produced by Alvarez attempts to show that Bellator amended terms without his knowledge.  Rebney indicated that this is not true and that Alvarez’s attorneys had the chance to review the letters.  Did Alvarez’s lawyers not see the November 1st letter?  Based on what the Court has opined in the Preliminary Injunction, will the “material” vs. “all” terms matter?  If you recall, the Court indicated that it would apply a common sense approach to matching terms.  Regardless of one might think, this lawsuit is going to start to heat up.  Moreover, arising out of the lawsuit are PR issues which Rebney, Bellator and Viacom must address and determine how to put out the fires.  By implicating other issues with fighters, we might see Makovsky, Alexandre and Garcia get pulled into this lawsuit as witnesses.

10 Responses to “Alvarez produces “smoking gun” document”

  1. Machiel Van on May 13th, 2013 3:03 PM

    I don’t think this will effect the case at all, but it’s pretty damning from a PR perspective. Bjorn should’ve stayed quiet. At this point, even if Bellator wins the case, they’ve lost the PR battle. I’ve got to think all this bad press has begun to influence managers’ opinions about their clients signing with the promotion.

  2. dfdfdfdfd on May 13th, 2013 6:23 PM

    Rebney is a lawyer

  3. dfdfdfdfd on May 13th, 2013 6:27 PM

    In any contractual dispute, full disclosure means that all documents including drafts etc. would have to be disclosed by Bellator. I have found this whole story incredibly interesting, and my strong gut instinct tells me that the Oct 30 is a draft document as opposed to a contractual offer.

    For one the fact that it took only 2 days for a new document to appear makes it very difficult to tell a story in which the Oct 30 document was ever meant to constitute a “final offer”. Even if I am wrong though, in contract law the party making the offer is the master of acceptance. Meaning that offer can be revoked at any time, before the offer is signed and accepted. Sending a new offer (with changed terms) LEGALLY AMOUNTS TO A REVOCATION OF THE ORIGINAL OFFER.

    The revision made of adding in “material terms” was a completely necessary one from a legal standpoint and makes all the sense of the world, and honestly I am shocked that “material terms” wasn’t just pro-forma part of the original draft document- if you want an example of sloppy lawyering, this is a great one. Why? Because without this necessary term Alvarez would be able to avoid any extension with Bellator in a number of ways. IE. “With the Zuffa contract I also get promoted on FOX and FX”, “with the Zuffa contract I have the opportunity to coach on the Ultimate Fighter” etc. etc. Bellator will always be incapable of matching certain terms that may be implied with a Zuffa contract. It would be completely foolish of Bellator therefore to not explicitly make “material terms” standard wording in all contracts that require matching an organization, but nonetheless a court is unlikely to kill an entire contract where the intent is clear due to one stupid legal oversight.

    My final 2 cents: When this goes to court, even if the court finds “material terms” was not part of the original contract, they will find that this is an implied term of the contract due to the reality of the business context in which the contract was made, and therefore Bellator will win.

  4. dfdfdfdfd on May 13th, 2013 6:27 PM

    In any contractual dispute, full disclosure means that all documents including drafts etc. would have to be disclosed by Bellator. I have found this whole story incredibly interesting, and my strong gut instinct tells me that the Oct 30 is a draft document as opposed to a contractual offer.

    For one the fact that it took only 2 days for a new document to appear makes it very difficult to tell a story in which the Oct 30 document was ever meant to constitute a “final offer”. Even if I am wrong though, in contract law the party making the offer is the master of acceptance. Meaning that offer can be revoked at any time, before the offer is signed and accepted. Sending a new offer (with changed terms) LEGALLY AMOUNTS TO A REVOCATION OF THE ORIGINAL OFFER.

    The revision made of adding in “material terms” was a completely necessary one from a legal standpoint and makes all the sense of the world, and honestly I am shocked that “material terms” wasn’t just pro-forma part of the original draft document- if you want an example of sloppy lawyering, this is a great one. Why? Because without this necessary term Alvarez would be able to avoid any extension with Bellator in a number of ways. IE. “With the Zuffa contract I also get promoted on FOX and FX”, “with the Zuffa contract I have the opportunity to coach on the Ultimate Fighter” etc. etc. Bellator will always be incapable of matching certain terms that may be implied with a Zuffa contract. It would be completely foolish of Bellator therefore to not explicitly make “material terms” standard wording in all contracts that require matching an organization, but nonetheless a court is unlikely to kill an entire contract where the intent is clear due to one stupid legal oversight.

    My final 2 cents: When this goes to court, even if the court finds “material terms” was not part of the original contract, they will find that this is an implied term of the contract due to the reality of the business context in which the contract was made, and therefore Bellator will win.

  5. Machiel Van on May 14th, 2013 7:28 AM

    dfdfdfdfd,

    Nice to see you over at MMAFighting! Consider Bloody Elbow as well.

  6. mooseknuckle on May 14th, 2013 7:28 PM

    I just don’t aee where the value in all of this is for Bellator. I guess it’s in the long run and having their contract held up in court. Even if they operate completely within their legal rights, their public dealings with fighters are a PR nightmare.

  7. brad60 on May 14th, 2013 8:36 PM

    I cant wait to see where Eddie ends up. I hope Ufc. I ment Eddie in Bodog fight, great guy very polite. He’s a beast in the cage.

  8. Chris on May 15th, 2013 5:23 AM

    I dont think this is even worth it for Bellator, he isnt their champ, they are taking major hits in the PR department for this and for what?

    Eddie lost to Chandler, if they sign him and give him a title shot adn he loses then what? 2 losses to the champ. So you throw him in a tournament, not sure how that works with his pay structure, does he get 70./70 for each tournament fight or reg tournament pay?

    But say he loses in the tournament or wins it and gets a third fight with Chandler but loses that?

    Difference between Bellator and UFC is when a guy in the UFC like Sonnen is out of title contention he still has value to the company. He can still headline a card in Brazil, be on Fox, FS1. third fight on a PPV.

    In Bellator everything right now is about the tournament, fighting to get into a tournament, fighting in a tournament or a title fight. They dont just put on fights just to do it, its all about the tournament. So if Eddie loses to Chandler again and loses in a tournament or a third time against Chandler what value does he have for Bellator?

    Do they pay him 70/70 to main event a regular card vs some guy not in a tournament? I know part of it is to show they arent a feeder org to the UFC, that the UFC cant just come in and take anyone they want but even if they win they still lose. Eddie wont be happy, fans have already turned on Bellator and all for a guy who could lose all value after one fight in Bellator.

  9. Machiel Van on May 15th, 2013 7:46 AM

    Mooseknuckle,

    This isn’t really about Eddie Alvarez’s contract or what value he can potentially bring to the company per se, it’s a test case: Bellator wants to see if the UFC’s contractual promises of PPV bonuses and access to the FOX platform will hold up in court. If not, then it will set a precedent, and the next time Bellator may want to match an offer, they’ll know they won’t have to match those terms. It looks like the PPV/platform part of the agreements DO have to be matched, but there still might be some legal wiggle room as to what exactly constitutes a “match” for those terms. If Bellator can merely offer the same value in the language of the contract, then that might be enough to satisfy a judge, regardless of whether or not they can actually deliver on those terms in reality. They want to know whether or not this will hold muster going forward, since there will undoubtedly be more of these matching disputes in the future. So it’s really about testing matching clause in the courts and establishing the minimum requirements for a “matching” offer. It sucks for Eddie, but it probably seemed like a good idea for Bellator at the time. Ultimately, it may do enough damage to their image that it will have not been worth it, but that remains to be seen. The summer series ratings will tell the tale as to whether the backlash has truly hurt their brand, or if a mere vocal minority has been following these stories.

  10. mooseknuckle on May 15th, 2013 7:55 PM

    I think it may have been just as much of a test for the UFC. They very easily could have bumped the signing bonus and guaranteed money to an unreachable level, while reducing the ppv cut.

Got something to say?