February 13, 2012
MMA Junkie had a recent article on the managers’ role in representing fighters. With the recent departures of Jose Aldo and Mauricio Rua from their representation, the need for managers has come into question.
The Junkie article looks at long time manager Alex Davis as he discusses the need for a fighter to have good management. He also addresses the question of whether top notch fighters need representation anymore. This comes on the heels of Rua’s statement (which could have been taken out of context) that the UFC does not want its fighters to have managers.
Via MMA Junkie:
“Some people will say that once a fighter reaches a level where he enters the UFC, he doesn’t need management anymore, but usually a manager has worked very hard to get him to that point without ever getting properly rewarded for his efforts,” Davis said. “Only once a fighter is at the top can a manager have a chance at making something in the deal, which is only fair. Not only that, but its not like, ‘Hey, great, now I am in the UFC. My problems are over!’ Far from that. Things get way more complicated.
Davis identifies more responsibility outside of just fighting that the fighter must consider once he makes it in the UFC. There are many tasks that a manager should handle while the fighter concentrates on training.
In addition, the manager may have contacts with sponsors and promoters in helping the younger fighter achieve his goals.
Manager and agent may be two separate jobs or one in the same. Certainly fighters can have both or one individual to handle both duties.
One need only look to Matt Mitrione, Brandon Vera and Alistair Overeem more recently as examples of what happens when you have issues with management. Mitrione publicly fired his manager, Vera lost a year due to a contractual dispute and Overeem is currently in litigation with Golden Glory.
Still, there are many MMA management agencies that take care of their fighters in securing sponsorships and public appearances. This can go a long way in getting fighters the visibility, notoriety and opportunity to increase the value of their own personal brand.
The Junkie article points out the reasons that a good manager is necessary in a fighters’ career. Certainly, there are many responsibilities and tasks a manager needs to do in helping fighters prepare for their next fight while making sure they maximize their opportunities.
The question is how much is a manager worth to a fighter? For top tier fighters, do they need a manager? Can the fighter have someone do the same tasks for less, without having to give up a portion of their purse or sponsorship payout. We will see if consolidation of management duties becomes a trend in MMA. There is a definite need for good representation, but at what cost?
November 11, 2011
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.”
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.
The information in this post and on my site consists of my opinion only, i.e., it is not the opinion of my employer or anybody else. In addition, and because this is my opinion, it is not intended to be (and is not) legal advice or an advertisement for legal services. This post provides general information only. Although I encourage interested parties to contact me on the subjects discussed in the articles, the reader should not consider information on this site to be an invitation for an attorney-client relationship. I disclaim all liability in respect to actions taken or not taken based on any contents of this post. Any e-mail sent to me will not create an attorney-client relationship, and you should not use this site or my site to send me e-mail containing confidential or sensitive information.
September 23, 2011
MMA Fighting reports that Alistair Overeem has left the managing stable of Golden Glory. Overeem’s decision to leave was due to “a breach of trust.”
Via MMA Fighting:
With Overeem only stating that “a breach of trust” was the reason for his departure, details behind the split are up for speculation and many people may be quick to point the finger at the recent issues between Golden Glory and Zuffa.
Overeem’s former manager, Bas Boon, indicated that Overeem’s departure was not related to the recent Zuffa-Golden Glory squabble which saw Zuffa cut Overeem, his brother, Valentijn, and Marloes Coenen. In a press release, Boon cited the current state of the fight business (outside of Zuffa we presume) as the culprit as he cited the fact that Golden Glory fighters are owed money from FEG and K-1. Boon cited the fact that Overeem is fighting in the UFC this December as a sign that the Zuffa-Golden Glory relationship is not fractured. But it appears that the money owed Overeem from other fight organizations may be the reason for the split.
Overeem’s departure is interesting considering it occurred after Golden Glory negotiated his contract for the Lesnar fight. This is another example of the tenuous business of fight management. We will see if Overeem decides to sign with another agent and, if so, whether the agent will make an effort to collect the past debt from the organizations.
September 17, 2011
MMA Weekly reports that MMA agent Ken Pavia has sold his agency, MMA Agents, to Paradigm Sports Management. The transaction includes Pavia’s company and his stable of fighters. Pavia is moving on to become Vice President of Business Development at sports agency Takedown Entertainment.
Via MMA Weekly:
Speaking to MMAWeekly.com on Friday, Pavia confirmed that he has sold his company and fight roster to Paradigm Sports Management, but will remain on in a consultant’s role to help the transition for his fighters.
Takedown Entertainment is a publicly traded company that produces and packages MMA shows for broadcast as well as digital release.
Mike Whitman of Sherdog spoke to Pavia about the offer from Paradigm:
“The timing and the opportunity were both right. Takedown represented an opportunity that, in the long run, not only benefits me, but also benefits my clients and the industry,” Pavia said. “The funny thing is that over the last four or five [years], because of my roster and connections, I’ve been offered two or three things a week — whether it’s helping out with a promotion or consulting or advising in some capacity, but it was never the right time or opportunity. With Takedown’s business model, it was an offer I couldn’t refuse.”
Pavia indicated that all employees of his company were going to Paradigm or staying with him in his move to Takedown so the transition would not leave anyone without a job.
Its an interesting move within the industry and we will see if any of Pavia’s fighters will seek other representation. The report indicates that Pavia will stay on with MMA Agents for a period of time to ensure a smooth transition so maybe there will be no switching of agents. Based upon the recent MMA Fighting article on the state of MMA sponsorships, the role of the MMA agent can be a difficult task. It appears as difficult as an NFL or NBA agent without the market of sponsors or big financial payoff as the two sports. This could change, ever so slightly, with the UFC-Fox deal. We are not saying that Pavia left for any specific reason, merely pointing out the tough and competitive job it is to be an MMA agent.
September 14, 2011
MMA Fighting had a piece on the state of sponsorships in MMA. It was a revealing look behind sponsoring of fighters in MMA.
Overall the piece depicts the sponsorship game as a huge investment for companies with a tenuous rate of return. For fighters, its a necessity to supplement their fight income as well as keep them financially afloat waiting for their next fight. For agents, its the likely primary goal in helping their clients.
Via MMA Fighting:
If you’re a company looking to sponsor a UFC fighter, the hit to your pocketbook varies depending on everything from the fame and popularity of the fighter you’re doing business with to the location of your logo. Walk-out T-shirts can be among the most expensive items, sometimes edging into the six-figure range, while a small decal on the thigh of his shorts might only run you a couple thousand dollars.
There is also the dreaded sponsorship “fee” or “tax” which the UFC has imposed on sponsors:
…most (sponsors and/or agents reached) put the cost of the tax at about $50,000 per year for the majority of apparel and supplement companies in the UFC, though the fee has been knonw to vary according to the sponsor and the situation…
Then, there is the issue of the return on investment. If a company pays to play, will viewers buy what your selling, let alone know who or what you are. Hayabusa’s Ken Clement told MMA Fighting:
“It’s trackable, but it’s very hard to be objective,” Hayabysa’s Clement said. “It’s the simple question of how many fans watching the UFC saw your logo and recognized it, and of those, who cares? …It can be looked at quantitatively, but there’s a lot of guesswork involved.”
Agent Dean Albrecht breaks down a company’s goals to sponsor a fighter in three categories: advertisement, sponsorship and endorsement. As defined by Albrecht, advertisement is the lowest tier of sponsorship as the relationship between fighter and sponsor is short-lived. The agreement is usually meant strictly for eyes to be on the sponsor’s logo. These are usually one-time sponsorship deals or done on a flat fee. Sponsorship is more of a commitment between the fighter and sponsor where the sponsor has the fighter wear its logo over a period of time. The idea is to become brand ambassadors for the company. Endorsements are an elite level of sponsorship as the relationship between fighter and sponsor is more exclusive. Its where the fighter will do more than just wear the sponsor’s patch or shirt during fight night. The fighter will exclusively wear the sponsor’s gear in and out of the cage. They will also make appearances for the sponsor.
An interesting tidbit of the article was the fact that less sponsors are interested in Strikeforce and focus more on the UFC. The fact that Zuffa imposed its tax on Strikeforce seemingly is driving sponsors from the organization. We reported this summer on sponsor Ranger Up as it no longer found it economically feasible to sponsor its Strikeforce fighters. Could this have been a harbinger for the impending demise of the organization?
The article reflects on the work of the agent as they broker the deals with sponsors for their fighters. This is something that is very important for fighters as we all recall the lack of sponsors was the reason Matt Mitrione famously relieved Malki Kawa of his duties.
With the Fox deal, we shall see if the sponsorship industry heats up. While we may see the downturn of certain companies, we could see major mainstream sponsors dipping its toes in sponsorship of fighters, perhaps in the “advertisement” stage of sponsorship. Hopefully, for all involved there could be a time where we see bigger commitments from sponsors.
July 2, 2011
Junior dos Santos announced via twitter that he has left Ed Soares and has hired new representation. The change came as a surprise to Soares as dos Santos has been on a roll this year.
“He wants to go a different way. If that’s how he feels, God bless him on his journey.”
“To tell you the truth, he hasn’t said why. I asked him, but he wasn’t much specific,” Soares added.” The only thing he told me was that the decision has been made. What am I supposed to say? If the guy wants to go another direction, who am I to tell him otherwise? I was his manager, not his father.”
Soares also represents many of the fighters under Team Black House including Lyoto Machida and Anderson Silva.
An interesting move by dos Santos who is on a roll in the UFC. Not only is he scheduled to challenge for the UFC Heavyweight title this fall, but he was the featured coach on The Ultimate Fighter. With this much momentum, a change in management seems unusual. It seems unlikely that he was neglected by Soares or that he was not receiving enough sponsorship opportunities. While Soares continues to have a venerable stable, losing dos Santos is a blow. It will be interesting to see how this management change affects his relationship with Team Blackhouse.
We have seen GSP and Frankie Edgar terminate their agent after much success. Here, dos Santos is doing the same. While nothing particular was mentioned for the reason for the change, it will be interesting to see what new management means for dos Santos.
May 6, 2011
Only 3 months into the partnership, Malki Kawa, agent for Jon Jones and other UFC stars is leaving Florida-based Authentic Sports Management (ASM). From the press release, it appears that this will be an amicable breakup.
Via Authentic Sports Management:
This move was a mutual decision that both parties amicably agree is in the best interests of the athletes they represent.
“We agree that this decision allows us to provide more focus, deeper resources and only the absolute best management services for the athletes we represent,” said (Glenn) Robinson. “This agreement is mutual and on good terms with the best intentions for everyone.”
“As managers we both agree this is the right move,” said Kawa. “We understand and respect each other and at this point I will go in a different direction. Starting today, I will resume operation of First Round Management through which I will continue my representation of UFC Light Heavyweight Champion Jon Jones, Thiago Alves, Carlos Condit, Ben Henderson and other talent.”
Robinson will assume the role of president of Authentic Sports Management, which represents UFC athletes Rashad Evans, Kenny Florian, Anthony Johnson, Jorge Santiago as well as Cosmo Alexandre, Gesias “JZ” Calvacante and the superstar brothers Danillo and Yuri Villefort, and others.
Jen Wenk will maintain public relations representation of Authentic Sports Management and its entire roster of athletes including Rashad Evans through StarPR Las Vegas LLC, and effective today with a new agreement directly with Jon Jones, will continue as the public relations representative for the UFC light heavyweight champion of the world.
As you recall Wenk left the UFC PR department to start her own agency and conduct press for ASM athletes including Jon Jones.
A very short marriage between Kawa and ASM. One would think that with the addition of Wenk, ASM would turn into a super agency for MMA fighters. It would be interesting to see how much planning the two parties did prior to entering into the partnership. Regardless, it seems clear that the parties wanted to make sure that everyone knew that the parting was mutual and amicable. Obviously, the cautious wording of the press release was to ensure their clients that everything was fine and that other agents would not poach them.
April 14, 2011
In his post-fight interviews from Saturday, Diaz talked about not getting paid enough, overworked, over-trained and possibly being suspended. The release of Strikeforce salaries shows Diaz earned $175,000 (not including sponsors) for his fight with Paul Daley.
Nick Diaz last four payouts in Strikeforce:
vs. Paul Daley – $175,000
vs. “Cyborg” Santos – $150,000
vs. KJ Noons – $50,000
vs. Marius Zaromskis – $100,000
Diaz is earning respectable money for the Strikeforce WW champ. Speaking of underpaid, the latest Strikeforce salary report has Paul Song receiving only $750 for his prelim bout.
The full interview will be on Inside MMA on HD Net this Friday.
This is an unusual career move if the information is true. Only Fernando Vargas benefits from this news as he is the only one that will receive a career boost from the fight. In a post-fight interview, Dana White talked about how Diaz could be a star and that the money will come. It should especially with the new marriage with Zuffa. Still, Diaz seems only happy when he’s miserable.
Shouldn’t Diaz question his management about the direction of his finances? If he is claiming that he’s not seeing the money then maybe he should ask his manager instead of demonizing a straw person (or people) holding him back. It should be the role of the manager or agent to come up with opportunities both inside and out of the ring. Sure, an agent can only go so far to lobby for matches. But, they definitely can help a client with outside opportunities. Sponsorships, business investments and general finances are well within the realm of a manager. This is what White meant when he stated Diaz “won’t play the game”. If Diaz would be more media savvy, he might be able to get more opportunities. Diaz has the “Stone Cold” persona which could play well with sponsors and advertisers. A lot of people are fans of this Nick Diaz. He just needs to know when to turn it on and off.
A fight with Vargas diminishes the Diaz brand at a time when its received the most publicity.
UPDATE 4/14/11, 11pm: The Vargas fight fell threw according to MMA Junkie. Diaz has restructured his Strikeforce contract (presumably to allow boxing) and will look to fight Jeff Lacy. Lacy lost to Roy Jones, Jr. in 2009 via TKO. Jones was 40 years old at the time of the fight, not the dominant fighter of the late 1990s.
Could this all be a ploy so that Diaz will get a fight (and more importantly) a payday he wants? Fighting tomato cans doesn’t seem like the proper career path if the end goal is a big payday.
March 10, 2011
MMA Weekly reports that UFC Lightweight champ Frankie Edgar has signed on with Dominance MMA headed by Ali Abdel-Aziz. Abdel-Aziz and Edgar’s wife will handle The Answer’s management going forward.
In February, Edgar split ways with agent Shari Spencer. Spencer had managed Edgar and Georges St. Pierre. But, GSP split with Spencer in January and Edgar followed suit.
Via MMA Weekly:
Abdel-Aziz manages several other prominent fighters including Renzo Gracie, Ricardo Almeida, Rafael “Sapo” Natal, as well as several Gracie fighters including Igor, Gregor and Rolles Gracie.
Edgar is a mainstay at the main Renzo Gracie academy in New York City, while also training at Ricardo Almeida’s gym in New Jersey.
Obviously, Abdel-Aziz’s relationship with the Renzo Gracie Academy helped him with signing Edgar. Also, having Edgar’s wife included in the management team could have been a factor. This is similar to GSP’s hiring of new manager Rodolphe Beaulieu, who is a longtime friend of the welterweight champ. It is interesting to see the trend of having family/close friends assist in the business side of managing their career. There are obvious pluses and minuses in having family/friends involved business. We will see how this will play out.
February 14, 2011
Jon Jones’ agent, Malki Kawa, has joined forces with a sports management agency to form Authentic Sports Management. The agency will have offices in New York, Los Angeles and South Florida.
Via Authentic Sports Management press release:
Entrepreneur and business owner Glenn Robinson and entertainment manager Jon Rubinstein announce the establishment of Authentic Sports Management (ASM) company and the merger of ASM with longtime Mixed Martial Arts (MMA) manager Malki Kawa’s First Round Management. The merger forges a team with vast experience in MMA and sports and entertainment management, endorsements and sponsorships, brand building, marketing and public relations to create a unique full service firm. ASM offers unparalleled representation that will set a new standard in the MMA sport.
The press release indicates that Robinson began a sports agency in late 2010 but it does not indicate whether he had experience in representing mixed martial artists. Rubinstein owns an entertainment agency with offices in New York and Los Angeles. As we know, Kawahas a stable of MMA stars including Jones. The alliance combines Robinson’s marketing experience, Rubinstein’s mainstream entertainment knowledge and Kawa’s MMA clientele. One might see this as an acquisition of Kawa’s stable so ASM can get its foot in the door of MMA.
With the recent ousting of manager Shari Spencer by GSP and Frankie Edgar, this new merger of fighter services will be interesting. It appears that the move is an attempt to bolster the visibility of MMA fighters with the goal of getting fighters (namely, Jon Jones), mainstream sponsorships. We will see how Rubinstein can leverage his entertainment business knowledge into opportunities for mixed martial artists. Also, how receptive will mainstream sponsors be of fighters. After GSP, maybe Jon Jones (provided he wins in March) can crossover. But, will there be enough appeal for others?