Golden Boy, Haymon file motion to dismiss claims in Main Events lawsuit

July 25, 2014

Al Haymon and the rest of the defendants sued by promoter Main Events for allegedly breaching a contract for a fight between Adonis Stevenson and Sergey Kovalev have filed motions to dismiss the lawsuit.  However, the Court has allowed Main Events to amend its Complaint which may render the motions moot.

Some background on the lawsuit is here.

Haymon, Showtime Networks, Inc. and Adonis Stevenson filed a motion requesting an oral argument be heard in the motion to dismiss the Complaint.  In general, in federal court, most preliminary motions are decided on the moving papers unless oral argument is requested.  Even then, the Court may deny a request.   In addition, Richard Schaefer filed a motion to dismiss as well under the theory of respondent superior.

Essentially, Haymon et al. argue that there was no valid contract and as a result the Complaint filed against them should be dismissed.  Since there is no contract, the allegations of tortious interference with a contract and interference with economic prospective advantage must be dismissed.  Additionally, defendants claim that it lacked the requisite malice and intent needed for these claims.

The overarching issue is the lack of contract agreement.  The defendants cite an email which preceded the purported email agreement between Stevenson’s promoter and Main Events.  The email indicates that there was an agreement to agree on terms but details needed to be hashed over by attorneys at a later date.  According to the defendants’ brief, in New Jersey, an “agreement to agree” upon material terms at a future time is an unenforceable indefinite promise.

Golden Boy also filed a motion to dismiss the tortious interference with contract and interference with prospective economic advantage claims as well.  Golden Boy joined the motion of the other defendants but argued in addition that it was not responsible for Schaefer’s conduct on the basis of respondeat superior as the allegations occurred after Schaefer’s resignation.  Basically, Golden Boy attempts to absolve itself from any conduct Schaefer may have done while as CEO as it pertains to dealings in the Stevenson-Kovalev deal.

While these Motions to Dismiss were filed, the Court allowed Main Events to submit an Amended Complaint no later than August 4, 2014 (which would make it the Second Amended Complaint).  Discovery is stayed (halted) until further action from the Court

Payout Perspective:

As predicted, defendants have filed a Motion to Dismiss citing no formal contract.  While emails between parties may be considered a binding contract, defendants make the argument that the terms were not definite and were only an “agreement to agree.”  However, the news that Main Events may amend its Complaint may mean it will provide further definitive information on its claim.  MMA Payout will keep you posted on the lawsuit.

Main Events sues promoter, Schaefer and Stevenson

June 30, 2014

MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev.  The lawsuit centers around the involvement of boxing insider Al Haymon.  It was filed last month with little occurring in the lawsuit so far.

The lawsuit was filed last month and has not seen much movement in the initial filing at this point.  The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events.  The promotion is owned by Kathy Duva.  As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.

The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.

To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson.  The deal was allegedly sealed with emails in late January 2014 between Duva and Michel.  The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee.  The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.

However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev.  Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.

The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.”  It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy.  As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together.  The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.

Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.

The legal claims:

Breach of Contract

Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.

Breach of Fiduciary Duty

Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.

Fraud by Stevenson’s Promoter

Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.”  The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara.  Stevenson fought Fonfara in late May on Showtime.  In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.

Tortious Interference with Contract

Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.

Interference with Prospective Economic Advantage

Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.”  Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson.  But there was interference which caused Stevenson to back out of the agreement.

Payout Perspective:

This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy.  Actually, here its Main Events.  Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies.  The latest has a Summons issued to Schaefer in Laguna Beach, California.  A  pretrial conference that was to occur last week has been pushed to July 11th.

As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach.  Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.

The lawsuit underscores the power of Al Haymon in the boxing industry.  It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime.  As many know, Haymon advises Floyd Mayweather.  Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters.  The Complaint does not delve into this violation as it is not a plead cause of action at this point.  However, if discovery commences in this lawsuit, we may see allegations of specific violations.

It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.

UFC policy now requests background checks for fighters

May 29, 2014

MMA Junkie reports on the UFC’s new policy of requesting its contracted fighters to sign a release of their personal information for background checks including details related to their medical, educational and criminal history.

As pointed out by Stephen Marocco’s piece, the request includes a waiver of “doctor/patient confidentiality” which circumvents HIPAA (Health Insurance Portability and Accountability Act) privacy laws.  Essentially, Zuffa could discuss a fighter’s health history with a fighter’s medical provider.

According to the article, the information has been collected for several years but the new document encompasses all of the releases in one form.

Payout Perspective:

There are obvious needs for the releases from the fighters.  The UFC does not want to be surprised by any unknown criminal issues or associations such as Will Chope or Benjamin Brinsa.  The health information is important because the UFC probably does not want to discover a pre-existing health condition which might preclude the fighter from fighting.

The Junkie article also talked to Sports Law professor Warren Zola about whether the release of information is standard for independent contractors.   Zola indicated that while the request is “more than many employers would ask,” it was not illegal.  Zola goes on to indicate that Zuffa’s leverage allows it to request the information and most fighters wanting to fight for the company must abide by its rules otherwise there’s the possibility that they may not work for the company.  Only top-notch talent would have some bargaining power over these consents.

Overall, the request for information is a way that the UFC is trying to protect its brand.  As it continues to grow and expand internationally, these new consents are a way to ensure that all of its bases are covered with its fighters so that it does not get blindsided with possible PR issues in the future.

If you read the article, you will find that Professor Zola uses the “M” word (he actually says “They have close to a monopoly…”) when talking about the UFC and its leverage to obtain these consents from its contracted workers.

Boxer Mikey Garcia sues Top Rank

April 29, 2014

Boxer Mikey Garcia has sued Top Rank Boxing for violations of the terms of its promotional agreement under the Muhammad Ali Boxing Reform Act and laws in the state of California.  Garcia’s lawyers characterize the promotional agreement as making the boxer an “indentured servant.”

The lawsuit was filed earlier this month in Riverside County Superior Court in Riverside, California.

According to the lawsuit, “Garcia will demonstrate that Top Rank’s Promotional Rights Agreement violates numerous provisions of both California law and California’s strong public policy to protect California-based boxers from unscrupulous promoters and managers and from entering into improvident arrangement and is therefore unenforceable.”  As for the violations of the Ali Act, Garcia’s attorneys state that Top Rank did not provide the required disclosures under the act which requires that Top Rank let Garcia know the amount of money it would make from each of Garcia’s bouts.

Garcia is a Super Featherweight out of Riverside, California.  He is currently the World Boxing Organization’s champion.  He signed a Promotional Rights Agreement before Top Rank represented him which Garcia’s lawyers contends it grants Top Rank the ability to extend the agreement indefinitely.

The promotional contract was entered on April 13, 2006 which gave Top Rank the exclusive right to promote Garcia’s services as a boxer.  The terms of the Contract, which ran for 5 years, gave Top Rank the right to renew the terms of the agreement.

Garcia’s lawyers argue that Top Rank acted as Garcia’s manager which would be a violation of California law since it did not fill out the requisite forms to manage a boxer in California.  This was similar to the problems faced in the Ronda Rousey-Fight Tribe arbitration.

The Complaint also alleges that Top Rank did not disclose the payments it received from Garcia’s fights which would be a violation of the Muhammad Ali Act. Specifically sec 6307e(b)(1)-(3).

Lawyers for Top Rank have downplayed the lawsuit calling it “baseless” and we will likely see them seek a dismissal of Garcia’s claims.

Payout Perspective:

The promotional contract indicates that the jurisdiction is Nevada which may cause some procedural backlash by Top Rank.  In addition, Garcia is suing based on the Ali Act, a federal law, which may cause another procedural issue related to removing the case to federal court.

It’s interesting to note that on HBO’s The Fight Game, the belief was that no one close to Garcia knew he was unhappy and that he was going to file the lawsuit.  The inference is that there were no issues between Garcia and Top Rank.

I have not seen a fighter prevail in a case under the Muhammad Ali Act.  While Garcia may have a valid claim, it’s likely that the lawsuit will precipitate a settlement with Top Rank or to sever ties with it.

MMA Payout will keep you posted.

Harvey responds to Rousey ruling

April 5, 2014

Darin Harvey issued a statement on the California State Athletic Commission (CSAC) ruling which released his former client, Ronda Rousey from her fight contract.   MMA Payout has obtained the decision siding in favor of the UFC women’s bantamweight champion and we take a look at what went wrong.

Via Inside MMA on AXS TV:

“When I first met Ronda Rousey four years ago, she was destitute and UFC President Dana White was quoted as saying a woman would never fight in the UFC. I set out to make Ronda a star and prove Dana wrong. The results speak for themselves. Ronda is now a highly sought-after model, spokesperson and actress, not to mention the first and still reigning female UFC champion. She deserves all the credit in the world for her accomplishments, but she never would have achieved such unprecedented success without the unwavering financial investment, career guidance and professional support Fight Tribe Management and I provided her.

I am not a litigious person, but I never thought for a moment that once she made it to the top, Ronda would turn her back on us and refuse to honor her legal and moral obligations. After months of radio silence and without even giving me the courtesy of an explanation I was forced to go to court to compel Ronda to private arbitration per the terms of our agreement. Before that could be sorted out, Ronda’s legal team ran to the State Athletic Commission, demanded an expedited hearing and tried to get our entire agreement thrown out on a technicality. During our four-hour hearing last week, I finally heard Ronda’s side of the story. Frankly, it’s pathetic and I’m not surprised the Commission chose not to include any of that in their written decision. The Commission did properly reject Ronda’s attempt to invalidate the entirety of our agreement, and I am very pleased with that aspect of their decision. Our case against Ronda will now proceed. I am confident that when all the facts are presented to an impartial private arbitrator, Fight Tribe Management’s contributions to Ronda’s career will be fully recognized and fairly rewarded.”

Harvey also tweeted the following:

 

Roy Englebrecht, a fight promoter in California, empathized with Harvey’s plight but also advised the following:

I have seen this happen a number of times over the years, where well intentioned people want to get involved in the fight business, but never take the time to learn about the business and some of the rules that govern it. This situation with Rhonda and Darin could have been avoided if Darin knew the CSAC rules and followed them. This manager/fighter agreement or promoter/fighter agreement in California is unique to the sport, and if not followed you will lose, as this ruling showed.

The comments are based on the ruling issued by Andy Foster of the CSAC in which it determined that the evidence and testimony at the March 28th Arbitration showed that the “Service Agreement” (as identified in the CSAC Arbitration Decision) was void as to the professional fighting services only.

The ruling, in favor of Rousey, is premised on Harvey not properly executing the fight contract on “printed forms approved by the commission.”  The Commission ruled that, “[t]he controlling contract was the subject “Representation Agreement”, which was entered into in California and specifically binds the parties to be governed by California law.” Hence, the rationale by the Commission would lead it to conclude that since the contract was not on its printed forms, the contract was void as to the fighting portion of the contract.  In addition, the Commission ruled that “a fighter-contract” is not valid unless both parties appear at the same time before the Commission, and the contract receives the Commission’s written approval.”  This did not happen as the contract, which was originally drafted in May 2012, was not executed until January 2013.  Regardless, it was not done before the Commission.

Even though Harvey’s “Representation Agreement” did not comply with the Commission rules, he still argued that he was entitled to “quantum meruit” (latin for “what one has earned”).  This is a theory in contract law allowing a party to be compensated for actual work/services performed.

Under this theory, Harvey was seeking to recoup losses incurred from representing Rousey.  Harvey indicated in an exhibit at arbitration that from January 1, 2010 to January 31, 2014, he collected $25,608 in income from Rousey fights, $23,180 from PPV fights and $20,830 from income of sponsorships.  This is offset by Harvey’s claim that he paid $170,376 in expenses related to Rousey’s fighting career which makes Harvey at a loss of $85,818 from representing Rousey.  The paid expenses included paying for training including strength and conditioning, sparring partners and living expenses.

However, the Commission ruled that Harvey was not entitled to quantum meruit since “such a finding would be inconsistent with the provisions of California law requiring proper fighter-manager contracts…”   The Commission reasoned in its decition, “[i]f Harvey, or other managers, were allowed to recover by means of quantum meruiti, it would undermine the statutory authority purposes of the Boxing Act.”  Thus, the Commission ruled against Harvey based on the overarching policy that it must protect the fighters from manager graft.  As stated in the decision, “[t]he Boxing Act is a regulatory statute, and recovery on a quantum meruit theory in the absence of compliance with the act would be inconsistent with its regulatory purposes.”

Payout Perspective:

As we indicated in a previous post, expect this case to heat up in the anticipated lawsuit and/or private arbitration.  However, this situation may have been avoided if Harvey and Rousey entered into a fight agreement as dictated by the rules of the CSAC.  If there would be further representation in other matters outside of fighting, it would seem that a second representation agreement would be necessary.  Based upon the facts, it looks as though the fighter-manager relationship was informal at the beginning with no need for things such as a signed contract.  This may explain the long lag between the date of the Representation Agreement (May 15, 2012) and the date Rousey actually signed it (January 29, 2013).  The harshness here is that for not following the rules of the CSAC, Harvey lost over $85,000 spent on her client that he will not be able to recoup.  The moral here is to follow the rules.

CSAC rules Rousey released from fight contract

April 4, 2014

Sherdog’s Mike Whitman first reported that the California State Athletic Commission issued its ruling in the arbitration of Ronda Rousey and Fight Tribe Management.  The commission ruled that Rousey is released from her fight contract but left the commercial aspect of the contract to the court.

Executive Director of the CSAC, Andy Foster heard the arbitration between the parties last week over the dispute between the UFC women’s bantamweight champion and her manager Darin Harvey.  Originally, Harvey had petitioned the Los Angeles Superior Court for the issue regarding the representation agreement between the parties to be decided via arbitration.  However Rousey’s legal representatives claimed that the contract should be determined by the CSAC.  The arbitration was held on March 28 with Foster serving as the arbitrator with the assistance of two attorneys from the AGs office.

Harvey claimed that the representation agreement was drafted as a talent contract and not a fighter-manager contract.  Regardless, Rousey’s attorneys argued that the representation agreement was void under California law.

The facts stated that Rousey and Harvey entered into a 3 year agreement starting on May 15, 2012 and signed on January 29, 2013.  Harvey would receive 10% of Rousey’s income generated from professional fighting, modeling, acting and other commercial activities.  However, the CSAC determined that the agreement “was not prepared on the required, pre-approved forms, nor did both parties appear before the commission at the same time in order to receive the commission’s approval, thereby invalidating the agreement as a fighter-manager contract in California.” (quote via Sherdog)  The CSAC ruled that Harvey was not a “manager” as defined under Business and Professions Code section 18628

The CSAC left open the issue as to the “commercial activities” that were incidental to “fighting activities” to the court.  So, it’s likely that we have not heard the last of this dispute.

Payout Perspective:

MMA Payout will have more on this decision as it becomes available.  The initial read from Sherdog’s report reflects the fact that this contract dispute is not over.  It’s interesting to note  that based on the information available, Harvey sought his manager fee from “commercial activities” which may have been a conflict with Rousey’s agents at William Morris. We note that Rousey signed Fight Tribe’s agreement on January 29, 2013 and then signed on with William Morris in late February 2013.  Whether this was coordinated by Harvey and/or the relationship between Fight Tribe and William Morris became strained over time is an issue that may play out in court proceedings.

Rousey-Fight Tribe arbitrate dispute

March 28, 2014

MMA Junkie reports that Ronda Rousey and her estranged management group, Fight Tribe Management, are in an arbitration hearing today (Friday) before the California State Athletic Commission to determine the validity of Fight Tribe’s representation agreement with the UFC bantamweight champion.

Two weeks ago, Fight Tribe Management filed a petition for arbitration in Los Angeles Superior Court to determine the validity of the representation agreement.  Under California Business and Professions Code §18640 CSAC has the “sole direction, management, control of and jurisdiction” of mixed martial arts and can hear disputes such as these.

According to the Junkie article, Foster, along with assistance from the California attorney general, will review the briefing submitted by both parties, hear testimony from witnesses at the arbitration hearing and render a decision.

There appears to be a dispute on the validity of the contract and it’s not clear whether the CSAC ruling will end this dispute.

In its filing with the Court on March 7th, Fight Tribe indicated that it wanted the issues concerning the dispute confidential based on the terms of the contract entered into by Rousey and Fight Tribe.

Payout Perspective:

From its initial filing on March 7th, the disputed contract issue has not been made public although the commission’s decision will be public record.  So, it may be that we will not hear about the contractual issues in dispute until the CSAC renders its opinion sometime next week.  Even with the CSAC decision, the legal wrangling behind this dispute may not be over.  MMA Payout will keep you posted.

Boxer in limbo after lawsuit

December 17, 2013

With the announcement of Vitaly Klitschko vacating the World Boxing Council’s heavyweight championship belt to focus on his homeland, it leaves open the issue of another boxer’s future Bermane Stiverne.

Stiverne, a heavyweight contender, has sued Don King and his promotional company under the Muhammad Ali Act contending violations of the Act by Don King Productions (“DKP”) and other associated entities.  Specifically, Stiverne contends that he was forced to sign an exclusive promotional agreement with DKP in order to receive fights.

Last week, the Court in the Southern District of New York denied Stiverne’s request for a Preliminary Injunction and Temporary Restraining Order.   The requested relief asked that the Court enter an Order to request DKP among other defendants “not to interfere in any way, directly or indirectly, with the ability of plaintiff…to enter into any bout agreement with any other boxer, including for a heavyweight championship bout.”  Stiverne is considered the number one contender for the WBC’s heavyweight championship belt.  According to Court documents, Stiverne’s manager was working with the Klitschko management team to negotiate and sign a bout agreement.  Stiverne’s concern was that King will intercede.

The Preliminary Injunction came as a result of alleged threats made by King that “he would do everything in his power to prevent Stiverne from getting any more boxing bouts whatsoever.”

In addition to Stiverne’s Motion for Preliminary Injunction and Temporary Restraining Order, the Court further ordered that the parties are instructed to submit letters by Friday, December 20, 2013 updating the Court on the status after a mediation session before the WBC.  The mediation session was to negotiate a fight contract between Stiverne and Klitschko.  Since Klitschko has given up his title, there will be no meeting and the Court must now address what to do next in Stiverne’s lawsuit.

DKP has filed its Answer and Counterclaims to Stiverne’s lawsuit requesting declaratory relief from the Court to invoke the purported promotional contract between Stiverne and DKP.  In addition, DKP claims Stiverne has breached its contract and tortuously interfered with DKP’s rights under the 2011 Promotional Agreement.

Payout Perspective:

Reviewing Stiverne’s request for the Preliminary Injunction and Temporary Restraining Order, it seemed like a longshot that the Court would grant his motion.  With the announcement that Klitschko has given up his belt, it puts Stiverne’s career options up in the air.  But, the lawsuit brings up the question of the bite of the Ali Act.

Stiverne must now address Counterclaims for breach of contract and tortious interference with a contract.  These claims coincide with the promotional contract that Stiverne signed but the fighter claims was done under pressure.  There are few lawsuits that have been brought under the Ali Act and even fewer where a fighter prevails (I actually count none) under the Act.  So, while there are portions of the Act which allow for private rights of action, from a practical standpoint, most boxers are not in the position to pay lawyers to litigate these claims.  Even then, in situations like this where a promotional contract is disputed, there is the threat of a countersuit from the promoter for breach of contract.  Thus, the fighter is put in a situation where he could find himself defending a lawsuit.

While the purpose of the Ali Act has good intentions, one must wonder if it should be amended to allow for better ways to resolve disputes short of costly litigation.

Bellator-Alvarez case will not go to trial until late 2014 at earliest

June 26, 2013

The “Joint Proposed Discovery Plan” filed with the Court in the Eddie Alvarez-Bellator case reveals the sobering reality of the judicial system.  Among the dates set by the Court, a pretrial conference will occur sometime after  September 15, 2014 which would mean an actual trial in the case would not occur until late fall 2014 or even early 2015.

The Court held an initial status conference this week which included the rendering of a “Joint Proposed Discovery Plan” which essentially lays out the plan on litigating the case.  This includes the written discovery and a plan on how many people will be deposed by each party (each side will have a maximum of 10 depositions).  It also includes a time for expert reports and expert depositions.

A pretrial conference may take place “any time after September 15, 2014 and after resolution of any dispositive motions (motions to dismiss claims)” according to the Order.

At that pretrial conference, the Court will likely appoint a Court date.  Thus, it’s most likely a trial would not commence until late 2014 or even 2015.

Another interesting note that has come out of the case is that the parties have agreed to a Discovery Confidentiality Order which may prevent the public from seeing documents deemed confidential by the parties.

Another interesting point was the status of the settlement talks which occurred prior to the filing of the discovery plan.  Bellator had offered Alvarez two PPV level fights with the first being a shot at the lightweight title currently held by Michael Chandler.  Alvarez declined the offer and countered with just one fight for Bellator.  This stalled the negotiations.

Payout Perspective:

And this is why Alvarez should not have stated that he was not going to settle with Bellator.  A trial date at best would not happen until the fall of 2014 (Alvarez will be out of action for 2 full years if this happens) but this does not even include any scheduling delays or motions to continue a trial date which are norms in litigation.  The parties have already noted that there may be scheduling issues with third parties (UFC?) and “disputes regarding designation of documents as confidential.”  Thus, there are already logistical obstacles and it’s still June 2013.  We shall see how this progresses and if the parties will look to settlement discussions.  But, in my opinion, the parties will want to conduct some discovery and depositions before any further discussions on settling occur.

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.

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