MMA Junkie reports on the issue with Eddie Alvarez. The ex-Bellator fighter is a not such a free agent with negotiations with the UFC and Bellator hitting a huge snag and destined for the courts.
In December, the UFC made an offer to the outstanding lightweight, however, Bellator invoked its “matching rights” clause in his contract in an effort to keep Alvarez. Bellator claims to have matched the offer made by the UFC however it did not take into account other streams of compensation (i.e., PPV upside, discretionary bonuses).
Alvarez was sued by Bellator according to the fighter in an interview on the MMA Hour. Although no details have surfaced, its likely that Bellator is suing based on its “matching rights” clause in his contract.
According to MMA Junkie, Alvarez would have received a $250,000 signing bonus and would make a $70K to show and $70K win bonus from the UFC.
In comparison, the current champ of the weight class, Benson Henderson, tweeted to a follower that he gets a base of $39K for show with a $39K win bonus.
Payout Perspective:
“A bad settlement is always better than great litigation,” said Alvarez (via Bloody Elbow). A great quote if you aren’t a litigator of course. Its not clear what specific causes of action Bellator would bring against Alvarez but breach of contract would be a likely claim.
Alvarez is in a sticky situation at this point. He does not want to have this keep him out of action for a prolonged period of time. Think of what that did to the momentum of Brandon Vera’s career. His was a different contract dispute but the gist is the layoff set back his career.
Recall last year Bellator fighter Tyson Nam faced a similar situation with a similar clause. Nam had a matching rights period of 18 months. It seems as though this window was only two weeks.
The matching rights clause appears to be similar to the “Franchise Tag” in the NFL. Briefly, with a franchise tag, there’s an impasse in negotiation between organization and player, the team would be able to retain the player’s rights provided it pay the player an amount reflecting an average paid for their position (I believe top 10 paid in their position). This would prevent another team from signing the player.
The aftermath of this could benefit fighters if Bellator prevails it may mean it would secure more guaranteed money on behalf of fighters. Thus, in matching contracts, the UFC would have to pay more defined money than just rely on vague incentive payments.
This will be very interesting. NOt only will the courts have to decide if the PPV % clause adds any value to the contract. But they would also have to put a vlaue on it if they rule it does count. Depending on its assigned value the UFC could possibley under bid Bellator on disclosed pay and let the PPV cut sway the fighter making Bellators match clause meaningless.
I think what will happen here is the UFC will not win with the contrac format they used. IMO they are the better deal and the contract is by far better than Bellators for Alverez. But if the courts rule in favor of the UFC to use the PPV cut it opens up a can of worms i dont think they are prepared to open. So the UFC will be forced to commit to a gaurenteed amount for that PPV cut for Alverez or at very least and exact date or event he will get a PPV cut rather than just a chance to oen day earn a cahnce to fight for a PPV cut. I just dont see how they can count something that isnt gaurenteed.
If i was Bellator i would rewrite the contract to include $100 in Powerball lotto tickets. Then if the court rules the PPV cut does count then they would also have to add in the possibility of those tickets winning the jackpot which would make the Bellator contract worth many millions more than UFC contract.
You idiot.
But that was funny
Funnier than your claim that Fox will cancel a 9 year deal 1 year into it with good Fuel tv ratings boost and 3 of 5 Fox events doing good and FX getting a million viewers with everything they show. HAHAHA You are to stupid to realize why FOX and the UFC have a 9 year deal when 4-6 years is typical. They didnt expect anything starting out. They new it would take time to break into other demographics for the UFC to have network success.
Dont worry! About this time next year i will be again calling you an idiot while watching the UFC on FOX while you piss and moan and wait for yet another Boxing fight that will never happen.
Once the Complaint is posted by the court online I’ll try to obtain a copy.
Take it easy Dana. How was your surgery?
Its interesting that we are getting all this contract info. Its through this stuff we learn the nature of the UFC contracts like with the Couture situation. Apparently what will help the UFC here is they are giving Eddie a auto title shot. If it is indeed in the contract that and he doesnt have to win a fight to get it that would make it gaurnteed. JUst the amount is unknown. It should also help that Bellator has no PPVS planned or history of them.
Im still surprised how the UFC arranged this contract. They had to have known the PPV cut was going to throw red flags that would cause a shit storm. I think Zuffa and their team of lawyers either wanted this to get drug out and tie Bellator and Alverez up for a long time. OR they didnt really want Eddie just wanted to force Bellators hand and run up the price. Because if they really wanted Eddie imo. All they had to do was forgo the PPC cut on the first contract. The PPV cut for the first fight will only be worth about $200-$300,000. Why not pay him a flat rate for that fight with that added as the PPV cut. Do a 3 fight deal with hard numbers Bellator wont match. So basically he would get 250K sign bonus. 70/70k for each fight and 300K bonus for the title fight. So the 3 fights would be worth 800,000-1,000,0000. After the 3 fights they could do the long term deal without any challenge from Bellator. There was a million ways to do this deal that would tie Bellators hands imo. Using the PPV % only gives Bellator a chance to get Alverez for less than the UFC if the judge rules in their favor. I would have used real numbers and forced them to put up or shut up. Since they didnt we have to assume this is exactly what the UFC wanted. I also do not think the UFC will give Alverez a title fight in his first fight. They are floating that to give the PPV cut some weight. But i dont believe they will commit to it. How could they promote that without hardly any library of his past fights and no fights to build him. I doubt Alverez wants his PPV buys to bomb either. He would need to wins in the UFC to make him credible. Even if the UFC wins this Alverez will never fight for the belt in his first fight.
You are pretty dumb… Use hard numbers? Can you imagine the uproar from current managers/fighters when Alvarez is offered a guarantee 5X higher than their own…. STUPID
MMAJunkie and Bloodyelbow have updated story – with more information about PPV cuts and other things (guaranteed showings as host commentator etc..).
It goes like this: nothing for PPV buys under 200 000, $1 for 200-400k range, $2 for 400k-600k range and 2,5$ for everything bigger than that.
Which of course means, that their deal is way better than that of a Bellator, BUT: Even if they guaranteed Alvarez a PPV fight, there is no guarantee he would get a PPV bonus, since there already were PPV under 200 000 buys which means zero bonus (UFC 150 headlined by lightweight coincidentaly).
BTW: UFC really doesn’t want to unveil the contracts – Fury of the champion, Benson Henderson is best proof – and there is no wonder: Right now, offer for Alvarez is probably way better than what he gets – and thats not a correct way how to handle your champion.
I agree Caidel. How are you publcly going to offer a contract to a new free agent significantly better than what yout current champion is seeing?
In other sports this is where a manager/agent would go to the team and ask to “revisit the contract.” I think Drew Rosenhaus called it “outperforming the contract.” This is where the UFC has an advantage. I doubt this happens with DW.
Certainly for Bendo, knowing that Alvarez was offered 41K more to start when Bendo made, I believe, $17K to show in his first UFC appearance at UFC 129 is well…annoying. Bendo had just come off the “Showtime Kick” loss but still was the WEC LW Champ and undefeated in the WEC before the Pettis fight.
This is where the MMA industry will change forever.
Viacom will never sell Bellator to UFC. They have the pockets and distribution channel to compete.
Let the games begin and the boxing cycle repeat itself.
Im sure Bendo is a little upset. But i dont think it is a big issue. IF Bendo wins out his contract and is Champ for renegotiations. His contract will be much higher than the Alverez contract. IF he loses soon and is just one of the revolving doot champs then he wont have a leg to stand up to be pissed. Bendo hasnt done enough to really claim he deserves anything. He is 6-0 in the UFC but 2 of those were contraversial wins and he has yet to finish anyone in the UFC. He is still 2-3 fights away from cementing himself at the top to demand a huge contract.
You don’t think it’s a big issue because you have no fore sight into the future…
Bendo gets a bigger contract and then guess what… the rest of the fighters clamor for bigger contracts.
Then the next lightweight Bellator Champion gets an even bigger offer from UFC to jump ship.
Then purse demands sky rocket past what the UFC can pay out profitably and the industry then has major issues on hand.
Pretty simple
Sampson Simpson: I don’t really think, that would be the case – difference, what UFC pays its fighters now and what can pay out profitably is in my opinion HUGE amount and UFC could (and should) pay its fighters a lot more without serious problems. Especially lower level guys, where it matters more.
But truth is, that pressure from Bendo and the others will probably made salaries go up (which is good). I just think that UFC can afford that quite easily.
At this very moment and in the near future yes UFC can afford to pay but who knows how long that lasts.
Most look at the general figures and assume strong profit but most have no idea on the overhead which is massive compared to boxing promoters. Most boxing companies employ less then 5 people
And here it is 🙂 Benson Henderson got a brand new contract today 🙂
I understand what you are saying Sampson. But this has always been the case throughout UFC history. There always comes a point where the UFC kills off this trend that other sports get killed by. They did it with Jens Pulver and Marilo Bustamante and BJ Penn and Tito Ortiz among many others. Pulver wanted more because eh beat Penn. Penn wanted Hughes type money because he beat Hughes. UFc showed thats not how it works and stripped him. Marilo wanted 6 figure contract when no one in the UFC was getting that and they released and stripped him.
If Benson demands to much they will do the same to him. Most fighters do not have the bname to demand much without the UFC brands. Thats why i beleive the UFC brand is so important. They have the leverage to keep the fighters from killing the sport. Wether Benson got his new contract or not it would all work out for him if he was really any good even if he finished his contract. There was never a need for him to be upset or rock the boat unless he really doubted his ability. In fact he should have welcomed the Alverez situation. It was going to make him money at some point.
As usual you are completey missing the point Dana. Viacom has pockets to compete and inflate official fighter guarantees.
Now UFC fighters have an additional outlet for potential earnings
You are missing my point. Viacom has shown not interest in spending that money. They have yet to buy any fighters and the one fighter Bellator did make on offer to they only matched the UFC offer rather than beat it. Which is why i said Viacom/Bellator didnt really want Alverez or to spend the money. They just wanted the publicity of a court battle with the UFC. What better way to get people to notice the move to Spike and get the attention of UFC fans? So like i said there is nothing to suggest Viacom is going to invest even a modest amount of money to compete with the UFC. Also big name fighters are almost useless to Bellator because of the tournament format they are still putting their name behind. It would be counter production for a high paid fighter to lose to a no name in a crap shoot tournament. And it would happen a lot and it is why every fighter tries to avoid them when they get the leverage just like Alverez. HE refused to go through another tournament and demanded Bellator to take that out of his contract.
Why would they spend any significant money when they were limited to MTV2?
Now that they have the platform with the audience on Spike, that’s set to change. How hard is that to understand?
Not very