UnderGround Forums
 

UnderGround Forums >> UG's Myths re: Eddie Alvarez Situation


1/8/13 11:14 AM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20883
 

UG Myth #1: You know the terms of Eddie's contract

No you don't. Unless you have actually seen Eddie's Bellator contract, you have no idea what it says, so for you to declare with such conviction  what Bellator and/or Eddie's rights and obligations are is just silly. There is a little principal in contract law called freedom of contract which basically means parties are free to agree to whatever terms they want, subject to certain limitations. If the contract says that Bellator only needs to match the color of the offeror's contract, then thats all they have to match.

UG Myth #2: Bellator has to match UFC's PPV points because thats what the contract requires

Since noone knows the actual language of Eddie's contract, there is no way to know whether or not Bellator has to match the PPV component of the UFC's offer. According to Bjorn, however, Bellator was not obligated to match the PPV offer and if his lawyers have any worth, he's probably speaking the truth. Think about it. Take yourself back in time when Eddie originally signed with Bellator. At the time, Eddie essentially had two primary options he was considering, Bellator and the UFC. Eventually, Eddie went with Bellator because they offered more money and as part of the agreement, Bellator's lawyers inserted this controversial right of first refusal provision. Imagine you are a Bellator attorney drafting this provision. What offer could you forsee having to match in the future? Obviously the UFC's. Well, the UFC is well- known for paying a lot of unguaranteed money, in terms of backroom bonuses, fight bonuses and PPV points. If you had any sense, as Bellator's attorney you would specifically provide that Bellator is only required to match the monetary, guaranteed component of any offer - nothing else.  If you left it broad and obligated yourself to match ALL terms of the offer, the UFC could simply write into their offer that Eddie would fight in an octagon in every fight with Dana White sitting ringside. Of course, that isn't something Bellator could match. And even if by the terms of the contract Bellator was required to offer Eddie PPV points, apparently, thats what they did. Sure, Bellator doesn't have any PPVs currently, but theres no guarantee that Eddie will be on any UFC PPVs. If you require Bellator to be on PPV to match, then Bellator would be unable to match any UFC offer, regardless of how low the guaranteed money is.

UG Myth #3: Bellator has to match UFC's PPV points because they have to match the value of UFC's offer

The likelihood of the contract requiring Bellator to match the value is highly, highly unlikely. Think about how "value" would be determined. How would you project how many times Eddie would be on a PPV card? He could very well have some or all his fights on FOX, FX or fuel. Secondly, even when he is on a PPV card, how can you accurately predict the number of buys? Even if you knew the timing (which you don't), the venue (which you don't) or the other fighters on the card (which you don't), even then, predicting the PPV numbers would be virtually impossible. Not to mention the fact its virtually impossible to measure other aspects of value such as backroom bonuses, fight bonuses, increased sponsorship and merchandising opportunities, etc. Even if you involved appraisers in the process it would be a total crapshoot. 

UG Myth #4: Bellator has to match UFC's PPV points because its only fair.

First of all. See UG Myth #1. "Fairness" has virtually no bearing on the interpretation of contracts in most cases. If you want to sell your ferrari to someone for a ham sandwhich, you are free to do so, and if you sign a contract to that effect, absent fraud, duress or similar circumstances, you will be bound by that contract. Secondly, what is fair really? Noone put a gun to Eddie's head and made him shun the UFC and sign with Bellator. He eagerly signed the original contract with Bellator which has earned him around a million dollars. And in return,  Eddie agreed, among other things, to fight for Bellator and he  also agreed to this right of first refusal. That was part of Eddie's consideration to Bellator. Now that he can make more money in the UFC he wants to forget that part of his promise. THAT isn't fair. Should Eddie give back the money Bellator paid him? Of course no. Similarly, Bellator shouldn't have to give back the rights they have contracted for.

 

 

 

 

1/8/13 11:48 AM
Ignore | Quote | Vote Down | Vote Up
Yelm
18 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 1/24/04
Posts: 12105

I care nothing about the contract situation.  I simply want him to be in the UFC cause there are so many more fights for him there.  

1/8/13 11:53 AM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20887
Othello - So at the end of the day, Alvarez is entitled to just say FU to Bellator, not sign their contract and wait till the matching period has ended and sign with whomever he chooses?

well, again, i havent read the contract, but presumably eddie was obligated to offer to re-sign with bellator on the same terms as the ufc offer, which he apparently has failed to do

1/8/13 12:29 PM
Ignore | Quote | Vote Down | Vote Up
jimbonice
Send Private Message Add Comment To Profile

Member Since: 8/13/12
Posts: 440
Othello - So at the end of the day, Alvarez is entitled to just say FU to Bellator, not sign their contract and wait till the matching period has ended and sign with whomever he chooses?
He's going to wait out forty months? I doubt that. Phone Post
1/8/13 12:46 PM
Ignore | Quote | Vote Down | Vote Up
Gullivers Travels
6 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Edited: 01/08/13 12:46 PM
Member Since: 5/17/08
Posts: 4336
For point # 3, couldn't Eddie's lawyers and the UFC theoretically provide the average PPV buys for an event as a tangible potential earning? I understand that the contract likely revolves around guaranteed earnings, but the fact that there is no way for Bellator to offer any PPV at the moment, let alone in the foreseeable future, you don't think that can have any effect on the outcome?
1/8/13 12:57 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20902
Gullivers Travels - For point # 3, couldn't Eddie's lawyers and the UFC theoretically provide the average PPV buys for an event as a tangible potential earning? I understand that the contract likely revolves around guaranteed earnings, but the fact that there is no way for Bellator to offer any PPV at the moment, let alone in the foreseeable future, you don't think that can have any effect on the outcome?

why should average ppvs be the measuring stick...the buy rates for every ppv is drastically different..and theres no guarantee that alvarez will ever be on a ppv card just like theres no guarantee that bellator will ever have a ppv...

it wouldnt make a whole lot of sense for the UFC to offer alvarez $1 show and $1 win and .00000000001% of the ppv and therefore bellator couldnt match...

1/8/13 1:02 PM
Ignore | Quote | Vote Down | Vote Up
TheZa
133 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 4/3/11
Posts: 2881

Eddie's waiting period is FORTY fucking months?  As a non champion???

1/8/13 1:04 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20905
TheZa - 

Eddie's waiting period is FORTY fucking months?  As a non champion???


lol..is it really 40 months? then eddie should turn around and sue his own attorneys

1/8/13 1:08 PM
Ignore | Quote | Vote Down | Vote Up
TheZa
133 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 4/3/11
Posts: 2882
Orcus Knows MMA Better Than Goku - 
TheZa - 

Eddie's waiting period is FORTY fucking months?  As a non champion???


lol..is it really 40 months? then eddie should turn around and sue his own attorneys


According to jimbonrice.

I have no idea, and I'd like to find out. 

1/8/13 1:09 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20906
TheZa - 
Orcus Knows MMA Better Than Goku - 
TheZa - 

Eddie's waiting period is FORTY fucking months?  As a non champion???


lol..is it really 40 months? then eddie should turn around and sue his own attorneys


According to jimbonrice.

I have no idea, and I'd like to find out. 


no..i think the new contract was for a 40 month term..ive read rumors the matching period is 18 months...

1/8/13 1:11 PM
Ignore | Quote | Vote Down | Vote Up
Gokudamus stole my name
95 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 1/1/01
Posts: 21568
His Zuffa contract was 40 months and/or 8 fights

1/8/13 1:17 PM
Ignore | Quote | Vote Down | Vote Up
Burt Reynoldz
143 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 5/15/07
Posts: 7374
Orcus Knows MMA Better Than Goku - 

UG Myth #1: You know the terms of Eddie's contract

No you don't. Unless you have actually seen Eddie's Bellator contract, you have no idea what it says, so for you to declare with such conviction  what Bellator and/or Eddie's rights and obligations are is just silly. There is a little principal in contract law called freedom of contract which basically means parties are free to agree to whatever terms they want, subject to certain limitations. If the contract says that Bellator only needs to match the color of the offeror's contract, then thats all they have to match.

UG Myth #2: Bellator has to match UFC's PPV points because thats what the contract requires

Since noone knows the actual language of Eddie's contract, there is no way to know whether or not Bellator has to match the PPV component of the UFC's offer. According to Bjorn, however, Bellator was not obligated to match the PPV offer and if his lawyers have any worth, he's probably speaking the truth. Think about it. Take yourself back in time when Eddie originally signed with Bellator. At the time, Eddie essentially had two primary options he was considering, Bellator and the UFC. Eventually, Eddie went with Bellator because they offered more money and as part of the agreement, Bellator's lawyers inserted this controversial right of first refusal provision. Imagine you are a Bellator attorney drafting this provision. What offer could you forsee having to match in the future? Obviously the UFC's. Well, the UFC is well- known for paying a lot of unguaranteed money, in terms of backroom bonuses, fight bonuses and PPV points. If you had any sense, as Bellator's attorney you would specifically provide that Bellator is only required to match the monetary, guaranteed component of any offer - nothing else.  If you left it broad and obligated yourself to match ALL terms of the offer, the UFC could simply write into their offer that Eddie would fight in an octagon in every fight with Dana White sitting ringside. Of course, that isn't something Bellator could match. And even if by the terms of the contract Bellator was required to offer Eddie PPV points, apparently, thats what they did. Sure, Bellator doesn't have any PPVs currently, but theres no guarantee that Eddie will be on any UFC PPVs. If you require Bellator to be on PPV to match, then Bellator would be unable to match any UFC offer, regardless of how low the guaranteed money is.

UG Myth #3: Bellator has to match UFC's PPV points because they have to match the value of UFC's offer

The likelihood of the contract requiring Bellator to match the value is highly, highly unlikely. Think about how "value" would be determined. How would you project how many times Eddie would be on a PPV card? He could very well have some or all his fights on FOX, FX or fuel. Secondly, even when he is on a PPV card, how can you accurately predict the number of buys? Even if you knew the timing (which you don't), the venue (which you don't) or the other fighters on the card (which you don't), even then, predicting the PPV numbers would be virtually impossible. Not to mention the fact its virtually impossible to measure other aspects of value such as backroom bonuses, fight bonuses, increased sponsorship and merchandising opportunities, etc. Even if you involved appraisers in the process it would be a total crapshoot. 

UG Myth #4: Bellator has to match UFC's PPV points because its only fair.

First of all. See UG Myth #1. "Fairness" has virtually no bearing on the interpretation of contracts in most cases. If you want to sell your ferrari to someone for a ham sandwhich, you are free to do so, and if you sign a contract to that effect, absent fraud, duress or similar circumstances, you will be bound by that contract. Secondly, what is fair really? Noone put a gun to Eddie's head and made him shun the UFC and sign with Bellator. He eagerly signed the original contract with Bellator which has earned him around a million dollars. And in return,  Eddie agreed, among other things, to fight for Bellator and he  also agreed to this right of first refusal. That was part of Eddie's consideration to Bellator. Now that he can make more money in the UFC he wants to forget that part of his promise. THAT isn't fair. Should Eddie give back the money Bellator paid him? Of course no. Similarly, Bellator shouldn't have to give back the rights they have contracted for.

 

 

 

 


GTFO with your facts! How are we supposed to hate Bellator/Viacom when you post shit like this?

1/8/13 1:39 PM
Ignore | Quote | Vote Down | Vote Up
whoabro
Send Private Message Add Comment To Profile

Member Since: 1/22/07
Posts: 8886
Great post op, thanks! Phone Post
1/8/13 1:52 PM
Ignore | Quote | Vote Down | Vote Up
SmackyBear
27 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 1/10/12
Posts: 190
Back when I was taking my business law classes, which granted seem like forever ago, one of my professors had a saying about contracts. "Nothing fails like success."

When a contract restrains trade, the public policy goal of promoting free trade sometimes overrides the freedom of the parties to enter into contracts.

So the employer may have a really awesome non-compete clause (or right to match a competing offer that says you needn't match the real value of said offer) that they got an employee or contractor to agree to, but the better those clauses are for you, the less likely a court is to enforce them.

I can assure you, that when challenged in court, fairness is taken into account.
1/8/13 1:58 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20911
SmackyBear - Back when I was taking my business law classes, which granted seem like forever ago, one of my professors had a saying about contracts. "Nothing fails like success."

When a contract restrains trade, the public policy goal of promoting free trade sometimes overrides the freedom of the parties to enter into contracts.

So the employer may have a really awesome non-compete clause (or right to match a competing offer that says you needn't match the real value of said offer) that they got an employee or contractor to agree to, but the better those clauses are for you, the less likely a court is to enforce them.

I can assure you, that when challenged in court, fairness is taken into account.

I can assure you, as a contract attorney that drafts, reviews and negotiates contracts every day, that any judge will be extremely reluctant to determine the fairness of a contract in virtually all cases absent some type of fraud or similar shadiness, which is not the case here...alvarez presumably had his own counsel review the contract and he signed it..a judge isnt going to second guess or try to weigh the fairness of the transaction under these circumstances..

 

yes there are principals that override freedom of contract especially dealing with the ability of a person to make a living but bellator isnt preventing eddie from making a living..in fact they are offering him hundreds of thousands of dollars, if not millions, to perform his trade

1/8/13 2:00 PM
Ignore | Quote | Vote Down | Vote Up
sparkuri
Send Private Message Add Comment To Profile

Member Since: 8/4/08
Posts: 12320
TY OP ! Phone Post
1/8/13 2:20 PM
Ignore | Quote | Vote Down | Vote Up
Wovito
Send Private Message Add Comment To Profile

Member Since: 4/25/08
Posts: 7262
Orcus Knows MMA Better Than Goku - 

UG Myth #1: You know the terms of Eddie's contract

No you don't. Unless you have actually seen Eddie's Bellator contract, you have no idea what it says, so for you to declare with such conviction  what Bellator and/or Eddie's rights and obligations are is just silly. There is a little principal in contract law called freedom of contract which basically means parties are free to agree to whatever terms they want, subject to certain limitations. If the contract says that Bellator only needs to match the color of the offeror's contract, then thats all they have to match.

UG Myth #2: Bellator has to match UFC's PPV points because thats what the contract requires

Since noone knows the actual language of Eddie's contract, there is no way to know whether or not Bellator has to match the PPV component of the UFC's offer. According to Bjorn, however, Bellator was not obligated to match the PPV offer and if his lawyers have any worth, he's probably speaking the truth. Think about it. Take yourself back in time when Eddie originally signed with Bellator. At the time, Eddie essentially had two primary options he was considering, Bellator and the UFC. Eventually, Eddie went with Bellator because they offered more money and as part of the agreement, Bellator's lawyers inserted this controversial right of first refusal provision. Imagine you are a Bellator attorney drafting this provision. What offer could you forsee having to match in the future? Obviously the UFC's. Well, the UFC is well- known for paying a lot of unguaranteed money, in terms of backroom bonuses, fight bonuses and PPV points. If you had any sense, as Bellator's attorney you would specifically provide that Bellator is only required to match the monetary, guaranteed component of any offer - nothing else.  If you left it broad and obligated yourself to match ALL terms of the offer, the UFC could simply write into their offer that Eddie would fight in an octagon in every fight with Dana White sitting ringside. Of course, that isn't something Bellator could match. And even if by the terms of the contract Bellator was required to offer Eddie PPV points, apparently, thats what they did. Sure, Bellator doesn't have any PPVs currently, but theres no guarantee that Eddie will be on any UFC PPVs. If you require Bellator to be on PPV to match, then Bellator would be unable to match any UFC offer, regardless of how low the guaranteed money is.

UG Myth #3: Bellator has to match UFC's PPV points because they have to match the value of UFC's offer

The likelihood of the contract requiring Bellator to match the value is highly, highly unlikely. Think about how "value" would be determined. How would you project how many times Eddie would be on a PPV card? He could very well have some or all his fights on FOX, FX or fuel. Secondly, even when he is on a PPV card, how can you accurately predict the number of buys? Even if you knew the timing (which you don't), the venue (which you don't) or the other fighters on the card (which you don't), even then, predicting the PPV numbers would be virtually impossible. Not to mention the fact its virtually impossible to measure other aspects of value such as backroom bonuses, fight bonuses, increased sponsorship and merchandising opportunities, etc. Even if you involved appraisers in the process it would be a total crapshoot. 

UG Myth #4: Bellator has to match UFC's PPV points because its only fair.

First of all. See UG Myth #1. "Fairness" has virtually no bearing on the interpretation of contracts in most cases. If you want to sell your ferrari to someone for a ham sandwhich, you are free to do so, and if you sign a contract to that effect, absent fraud, duress or similar circumstances, you will be bound by that contract. Secondly, what is fair really? Noone put a gun to Eddie's head and made him shun the UFC and sign with Bellator. He eagerly signed the original contract with Bellator which has earned him around a million dollars. And in return,  Eddie agreed, among other things, to fight for Bellator and he  also agreed to this right of first refusal. That was part of Eddie's consideration to Bellator. Now that he can make more money in the UFC he wants to forget that part of his promise. THAT isn't fair. Should Eddie give back the money Bellator paid him? Of course no. Similarly, Bellator shouldn't have to give back the rights they have contracted for.

 

 

 

 


FRAT version:

If you haven't read EA's contract, you don't know what contractual terms it contains.
1/8/13 2:36 PM
Ignore | Quote | Vote Down | Vote Up
armbarheelhook
87 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 2/4/11
Posts: 1104
orcus seems to know what he is talking about..

So... Without having the contract infront of you its hard to determine.
But, what are Eddie's options.?
1) Sign with Bellator
2) Take to court
3) Get UFC to make another counter-offer
4) Sit out the remainder of matching clause
5) Have Zuffa buy Bellator.. lol (trend that they have done numerous times before thus not having to deal with red tape).

??????? Phone Post
1/8/13 2:44 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20913
armbarheelhook -  orcus seems to know what he is talking about..

So... Without having the contract infront of you its hard to determine.
But, what are Eddie's options.?
1) Sign with Bellator
2) Take to court
3) Get UFC to make another counter-offer
4) Sit out the remainder of matching clause
5) Have Zuffa buy Bellator.. lol (trend that they have done numerous times before thus not having to deal with red tape).

??????? Phone Post

its hard to know without seeing the contract, but if it is a standard right of first refusal then eddie only had one bite at the apple..meaning once he had an offer he was happy with, he was obligated to let bellator match it, which bellator apparently did..meaning if eddie now wants to reneg, he is in breach...

so his only options as i see it would be: (1) fight for bellator; (2) dont fight again indefinitely (noone can make him fight; (3) try to take Bellator to court to argue that he didnt breach the contract (ie bellator didn't really match) or the provision is for some reason unenforceable; or (4) settle with bellator (i.e. eddie or zuffa buys out the contract).

imo 4 is the most likely path

1/8/13 3:06 PM
Ignore | Quote | Vote Down | Vote Up
armbarheelhook
87 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 2/4/11
Posts: 1105
^ ok. So if you're saying option 4, then we refer back to UFC offer to eddie.?

$250k sign bonus, $70k fight/ $70K win over 40 months or 8 fights..

Meaning the UFC or Eddie would have to pay Bellator out of pocket $250K plus $70K x (8) fights..? To release him from any Bellator contractual obligations. Phone Post
1/8/13 3:27 PM
Ignore | Quote | Vote Down | Vote Up
Thacommish
47 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 6/4/10
Posts: 715
" You know the terms of Eddie's contract

No you don't. Unless you have actually seen Eddie's Bellator contract, you have no idea what it says, so for you to declare with such conviction what Bellator and/or Eddie's rights and obligations are is just silly. "

"The likelihood of the contract requiring Bellator to match the value is highly, highly unlikely."

how can you say highly, highly unlikely with such conviction like that without knowing?
1/8/13 3:44 PM
Ignore | Quote | Vote Down | Vote Up
SmackyBear
27 The total sum of your votes up and votes down Send Private Message Add Comment To Profile

Member Since: 1/10/12
Posts: 191
Out of curiosity Goku, where do you practice?

I've seen quite a few covenants not to compete fail due to unreasonableness in scope or time, or just not protecting a legitimate business interest.
1/8/13 4:31 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20920
armbarheelhook -  ^ ok. So if you're saying option 4, then we refer back to UFC offer to eddie.?

$250k sign bonus, $70k fight/ $70K win over 40 months or 8 fights..

Meaning the UFC or Eddie would have to pay Bellator out of pocket $250K plus $70K x (8) fights..? To release him from any Bellator contractual obligations. Phone Post

no, not necessarily...they could just pay Bellator $200K for example to waive the right of first refusal provision...they don't have to pay the amount of Eddie's offer, it can be any amount that Bellator agrees to

1/8/13 4:32 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20921
Thacommish - " You know the terms of Eddie's contract

No you don't. Unless you have actually seen Eddie's Bellator contract, you have no idea what it says, so for you to declare with such conviction what Bellator and/or Eddie's rights and obligations are is just silly. "

"The likelihood of the contract requiring Bellator to match the value is highly, highly unlikely."

how can you say highly, highly unlikely with such conviction like that without knowing?

i can state that its highly unlikely because its not the norm..i am not saying it absolutely does not include the value - there is a difference..others are saying that bellator HAS to match the value

1/8/13 4:35 PM
Ignore | Quote | Vote Down | Vote Up
Orcus Knows MMA Better Than Goku
Send Private Message Add Comment To Profile

Member Since: 8/6/08
Posts: 20922
SmackyBear - Out of curiosity Goku, where do you practice?

I've seen quite a few covenants not to compete fail due to unreasonableness in scope or time, or just not protecting a legitimate business interest.

i primarily practice in securities/general corporate

 

admittedly, I am not a labor attorney and I don't know what jurisdiction the agreement is governed by so I don't know for sure the right of first refusal is enforceable...but, a non-compete and right of first refusal are technically different and presumably bellator's attorneys would not have included the provision if it was unenforceable


Reply Post

You must log in to post a reply. Click here to login.