Unconscionability of Bellator’s “Matching Provision” Disputed

By Bryanna Fissori

Legal Analyst

 

Since the first time Bellator’s “Matching Provision” became a media issue there has been contention about its legality. Can the Promotion bind an unwilling participant to perform?

 

Specific Performance/Slavery

To avoid a constitutional breach of the law concerning personal servitude (i.e. slavery) most courts traditionally refuse to enforce contracts requesting “specific performance” of a personal service. This kind of contract is one that involves a party who possesses an unusual, special or unique talent that another person cannot perform equally. Fighter contracts are this kind of agreement because no two fighters are exactly the same. That is what makes them entertaining.

The concept may be more vividly explained with a reference to the recent movie “Django” about a slave in the pre-civil war days. There are multiple scenes in the movie where slaves are bought and sold for the purpose of fighting each other (no holds barred). They are forced to fight against their will because that is what they were purchased to do. It is for the avoidance of this same basic concern that the court is unlikely to force a fighter to perform.

What a court will do is disallow a fighter to breach a valid contract with one promotion while retaining the right to compete for another. That being said, the legal issue is likely to come down to the unconscionability of the Bellator agreement terms.

 

Matching Provision: Fighter v Promotion

The concept behind the “Matching Provision” is that the fighter’s contract with promotion A expires, is inactive or he/she is terminated. At that point they are up for grabs by another promotion. Promotion B decides that they would like to acquire the fighter. They make the fighter an offer. Promotion A retains the right to match the offer of promotion B within a certain time period after the offer is made.

In the case of fighters like Eddie Alvarez, Hector Lombard and Tyson Nam the theory is that the Bellator promotion helped to build the image of the fighter, thus increasing his value. Because of the risk they took in signing the fighter and the work they have put in to build their popularity, Bellator should have the first option to try and retain that fighter. On the other side of the agreement, the fighter stands to gain more financially by going with the promotion that is willing to pay the most, though in this case they agreement does not require Bellator to pay more, but instead only pay the same as the offering promotion.

 

The  Exact Match

According to Bellator CEO Bjorn Rebney, the promotion was given a copy of the recent UFC offer made to Eddie Alvarez, which required among other things, a $250,000 signing bonus. $70,000 to show and $70,000 to win. They took the agreement, changed the name on it from UFC to Bellator and thus matched the offer word for word, which essentially fills the matching requirements of the agreement with Alvarez.

One contention on the “exactness” of the match is that the UFC offers part of the Pay Per View payout to fighters on the televised portion of PPV cards. On the flip-side of that, the UFC does not guarantee a fight on a PPV card, which is understandable given the nature of the sport which necessitates the freedom to change the line up basically at will. Because the PPV option is not part of the contractual guarantee, it should not be a matching consideration for Bellator.

The most controversial issue for the fighter is that they lose the immediate ability to act as a free agent and even if they fighter was able to secure more money from promotion A, promotion B may have a greater long-term benefit for the fighter’s career. This is the argument that Alvarez appears to be making, prompting the recent flood of litigation between himself and Bellator.

 

UFC Matching Terms

The UFC fighter agreement also retains this same “Matching Provision” though they rarely, if ever, make issue of it because they are typically the highest bidder and the glass ceiling in the sport. Rebney has stated in previous interviews that if the UFC was willing to take the matching language out of their contracts Bellator would do the same.

Rebney did make the contention that when Bellator signed Muhammed “King Mo” Lawal, who had been cut from the UFC earlier this year, they went through the required procedure of allowing the UFC the right to match their offer before the signing could be official.

 

Legality

As to the legality of the “Matching Provision,” to have it legally stricken from the agreement a court would likely have to find the terms substantive unconscionable, which refers specifically to fairness of the terms of the contract, and is typically available when one party is benefiting more than the other. Procedurally, a claiming party could also look to the manner in which the contract was formed or executed as it relates to the benefiting party’s bargaining power or other circumstances at the time of formation.

To date the provision has not been challenged in court, though it is quite possible that the causes of action filed by Alvarez’s legal council may address the issue as a method to void the Bellator contract.

 

MMAOnline.com will continue to follow and update all legal developments.

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This entry was posted onWednesday, January 9th, 2013 at 6:03 pm and is filed under Headlines. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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