Dollar Per Dollar, Who is Rebney Kidding?

[bbman182]

http://www.mmafighting.com/2013/1/7...ute-over-matching-eddie-alvarezs-ufc-offer-we

Who is Rebney kidding by saying they matched the UFC's offer dollar per dollar? Sure they may have matched some payments dollar per dollar but when it comes to PPV buys and the fighters cut, there is no way they can match that dollar per dollar. They may have matched it as a % but not to the dollar.

Hypothetically, let's say the contract states 1% of the no. of PPV buys and an Alvarez fight in the UFC sold 500K buys at nice round no. of $50 per view, that equates to $25M.

Not let us say Alvarez' cut is 1% of that, for a total of $250K. Is Rebney really saying he has enough money to give Eddie $250K per fight as a main card headliner? I'm being fictitious about 500K but that could be 800K, 1M, who knows? So that's my point.

There is now way Bellator's contract can be dollar per dollar when no one knows how many PPV buys Edddie Alvarez will sell for the UFC. He could sell 1M or he can sell 250K buys. The only thing that contract will state is a percentage with tolerances which could stair depending on how many PPVs Alvarez sells. That contract can even say 1% if <=500K buys vs. 1.5% if between 501K and 800K, etc.

Why else would Alvarez say what he said below?

According to Alvarez in a Monday interview on The MMA Hour, Bellator didn't match the deal. Speaking metaphorically to avoid exact contract language, he likened the UFC's deal to "fine dining" and Bellator's to "McDonald's," saying all dinners are not created equal.

In my mind Rebney saying Bellator matched the UFC's offer is like having a $50 piece of steak with the UFC vs. 10 Big Macs from Bellator. Sure they both work out to around $50 but who wants to eat 10 Big Macs when you can have a fat juicy bone in ribeye at the same table as the rest of the UFC Superstars

Exactly... and how do you quantify the exposure (i.e. the potential sponsor money) that would be gained by being an FX headliner or having a FOX main card spot??... Especially when your programming will never be seen by more than 1 million on a non-primetime, non-network station.

 

[Metal_Daze]

TS seems to have missed the most important paragraph:

"There is no guaranteed pay-per-view in the UFC offer to Eddie Alvarez," he says emphatically. "We as Bellator don't have to match projections. We don't have to match what could conceptually happen. We have to match guaranteed dollars and what the UFC contractually guaranteed would occur. That is what we are held to."

you don't have to like it, but you should at least attempt to understand it.

While this might be true that doesn't mean its legal to do that. A judge could rule still rule in Eddies favor. People seem to think just because it's in a contract and you signed then it's legal. That's not the way it works.

You're avoiding the entire issue, Method115. Sure a judge *could* still rule in Eddie's favor but he has no legal grounds to do so since the PPV money isn't "contractually guaranteed" money. It's like two jobs offering you the same money but one says it will also throw in a part of the profit. Sure it's interesting but if they don't make any profit, what you get is in fact 0$. That's what Bjorn is talking about when he says "conceptually".

For example, most PPV bonus in the UFC start at a specific number. Let's say 250k. Before that, you get squat. Then, let's say from 250k to 300k, you get 1$/ppv, from 300k to 500k you get 2$ and 500k and more you get 3$ (these numbers are just example). Sure you "conceptually" could make a shitload of money but you could also do the contract amount, no bonus if the PPV sells less than 250k.

Legally, it means squat if it's not guaranteed money.

 

[bbman182]

Letter of the law this may stand, but common sense tells anyone that this isn't a "match". A possibility for a set percentage of revenue from a PPV that could do half a million buys is unarguably better than the possibility for a set percentage of a PPV that would do a fraction of the buys in an organization where PPV does not currently exist. I don't know if this comes down to a ruling on whether the wording was matched or whether the estimate of salary was matched, because if it's the latter, then there's no question the answer is no.

yup... not to mention Bellator would love for this lawsuit to drag on for the whole year in order to rack up legal fees for Eddie and keeping him from fighting therefore forcing him to agree to the "matched" deal.

 

[Alexandergreat3]

TS seems to have missed the most important paragraph:

"There is no guaranteed pay-per-view in the UFC offer to Eddie Alvarez," he says emphatically. "We as Bellator don't have to match projections. We don't have to match what could conceptually happen. We have to match guaranteed dollars and what the UFC contractually guaranteed would occur. That is what we are held to."

you don't have to like it, but you should at least attempt to understand it.

This is a really informative and intelligent post.

 

[Alexandergreat3]

I think he's doing a great job. He knows the UFC will suck out the talent no matter what. And he knows that they're not going to work out any kind of feeder program with him, where they in some small way work with his show or co-promote it. They wouldn't do it with the WEC or strikeforce. They won't do it with Bellator.

What he's doing is driving up the price. He's putting everything on the table he can afford and then the UFC will beat that offer or match it, forcing them to overpay for fighters. He's done it in a big way twice now. He knows losing fighters is inevitable. But you can guarantee he's costing the UFC a lot of money. Not only that, a lot of good fighters will try and sign with Bellator first now and fight lesser competition so they can possibly build their name up and then go sign for big bucks with the UFC, which is a much smarter strategy than just jumping right in with the UFC for 10k a fight or so (if you win).

So again, he knows he can't work with the UFC. He knows he will lose fighters to the UFC no matter what. So he's costing the UFC a shitload of money while also making his MMA brand much more attractive to up and coming talents. Sounds like he knows exactly what he's doing.

This is an insightful post!

You made a REALLY great point about up-and-coming talents will try to sign with Bellator to build up their name first rather than jumping right into the UFC for a 10k fight.

I'd like to add that, based on this idea, it would be a really dumb idea for new talents to sign for TUF and get lowballed with the TUF contract (ie. Shane Carwin's contract), when they could sign with Bellator, build up their names, and get a bigger offer from the UFC down the road.

Once again, great post, man!

 

[HaulParris]

I'm not a fan of Zuffa's strong-arm tactics, but Bjorn should learn from the past and see what happened to Affliction, Pride, EliteXC, etc.

Of course, it's Bjorn's prerogative of he wants to keep his star athlete signed to his company, but this prolonged legal battle, and
the counter-programming, is not going to win him the war for the ratings.

 

[KJKhaos]

This is an insightful post!

You made a REALLY great point about up-and-coming talents will try to sign with Bellator to build up their name first rather than jumping right into the UFC for a 10k fight.

I'd like to add that, based on this idea, it would be a really dumb idea for new talents to sign for TUF and get lowballed with the TUF contract (ie. Shane Carwin's contract), when they could sign with Bellator, build up their names, and get a bigger offer from the UFC down the road.

Once again, great post, man!

It's possible, but the exact opposite is just as likely. Not just because of the Eddie situation, but the things that went down with the Nam, Hollett, Herman, and Brookins
situations. Sure contractually speaking they might not have done anything wrong, but the general perception every time something like this happens seems to be that Bellator is a shady company, that could deter future prospects from signing with Bellator even if the money up front is better.

I think that Bellator will still get plenty of young fighters to sign, but the prospects that people are already aware of will probably be less likely to sign as they are still getting the exposure they want to get the fans attention, which means that they will get the attention of the UFC if they continue to win, all without being tied into that contract with that lengthy matching clause. Also there is no guarantee that the UFC will bother trying to overspend for most of these hypothetical prospects in the future, considering that in a majority of the weight classes they already have a majority of the top talent, and if the UFC doesn't get into a bidding war often then it's likely too much of a gamble for the best prospects to take.

 

[Mavant]

Rebney is absolutely right in that only GUARANTEED money should count.

The whole PPV% is just smoke and mirrors. Sherdoggers don't seem to understand that Eddie is unlikely to see ANY return on PPV%....because he simply won't draw enough to make a dent.

Any fighter who appeared on the fight poster for an event was credited for a percentage of that event's sales, with it being weighted to credit the main event fighters the most (example - main event participants get 75% of the buyrate total credited to them, other fighters on fight poster split the remaining 25%).
Source: http://www.mma-manifesto.com/ufc-ppv-data/ppv-main/top-10-ufc-ppv-draws-current-fighters.html

For Eddie to see the big money, he needs to 1) headline a PPV card as the MAIN EVENT (which likely translates into a title shot) and 2) draw viewers at a high rate like GSP and Jon Jones.

The UFC can string him along on FUEL TV cards and unless he absolutely beats everyone, he may never get a title shot. With monsters like Bendo, Maynard, Cerrone, Diaz, Miller and Pettis already in line....I don't see Eddie beating all of these guys in a row...forcing the UFC to be in a position to give him his PPV slot. The likely PPV% in actual terms is probably closer to $0.

Conversely, if Bellator did a small PPV....Eddie probably has a SOLID chance of headlining it and see a small sum. So it is very possible that the Bellator contract >>>>>>> UFC contract in terms of actual money Eddie will likely see.

 

[The_Renaissance]

When Bellator first started, Rebney seemed a decent alternative to Dana White but nowadays, he comes across as even more spiteful and vindictive.

Just accept you're not gonna be the 'big dog' in MMA - there's nothing wrong with being a highly successful number 2 organisation renowned for grooming contenders/future greats.

 

[KJKhaos]

Rebney is absolutely right in that only GUARANTEED money should count.

The whole PPV% is just smoke and mirrors. Sherdoggers don't seem to understand that Eddie is unlikely to see ANY return on PPV%....because he simply won't draw enough to make a dent.

Any fighter who appeared on the fight poster for an event was credited for a percentage of that event's sales, with it being weighted to credit the main event fighters the most (example - main event participants get 75% of the buyrate total credited to them, other fighters on fight poster split the remaining 25%).
Source: http://www.mma-manifesto.com/ufc-ppv-data/ppv-main/top-10-ufc-ppv-draws-current-fighters.html

For Eddie to see the big money, he needs to 1) headline a PPV card as the MAIN EVENT (which likely translates into a title shot) and 2) draw viewers at a high rate like GSP and Jon Jones.

The UFC can string him along on FUEL TV cards and unless he absolutely beats everyone, he may never get a title shot. With monsters like Bendo, Maynard, Cerrone, Diaz, Miller and Pettis already in line....I don't see Eddie beating all of these guys in a row...forcing the UFC to be in a position to give him his PPV slot. The likely PPV% in actual terms is probably closer to $0.

Conversely, if Bellator did a small PPV....Eddie probably has a SOLID chance of headlining it and see a small sum. So it is very possible that the Bellator contract >>>>>>> UFC contract in terms of actual money Eddie will likely see.

While that all could be very true, the PPV% breakdown given was an example and without any quantifiable # with some facts behind it we also have no way of knowing how much he would pull in off of a PPV. Also a #1 contender fight could just as likely get a main event slot as a title fight with as many events as the UFC is putting on now, which means more chances to headline. Rebney might be right in the sense that he only has to match the guaranteed money, butif the UFC shows the judge some documented reports of the buy rates of recent PPV's(somewhere between the last 6-12 to get an average) and the judge agrees believes that it is concrete enough to tell whether Bellator has offered enough to financially compensate for that revenue being that they have never held a PPV, so there's would likely do nowhere near the same numbers.

No matter how you look at it, the UFC can't lose on this one, they don't need Eddie, and no matter how right Bellator may be as it concerns the stipulations of the contract, this situation along with the handful of others that Bellator has went through with some of it's fighters might have weakened their ability to sign future prospects that have any sort of bargaining power. The worst that happens to the UFC in this situation is that they miss out on a top 10 fighter in what is arguably their most stacked division, they essentially nothing to lose on this one, and everything to gain.

 

[Mavant]

While that all could be very true, the PPV% breakdown given was an example and without any quantifiable # with some facts behind it we also have no way of knowing how much he would pull in off of a PPV. Also a #1 contender fight could just as likely get a main event slot as a title fight with as many events as the UFC is putting on now, which means more chances to headline. Rebney might be right in the sense that he only has to match the guaranteed money, butif the UFC shows the judge some documented reports of the buy rates of recent PPV's(somewhere between the last 6-12 to get an average) and the judge agrees believes that it is concrete enough to tell whether Bellator has offered enough to financially compensate for that revenue being that they have never held a PPV, so there's would likely do nowhere near the same numbers.

No matter how you look at it, the UFC can't lose on this one, they don't need Eddie, and no matter how right Bellator may be as it concerns the stipulations of the contract, this situation along with the handful of others that Bellator has went through with some of it's fighters might have weakened their ability to sign future prospects that have any sort of bargaining power. The worst that happens to the UFC in this situation is that they miss out on a top 10 fighter in what is arguably their most stacked division, they essentially nothing to lose on this one, and everything to gain.

The UFC is definitely in the driver's seat in contract negotiations in most cases. I totally agree that they don't need Eddie...as the UFC LW division will certainly survive and thrive without Eddie.

But Bellator is certainly not losing here as well. There is too much stock being put into how damning a lawsuit against Bellator will appear in the eyes of future prospects. This is due to the lack of understanding about how financially strapped a no-name prospect really is. Living paycheck to paycheck or living on credit is probably the norm. As the saying goes, "beggars can't be choosers." When Bellator comes calling, they will answer because Bellator money is still superior to anything else they have going on. In fact, Bellator money is probably more than UFC prospect money (outside of Ultimate Fighter). And if a prospect wants to hold out because they don't like Bellator's contract, they know that they may never get exposure or a shot in the future by any organization.

The potential big winner/loser is Eddie. If he performs spectacularly, he will do well for himself in the UFC. But if he gets out-classed, which is a distinct possibility, he may just get cut from the UFC or relegated to facebook matches until his contract expires...at which time, he can no longer stay with the UFC and he has made an enemy out of Bellator.

Wherever Eddie ends up, he better save his money because it may not last too long.

 

[method115]

You're avoiding the entire issue, Method115. Sure a judge *could* still rule in Eddie's favor but he has no legal grounds to do so since the PPV money isn't "contractually guaranteed" money. It's like two jobs offering you the same money but one says it will also throw in a part of the profit. Sure it's interesting but if they don't make any profit, what you get is in fact 0$. That's what Bjorn is talking about when he says "conceptually".

For example, most PPV bonus in the UFC start at a specific number. Let's say 250k. Before that, you get squat. Then, let's say from 250k to 300k, you get 1$/ppv, from 300k to 500k you get 2$ and 500k and more you get 3$ (these numbers are just example). Sure you "conceptually" could make a shitload of money but you could also do the contract amount, no bonus if the PPV sells less than 250k.

Legally, it means squat if it's not guaranteed money.

That's just it were not sure how the ppv is setup for Eddie. We certainly can't take Bjorn word on it he's going to make himself sound good just like he did with the last fighter they screwed over. If you talk to Eddie it's a no brainier that he will be making a lot more money and his manager seems to agree will see what the judge thinks.

 

[Ughugh]

As been mentioned: how can they match a hypothetical ppv offer that possibly could become a reality in the future? There's no guarantees he'll even win a single fight in the UFC let alone ever reach ppv status. Should they have offered him GSP money as well because it's something he could potentially earn in the future??

It's the UFC's fault for not offering him a better deal up front or contractual ppv's from the get go. If someone buys me a $5 lottery ticket I'm sure as hell isn't gonna pay a $1M for it just in case it's a lucky one.

 

[MikeCandler]

As been mentioned: how can they match a hypothetical ppv offer that possibly could become a reality in the future? There's no guarantees he'll even win a single fight in the UFC let alone ever reach ppv status. Should they have offered him GSP money as well because it's something he could potentially earn in the future??

It's the UFC's fault for not offering him a better deal up front or contractual ppv's from the get go. If someone buys me a $5 lottery ticket I'm sure as hell isn't gonna pay a $1M for it just in case it's a lucky one.

Fact is we really have no idea what the terms are...if in fact the only difference is the PPV buy percentage this will be an interesting case. If Bellator offered the same fight pay plus the signing bonus that is.

As for the "hypothetical $$" again we have no idea what the terms are however if the UFC guaranteed his first fight would be a co-main on a PPV he in fact would be guaranteed a percent so again this is where the details can get tricky.

 

[HardwoodOctagon]

Sounds like the UFC erred by not putting some kind of guarantee on the PPV points and Eddie probably erred by even signing the offer. Probably should have just waited out the matching period.

 

[FrodoFraggins]

There's nothing keeping Zuffa from guaranteeing a minimum payment that Bellator couldn't really afford. If they lose him it's because they stuck with %'s rather than actual value guarantees.

 

[FrodoFraggins]

I'm not a fan of Zuffa's strong-arm tactics, but Bjorn should learn from the past and see what happened to Affliction, Pride, EliteXC, etc.

Of course, it's Bjorn's prerogative of he wants to keep his star athlete signed to his company, but this prolonged legal battle, and
the counter-programming, is not going to win him the war for the ratings.

I wonder if Zuffa could convince FOX/FX/Fuel to counter program all of Bellators events.

 

[FrodoFraggins]

When Bellator first started, Rebney seemed a decent alternative to Dana White but nowadays, he comes across as even more spiteful and vindictive.

Just accept you're not gonna be the 'big dog' in MMA - there's nothing wrong with being a highly successful number 2 organisation renowned for grooming contenders/future greats.

Bellator has like 2 or 3 marketable fighters. They can't afford to lose any of them. They also got their contract terms from Zuffa ...

 

[born2killl]

Who gives a shit? youre not an agent; youre a fan. Enjoy & discuss the fights and stop debating the business side; contracts, ppv sales, ratings and things which are a) not any of our business, as fans. b) you have no fucking clue about.

 

[Lucifer Alpha]

I wonder how discretionary bonuses factor into the matching process.