The Champion’s Clause: An MMA Comparative

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grappler0000
8/25/09 5:49:29PM
Last week MMAPayout.com examined how Anderson Silva might avoid the “champion’s clause” in his UFC contract in order to seek the oft-rumoured boxing match with Roy Jones Jr. While Silva’s manager, Ed Soares, has sinced cleared the air with regards to Silva’s intentions, the situation nonetheless has provided an opportunity to shed more light on the champion’s clause - it may surprise you to know that the UFC isn’t the only organization with such a contractual obligation.

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grappler0000
8/25/09 5:53:03PM
Don't know why the link is dead, but I'll post the remainder here until it gets fixed:



UFC version:


“if, at the expiration of the Term, Fighter is then UFC champion, the Term shall be automatically extended for a period commencing on the Termination Date and ending on the earlier of (i) one (1) year from the Termination Date; or (ii) the date on which Fighter has participated in three (3) bouts promoted by ZUFFA following the Termination Date (”Extension Term”). Any references to the Term herein shall be deemed to include a reference to the Extension Term, where applicable.”



Strikeforce version:


“The initial term of this Agreement shall commence upon the date of this Agreement is signed by Fighter (Effective Commencement Date”) and shall expire two years from the date that Fighter signs this Agreement, unless terminated or unless extended or suspended in which case this Agreement shall expire no later than thirty (30) months from the Effective commencement date hereof. Fighter grants EXPLOSION the option and the right but not the obligation to extend the term of this Agreement (“extended term”) upon the same terms and conditions except as hereinafter set forth for a one (1) time additional one year if Fighter at any time during the initial term hereof holds or held a Strikeforce Championship Title.”



Bellator version:


“If, at any time during the term, FIGHTER is declared the champion of his weight class, a Tournament winner, or a Tournament runner-up, the Term shall be automatically extended for a period commencing on the Termination Date and ending on the earlier of (i) eighteen (18) months from the Termination Date, or (ii) the date in which FIGHTER has participated in three (3) bouts promoted by PROMOTER following the Termination Date (”Extension Term”). Any reference to the Term herein shall be deemed to include a reference to the extension term where applicable.”



Payout Perspective:

The UFC’s clause is the most controversial because it lacks the clarity to be definitive. The consensus seems to be that most courts would interpret the clause to stipulate a one-term only extension of the contract. However, a very strained interpretation of the clause - one where “Term” could also refer to Extension Term - might allow the UFC to automatically renew the contract in perpetuity, so long as the fighter holds the belt at the end of each term.

The wording is so difficult that the matter would likely end up in court should the UFC choose to contest the issue; something that would effectively serve the purpose of the champion’s clause in keeping a fighter away from rival organizations. The wording also raises many interesting questions such as whether the UFC could appoint someone as champion in order to trigger the clause, or whether a champion could in fact resign or relinquish the belt to avoid the clause.

If, indeed, the UFC’s clause is interpreted to be a one-time extension of the contract, it would appear to be far less restrictive than both the Strikeforce and Bellator clauses. Whereas the UFC clause might only be triggered if a fighter holds a championship at the time of his contract’s “Termination Date,” both the Strikeforce and Bellator clauses are triggered if and when a fighter wins a championship at any time.

Are these restrictions a bad thing? It depends on your perspective.

MMAPayout.com’s Robert Joyner has tackled the subject previously when looking Inside the Bellator Contract, and he highlighted a very important point: champion’s clauses are a necessity from an organizational standpoint, because they’re “self-fulfilling” talent retention mechanisms (particularly in the case of Bellator whereby not just champions, but even contenders are re-upped for an additional term).

It’s simply in an organization’s best interest not only to avoid having a fighter leave with a belt or gain substantial negotiating leverage, but also to help retain top-level talent for competitive reasons.

However, from the perspective of the fighter, these types of clauses hinder their ability to cash-in on their in-cage or in-ring success. The fighter isn’t able to immediately hit the open market, or use the leverage of such a potential scenario, to establish contract terms and sell his services for fair market value.

Not surprisingly the rest of MMA’s stakeholders will take sides according to their own positions within the community. Sponsors will side with the UFC, because more stars mean a better product which attracts more attention to their advertised brand. Fans will side with the fighters as the public seemingly always does when it comes down to employer vs. labour. The government is left somewhere in the middle, hoping that nothing becomes too restrictive or too lax that control is lost and regulatory equilibrium thrown out of balance.

…thus it would appear these MMA organization’s aren’t the only ones looking out for their best interests.
Brain_Smasher
8/25/09 9:21:38PM
In short.

The UFC isnt the Evil Empire some "fans" think. Its business and all MMA promoters who have a slimmer of a chance to survive have to use proper business practices. These contracts while giving fighters guaranteed work, pay, promotion, etc. Also look out for the long term stability of the company.

Any employer who hires someone of value will make sure they tie them up for a reasonable time. The UFC is the same way. If you dont join their contract they wont put you in a position to be valuable to them. They will promote someone else.

Most of the UFC decisions have come about through trial and error. Then other companies adopt the concepts as you see in this article. The UFC avoids long term deals because they got screwed by Pedro Rizzo back when he was a stud. Give him like 6-9 fights at 100K which was a lot then. Then they try to avoid champs winning belts them holding it for randsom like Bustmante, Penn, and Couture have done in the past.

There is logical reasoning for the decisions the UFC makes wethere they are well received or not.
RearNakedJoke
8/25/09 9:50:55PM
nicely said B_S!

personally i think deals like these are good for the fans and mma not just for the companies that use them. it was irritating to see couture hold up a belt for so long. and it sucks when i champ just disappears after their contract expires.
jae_1833
8/25/09 10:05:35PM
Although I think they should all be a little more consistant and percise. I liked what I percieved from the Bellator one because it stated 18 months with 3 fights....simple. The UFC's was much too vague. I didn't really have much of an opinion of Strikeforce's because I can't help but think that Cung Le is in direct violation as he has not defended the title that he earned in 15 months.
EliasG
8/25/09 10:49:09PM
You make vague legal language for a reason. 1--you have better lawyers and deeper pockets so you can litigate longer 2--you have strong standing in the courts and expect to win in your district 3--both 1 and 2 and 4--you have a weak legal team that wrote anemic legal language that you'll lose in court

It's not 4.

It's 3. When contracts are challenged they have to be contested in Nevada District court where the Fertitis have long worked and have political influence. It's a stretch to say that they have sway over the courts, but it isn't a stretch to say that their legal teams do A LOT of business in THOSe courts and they have the best legal minds operating in Nevada District court---on their team. They also have very deep pockets and strong legal teams so if you Mr. Individual fighter want to challenge ZUFFA===no matter how big you are===you face an incredibly daunting task. They can bury you in legal fees. Ask Randy.
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