EliteXC Fighters Still Screwed
by Michael Rome on Jan 9, 2009 6:24 PM EST
in MMA News
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PrintDave's new column over at Yahoo Sports is must-read. He confirms that the Strikeforce-Pro Elite deal is basically dead, and that the fighters are being shut out and left in the dark:
“Every day the story is different; nothing ever comes to fruition,” said Walker, who specifically mentioned UFC and Strikeforce as possibilities for Carano. Walker also questioned whether fighter contracts would even be assignable in a sale. Originally, Elite XC was going to auction off the contracts individually as a way of raising some money for the companies it owed money to, but agents representing 60 of the 80 fighters worked together in getting the auction canceled. This gives me the impression nothing has been filed yet, but my guess is we will be hearing about lawsuits very soon. I believe Walker is with CAA, and I don't think he is going to buy into this line of crap from Pro Elite anymore. The reason the deals keep falling apart last minute is all the dirty details don't come out until the end of the deal when companies have to make representations to each other and disclose all financial obligations. What company is going to take on that kind of debt in exchange for a losing investment? It makes no sense.
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I really don’t get why the fighters and agents aren’t doing anything about this. The agents were quick to band together to stop the auction, I really don’t get why nothing is happening.
Get your licensed revoked in CA?
That’s not really the best thing, and some of the fighters have exclusive contracts, so they can’t do anything. And the fighters that do have non-exclusive contracts can’t go to Zuffa (not all of them should, but the fact that the one’s who should be there can’t is bad.
Also, I don’t know how smart relying on Japan for your living would be at this time. Neither org is as big as Pride was, thy are always making last minute card changes and other assorted madness, and that doesn’t even cover the problems Dream has had with paying fighters.
My god, EXC manages to screw people IN THE FUTURE. It’s time-travelling screwage!
Seriously, I still hear people say “I don’t get the hate for EXC. They put on good shows!” Yeah, but they also ran a terrible business, made MMA look like a carnival act, screwed fighters both before and after their demise, and had the stink of corruption about them even before the end. Let’s all admit (including EliteXC, if they can) that it was just a bad scene from start to finish, cut losses, and let everyone move on.
"I'm AJB and I endorse this nut-puncher."
This is an reason of why more athletes hire lawyers as sports as agents.
by The Bronzeville Bully on Jan 11, 2009 9:58 PM EST up reply actions
I am missing something.
I do not understand why agents representing 60 of the 80 fighters would move to stop the auction of their fighters’ contracts. I understand why an agent and a fighter would want to be able to negotiate with a new company on their terms, but doesn’t it make more sense to have your contract transfered to a new organization in order to allow the fighter to fulfill it more quickly and therefore be able to negotiate with whomever they choose more quickly, particularly when the alternative is having your contract, and subsequently your salary, frozen?
That was one hell of a run on sentence.
"BJ on the BE" - Kierkegaard
Most of the contracts are not transferable. We saw that when UFC bought PRIDE. The auctioning of the contracts was only to try and provide liquid assets so that a dead company could pay off debts. It was in no way in the best interests of the fighters. Had the contracts been auctioned – and assuming any organization was stupid enough to buy them – all it would do is trap the fighter in another legal situation as a result of their contract being caught in limbo between a dead promotion and a different promotion, adding a layer of legal bullshit. There’s no guarantee they wouldn’t be frozen out anyway. So, the alternative was to deny EXC the ability to auction off their most plentiful (and valuable?) holding and force them to deal with the fact that EXC had ALREADY violated the contracts. There isn’t an agent – or athlete – on the planet who would honour a voided contract, transfered to a different party, just because it might be “quicker”.
"I'm AJB and I endorse this nut-puncher."
by AJB on Jan 9, 2009 7:18 PM EST up reply actions
So the idea is that Pro Elite was trying to auction off contracts that wouldn’t be worth the paper they were written on because the contracts are not transferable.
In other words, Pro Elite was trying to transfer non-transferable contracts, is that right?
And if so, isn’t that illegal? That seems illegal to me. I mean, if there is language in the contract that specifies that the fighter is bound only to the EliteXC parent company and that upon transference of the contract he the terms of the contract are null and void, it seems like they were not actually auctioning anything.
Are you sure the contracts were non-transferable via auction, or only if sold as part of the assets if the entire Pro Elite organization were sold? Or is that distinction without difference (or whatever that phrase is)? And if the contracts were auctioned even if the deals are non-transferable, wouldn’t that in turn make the fighters bound to the auctioned contracts de facto free agents?
"BJ on the BE" - Kierkegaard
I am 100% NOT a legal expert. But a friend of mine had a contract with ProElite, signed just before they folded, so my understanding is from that. With that caveat…
The contracts are “partially” transferable, in that they are an “asset” of the company and can be sold. However, you can’t just swap out one partner to a contract with another partner. (In cases where that is legal, like the transference of a lease when the building is sold, there is usually some sort of specific legislation that spells out the legality.) However, that doesn’t make the contract in and of itself null and void, because the purchaser of the contract will retain rights with respect to the contract. In short, while they can’t enforce the contract, they MAY be able to block the signing of a similar contract while the terms of the old one are still valid.
So, that being said, I think it would be indestinguishable situations: if the contracts change hands without the consent of the contracted party (the fighter), they remain in the same situation: an unenforcable contract that can still interfere with other contracts being signed.
Like I said, I’m not a legal expert; I’m a political theorist. But that’s how it was explained to me. Of course, they also said that the whole thing is a legal clusterfuck in that no one actually knows exactly what the logical end point of some of these issues are because no one wants to go there, so I’m not sure that even the lawyers understand what’s going on at this point.
"I'm AJB and I endorse this nut-puncher."
by AJB on Jan 9, 2009 7:44 PM EST up reply actions
So, Pro Elite are assholes though, right? I mean, a lack of in-depth legal understanding aside (and I mean me despite your admission), the plan to auction off that particular set of assets is a proverbial flipping of the bird to the talent, right?
I understand where they would feel it necessary to get income by any means necessary, but if they idea was to resurrect the product in some way, auctioning fighters’ contracts is wrong on many levels.
"BJ on the BE" - Kierkegaard
These guys are such jerks. Luke did an excellent piece on the whole situation on MMA nation before the auction was suppose to take place. What he said in a nut shell was the fighters they had need to fight to make a living and how dare these jokers hold that process up with nonsense. I agree with him 100%. Fuck Elite XC. Best of luck to them in the future. But release the fighters and let them earn money to feed their kids or make car payments or pay cable bills or smoke crack or whatever.
Elite XC Sucks!
Seriously they need to stop holding on to these fighters when they fully know that they can’t make another show for them to fight in and earn a paycheck. These guys made bad decisions and are making the fighters pay for it. Not good.
Ding-dong, the witch is de… what? She’s still kicking?
Next time I hear someone talk about how Zuffa treats fighters like shit, I’m going to use one hand to point at this debacle and the other one to flip them off.
by Derek Suboticki on Jan 9, 2009 9:09 PM EST reply actions 1 recs
Horrible.
Did you know we are in high demand, Laura?
by Eugene Schelfaut on Jan 9, 2009 9:30 PM EST reply actions
I feel awful for the fighters. There are very few things more emasculating than wanting to work and not being able to.
The situation is especially
emasculating to the women. ;) Sorry, I had to do it.
You’re right, though. This is absolutely sickening to watch (not?) happen. Utterly disgusting.
There is no such thing as innocence, only degrees of guilt.
This isn't news . . .
What’s changed . . . nothing.
The only news in Meltzer’s article was Strikeforce and Zuffa put in an offer to buy. CBS doesn’t think it can work with UFC so Pro Elite has been working to sell to Strikeforce, however they already have TV contract with NBC so they are stalled until they can come up with a resolution.
Also, their was no talk of anyone taking on Pro Elite’s debt . . .nice analysis! Bankruptcy doesn’t transfer to the person who buys your asset.
That would be relevant if they declared bankruptcy, but they haven’t done that yet, because then the creditors will just take the assets, instead of Pro Elite being able to sell them to who they wanted.
It’s a nice update, because before Christmas, there was talk about how the sale was close to being done, and this thing was being resolved, but it’s been a few weeks, and there are still fighters unable to work.
All right that is fair . . . but I don’t think anyone believes the buyer is going to accept any of Pro Elite’s $55 million debt. Everything points to a sale of assets than the bankruptcy papers, unless some sucker comes along . . .
Also, the blurb posted above mentioned nothing of this news. It was all EliteXC bashing. . . it’s time to move on from Gary Shaw. The two guys remaining at least seem to be trying to do something, the blurb could have mentioned that.
The blurb was about the fact that the people trying to do something haven’t done anything That’s the whole point. I don’t care what they’re trying to do, this thing needs to end so the fighters can go fight.
If you are worried about fighter’s fighting than how about a blurb about Chuck Liddell’s next fight? I think EliteXC’s last show was after Chuck’s last fight.
1. Are you really comparing every single fighter in EliteXC’s future to multi-millionaire Chuck Liddell getting his next fight (which we know he will get one) because Chuck hasn’t fought in longer than the last EliteXC event? Seriously you think anyone should be worried about when Dana White’s best friend, multi-millionaire Chuck Liddell who is closing in on retirement anyway not having a announced fight yet? Chuck not having an announced fight isn’t even comparible to the entire EliteXC roster having their futures put on hold while what remains of the company can’t even figure out how to sell itself off without bungling it.
2. Did every single fighter with an EliteXC contract fight on their last card? Because it seems to me that there are guys that have been waiting a lot longer for for their next fight than just the last EliteXC card. Heck even the guys who have managed to get a one shot fight here or there still have had their futures put on hold because no one is going to sign them long term right now.
3. The IFL went through a similar situation when they failed as a company only they let the fighters go first and then sold off the assets. What the guys remaining at ProElite are doing is trying to take care of the guys remaining at ProElite not the fighters and not the sport of MMA. I know the situation is complicated but good grief they have earned any negative press they get over this.
4. Just because it’s probably a select asset sale doesn’t automatically mean that their won’t also be some of the debt to transfer too. We don’t actually know the specifics but I’m sure if Showtime is going to be willing to work with a new owner then they probably want their 6 million dollars in loans back. The Showtime loans aren’t just something you can bankrupt easily they were guaranteed with ProElite’s assets.
When is the last time you read anything and understood it? Zuffa did not put in an offer. They rejected a strikeforce offer, and don’t want to work independently with UFC.
Tons of fighters who have almost no money are wondering when their next fight is. That is who this column was for. Elite has strung fighters along with bogus promises of sales.
by Michael Rome on Jan 12, 2009 1:34 AM EST up reply actions 1 recs
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