Pro Elite's Contracts Are Complicated; Update: Jake Shields Reportedly Not on Board
The issue about assignability of contracts is more complicated than Shawn Schatze of fightlinker makes it out to be. He is referring to Frank Shamrock's contract, which you can see here.
The provision in question states:
Pro Elite shall have the absolute right to assign, license, or transfer any or all of the rights granted to it hereunder without fighter's consent or approval, however, Pro Elite must obtain fighter's consent, which cannot be unreasonably withheld, to assign, license, or transfer Pro Elite's right to promote any bought of fighter.
The bolded sentence here actually suggests the opposite of what the fightlinker post says. This clause is in very few Pro Elite contracts. I have seen other ones that do not have that sentence, only the stars got a consent clause in their contract.
There's a reason Coker has said there can be a business solution or a legal solution. The bottom line is that for most fighters without the consent clause, Strikeforce has a very strong legal position in favor of assignability. As for fighters with the consent clause, their position is weaker. However, even where there is no consent clause, boilerplate language favoring pro elite is not the beginning and end of the story. These contracts are in California, a state where courts strike down any no compete clauses in standard employment contracts even when employees knowingly signed them.
Assignability in this case, where the new company is almost exactly the same as the old, is unlikely to offend a court in a way that would lead to it being struck down as a matter of public policy. This is unlike being assigned to a completely different line of work.
Fighters attempting to challenge assignability have an uphill challenge, but there's a reason Strikeforce isn't just telling fighters like Carano to stick it. They are renegotiating because their position isn't completely bulletproof, and they'd rather come to a deal than end up in litigation. I haven't seen her contract, but my guess is she has one of these consent clauses.
My hope is they just work all this stuff out and find a way to avoid the courtroom. I've spoken with 4 lawyers about the assignability of these contracts, and the opinions have varied. That only suggests to me that litigation would be long, drawn out, and a major waste of time. I believe they'll work it out.
Update: MMA Weekly's insider blog has a report that Jake Shields may not be on board with Strikeforce:
Though Coker says most of Elite's "top 12" fighters have given assurances they will fight for Strikeforce, it's former welterweight champion, Jake Shields, is not yet committed to the San Jose-based promotion.
"We're still in negotiations," Shields' manager and father, Jack Shields, told MMAInsider late Sunday night.
"Just like with Randy's deal, when he was in the situation with the UFC, to do a declaratory (ruling), it's going to be another six months for these fighters, and then we'll be forced to take them down that path, and the fighter's not going to fight for six months, and the court will rule one way or another.
Jake Shields was always the most likely holdout. He's made it clear he wants to go to the UFC, and there are no relevant 170 pound challengers for him in Strikeforce. Shield has a tough decision to make now about whether he wants to fight this out in court or just settle for Strikeforce under his current deal.
I can't be sure about Jake's contract, but the public Frank Shamrock contract doesn't mention a champion's clause. If there's no such clause, his current contract isn't much longer, and he may be able to just fight a couple times and leave in the same amount of time a costly court battle could take.
Of course, I said the same thing about Couture back before his litigation, and he ended up blowing through an incredible amount of money only to end up back in the UFC. Frankly, Jake can probably increase his stock with a couple of big wins on Showtime or CBS, and then move over to the UFC. He still has room to improve anyway before taking on guys like St. Pierre, Fitch, Alves, and other top welterweights.
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Fightlinker should stick to fart jokes and cribbing content from the UG. When they actually attempt to weigh in on serious subjects, its usually embarrassing for everyone involved.
I get the impression that there are only a small handful of fighters who could possibly be a risk to take this to court. It sounds like Lawler and Diaz are happy to just continue with their lucrative EXC contracts. The lower tier fighters aren’t worth the hassle for Strikeforce. The only fighters who might be a problem are Carano, Shamrock, Slice, Noons and Alvarez, unless I’m missing something.
by smoogy on Feb 9, 2009 10:52 PM EST reply actions 0 recs
I think Lawler and Diaz are the most disturbed by this. Both have expressed their desire to fight in the UFC again. No way Shamrock fights for Dana again, Noons will continue his boxing career and Alvarez can make more money not signing an exclusive contract. As for Slice, I don’t think we will see him in another MMA match again.
by steveoc24 on Feb 9, 2009 11:06 PM EST up reply actions 0 recs
I really doubt any of them are taking this to court. The only one that probably can afford to is Gina, and I just don’t see the incentives for her right now. She has the kind of money and high powered representation to do it, but I don’t think she will.
However, if I’m her, I am demanding my first fight be against Santos and not some random girl. Maybe give Santos a warmup to expose her more to fans, but there’s no reason at all to be risking Carano anywhere else besides Showtime. The fact that Afromowitz even made that comment suggests to me they are playing hardball.
by Michael Rome on Feb 9, 2009 11:46 PM EST up reply actions 0 recs
You think that Shields might? He was quite vocal about wanting to go the UFC.
"I see him beating Anderson Silva. I see him picking him apart. Him at a 131 years old...(trails off)." - Tito on Belfort at Affliction:DOR
by Rundownloser on Feb 10, 2009 12:04 AM EST up reply actions 0 recs
Shawn Schatzle
Rome, I’m not going to pretend to know much about California courts, because I don’t. But from a basic legal standpoint, I would presume that California courts would “strike down any no compete clauses in standard employment contracts even when employees knowingly signed them” in a situation where an employer was stopping an employee from obtaining gainful employment of some type, with no offer from said employer to obtain such employment.
On top of that, in this situation Coker and company literally bought Pro Elite, which isn’t as though they just bought the rights to the EliteXC name. They own the parent company to which the fighters are contracted. The contracts are in possession of Strikeforce now, and based on the boiler plate language of phrases like “unreasonably withholding consent,” a fighter would have to come up with some legitimate reason to get out of it.
Also, where you point out that “Assignability in this case, where the new company is almost exactly the same as the old, is unlikely to offend a court in a way that would lead to it being struck down as a matter of public policy. This is unlike being assigned to a completely different line of work.” I point that out at fightlinker as well, so I’m unsure of what different point you’re making.
On top of all of this, Coker seems genuinely willing to renegotiate with any fighter who deserves it (i.e. Lawler and Carano). While he owns the contract from a legal perspective, it is in his future interest to negotiate with fighters like that in order to keep them happy.
I am not seeing the difference between what you said and what I said, aside from the information you have that the consent requirement is only in certain contracts. The contracts are transferable and everyone is going to wind up happy. Plus, for any problem to arise a fighter would need an incentive to want to get out of the contract. Lawler or Carano aren’t going to be able to make the argument in court that they want out of their Pro Elite contract because Zuffa has offered them a better deal. Nor are they even likely to win an argument saying that assignability is void since, as you wrote, the new company is almost exactly the same as the old.
On top of that, what incentive would they have to burn a bridge with their new employer on the off chance they get a judge to rule in their favor?
by dropkick101 on Feb 9, 2009 11:39 PM EST reply actions 0 recs
i just re-read what i wrote and i used the phrase “on top of that” about 16 times too many
by dropkick101 on Feb 9, 2009 11:40 PM EST up reply actions 0 recs
Strikeforce didn’t buy the parent company though. They just acquired some choice assets.
by smoogy on Feb 9, 2009 11:42 PM EST up reply actions 0 recs
Few things:
1) They did not buy Pro Elite. They bought assets from it. Pro Elite will continue to operate independently.
2) The point about CA striking down no-compete clauses is that CA courts have a strong bias in favor of worker mobility. That bias works against strikeforce here.
3) He’s not renegotiating based on who deserves it, he’s renegotiating with fighters that have the kind of representation and contracts to mount a challenge.
4) Whether or not Zuffa has offered someone like Carano something better is unknown to us. I do know they are higher on her than ever, and she is the crown jewel of this deal. She is the only proven ratings draw besides Kimbo on their roster.
The main point I’m trying to make here is it’s not a slam dunk they’re transferrable. Most fighters will just accept it, but the fact that a company puts this into a contract doesn’t make it enforceable.
by Michael Rome on Feb 9, 2009 11:43 PM EST up reply actions 0 recs
“Most fighters will just accept it, but the fact that a company puts this into a contract doesn’t make it enforceable.”
Fair enough. I touched on that slightly when I wrote “Any agreement is subject to the language of the contract so as long as the language of the contract itself isn’t illegal and, therefore, unenforceable.” I think you’d agree that, although just listing a term in a contract doesn’t make it unenforceable, this situation would seem to fall into a category that would make it enforceable. After all, the two companies are so similar that they might as well be the same.
And again, you seem to have a lot more knowledge of the California courts than I do (I have none – I study NY law almost exclusively), but it would seem to me that any court tendency leaning towards worker mobility would be based on certain public policy concerns. I don’t see how the situation here would fall under that umbrella of decision making.
I would also venture to say that, based on what you said, Coker is essentially still renegotiating based on who “deserves” it, meaning he’s renegotiating with fighters who have value to him and the company and thus “deserve” it. For instance, he’s not going to renegotiate with Kimbo if Kimbo wanted a pay increase because he’s likely no longer worth that amount — whereas fighters like Lawler and Carano have more value than their contract currently stipulates.
by dropkick101 on Feb 10, 2009 12:07 AM EST up reply actions 0 recs
Coker didn’t buy ProElite nor did they get the EliteXC name, they just bought select assets that included 40 or so fighter contracts. ProElite still exist and has said they are going to continue to promote MMA.
by who me on Feb 9, 2009 11:44 PM EST up reply actions 0 recs
On top of that, what incentive would they have to burn a bridge with their new employer on the off chance they get a judge to rule in their favor?
That goes both ways what company wants a fighter under contract that now hates them and their company and will refuse to ever sign back after the contract is up? Just getting guys moved to under a Srikeforce contract isn’t the end of things you also have to be able to work with them. A court battle cost both sides time, energy and money and regardless of who actually wins the relationship has been damaged between the two sides. Hell if Strikeforce did manage to sue a guy into fighting with them by force of contract do you think they would actually get any value or commitment out of the fighter?
by who me on Feb 10, 2009 12:00 AM EST up reply actions 0 recs
That’s the point. Neither side is going to want to litigate. It’s in everybody’s (or at least the vast majority’s) best interest to simply adhere to the contracts
by dropkick101 on Feb 10, 2009 12:05 AM EST up reply actions 0 recs
And any of them that want to really fight against it won’t be worth the trouble for Strikeforce to pursue in court anyway. This isn’t the Randy Couture situation and Strikefoce doesn’t have the warchest that Zuffa does either, even if they could get a contract to hold up in court just what are they getting for all that wasted time and money?
Strikeforce is going to want to get all these guys signed into Strikeforce contracts with terms that are acceptable to Strikeforce and for the length that Strikeforce wants, they don’t want to fight with a guy to force him to fight under an old contract they want happy fighters who are committed to their company. they are going to negotiate with these fighters because that is also in their best interest too.
by who me on Feb 10, 2009 12:29 AM EST up reply actions 0 recs
I had no idea you were Schatzle
I like your avatar here a bit better :)
by asa on Feb 11, 2009 12:21 PM EST up reply actions 0 recs
Strikeforce’s biggest advantage here is that they are a good company and most of these guys will be happy with the transfer. What will be interesting is if they lock up guys in new closed contracts.
by who me on Feb 9, 2009 11:42 PM EST reply actions 0 recs
Strikeforce Having Trouble Getting Jake Shields On Board?
http://www.mmaconvert.com/2009/02/10/strikeforce-having-trouble-getting-jake-shields-on-board/
by who me on Feb 10, 2009 1:46 AM EST reply actions 0 recs
No surprise their since the UFC lawyers were trying to help Shields get out of his contract , but it also wouldn’t be a surprise to see him at Strikeforce either.
by MMASuPreMaCy on Feb 10, 2009 2:22 AM EST up reply actions 0 recs
I don’t see the incentive for Strikeforce to fight for him. They have no 170’s for him to fight, he has no real drawing power, and he’ll be asking for more than he’s worth. Honestly, I feel like it would be smarter to let him go and focus on valuable fighters.
by Michael Rome on Feb 10, 2009 2:50 AM EST up reply actions 0 recs
My thoughts exactly. He’s gone as soon as his contract is over and they have no real challengers for him, and therefore no money matches. It makes a lot more sense to let him go and build up a 170 division from the ground up.
by Michaelthebox on Feb 10, 2009 3:46 AM EST up reply actions 0 recs
The more I think about it, the incentive is not fight related, it’s about precedent. You don’t want to give other fighters that want out something to point to.
by Michael Rome on Feb 10, 2009 4:05 AM EST up reply actions 0 recs
Someone suggested a novel solution on the UG: Make a trade with the UFC. It sounds dumb, but if the alternative is a court battle, why not? A sign and trade for Shields, in exchange for the rights to Thiago Tavares and Tamdan McCrory… which side doesn’t make that deal?
by smoogy on Feb 10, 2009 6:19 AM EST up reply actions 0 recs
I like the idea, I just don’t think the UFC will take it. There’s a strong feeling inside the UFC that Jake will be badly exposed by any of the top 170 guys…then again, in a rational world they would make the deal. Of course, the fighters would have to consent, they cant just be traded. I don’t think Tamdan would be happy with that.
To me the better deal is to free Shields in exchange for a promise of no counter programming against their first CBS show.
I honestly don’t know that Shields is better off in the UFC. I think even Anthony Johnson would give him a VERY hard fight.
by Michael Rome on Feb 10, 2009 6:44 AM EST up reply actions 0 recs
I think Johnson would have his dirty dirty way with Shields, based purely on his Rosholt-esque stand up and his shot which isn’t set-up with striking. If Paul Daley had a smidge of a ground game I think he would have ended up taking that fight.
Having said all that, bring Shields on over to the UFC, there’s no place for him outside of the UFC. He’s good, just not great.
by SamCupitt on Feb 10, 2009 8:29 AM EST up reply actions 0 recs
strikeforce will probably let him go if he postures too much… but only AFTER everyone else is locked in.
They will not let anyone out until they got most are all the ones they want in because then that will cause a ripple effect where everyone starts over posturing.
by mmalogic on Feb 10, 2009 8:38 AM EST up reply actions 0 recs
Let him go...
and start building up a division based around young, homegrown talent. They don’t have the depth and honestly what are they going to do? Ruin guys by getting them a win or two and feeding them to Shields? Having an exciting division of guys that maybe don’t have the experience is worth more than having one guy just bombing out the guys they don’t have any business in there with him. I’d like to see Daley get another shot at Shields…but that’s about it.
Contributing Editor - BloodyElbow.com - SBNation's mixed martial arts headquarters.
by Brent Brookhouse on Feb 10, 2009 10:33 AM EST up reply actions 0 recs
Strikeforce has at least 12 events they will be putting on plus up to 4 more…
Fighters should just finish out their contracts and renegotiate – most of the top contracts are almost up anyway.
There’s really no risk in being sandbagged…
The only risk is losing before your contract is up.
Expect to see very lopsided fights.
by mmalogic on Feb 10, 2009 8:45 AM EST reply actions 0 recs
That's the problem...
MMA is a sport where everyone is one lucky punch away from losing out on big money. If Shields took a cakewalk fight and just happened to lean into a right hand to the jaw…he’s going to lose some value. The UFC would still want him but they’d have the room to say “well man…you’re coming off a loss…that devalues you a bit doesn’t it?”
Contributing Editor - BloodyElbow.com - SBNation's mixed martial arts headquarters.
by Brent Brookhouse on Feb 10, 2009 10:34 AM EST up reply actions 0 recs
I agree, any fighter than wants out just needs to finish the contract. As stated, the top contracts don’t have many fights remaining. It would be quicker to finish the contract and move on than take it to the courts. If don’t believe me ask Randy how long it takes to get a resolution on these legal matters.
by bignerd on Feb 10, 2009 7:20 PM EST up reply actions 0 recs
Shields really needs to be in the UFC, like everyone has mentioned. Besides not wanting to set a precedent of letting a fighter get out of their deal, I really don’t see much of a positive for Strikeforce having him, or for him being with Strikeforce. Strikeforce has no real attractive fight for him at 170lbs. right now, and he isn’t a big draw either way. Jake needs to fight the top guys in his weight class and they are all in the UFC.
by Meers311 on Feb 10, 2009 10:22 AM EST reply actions 0 recs

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