UFC Star Roy Nelson Stuck in Contractual Limbo

Roy Nelson has been the subject of lawsuits and counter-law suits for most of this year, but it hadn't stopped him from fighting for the UFC, until now.  When Nelson signed with the UFC to participate in the tenth season of The Ultimate Fighter, he apparently believed he was free and clear from other contractual obligations. 

It's looking like Nelson was incorrect.

MMA Junkie reported yesterday:

UFC president Dana White today told MMAjunkie.com that Nelson (15-5 MMA, 2-1 UFC) is currently contractually bound to another fight promotion.

As such, he won't be seen inside the octagon until he is in the clear from his previous employer.

The story was originally broken by Robert Joyner:

Nelson, as well his overseers at Zuffa, are facing off in court with another combat sport participant that goes by Junior - Roy Jones Jr, that is. RJJ and his Square Ring, Inc. (SRI) filed suit in late Spring in Nevada court against both Nelson and Zuffa, alleging that the two parties acted together to deprive SRI of its' contractual rights.

Nelson initially entered into a relationship with RJJ and SRI when participating against Jeff Monson on the Boxing/MMA March Badness PPV, which was headlined by Roy Jones Jr. vs Omar Sheika. In his contract for the fight, SRI alleges that Nelson granted "exclusive first negotiation rights" on subsequent fights and under certain conditions the right to match any offers that Nelson received in the future.

Nelson would continue to work with Square Ring after his fight vs Monson. Nelson served as an advisor to Square Ring matchmaker for a mixed boxing and mma event on May 24th, 2009 in Primm, Nevada. The suit claims that UFC VP Marc Ratner was at said event and met with Square Ring CEO John Wirt. In the process of their conversation Wirt alerted Ratner to the fact that Nelson was assisting at the event in a matching making role and also stated that Nelson was an under contract Square Ring, Inc. fighter. The case states that Ratner later met separately with Nelson while at the Primm event. After the event, in late May/early June, SRI alleges that Nelson would negotiate first with Zuffa, did not provide SRI with the opportunity to match the Zuffa offer, and would sign an exclusive promotional agreement with Zuffa. SRI alleges that all these actions violated their agreement with Nelson. SRI also alleges that bouts that Nelson participated in while competing in the TUF 10 season were also in violation of the agreement.

The Fight Lawyer looked at the case, and the flurry of counter suits filed by Zuffa and Roy Nelson in August:

I checked the docket and it appears that Zuffa asserted a cross-claim against Nelson on May 3, 2010 and that Nelson asserted a counterclaim against SRI on June 17, 2010.

I have not seen either of these documents, but my guess is that Zuffa's counterclaim against Nelson is for contractual indemnification -- especially given the amount of time and money Zuffa asserts is involved in drafting its contracts.   

That is, my guess is that under Zuffa's agreements with Nelson, Nelson has agreed to indemnify Zuffa for any losses Zuffa incurs (including attorney's fees, costs, judgments, etc.) arising from or relating to Nelson's breach of any agreements with any other promoter, which would include all of these claims that undoubtedly arise from Nelson's alleged breach of his agreement with SRI.

So, although people may assume that this litigation is causing Zuffa some pain (and litigation is always a hassle), I predict that Zuffa is likely to be covered for any of its expenses relating to this lawsuit and those expenses are likely to come from Nelson's pocket...    

Dana White commented to MMA Junkie:

"These guys go out and sign with these rinky-dink little promotion companies and sign these bad contracts, and let's just say Roy Nelson is involved in a bad contract right now that he had before," White said. "There's a couple of different organizations out there that do it."

...

"There's organizations that are locking these guys up to the old-school boxing contracts," White said. "The contracts that King and those guys were doing back in the 60s, 70s and 80s where they have options on top of their options - so your contract never ends with these guys.

"These are the kinds of contracts that some of these guys are signing in these other organizations out there that some of these MMA websites go, 'Oh, stick up for these guys, they're the small guys.' The small guys are the guys that are really [expletive] the fighters."

In sum, it appears that Nelson took $30,000 to fight Jeff Monson for Roy Jones, Jr.'s Square Ring promotion and apparently didn't realize that contract gave Square Ring the option to match any future contracts Nelson was offered.

I'm surprised that Nelson fought for the UFC twice since the suit was originally filed and I'm curious as to what has changed to make Zuffa unwilling to book Nelson for further fights.

I do have to agree with Dana White that this appears to be one time where questionable boxing business practices have come over into MMA.

I'm not quite clear on what Square Ring thinks they are gaining by suing Nelson beyond a possible cash settlement. If they had an option to match other offers to Nelson, it's unclear to me that they could have matched the UFC's offer since they haven't put on an MMA event since 2009 to my knowledge.