It's been quite a week for those of us who enjoy keeping up with the antics of the various carnies and grifters who
take advantage of manage the business interests of MMA fighters. First off, Jason Genet, manager to Shane Carwin, Efrain Escudero and Benson Henderson among others agreed to pay a hefty settlement to the SEC. The Fight Lawyer has the terms:
(a) permanently restrains and enjoins Defendant from violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)], Exchange Act Rule l0b-5 [17 C.F.R. § 240.10b-5], and Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 [15 U.S.C.§§ 77e(a), 77e(c) and 77q(a)];
(b) orders Defendant to pay disgorgement in the amount of $1,700,000.00, plus prejudgment interest thereon in the amount of $697,745.57;
(c) orders Defendant to pay a civil penalty in the amount of $130,000.00 under Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; and,
(d) bars the defendant from participating in any offering of a penny stock for a period of five years.
Naturally Genet admitted no wrong doing, he's just ponying up $2.3 million to put it all behind him and clear up the misunderstanding.
It's kind of remarkable that Genet was allegedly able to wring so much money out of a penny stock when he allegedly was totally unable to get the 35 year old Shane Carwin a % of the PPV buys for the biggest fight of his life at UFC 116. Carwin will never again be an undefeated heavyweight challenging for the belt but maybe, just maybe with some luck and lots of hard work, (and a cure for lactic acidosis please give generously) he might get another title shot and maybe next time maybe his alleged management will get him a bigger alleged slice of the pie. Maybe next time he'll even have an alleged manager who isn't distracted by an alleged SEC suit. Good thing he kept his day job.
More atrocities, including MC Hammer in the full entry:
Bellator is the defendant that will get a lot of attention, but Ken Pavia is the real target here. As we've seen with the Jason Genet case (where he paid a settlement to the SEC), there is going to be much more scrutiny on agents in MMA who portray themselves as powerful. One thing we know about UFC and Dana White, in particular, is that they don't like dealing with many of the agents in the business. By going after Pavia, they are laying down a marker to all agents who do business with them. By having that message come out through Kevin Iole and Yahoo, it becomes a crystal clear public message - don't screw with us.
... In this case regarding Zuffa's lawsuit against Ken Pavia and Bellator, UFC is trying to portray Pavia and Bellator as being sloppy in the way they handle their business. When you are dealing with a company as ruthlessly efficient as UFC in the MMA marketplace, one moment of carelessness could cost you very big.
BE commenter Smoogy2 also pointed out something important:
These emails show that Pavia explicitly helped Bjorn Rebney design the onerous, UFC-like contracts that Bellator holds over fighters like Dave Herman and Jorge Masvidal when things go sideways. Why would an agent conspire with a promoter to clone UFC contracts for Bellator? I can think of two very good reasons: to ingratiate himself to the promoter, and to help create a similar framework to the one in the UFC that has made a lot of money for Pavia at the expense of the countless overmatched club fighters he has pumped and dumped through their lower ranks. Bellator has this hokey sales pitch to sponsors about being in 500 billion homes when you combine all their weak TV deals, and we know Pavia makes his bread on the sponsor side as much as anything. If I was a Pavia client fighting for Bellator, I'd be contacting my attorney right about now. This sounds like a pretty serious conflict of interest, not to mention a damning glimpse into how Pav views the fighters he works for.
But never fear kiddies, if you're worried that your favorite fighters are being taken advantage of by less than stellar business advisors, MC Hammer is coming to the rescue:
Three-time Grammy Award-winner MC Hammer has launched Alchemist Management (www.alchemistmgmt.com), a management, promotion, marketing and brand-building firm for MMA fighters. Hammer serves as the new company's CEO and has named Lex McMahon as President and Nima Safapour as Vice President of Business Affairs and General Counsel. Alchemist Management is based in Los Angeles.
Hammer brings significant experience in top-tier sports and entertainment management to Alchemist. Prior to his celebrated musical career, he began his professional life in sports. Later, after achieving worldwide fame in the music industry, he returned to the sporting world and represented professional athletes in contract negotiations. In the 1990s, he managed Evander Holyfield to the world heavyweight boxing championship.
"I've been a fan of combat sports for years," said MC Hammer. "MMA is the fastest growing sport in the world and this is a great opportunity for us to launch a full-service management company. Alchemist Management will leverage its relationships and resources for the benefit of fighters, the sponsors, and the industry at large."
Hammer is joined by executives Lex McMahon and Nima Safapour who will oversee day-to-day operations and fighter management.
Hammer's stable already includes: Nate Marquardt, Tim Kennedy, Vladimir Matyushenko, Jorge Rivera and several others.
As easy as it is to make fun of Hammer, he's been around the sports and entertainment worlds a long time and made (and lost) more than one fortune. To my knowledge, he's also got a rep as an honest guy which is pretty rare in this line of work! If anyone knows otherwise, please post in the comments.