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The Fertittas Deal From the Bottom of the Deck

Adam Swift has a piece up at Sherdog that outlines the suit against a couple of companies owned by UFC co-owners Frank and Lorenzo Fertitta who also own the UFC. They basically loaned Xyience money that Xyience spent "sponsoring" the UFC (why you ask? they needed sponsors to secure a $325 million loan ). The kicker is that the loan included clauses that basically handed the whole company over to the Fertittas if the already floundering Xyience failed to repay. But here's the kicker, check how the new agreement works, it's a classic "heads I win, tails you lose" proposition:

The complaint says that the UFC is to receive $32.4 million over the three-year term of the new agreement: $9 million in the first year, $11 million in the second and $12.4 million in the third.

Under the prior agreement, Xyience was the title sponsor with its marquee on the center of the mat at UFC events. The new agreement provided that after March 2008, Xyience would not be the title sponsor or appear on the center of the mat, would not be announced by the ring announcer, would not be announced as the title sponsor at commercial breaks and would no longer appear on fighters' clothing.

And I haven't commented on the Brandon Vera arbitration which most people seemed to interpret as a clear case of Vera being a greedy jerk. To me it reveals more about the manipulative tactics of Dana and company and how they deliberately drove a wedge between Vera and his management. Dr J at MMAHQ has a good post covering Zuffa's antics, including refusing to make written offers. This piece also has more on Zuffa's interpretation of Vera's request for a July 2006 fight rather than a May date as Vera's management declining a fight -- which entitled Zuffa to extend his contract an extra three months.

Don't get me wrong, Dana and the Fertittas have done great things for the sport. I'm just saying, their habit of treating everyone they do business with the way the Fertitta's casinos treat the suckers who gamble there is going to bite them in the ass.

Update [2008-3-21 21:51:42 by Kid Nate]:

This Canadian Press article has more on the Vera situation and summarizes it nicely:

According to Dion's testimony at the hearing, White flew him out to Las Vegas on Dec. 4, 2006, to talk turkey. White wrote down two offers on the blue Post-it - Exhibit 39 in the hearings - divided by a line down the middle.

The first, a three-fight deal, was 90/90, 100/100 and 115/115. That meant Vera would make $90,000 the first fight and another $90,000 if he won, and so on. Another set of numbers - 150/150, 170/170 and 185/185 referred to an upgraded package if Vera won the title.

On the other side of the note is written "7 million, 4 year deal."

Dion testified that White also made a verbal offer of a $100,000 bonus if Vera won the title.

The Post-it was par for the UFC course, according to Dion.

"UFC doesn't send no letters, period," he testified. "They've tried to avoid all that stuff."

"This is all I got from Dana White," he said later in his testimony. "This is all I could show to Mr. Vera. There was no e-mails. Dana White likes to keep - keep himself covered on all aspects."

Asked for comment, the UFC said this week that White had been travelling and was not immediately available.

Three days after the White Post-it offer, Dion makes a counter-offer. Option one was a one-year three-fight contract: 150/150, 175/175 and 200/200 with a signing bonus of $1.5 million.

According to Dion, UFC matchmaker and vice-president of talent relations Joe Silva made a reduced offer to Vera later in December: $50,000 for the first fight with a $50,000 win bonus, followed by 60/60 and 70/70. If Vera won the title, the package would be upgraded to 90/90, 100/100 and 110/110 along with a $100,000 signing bonus.

Dion rejects the Silva offer at 4:46 p.m., Dec. 26, in an e-mail to White. "No disrespect to your last offer, but we've decided to pass." At 7:16 p.m., the UFC replies, saying it is exercising its right to extend the contract by three months, citing Dion refusing a fight the previous June because of a Vera injury in May after his UFC 60 win over Assuerio Silva.

Armando Garcia of the CSAC has the final word, and I think put the blame where it truly goes -- not on Vera or on his manager, but instead on the man running the 3 card monte game, Dana White:
In his ruling, Garcia also pointed to the bonus controversy and the Post-it note.

"It seems to the arbitrator that the ambiguity of the Post-it note, which appears to be the root of the current dispute, could have been avoided if the UFC had put their offer in the form of a proposed contract and sent it to (the) manager," he wrote.

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