Tiki Ghosn details the MMA sponsorship market in Bellator lawsuit

Many times when we hear reports of sponsorship deals between consumer product companies and MMA promotions they go hand-in-hand with the phrase, "Financial details were not reported."

When you sue someone, you have to provide details. That's what happened last year when Tiki Ghosn sued Bellator for breach of contract. Bloody Elbow has confirmed that the lawsuit was settled out of court, but in the process of litigating he shed light on a side of MMA we don't often get to see.

According to Ghosn, Bellator contracted with him to find "sponsors and sponsorship money" for its events. In return for his efforts, Ghosn was to receive 20 percent of all gross sponsorship revenues and 20 percent of any renewals from sponsors he had procured.

Ghosn says he obtained sponsorship agreements with Monster Energy Drinks and Attack Poker which each paid Bellator approximately $2 million in less than a two year period. This means he was owed $800,000 in commission fees whereas Ghosn claims to have been paid only $220,000.

The lawsuit settled, but not before giving a glimpse as to the commissions a company like Bellator was willing to pay to obtain sponsors and how much a company like Monster Energy had to pay to sponsor a "minor league" such as Bellator -- 20 percent and around $1 million per year (assuming no significant up-front payments). At that rate, I might have to quit my job and find Bellator some sponsors.

Here's the main text of Ghosn's complaint:

In November of 2012, GHOSN entered into an agreement with BSW and BELLATOR. BSW and BELLATOR wanted to locate and find sponsors and sponsorship money for its MMA fight competitions, tournaments and productions and contracted with GHOSN to do just that. In consideration for expending his time, resources and efforts, GHOSN was to be paid by BSW and BELLATOR twenty (20) percent of all gross sponsorship monies from sponsors he brought to BSW and BELLA TOR. The twenty (20) percent was also to be paid for sponsorship monies arising from sponsor renewals with BSW and BELLA TOR, year after year, by sponsors obtained and procured by GHOSN.

GHOSN was successful in finding and procuring two (2) major sponsors for BSW and BELLATOR. They were and are, MONSTER ENERGY DRINKS (hereinafter "MONSTER") and ATTACK POKER (hereinafter "AP"). Both MONSTER and AP are believed to have paid BSW and BELLATOR approximately two (2) million dollars each for sponsorships to date.

BSW and BELLATOR acknowledged that GHOSN had procured MONSTER and AP as sponsors for them. BSW and BELLA TOR however, never advised GHOSN of the actual amount of sponsorship money they had received from MONSTER or AP. BSW and BELLATOR made partial payments to GHOSN under their contract. GHOSN was paid Seventy Thousand Dollars ($70,000.00) by BSW and BELLATOR as a partial payment for the MONSTER sponsorship that was secured. GHOSN was paid One Hundred Fifty Thousand Dollars ($150,000.00) by BSW and BELLATOR as a partial payment for the AP sponsorship that was secured. BSW and BELLATOR through its agents, officials, principals and employees to date, have not advised GHOSN of the exact amount of total sponsorship monies that were paid to them by MONSTER and AP. GHOSN is of the belief that approximately Four Million Dollars ($4,000,000.00) in sponsorship money has been paid to the defendants to date from MONSTER and AP. GHOSN is seeking an accounting and full payment under his agreement with the defendants.

Paul is an economics professor and Bloody Elbow's analytics writer. Follow him @MMAanalytics.