Thanks to the UFC Anti-Trust Lawsuit, a class action suit that was lodged by a team of former UFC fighters against ZUFFA LLC, we are learning new information about how the UFC operates. A great deal of this new information comes to us thanks to an Expert Report conducted by Hal J. Singer, who is an expert witness for the Plaintiffs (fighters).
Jason Cruz of MMAPayout and Bloody Elbow’s ‘Show Money’ podcast has presented a number of passages from Singer’s report (which were recently un-redacted) on his blog. From those postings we have learned about Brock Lesnar’s champion pay-grade, Lyoto Machida’s $100K stoppage bonus, and the UFC’s secretive PPV point system.
Something else that received a lot of attention in Singer’s report is the modus operandi of former UFC matchmaker Joe Silva. Silva joined the UFC in 2001 and stepped down as the company’s lead matchmaker in 2016, having received a large payment as part of WME-IMG’s purchase of ZUFFA LLC and the UFC.
Below are a number of interesting details regarding clauses in UFC contracts. Also below are examples of how Silva utilized these clauses to ensure that fighters were under UFC control for as long as possible, under less than ideal terms for fighters.
In one of Singer’s passages (see Extract 1) it is established that most UFC contracts, “include provisions that toll the agreement for any period that a fighter is injured, retired, or otherwise unable or unwilling to appear in a bout.”
‘Tolling’ is a legal term, which in this context, means pausing, delaying, or suspending a time period within a contract.
Sometime before November 2012 the UFC began utilizing another tactic to prolong the amount of time a fighter is contracted to the UFC; ‘injury extensions’ (see Extract 2).
Singer’s report alleges that the UFC began automatically extending the contracts of fighters’ who were known to be injured after a bout, thus prolonging how long a fighter was controlled by the UFC and how long the UFC had to offer them bouts. In Singer’s report there are two emails from UFC veterans who seemed unhappy regarding their extensions.
In a message to ZUFFA’s Fighter Relations czar Tracy Long 16-fight UFC veteran Matt Wiman wrote, “I’m a little confused about my extension… Can u explain it in simpler terms to me… I was only injured 2-3 months and the letter states an 8 month extension.” Long responded with, “Joe Silva gave me the time frame. I believe it is based upon when you last fought and when you will fight. You last fought on October 1, 2011. You are now scheduled to fight on September 29, 2012.” Wiman then asked, “So all the months I’m training and waiting patiently are not counted?” This is bc there’s so many fighters and you all have to honor your contracts?”
UFC vet Bryan Caraway had similar concerns. In a message to ZUFFA he said, “I was only hurt for 2 months?? Why is my contract being extended 6 months?”
In addition to language that meant time essentially stopped still, as far as contracts were concerned, if a fighter was injured or ‘unwilling’ to fight, about ten percent of ZUFFA contracts included an “option period.”
Singer’s report (see Extract 1) details this option period in considerable detail:
…an “option period” that allowed Zuffa to, in its sole discretion, renew the initial term (in bouts and months) of the contract at the end of a Fighter’s contract a set number of times — effectively doubling or tripling a contract’s effective length.
In the report there is a direct quote from a fighter contract outlining this process:
“Fighter hereby irrevocably grants Zuffa two (2) separate one year-option periods (each referred to herein as an “Option Period”) to extend the duration of this Agreement including all of Fighter’s obligations hereunder… ZUFFA shall have been deemed to have exercised any applicable Option Period unless ZUFFA notifies Fighter in writing of ZUFFA’s intent not to exercise a certain Option Period by thirty (30) days prior to the commencement of the applicable Option Period… Zuffa shall provide Fighter with the opportunity to compete at least three (3) Bouts during the Initial Period and during each Option Period that ZUFFA chooses to exercise…”).
The UFC’s typical practice is to offer a new contract to fighters before the last fight on their contract. If a fighter’s contract includes option periods, the fighter would need to decide whether or not they wish to sign a new deal knowing that if they didn’t the UFC had the power to exercise the option and have the fighter serve out an identical contract to the one they previously signed.
If there was no option period in a fighter’s contract, they faced a separate dilemma about whether or not to ‘re-up’ with the UFC when offered a new deal before the last fight on their current contract.
In a deposition former UFC welterweight title challenger Jon Fitch discussed that exact scenario (see Extract 3). “If I didn’t sign up, if I didn’t to do the re-up with the contract, I wouldn’t have gotten a bout agreement,” said Fitch who added that in that situation the UFC would likely force him to wait out the entire remainder of his contract for either his last bout or a release from the company.
In his deposition Fitch said this is what happened to current UFC heavyweight Andrei Arlovski, and former fighter Roger Huerta. “I know two examples where the guys were brave enough to see it through,” said Fitch. “Most guys know if you don’t sign the re-up, you don’t get your bout agreement. If you don’t get your bout agreement, you don’t get paid, you don’t get money, you can’t feed your children.”
In Silva’s deposition (Extract 3) he was asked the following about the practice Fitch described: “If a fighter refused the new deal you were offering between the third and fourth fight, he would face a situation where he was fighting that last fight at less compensation than he would have gotten had he accepted the new deal?” Silva answered, “Yes, he chose to fight at less money.”
Along with the power to make fighters keep competing under terms from an old agreement, and the freedom to wait extended periods of time before offering fighters bouts, the UFC also had another very powerful tool written into their contracts with fighters.
In Silva’s deposition he confirmed that the UFC had the ability to extend fighters’ contracts for six months if they turned down a fight. The report states that, “In principle, Zuffa could retain a Fighter under contract in perpetuity if the Fighter refused to accept matchups that Zuffa proposed.”
The report also includes email exchanges from Silva that show this provision being considered with both Jon Jones and Roy Nelson (Extracts 3 and 4).
In 2014 the UFC’s top lawyer Lawrence Epstein wrote in an email to Assistant General Counsel Kirk Hendrick and Senior Vice President Business, Legal, and Government Affairs Mike Mersch, about Jones, stating, “We need to send him a letter formally offering the Gustafson (sic) fight and giving him a specific deadline to accept or reject. When he says no we need to extend him.”
In 2013 Lorenzo Fertitta wrote this about Nelson after his manager turned down a new contract offer. “I offered 9 fights 125+50 for regular bout, 500 flat for title fight, 500 plus ppv if defending. If ppv does 600k buys he makes 1.1m. Very fair offer.”
Silva responded with, “If you can’t get Roy to do that deal tell him instead he can fight Dos Santos June 15 in Winnipeg on his last fight for 24+24. [I]f he turns that fight down it allows us to extend his contract.”
Silva’s negotiating style is also on display in emails from April 2010, when he discussed his approach to trying to re-sign Nick Diaz (see Extract 4). “I lowballed them on purpose the first offer knowing they would turn it down,” wrote Silva. “How bout I come back with 29+29, 32+32, 35+35, 38+38. If they turn it down I put him in a prelim against a really tough guy for his last fight.”
In his deposition Silva was asked about this tactic of giving a fighter a “really tough guy” for their final fight, if they have refused to re-up with the UFC. Talking about the Diaz situation, Silva said he would have given Diaz a “tough guy regardless”, but conceded that he was more likely to give a fighter who re-upped a slot on a main card versus a fighter who was fighting out their contract.
The documents reveal another window into Silva’s negotiation tactics thanks to what is shared regarding Hector Lombard (see Extract 2). Singer’s report quotes Silva, who explained that when Lombard was on the fourth fight of his eight-fight UFC contract, he stood to make $205,000 to show and $75,000 to win. However, Silva said he was able to convince Lombard to fight for less than half that amount ($100,000) in exchange for not being cut by the promotion.
Bloody Elbow will continue to monitor the UFC Anti Trust Lawsuit as more potentially more information on ZUFFA wheeling and dealing becomes public.