M-1 Global and Fedor getting all legal on Affliction

speeds · Nov 3, 2009

http://www.bloodyelbow.com/2009/11/3/1112995/bloody-elbow-exclusive-m-1-and

Disclaimer: This post will detail a legal complaint. Please note that a complaint is just one side’s view of events. I will describe some of the allegations below, but I am not saying any of them are true. I am simply relaying M-1 and Fedor’s claims.

On October 28, 2009, M-1 and Fedor Emelianenko filed a lawsuit against Affliction Clothing, Affliction Entertainment, and 50 unnamed John Does in the Central District of California. The complaint states claims for breach of contract, breach of the violation of good faith and fair dealing, and declaratory relief. If they are able to join other parties, the complaint might be amended to include claims for tortuous interference with contract and related claims.

There are likely many targets among the unnamed John Does, but the UFC has to be considered the central target based on language of the complaint. After reading the complaint, it seems possible that M-1 believes the UFC was somehow involved in the cancellation of Affliction’s third show.

The complaint alleges that Strikeforce, Affliction, and M-1 reached an agreement with M-1 to allow Brett Rogers to fight Fedor Emelianenko at Affliction: Trilogy, but unbeknownst to Fedor and M-1, Affliction was simultaneously working on a renewed sponsorship deal with the UFC that would necessarily force Affliction out of the MMA promoting business. In short, the complaint alleges that Affliction was putting up a false front about searching for a replacement for Josh Barnett, and was simply buying time while they were trying to make a deal with the UFC.

The complaint alleges that Affliction kept these negotiations secret in an attempt to fool M-1 into believing they were looking for a replacement, and did not inform M-1 of its ongoing negotiations and new deal until July 24, 2009, at which point Fedor and his party of 30 had already boarded a flight from Russia to the United States.

The complaint alleges that the deal to allow Brett Rogers to fight Fedor Emelianenko on Affliction: Trilogy was completed the day before the show was cancelled, and alleges that Affliction was simultaneously pursuing two incompatible options: if the UFC deal closed they would cancel the show, and if it didn’t they would promote Brett Rogers vs. Fedor Emelianenko.

The complaint alleges that after conducting full discovery, M-1 and Fedor will amend the complaint to add “additional allegations, causes of action, and parties.”

The complaint alleges that in the run-up to Affliction: Trilogy M-1 began working on international deals to broadcast the show in Mexico, Central America, the Caribbean, South America, Eastern Europe, the United Kingdom, Australia, and elsewhere. The complaint details all of the deals M-1 entered into at length.

The complaint alleges Affliction was well aware this was going on all along and consented to it by not objecting. Because Affliction was supposedly aware of all of this, M-1 argues Affliction knew it would force M-1 to breach its contract with all of its international partners if it cancelled a show.

The complaint alleges that Todd Beard admitted to M-1 that Affliction could not and would not promote internationally, and agreed to allow M-1 to pursue all such opportunities with Affliction content. The change was not put into writing. This issue of modification appears to be a major issue of contention based on the complaint. Affliction will try to argue that M-1 changed the contract by pursuing rights not originally granted to it. If the court does not find that the contract was modified, Affliction cannot be held responsible for breach because M-1 went all over the world and did a number of international deals on their own.

In addition to the central claims described above, the complaint contains a lot of interesting information. The complaint alleges that in addition to the $300,000 fight purse, Emelianenko was paid an undisclosed sum that is not quantified in the complaint. The complaint also alleges that Affliction and M-1 Global entered into a “consulting agreement” in which Affliction paid M-1 a “substantial sum” in return for general consultant services.

The complaint alleges that Affliction and M-1 entered into an agreement in 2008 under which M-1 promised to produce a number of one-hour television episodes of “M-1 Challenge” and Affliction agreed to sponsor a number of the fighters. The terms of the deal are not disclosed. The complaint alleges that M-1 agreed to give Affliction promotional advantages relating to M-1 challenge including but not limited to use of the Affliction logo in marketing. In exchange for these promotional rights, Affliction agreed to pay M-1 a “substantial sum” that is not mentioned in the complaint.

Mark Hines, who is the lawyer representing M-1, also represented Silver Star against Affliction and Todd Beard in a state case earlier this year.

It is also worth noting that the complaint does not list Donald Trump or any of his entities as owners of Affliction Entertainment. Todd Beard is also still listed as an owner of Affliction and Affliction Entertainment in the complaint, which is contrary to prior public statements.

The big story to look at going forward is whether the UFC is eventually added as one of the Doe defendants in the complaint. The language of the complaint suggests that M-1 believes the UFC was involved in a conspiracy to convince Affliction to breach its contractual obligation to put on a third show.
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M-1 Global and Fedor getting all legal on Affliction

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M-1 Global and Fedor getting all legal on Affliction

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