THE CANADIAN PRESS
A contract offer scrawled on a blue Post-it note. A disgruntled fighter. A manager whose cut is one-third. A powerful promoter in hardball negotiations to tie up a young heavyweight star.
The California State Athletic Commission arbitration hearing into the dispute between mixed martial arts heavyweight Brandon (The Truth) Vera and his former manager, Mark Dion, lifts a corner of the curtain on the backstage world of the UFC.
The San Diego hearing came about as a result of Vera’s desire to get out of his management contract with Dion because he was irate at an alleged misrepresentation of a UFC signing bonus. This week, Dion posted the 135-page transcript of the arbitration hearing on his website, as well as the arbitrator’s ruling and a slew of exhibit documents.
Privately owned by billionaire brothers Lorenzo and Frank Fertitta and outspoken president Dana White, the UFC does not like talking money. But the Vera hearing sheds some light on UFC contract negotiations, suggesting that the battles outside the cage can be just as hard-nosed.
Vera, an Air Force veteran and talented fighter with a megawatt smile, signed a three-bout agreement deal with the UFC in late 2005. According to an unsigned 16-page contract submitted to the commission hearing by Dion, the deal called for Vera to make US$3,000 for the first fight with a $3,000 win bonus (UFC fighters normally work on a "show" fee and comparable win bonus). That increased to $5,000 and $5,000 for the second bout and $7,000 and $7,000 for the third fight, providing he won the first two. The fee stayed at $3,000 if he lost.
The contract shows the tight control the UFC has over its stable of fighters. It states the UFC can terminate the contract if the fighter loses whether the bout was UFC-promoted or not. When the contract ends, the UFC has an exclusive 60-day negotiating period. Once that ends, the UFC has a yearlong window to match any offers.
It also bluntly cites the risks of a combat sport.
"Fighter fully understands and agrees that the professional sport of mixed martial arts is an inherently and abnormally dangerous activity that can result in severe and permanent physical injury, including but not limited to irreversible neurological trauma, disability and/or death," the contract reads.
"Fighter hereby acknowledges that professional unarmed combat has the significant potential for serious injuries, and Fighter is knowingly and voluntarily assuming all such risks," it adds after noting the UFC will provide health and accidental death insurance as required by the relevant athletic commission.
And the deal enforces confidentiality, insisting fighters cannot reveal details to a third party save in certain circumstances.
The contract also reveals some of the logistical details surrounding UFC bouts. Fighters are entitled to two round-trip economy tickets from their hometown to the fight site and one hotel room. Those competing in championship bouts get two hotel rooms and three economy-class tickets.
The UFC per diem for fighters is $50. The combatants get four tickets to each event with championship bout fighters getting tickets within 10 rows of the Octagon.
The contract even specifies that fighters must provide one pair of light-coloured trunks and one pair of dark-coloured trunks, with the UFC having sole discretion to choose, to make sure the two fighters appeared distinct on TV.
Dion had his own management contract with Vera. It called for a one-third cut of Vera’s earnings, providing he paid for Vera’s training, travel and other expenses. The managerial cut was high, but Vera reckoned it was balanced out by the expenses Dion was covering.
It was this contract that Vera, upset at the way the UFC negotiations had gone, went to arbitration to get out of.
.As often happens, Vera’s first UFC contract was re-negotiated into a new deal after the second fight. The UFC likes to lock down fighters it wants to keep before their contract expires, since a fighter’s price tag can rise with a big win in the final bout of a deal.
Testimony indicated that Vera’s second three-fight UFC deal started at $16,000 — with a comparable win bonus — for the first fight, then 20/20 and 24/24.
Hearing exhibits included a one-paragraph document from White to Vera dated March 24, 2006, citing a bonus of $71,428.57 coming within 48 hours "in receipt of your executed agreement." Dion refers to it as a $100,000 bonus, so presumably taxes etc. ate into it.
Two fights into that deal, the renegotiation process began again.
Vera was hot. He was 8-0 and had just dispatched former heavyweight champion Frank Mir in 69 seconds at UFC 65 on Nov. 18, 2006.
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.
Option two was an insured three-year 10-fight contract. The first year called for four fights and $3 million, with the second and third years each calling for three fights and $3 million. The signing bonus remained at $1.5 million.
Vera would also receive a $1-million performance bonus if undefeated at the end of each year.
In testimony, Vera acknowledges it is an unrealistic offer, made only to kick start negotiations.
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.
In January 2007, Dion hires a lawyer to help with UFC negotiations. In March, according to Dion, Vera tells the UFC not to deal with Dion anymore.
The arbitration hearing was held Sept. 17, with the ruling handed down earlier this month.
The 30-year-old Vera, ending an 11-month absence from the cage, eventually fought Tim Sylvia at UFC 77 last October. He lost a unanimous decision, earning $100,000 according to the Ohio Athletic Commission (Sylvia made $200,000).
Vera told the arbitration hearing Dion withheld mention of the $100,000 signing bonus, which caused him to grow angry at the UFC. He later moved to try and rid himself of Dion via arbitration after being told by matchmaker Silva that the UFC offer had included such a bonus.
Dion denies withholding any bonus offer and argues why would Vera accept the same bonus that came with his previous, lesser contract.
.Arbitrator Armando Garcia, executive officer of the California State Athletic Commission, ruled March 3 that "Vera has not met his burden of proving that Dion engaged in illegal conduct" in violation of commission laws.
But he said the relationship between manager and fighter had deteriorated to a point that "the termination of their contract would be in the best interest of mixed martial arts and the parties." So he ordered the management contract, due to run through 2010, should be severed.
Garcia also ruled that Vera pay Dion one-third of his purse for the Sylvia fight in October 2007 (the final one of Vera’s third UFC contract) and $100,000 from future purses. Dion had argued that he should still be entitled to one-third of Vera’s purses until the September 2010 end of their deal.
Garcia disagreed, saying Dion was only entitled to "some of the benefit of his bargain with Vera," and settled on $100,000. In choosing that figure, Garcia said a projection of Vera’s purses through 2010 could range from several hundred thousand dollars to more than $1 million. But he also said the loss to Sylvia would "have a considerable negative impact" on that amount, concluding the $100,000 payment was "fair, just and equitable" for Dion.
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.
Vera continues to fight in the UFC, under a new deal. His next fight is against Brazilian Fabricio Werdum at UFC 85 on June 7 in London.
